Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Yum! Brands, Inc.
Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/yum/) today announced that a class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Yum! Brands, Inc. (“Yum”) (NYSE: YUM) publicly traded securities during the period between October 9, 2012 and January 7, 2013 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/yum/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Yum and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Yum describes itself as the world's largest quick service restaurant company, which, through the three concepts of KFC, Pizza Hut and Taco Bell, develops, operates, franchises and licenses a worldwide system of restaurants. Yum's business consists of four reporting segments: the China Division, the India Division, Yum! Restaurants International, and the United States Division.
The complaint alleges that during the Class Period, the defendants made materially false and misleading statements concerning the Company's current and future business and financial condition. As a result of defendants' false and misleading statements, Yum common stock traded at artificially inflated prices during the Class Period, reaching over $74 per share.
On November 23, 2012, reports in the Chinese media disclosed that certain of the Company's chicken suppliers had been feeding toxic chemicals to chickens sold to KFC China. On November 29, 2012, the Company announced that its previous forecast of single-digit to flat China Division same-store sales growth would not be met, but instead, the Company expected to report China Division same-store sales of -4%. On these disclosures, Yum's stock price fell nearly 9% to close at $67.08 per share on November 30, 2012.
On December 20 and 21, 2012, news reports began to circulate that the Company knew well before the Class Period that certain chicken suppliers in China had injected chickens with excessive antibiotics and other illegal chemicals but sought to conceal these facts. These disclosures caused Yum's stock price to drop further to a close of $63.88 per share on December 21, 2012.
Then, on January 7, 2013, the Company filed a Form 8-K with the SEC updating its full year 2012 guidance for same-store sales for its China Division, stating that it was lowering its financial outlook due to publicity surrounding the Chinese government's review of its poultry supply. As a result of the January 7, 2013 disclosures, on January 8, 2013, Yum shares dropped 5% from $67.89 per share to as low as $64.40 per share.
According to the complaint, the representations by defendants concerning the Company's current business and financial condition were each materially false and misleading when made, because defendants failed to disclose the following true facts which were known to defendants or recklessly disregarded: (a) slowing economic trends in China were stronger than reported and could not support the forecasted sales results for the Company's China Division nor the Company-wide increased earnings per share growth; (b) defendants knew but concealed that Yum's own food safety inspections had already found that Chinese chicken supplier Shandong Liuhe Group (“Shandong Liuhe”) had sold the Company chickens with high levels of antibiotics and other illegal drugs and/or chemicals; and (c) the Company had continued to buy products from Shandong Liuhe until as late as August 2012.
Plaintiff seeks to recover damages on behalf of all purchasers of Yum publicly traded securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With nearly 200 lawyers in nine offices, the firm represents hundreds of public and multi-employer pension funds with combined assets under management in excess of $2 trillion. The firm has obtained many of the largest recoveries in history and has been ranked number one in the number of shareholder class action recoveries in MSCI's Top SCAS 50 every year since 2003. According to Cornerstone Research, the firm's recoveries have averaged 35% above the median for all firms over the past seven years (2005-2011). Please visit http://www.rgrdlaw.com for more information.