December 07, 2020
On November 30, 2020, Weil won a significant victory for Campbell Soup Company and two former senior executives when the U.S. District Court for the District of New Jersey granted the defendants’ motion to dismiss in a putative consolidated securities class action relating to the performance and prospects of the company’s fresh foods division, C-Fresh.
In their consolidated complaint, the plaintiffs asserted claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act. The plaintiffs alleged, largely on the basis of more than a dozen confidential witnesses, that the defendants made false or misleading statements about the division’s profitability and top-line growth projections in the wake of a product recall and other developments.
In a 37-page opinion granting the defendants’ motion to dismiss, the court agreed with the defendants’ arguments that, among other things, the plaintiffs failed to adequately plead scienter. In particular, the court found that the plaintiffs’ allegations did not demonstrate that the defendants “were aware of facts that were actually contrary to the Individual Defendants’ expectations of top line growth and profitability” in the division. The court also rebuked the plaintiffs for their attempt to misrepresent the allegations contained in their own complaint in order to establish a stronger foundation for their arguments in support of fraudulent conduct by the former senior executives.