Norfolk County Retirement System v. Tempur-Pedic International Inc.
Status: Ongoing Case
The complaint alleges that Tempur-Pedic and certain of its officers made false and misleading statements and concealed material information between January 25, 2012 and June 5, 2012, inclusive (the class period), relating to the company’s deteriorating competitive position and projected net sales, earnings per diluted share (EPS) and related financial performance for fiscal year 2012.
Defendants filed a motion to dismiss the Complaint on June 7, 2013, which lead plaintiffs opposed. Lead plaintiffs also filed a motion offering to amend the Complaint if the court prefers. These motions are fully briefed and awaiting action from the court.
The case is Norfolk County Retirement System v. Tempur-Pedic International Inc., No. 5:12-cv-00195 (E.D. Ky.). Lead plaintiff is Norfolk County Retirement System. Defendant is Tempur-Pedic International, Inc.
Tempur-Pedic manufactures and distributes “premium” mattresses, pillows and related products that incorporate visco-elastic polyurethane foam, a pressure-relieving material.
Tempur-Pedic’s competitive position was rapidly deteriorating due to the influx into the mattress market of aggressively priced alternative brands and failed to disclose this information to investors. Instead, the company hid that fact by asserting that its competitive position had strengthened. Additionally, in the face of evidence that Tempur-Pedic’s financial outlook was declining, it also claimed that they foresaw material growth in net sales and EPS during the course of 2012.
As a result of the company’s false and misleading statements and omissions, Tempur-Pedic’s common stock traded at artificially inflated prices during the class period. On June 6, 2012, Tempur-Pedic admitted that the outlook for 2012 net sales and EPS that the Company had provided and confirmed over the prior six months was not simply overly optimistic, but was inaccurate. On this revelation, Tempur-Pedic’s stock price plummeted 48.73 percent on the heaviest volume in the company’s publicly traded history, wiping out millions of dollars in shareholder value.