Sealed Air investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Sealed Air specializes in providing packing solutions in the food, e-Commerce, electronics, and industrial markets. In 1998, Sealed Air completed a transaction with W.R. Grace & Co. (“Grace”) pursuant to which Sealed Air acquired the Cryovac packing business. As part of that transaction, Grace and its subsidiaries retained all liabilities arising out of their operations before the Cryovac transaction (including asbestos-related liabilities), other than liabilities relating to Cryovac’s operations, and agreed to indemnify Sealed Air with respect to such retained liabilities. Beginning in 2000, Sealed Air was named in a number of lawsuits alleging that the Cryovac transaction was a fraudulent transfer and/or gave rise to successor liability, and as a result Sealed Air was responsible for the alleged asbestos liabilities of Grace and its subsidiaries. Subsequently, Grace filed for bankruptcy protection and, after protracted litigation, the parties entered into a settlement agreement to resolve their asbestos-related liabilities, which was approved by the bankruptcy court in June 2005 (the “Settlement”). In February 2014, Grace emerged from bankruptcy and, in accordance with the Settlement and Grace’s approved reorganization plan, Sealed Air paid $930 million and 18 million Sealed Air shares into two trusts established for the benefit of asbestos claimants. In connection with the Settlement, Sealed Air recognized a $1.49 billion income tax deduction. Later, the IRS challenged the $1.49 billion deduction as improper, a claim that Sealed Air has strenuously denied. In late 2014, as Sealed Air was finalizing its accounting treatment for the improper $1.49 billion tax deduction, Sealed Air fired its auditor KPMG LLP and hired Ernst & Young LLP (“E&Y”).
The Class Period commences on November 5, 2014, when Sealed Air filed its quarterly report on a Form 10-Q for the quarter ended September 30, 2014.
According to the complaint, on August 6, 2018, Sealed Air filed its quarterly report on a Form 10-Q for the second quarter of 2018, which revealed that Sealed Air had received a subpoena from the SEC requesting documents and information concerning its accounting for income taxes and financial reporting and disclosures. Analysts widely viewed the SEC investigation as relating to Sealed Air’s tax treatment of the Settlement. Following this news, the price of Sealed Air stock fell over 5% to close at $41 per share on August 7, 2018.
The complaint alleges that, throughout the Class Period, the defendants failed to disclose the following adverse facts pertaining to Sealed Air’s business, operations and financial condition, which were known to or recklessly disregarded by the defendants: (a) Sealed Air had hired its auditor, E&Y, pursuant to a conflicted and improper process and in order to help facilitate the defendants’ efforts to engage in accounting fraud; (b) Sealed Air’s deduction of $1.49 billion in connection with the Settlement was indefensible and done for the improper purpose of artificially inflating Sealed Air’s financial results; (c) Sealed Air had artificially inflated its earnings, cash flows, and operating income during the Class Period; (d) as a result of the above, Sealed Air’s Class Period financial statements were materially false and misleading and not prepared in conformance with GAAP; and (e) as a result of the above, Sealed Air’s statements regarding its financial results, business, and prospects were materially misleading.
If you are a member of the class described above, you may no later than December 31, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Returning the attached form or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-844-887-9500 or 1-610-667-7706, or via e-mail at email@example.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-844-887-9500 (toll free) or 1-610-667-7706
Or by e-mail at firstname.lastname@example.org