US law firms advertise services for TWE shareholders’ legal battle
Never slow off the mark, American law firms are urging US investors to join their Australian counterparts in suing Treasury Wine Estates for allegedly misleading shareholders.
Attorneys from Los Angeles top New York are touting their services to launch a class action against the company. They believe Treasury may have violated US securities laws about disclosure of material facts to shareholders.
As the drinks business reported earlier this week, Australia’s biggest wine company has been served with two class actions in the past month. They both claim that Treasury’s management misled investors over the true state of the business for 18 months, causing them unwarranted losses.
In January Treasury cut its forecast growth in earnings for 2019-20 from an earlier estimate of between 15% and 20% to between 5% and 10%. The following day Treasury’s shares lost a quarter of their value.
The company said it had lowered its forecasts because of its weak performance in the US, where it had been hit by a wine surplus, challenging conditions and unexpected management changes.
The aggrieved shareholders claim that Treasury had problems in the Americas well before an earlier growth forecast was issued in the middle of February 2019.
In response, the company said: “Treasury Wine Estates has strong corporate governance practices and procedures in place that were used in our market update. TWE will vigorously defend any action.”