The complaint alleges that, during the Class Period, Defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (i) that the Company had double digit declines in its vodka portfolio and its loss of market share in Poland was growing steeper as discounters were taking shares; (ii) that the seriousness in the market share declines required that the Company take an impairment charge which the Company did not record on a timely basis; (iii) that the launch of the Company’s new vodka product with significant market spending in the form of rebates, was having a materially adverse effect on gross margin and impacted the channel mix in the market; and (iv) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.
On March 1, 2011, the Company issued a press release announcing its results for the full year 2010, surprising the market and reporting a net loss from continuing operations on a U.S. Generally Accepted Accounting Principles basis for the year of $92.9 million, or $1.32 per fully diluted share, as compared to a net profit of $72.7 million, or $1.35 per fully diluted share, for the same period in 2009. Following the full year earnings announcement, Defendants held a conference call with analysts and investors, wherein defendants disclosed for the first time an excise tax issue in production in Russia, where they had a dispute with authorities on an old excise stamp count, which resulted in the loss of two weeks of limited production runs, with one week having nothing produced in the middle of November, their “key selling period.” In response to the unexpected earnings announcement, shares of the Company’s stock fell $8.52, or more than 37%, to close at $14.33 per share, on extremely heavy trading volume.
On August 22, 2012, an Order Appointing Lead Plaintiff, Lead Counsel, and Consolidating the Related Actions was issued by the Court.
On November 14, 2012, a Memorandum Opinion and accompanying Order were issued by the Court denying the defendants Motion for interlocutory appeal.
On February 19, 2013, the lead plaintiffs filed an amended complaint.
On May 12, 2014, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on July 31. On November 14, the Court granted final approval of the Settlement and dismissed this case with prejudice.