Updated: August 16, 2019
Status: Ongoing Case
Labaton Sucharow LLP is currently litigating in Wisconsin state court a securities class action against Spectrum Brands Holdings, Inc. (“Spectrum” or the “Company”) relating to the merger between Legacy Spectrum and HRG Group, Inc. (“HRG”). Spectrum, formerly known as HRG, is a global branded consumer products company that manufactures, markets, and distributes a wide array of products, including for example: plumbing and hardware, pet supplies, household products and repellents, and auto care goods.
On August 16, 2019, the plaintiff filed an amended complaint alleging that the registration statement for the merger contained material false and misleading statements and omissions in violation of the federal securities laws. That complaint alleges that the registration statement misrepresented the Company’s financial condition, internal controls, risk factors, and adverse trends. In particular, the complaint alleges that these statements were false and misleading because Spectrum failed to disclose that at the time of the merger, due to a huge inventory build in 2016 followed by a sales slowdown in 2017 and 2018, Legacy Spectrum had millions of dollars of obsolete inventory that had to be written off or liquidated and Legacy Spectrum’s Auto Care segment’s goodwill was overstated by at least $92.5 million.
Spectrum’s common stock lost 30 percent of its value from the merger price to its closing share price on the date this action was filed.
The case is Plymouth County Retirement Association v. Spectrum Brands Holdings, Inc., et al., No. 19-cv-982. Labaton Sucharow represents plaintiff Plymouth County Retirement Association. The defendants are Spectrum, HRG, and certain of their officers and directors.