IBP irregularities3 May 2001
Following further disclosures regarding IBP's accounting irregularities and alleged GAAP violations, Wolf Haldenstein Adler Freeman & Herz have amended their complaint in their pending litigation and extended the period under review from March 25, 1999, to March 29, 2001. This will cover the recent announcement by IBP that they will take a $47 million charge in 2000 in conjunction with accounting irregularities in the company's acquisition of Corporate Brand Foods America and in the preparation of the financial reports for the DFG Foods subsidiary. It also takes into account Tyson Foods' termination of their proposed acquisition of IBP, based on their assertion that they were 'inappropriately induced to enter into the merger agreement' and accusing IBP of fraud in seeking to 'lure' them into 'vastly overpaying' for IBP stock. The amended complaint will further allege that the company's financial statements issued during the period were materially false and misleading and in violation of Generally Accepted Accounting Principles. In January 2000, class action lawsuits were initiated in the United States District Court for the District of Nebraska, on behalf of all persons who purchased the common stock of IBP between March 25, 1999, and January 12, 2000, inclusive. The complaints alleged, in part, that IBP and individual defendants Robert Peterson and Larry Shipley, issued a series of materially false and misleading statements concerning IBP's compliance with numerous state and federal environmental regulations without any basis to do so. In particular, defendants repeatedly represented that IBP 'believes it is in substantial compliance' with applicable environmental regulations and guidelines. At the time that defendants made those statements, however, IBP were, in fact, violating numerous state and federal environmental laws at their slaughterhouse, tannery, and wastewater processing facilities in Dakota City, Nebraska, and South Sioux City, Nebraska. IBP deny these charges and say much of the pollution in the area originates from plants other than their own but that this is not being properly investigated.