A four-year old lawsuit claiming that Keurig Green Mountain misled shareholders was revived on Friday, following a ruling from the 2nd U.S. District Court of Appeals in New York.
Reuters reported that the court’s three-judge panel said a lower court judge was wrong in dismissing the lawsuit that claimed Keurig inflated its share price in 2011 by overstating the company’s growth prospects and concealing high inventory levels. The plaintiffs in the case include five employee retirement systems that sought class action status for investors who bought the company’s stock from February 2, 2011, to November 9, 2011.
According to the report, judges ruled that the lawsuit “adequately alleged false statements were made to investors and that the complaint’s claims supported a ‘strong inference’ that the company intended to deceive shareholders.”
In a statement, Keurig said it was disappointed by the ruling and continued to believe the case is “totally without merit.”
The lawsuit was first filed in 2011 after a presentation in October of that year from David Einhorn, a hedge fund manager, claimed that Green Mountain misled auditors and inflated results. Following that presentation, the company’s stock fell nearly $23 per share. In November 2011, Green Mountain officials said the company did not meet sales and revenue targets and disclosed that inventory levels grew, according to Reuters.