{"id":1132,"date":"2018-04-02T00:00:00","date_gmt":"2018-04-02T00:00:00","guid":{"rendered":"https:\/\/www.johnsonfistel.com\/johnson-fistel-defeats-motion-dismiss-flowers-foods-securities-litigation\/"},"modified":"2018-04-02T00:00:00","modified_gmt":"2018-04-02T00:00:00","slug":"johnson-fistel-defeats-motion-dismiss-flowers-foods-securities-litigation","status":"publish","type":"post","link":"https:\/\/www.johnsonfistel.com\/johnson-fistel-defeats-motion-dismiss-flowers-foods-securities-litigation","title":{"rendered":"Johnson Fistel Defeats Motion to Dismiss in Flowers Foods Securities Litigation"},"content":{"rendered":"

SAN DIEGO, Mar. 29, 2018 \u2014 On March 23, 2018, Judge W. Louis Sands, Sr. of the United States District Court for the Middle District of Georgia denied<\/a>, in substantial part, the defendants\u2019 motion to dismiss in In re Flowers Foods, Inc. Securities Litigation<\/em>.<\/p>\n

\n

The plaintiffs in the case, represented by Johnson Fistel as co-lead counsel, allege that certain directors and officers of Flowers violated the Securities Exchange Act of 1934 and caused significant financial losses to investors as a result.\u00a0 Flowers is a food company that operates two primary business segments\u2014direct-store delivery (\u201cDSD\u201d) and warehouse-delivery, the former of which generates the majority of Flowers\u2019 sales. \u00a0The complaint alleges that, between February\u00a07,\u00a02013 and August 10, 2016, the defendants knowingly made false and misleading public statements, and withheld material information, concerning Flowers\u2019 business, operations, and prospects. \u00a0Specifically, the lawsuit contends that defendants misleadingly touted the purported competitive advantages of Flowers\u2019 DSD model while misleading investors about its DSD model\u2019s legal compliance, present and future success, and the risks posed by the DSD model.\u00a0 As a result of these false statements, Flowers\u2019 stock traded at artificially inflated prices during the class period. \u00a0However, as the truth emerged, including through the U.S. Department of Labor\u2019s announcement that it would conduct a compliance review into Flowers\u2019 classification of distributors, as well as through statements issued by analysts and the defendants themselves, the Company\u2019s stock price declined precipitously, causing significant losses to investors.<\/p>\n

The defendants moved to dismiss the case, which the court denied in substantial part. \u00a0The Court explained that \u201cPlaintiff has sufficiently alleged that the challenged opinion statements, including statements that Flowers was complying with the law, were misleading in context because they would \u2018conflict with what a reasonable investor would take from the statement itself,\u2019\u201d and that \u201cDefendants did voluntarily tout the benefits of the DSD model and that their failure to disclose known material problems with that model was materially misleading.\u201d\u00a0 The Court further found that the \u201cfacts sufficiently allege that Flowers\u2019 management had knowledge that its distributor program was violating laws and that yet Flowers concealed that information and misled investors about its legal compliance, present and future success, and the risks posed by the DSD model,\u201d as well as that \u201cpartial corrective disclosures revealed the falsity of Defendants\u2019 prior statements and caused Plaintiff\u2019s losses.\u201d<\/p>\n<\/div>\n

The case is captioned as In re Flowers Foods, Inc. Securities Litigation<\/em>, No. 7:16-cv-00222-WLS (M.D. Ga.).<\/p>\n

The Johnson Fistel attorneys leading the case include Michael I. Fistel, Jr., William W. Stone, and David A. Weisz.<\/p>\n","protected":false},"excerpt":{"rendered":"

SAN DIEGO, Mar. 29, 2018 \u2014 On March 23, 2018, Judge W. Louis Sands, Sr. of the United States District Court for the Middle District of Georgia denied, in substantial part, the defendants\u2019 motion to dismiss in In re Flowers Foods, Inc. Securities Litigation. The plaintiffs in the case, represented by Johnson Fistel as co-lead […]<\/p>\n","protected":false},"author":3,"featured_media":280,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","ub_ctt_via":"","compliance_id":"","post_disclaimer":"","footnotes":""},"categories":[10],"tags":[],"acf":[],"featured_image_src":"https:\/\/www.johnsonfistel.com\/wp-content\/uploads\/2021\/10\/Capture-2.jpg","author_info":{"display_name":"Matt Ostman","author_link":""},"_links":{"self":[{"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/posts\/1132"}],"collection":[{"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/comments?post=1132"}],"version-history":[{"count":0,"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/posts\/1132\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/media\/280"}],"wp:attachment":[{"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/media?parent=1132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/categories?post=1132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.johnsonfistel.com\/wp-json\/wp\/v2\/tags?post=1132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}