Rigrodsky & Long, P.A. announces that it has filed a class action lawsuit in the United States District Court for the Northern District of California on behalf of all persons or entities who purchased or otherwise acquired the stock of Diamond Foods, Inc. (“Diamond Foods” or the “Company”) (Nasdaq: DMND) between December 9, 2010 and November 4, 2011, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 (the “Complaint”). The case is entitled MacFarland v. Diamond Foods, Inc., Case No. C-11-05615-EJD (N.D. Cal.). If you wish to view a copy of the Complaint, to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Noah R. Wortman, Case Development Director of Rigrodsky & Long, P.A., 919 North Market Street, Suite 980 Wilmington, Delaware, 19801 at (888) 969-4242, by e-mail to firstname.lastname@example.org, or at: http://www.rigrodskylong.com/news/Diamond-Foods-Class-Action. Diamond Foods, engages in processing, marketing, and distributing snack products. The Company also offers culinary, in-shell, and ingredient nuts under the Diamond of California brand name. Diamond Foods enters into exclusive purchase agreements with walnut growers for their crops. According to the Company, under these agreements, the walnut growers deliver their entire walnut crop to the Company during the fall harvest season and the Company then determines the minimum price for the crops by March 31, or later, of the following calendar year. The Company represents that it determines the purchase price in good faith, taking into account market conditions, crop size, quality, and nut varieties, among other relevant factors. Since the ultimate price to be paid by the Company to the walnut growers is determined subsequent to receiving the walnut crop, the Company estimates the cost of the walnuts for its interim financial statements.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made materially false and misleading statements concerning, and/or failed to disclose that: (a) the Company overstated its earnings by improperly accounting for certain crop payments to walnut growers; (b) the Company’s acquisition of Pringles snack business would be delayed; (c) the Company lacked adequate internal and financial controls; and (d) as a result of the foregoing, the Company’s financial results were materially false and misleading at all relevant times.On April 5, 2011, the Company announced that it was going to acquire the Pringles snack business (the “Acquisition”) from The Procter & Gamble Company (“P&G”). The Company represented to investors that the Acquisition would be completed by December 2011. On November 1, 2011, after the market closed, the Company disclosed that the Company’s Chairman of the Audit Committee, Ed Blechschmidt, received an external communication “regarding Diamond’s accounting for certain crop payments to walnut growers[,]” which the Company’s Audit Committee is now investigating. As a result, the Company announced that it is delaying the acquisition of the Pringles snack business from P&G for at least six months. In response to the foregoing news, Diamond Foods’ shares reacted by falling more than 17.5%, to close at $52.79 per share on November 2, 2011, on very heavy trading volume. On November 3, 2011, The Wall Street Journal reported, among other things, that the “investigation centers around the timing of a recent payment to walnut growers for their 2011 crop” and that at least one of the improper payments is estimated at $50 million. On this news, Diamond Foods’ shares declined an additional $6.39 per share or 12% in two consecutive trading sessions, to close at $46.40 per share on November 4, 2011. Then, on November 5, 2011, Barron’s Online published an article stating, among other things, the Company’s “momentum payment” to walnut growers in September 2011, and that had the Company “properly booked costs for fiscal 2011... it would’ve earned as little as $1.14 a share,” instead of the reported earnings for the fiscal year ended July 2011 of $2.61 per share, before noncash charges and expenses. On this news, the stock fell an additional $7.31 per share or nearly 16%, to close at $39.09 per share on November 7, 2011. If you wish to serve as lead plaintiff, you must move the Court no later than January 9, 2012. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed 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.
Rigrodsky & Long, P.A., with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.Attorney advertising. Prior results do not guarantee a similar outcome.