Cases / Notable Cases

TreeHouse Foods, Inc. Securities Litigation


Court Approves $27 Million Settlement

In March 2020, the Parties entered into a mediation process under the auspices of a nationally recognized mediator. A vigorous mediation process ensued. Over an 11 month period, the Parties frequently communicated with the Mediator, exchanged mediation statements and reply mediation statements supplemented by memoranda providing additional authority, comparable settlement analyses and other documents.  The result of Wolf Popper LLP’s considerable efforts, the Parties reached an agreement in principle to settle the Litigation on February 4, 2021.  The ensuing Stipulation of Settlement included, among other things, the Settling Parties’ agreement to settle and release all claims asserted in the Litigation in return for a cash payment of $27,000,000 (funded by insurance) for the benefit of the Class plus interest being paid on behalf of Defendants.  

On July 28, 2021, the Court entered its Order preliminarily approving the proposed Settlement and the Parties’ proposed method of disseminating Notice to the Class Members, by mailing out Notices to all potential Class Members and their nominees and publishing the Summary Notice electronically over PR Newswire within the stipulated timeframe.   

The Court held its Final Approval Hearing on November 16, 2021 at 10:00 a.m. CST. Attended by counsel to the Parties and a PERS representative, the Court finally approved the Settlement in its entirety, including: (a) the $27 million Settlement Fund; (b) Lead Counsel’s Fee and Expense Application for attorneys’ fees and reimbursement of litigation expenses; (c) Lead Plaintiff’s PSLRA Award for their service on behalf of the Settlement Class or for Lead Plaintiffs’ reasonable time, costs and expenses directly relating to the representation of the Settlement Class; and (d) the Plan of Allocation of the Net Settlement Fund.

Members of the Class will have until December 15, 2021 to submit a Claim Form, available at http://www.treehousesecuritieslitigation.com/, and supporting documentation to the “Claims Administrator” – A.B. Data, Ltd. – to receive a payment under the Settlement.  

Class Certification Granted in TreeHouse Foods, Inc.

On February 26, 2020, the Hon. Robert M. Dow, Jr., U.S. District Judge for the N.D. of Illinois, granted Lead Plaintiff Public Employees’ Retirement System of Mississippi’s (“MSPERS”) motion for class certification.  The Court rejected each of Defendants’ arguments that MSPERS was subject to unique defenses and therefore an inadequate lead plaintiff and that the proposed damages model was insufficient.  The certified class includes investors who purchased TreeHouse Foods, Inc. common stock between January 20 and November 2, 2016.

Defendants argued that MSPERS was inadequate as a lead plaintiff because it relied on an investment manager for its investment decisions.  As the Court noted, this is a common practice and it is quite likely that other investors also relied on the advice of third parties.  The Court also found that the investment manager’s purchase of additional stock after the corrective disclosure in November 2016 does not indicate that the advisor did not rely on the market price of the common stock.

The Court also recognized that MSPERS was an adequate lead plaintiff, in part because it is the “‘exact type of sophisticated institutional investor that Congress intended to lead securities class actions under the PSLRA.’”  The Court rebuffed Defendants’ attacks on MSPERS’s representatives, finding that they illustrated a preparedness to participate in discovery and “testified in detail about the specifics of the alleged fraud and [MSPERS’] investment in this case.”  The small points of discrepancy in their testimony did not prevent them from serving as lead plaintiff.

The Court also found that Lead Plaintiff’s financial expert (Chad Coffman) properly found that damages were subject to common proof.  The Court recognized that the “out of pocket” calculation method based on an event study has been widely adopted, and that Mr. Coffman’s reports in particular have been accepted on class certification dozens of times.  The Court also rejected Defendants’ argument that Mr. Coffman inadequately addressed the level of inflation in the price of common stock during the class period, noting that Defendants “do not cite a single case where class certification was denied because of limitations in the proposed inflation formula.”

Court Denies Defendants' Motion to Dismiss

On February 12, 2018, the Court denied defendants’ motion to dismiss in respect to PERS’s consolidated complaint alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  Specifically, United States District Judge Samuel Der-Yeghiayan found that defendants made material misstatements and the allegations presented in the complaint support “a reasonable belief as to the misleading nature of the statements or omissions” and that defendants “knew the statements were false or misleading.”

Lead Plaintiff Public Employees Retirement System of Mississippi Filed Consolidated Complaint in TreeHouse Foods, Inc. Securities Class Action

On March 24, 2017, PERS filed a consolidated complaint in the action.  A copy of the consolidated complaint can be found here.  The action alleges that TreeHouse Foods, Inc. and certain of its current and former senior executives violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, during the period January 20, 2016 through November 2, 2016, issued a series of false and misleading statements arising out of the Company’s acquisition of ConAgra Foods, Inc.’s private brands operations, for $2.7 billion in cash in February 2016.

For further information about this case, please contact any of the following Wolf Popper attorneys: 

Robert C. Finkel
rfinkel@wolfpopper.com

Matthew Insley-Pruitt
minsley-pruitt@wolfpopper.com

Public Employees Retirement System of Mississippi Appointed Lead Plaintiff and Wolf Popper LLP Appointed Lead Counsel in TreeHouse Foods, Inc. Securities Class Action

On January 25, 2017, the United States District Court for the Northern District of Illinois appointed Public Employees’ Retirement System of Mississippi (“PERS”) as Lead Plaintiff in the securities class action titled Tarara v. TreeHouse Foods, Inc., Case No. 16 C 10632.  A copy of the Court's order can be found here.  The Court also approved PERS’s selection of Wolf Popper LLP as Lead Counsel and Robinson Curley & Clayton P.c. as Liaison Counsel.  The action alleges that TreeHouse Foods, Inc. and certain of its senior executives violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, during the period February 1, 2016 through November 2, 2016, by issuing a series of false and misleading statements arising out of the Company’s acquisition of ConAgra Foods, Inc.’s private brands operations, for $2.7 billion in cash in February 2016.


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