A US law firm has announced that it has filed a class action suit on behalf of Winn-Dixie investors alleging that the US supermarket operator failed to disclose financial problems.
The lawsuit, filed in the US District Court for the Middle District of Florida, alleges that between 9 October 2002 and 29 January 2004 Winn-Dixie was suffering from substantial undisclosed long-term business and financial problems and that former CEO Allen Rowland continued to tell investors that Winn-Dixie was capitalising on its strategic marketing plan.
In June 2003, Rowland stepped down as CEO and his successor, Frank Lazaran, ordered a comprehensive review of Winn-Dixie’s “entire business model”. The lawsuit claims that even while this restructuring was underway, Winn-Dixie and Lazaran repeatedly told the public that the company was successfully executing its sales and marketing plan.
On 30 January 2004, Winn-Dixie announced an unexpected $79.5m loss for its second fiscal quarter ended 7 January 2004, sending shares plummeting.