ORLANDO Fla. Another lawsuit was filed Monday against Darden Restaurants Inc. for allegedly misleading shareholders about the Red Lobster parent’s performance and outlook for the year ahead.
The suit, filed in a Florida district court by Schiffrin Barroway Topaz & Kessler LLP on behalf of Robert Kalkstein, seeks class-action status for all investors who owned shares of Darden between June 19, 2007, and Dec. 18, 2007. The action alleges that Darden and some of its executives misled investors by failing to reveal precisely how sharply food costs were rising, among other gauges of the casual-dining giant’s financial status. Darden chief executive Clarence Otis and chief financial officer Brad Richmond were cited among the defendants.
The complaint also asserts that the company shocked investors on Dec. 18 when it revised its earnings and sales projections downward because of difficult economic conditions. Many casual-dining chains have been stung by slowed consumer traffic and increased operating costs. Trading in Darden’s stock was unusually heavy on the day following the December announcement. Shares fell in price by about 21 percent.
Alawsuit similar to Monday's complaint was filed several weeks ago on behalf of an institutional shareholder.
Rich Jeffers, Darden’s director of media relations and external communications, said Tuesday that the company does not comment on pending litigation.
“We are proud of our record of transparency with shareholders and Wall Street,” he added.
Based in Orlando, Fla., Darden owns and operates nearly 1,400 casual restaurants. In addition to Red Lobster, its brands include Olive Garden, Bahama Breeze, Smokey Bones, Capital Grille, LongHorn Steakhouse and Seasons 52.