Molson Coors Brewing Company
- Company Name
- Molson Coors Brewing Company
- Stock Symbol
- Class Period
- February 14, 2017 to February 12, 2019
- Motion Deadline
- April 16, 2019
- Northern District of Illinois
The complaint charges Molson Coors and certain of its officers with violations of the Securities Exchange Act of 1934. Molson Coors manufactures and sells beer and other beverage products in the United States, Canada, Europe and internationally. On October 11, 2016, Molson Coors completed the acquisition of SABMiller plc’s 58% stake in MillerCoors, LLC, a joint venture formed by both companies in 2008.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to properly reconcile the outside basis deferred income tax liability for Molson Coors’ investment in its MillerCoors, LLC partnership and, as a consequence, Molson Coors misreported net income in its consolidated financial statements for the fiscal years ending December 31, 2016 and December 31, 2017, resulting in an overall downward revision to net income. As a result of this information being concealed from the market, Molson Coors securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $100 per share.
Then on February 12, 2019, Molson Coors announced that its “previously issued consolidated financial statements as of and for the years ended December 31, 2017 and December 31, 2016 should be restated and no longer be relied upon.” The Company stated that it had “identified errors in the accounting for income taxes related to the deferred tax liabilities for its partnership in MillerCoors, LLC.” In addition, the Company disclosed that it had “determined that a material weakness existed in [its] internal control over financial reporting . . . relating to the design and maintenance of effective controls over completeness and accuracy of the accounting for and disclosure of the income tax effects of acquired partnership interests.” That same day, Molson Coors filed restated consolidated financial statements for the fiscal years ended December 31, 2016 and December 31, 2017 in its annual report on Form 10-K for the fiscal year ending December 31, 2018. On this news, the price of Molson Coors stock fell $6.17 per share, or more than 9%, to close at $59.19 per share on February 12, 2019.