According to a press release dated October 18, 2011, the Complaint charges that the Company and certain of its officers and directors violated federal securities laws. In particular, the complaint alleges that officials at the Company failed to disclose to investors material adverse facts that: (1) the Company’s collection efforts and credit dealings with its animal nutrition customers were not working because the “formula based analysis” the Company relied on in determining accounts receivable and reserves for doubtful accounts was flawed; (2) allowances for doubtful accounts were wildly undervalued; (3) accounts were overvalued and bad debts were undervalued, causing reported asset values to be overstated and expenses to be understated; and (4) the Company exaggerated its market edge as the combination of overstated assets and understated expenses resulted in creating an illusion of heightened profitability and failed to provide a “long-term picture” of the Company’s value.
On August 2, 2011, the Company announced preliminary financial results for the second quarter of 2011 that showed that the Company was performing well below expectations and that the Company expected to post a loss of $17 million, as it added $5 million in allowances for its bad debt expenses. Additionally, on August 9, 2011, the Company disclosed to the U.S. Securities and Exchange Commission the true nature of its finances and the Company’s decision to withdraw the Registration Statement for its animal nutrition business. Since these revelations have emerged, shares have lost over 72% of their value.
On April 10, 2012, the Court issued an Order consolidating cases, appointing lead plaintiff, and approving the selection of lead counsel.
On February 14, 2013, the plaintiffs filed a consolidated and amended complaint.
On September 19, 2013, the plaintiffs filed a second consolidated and amended complaint.
On September 17, 2014, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on October 2. On December 8, the Court issued an Order granting final approval of the Settlement and dismissing this case with prejudice.