The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, MGPI is a manufacturer of hard liquors such as tequila, bourbon, rye, whiskey, vodka, and gin. MGPI sells the spirits it produces under its own brands as well as to other alcohol distributors and brands. Prior to the class period, sales of hard liquors, such as those produced and sold by MGPI, increased dramatically in the wake of COVID-19. However, as quarantines ended, sales of hard liquors slowed across the alcoholic beverage industry, and a backlog of inventory began to increase. During the class period, MGPI falsely assured investors that its projections and statements accounted for the industry slowdown and that it was well-positioned to avoid a buildup of inventory. The Company also incorrectly claimed that its projected sales took these industry trends into account.
The market was thus shocked when MGPI announced on October 17, 2024, that a slowdown in demand and an excess in inventories would undermine sales. This revelation caused the Company’s stock to plummet 29.5%. Then, less than two weeks later, on October 31, 2024, Defendants revealed that its excess inventory would have an even greater impact than previously reported. This caused the Company’s stock to drop another 14.7%, to a close of $49.04 per share on October 31, 2024. In total, MGPI’s share price declined nearly 50% on these two disclosures, wiping out hundreds of millions of dollars in market capitalization and damaging investors.
On February 28, 2025, the Court appointed the City of Atlanta General Employees’ Pension Fund, the City of Atlanta Police Officers’ Pension Fund, the City of Atlanta Firefighters’ Pension Fund, the Carpenters Pension Funds of Illinois, and the Employees’ Retirement System of the City of Baltimore as Lead Plaintiff. Saxena White is serving as Additional Counsel for the Employees’ Retirement System of the City of Baltimore.
On March 24, 2025, the case was transferred from the United States District Court for the Southern District of New York to the United States District Court for the District of Kansas.
On May 15, 2025, Lead Plaintiffs filed an amended complaint. On July 15, 2025, Defendants’ filed a motion to dismiss the amended complaint, and on August 28, 2025, Lead Plaintiffs filed their opposition to Defendants’ motion. On September 18, 2025, Defendants’ filed their reply brief. The motion is fully briefed and is pending before the Court.
