Embattled Kraft Heinz is facing a class action lawsuit questioning why an affiliate of controlling shareholder and co-owner 3G Capital transferred US$1.23bn of stock six months before the US food giant announced a $15.4bn writedown and a $12.6bn quarterly loss.

Shareholder Steve Walling filed the lawsuit – Walling v Kraft Heinz Co. et al – in the US District Court, Western District of Pennsylvania, this week.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

It claims Kraft Heinz executives formerly employed at 3G Capital artificially raised the food giant’s stock price to allow an unnamed 3G affiliate to sell the shares, a practice commonly known as ‘pump and dump’ in the US.

Walling has accused Kraft Heinz, chief executive officer Bernardo Hees, chief financial officer David Knopf, 3G and other named individuals – Paulo Basilio, Vince Garlati, Christopher Skinger and George Zoghbi – of concealing damage to Kraft Heinz’s brands and internal controls.

Class actions are most common where the allegations involve a large number of people who have been ‘injured’ by the same defendant in the same way and allow for the matter to be resolved in a single proceeding through the efforts of a representative plaintiff.

See Also:

3G, a private-equity fund, co-owns Kraft Heinz with investor Warren Buffett’s Berkshire Hathaway fund.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Kraft Heinz’ share price sank 27.5% last Friday (22 February) after the company revealed it had taken a $15.4bn writedown, primarily on its Kraft and Oscar Mayer brands and Canadian assets.

After announcing a fourth-quarter loss of $12.6bn, the company further revealed it has faced a US Securities and Exchange Commission probe related to its purchasing and accounting practices.

Kraft Heinz had not replied to just-food’s requests for a response to the lawsuit’s claims at the time of writing.