Just the Facts
Kraft Heinz Company (NASDAQ: KHC), the third-largest food and beverage company in North America, was formed in 2015 from the merger between Kraft Foods Group, Inc. and H.J. Heinz Holding Corporation. Berkshire Hathaway Inc. and global investment firm, 3G Capital, facilitated this merger with the hopes of implementing cost cutting measures and ultimately increasing company revenue. However, in February 2019, Kraft Heinz reported a $15.4 billion write-down (one of the largest in corporate history), which caused a 27.5% decline of its share price.
Immediately thereafter, the first securities class action lawsuit against Kraft Heinz was filed on February 24, 2019. Within this action, which was brought under the Securities Exchange Act of 1934, Plaintiffs alleged that Kraft Heinz made materially false or misleading statements and omissions regarding, among other things, Kraft Heinz’s cost-cutting measures, and its valuation and testing for impairment of goodwill and intangible assets which in turn artificially inflated the price of Kraft Heinz’s common stock. On May 5, 2023, after more than 4 years of litigation, the parties came to term and reached a $450 million settlement.
The $450 million settlement ranks as the 41st largest federal securities class action settlement of all time, but it is only the second largest settlement year to date – 2023 is shaping up to be another historic year.
In addition to the securities class action settlement, the U.S. Securities and Exchange Commission (“SEC”) had earlier ordered Kraft Heinz to pay approximately $62.3 million in civil money penalties after finding that the company “engaged in various types of accounting misconduct” the sum of which will be distributed to harmed investors in a Fair Fund, thus bringing the total recovery to harmed investors here to over half a billion dollars.
Although the securities class action and the SEC Fair Fund concern similar alleged misconduct, harmed investors will need to file claims in both settlement administrations.
|Opportunity #1: Securities Class Action Settlement||Opportunity #2: SEC Fair Fund|
|Claim Deadline||October 10, 2023||August 31, 2023 (extended)|
|Settlement Amount||$450 Million||$62.3 Million|
|Class Definition||All persons or entities who purchased or otherwise acquired Kraft Heinz common stock or call options on Kraft Heinz common stock, or sold put options on Kraft Heinz common stock, from November 6, 2015 through August 7, 2019, inclusive, and were damaged thereby.||Any person or entity who purchased or acquired shares of Kraft Heinz common stock listed on a U.S. exchange during the period from February 26, 2016 through February 21, 2019.|
|Security||Kraft Heinz Common Stock, Kraft Heinz Call and Put Options||Kraft Heinz Common Stock|
|Claims Administrator||JND Legal Administration||RCB Fund Services LLC|
|Class Counsel||Bernstein Litowitz Berger & Grossman LLP and Kessler Topaz Meltzer & Check, LLP||U.S. SEC|
|Lead Plaintiffs||Sjunde AP-Fonden and Union Asset Management Holding AG||N/A|