Legal & Courts  June 29, 2015

Boulder Brands faces third shareholder lawsuit

BOULDER — Local food company Boulder Brands Inc. (Nasdaq: BDBD) is facing a third shareholder lawsuit related to allegations that company officials made false and misleading statements about the company’s financial health and outlook.

Shareholder Edward Donahue of Cambridge, Mass., filed a verified shareholder derivative complaint on behalf of Boulder Brands in Boulder County District Court last week. Such suits allow shareholders to act in the name of the corporation against defendants, usually insiders, believed to have caused harm to the company.

The suit names nine current and former board members and executives of the company as defendants, including former chairman and CEO Stephen Hughes, who resigned earlier this month. The suit specifically alleges that the defendants concealed that the company was experiencing integration issues with the acquisitions of the Evol and Udi’s brands, that Boulder Brands’ Smart Balance segment was underperforming, and that the company’s gross margins would be lower than expected as a result.

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The suit seeks for the court to award Boulder Brands restitution from the defendants and order disgorgement of all profits and other compensation gained by them. The suit notes that certain Boulder Brands board members saw their compensation increase even during the period when company officials were alleged to have made false statements about the company’s well-being.

In addition to Hughes, board members James Lewis, Gerald Laber, chief operating officer James Leighton, board chairman R. Dean Hollis, Thomas McInerney and Benjamin Chereskin were named as defendants. Former board member William Hooper and chief financial officer Christine Sacco are also named in the filing.

The previous two lawsuits against Boulder Brands were class-action suits filed in U.S. District Court in Denver in April and May. Plaintiffs in those cases earlier this month moved to combine the cases.

Those suits are in addition to a lawsuit filed by H.J. Heinz Co. (NYSE: HNZ) earlier this month over a trademark dispute.

Boulder Brands shares closed at $6.91 Monday, down nearly 2 percent from Friday’s close and not far above their 52-week low of $6.64.

BOULDER — Local food company Boulder Brands Inc. (Nasdaq: BDBD) is facing a third shareholder lawsuit related to allegations that company officials made false and misleading statements about the company’s financial health and outlook.

Shareholder Edward Donahue of Cambridge, Mass., filed a verified shareholder derivative complaint on behalf of Boulder Brands in Boulder County District Court last week. Such suits allow shareholders to act in the name of the corporation against defendants, usually insiders, believed to have caused harm to the company.

The suit names nine current and former board members and executives of the…

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