TreeHouse Foods has reached a settlement with investors who sued the company after its purchase of the private label business of Conagra Brands.
TreeHouse has agreed to pay $27 million to a plaintiff class of investors headed by the Mississippi Public Employees Retirement System. The agreement was tentatively approved by a federal judge in Illinois.
The suit charges that before and after TreeHouse bought the private label business of what was then called ConAgra Foods in 2016, its officers misrepresented TreeHouse’s financial performance. It alleges that when TreeHouse bought Flagstone Foods, a processor of snack nuts and trail mixes, in July 2014, it was unable to successfully integrate the business due in part to incompatible enterprise resource planning software. When the Conagra deal was made, similar difficulties allegedly ensued. These problems were concealed from investors, the lawsuit charges.
When the financial problems came to light, TreeHouse was shaken up. Its stock price plunged, and its president resigned after just three months on the job.
The lawsuit was filed in 2017. A hearing for final approval of the settlement is scheduled for Nov. 16.
