Weber securities litigation victory
We secured dismissal of the action in its entirety
On September 27, 2023, Davis Polk won a complete victory for its client Weber, Inc. – the leading outdoor cooking company – in a putative federal securities class action. The claims related to Weber’s 2021 initial public offering, and the action was captioned Michalski v. Weber, 1:22-cv-3966 (N.D. Ill.).
The complaint was one of the first securities actions seeking to hold a company liable under the securities laws for a post-pandemic falloff in sales. The plaintiff in the case alleged that Weber’s IPO offering materials did not sufficiently warn of the impact of the COVID-19 pandemic on Weber sales, contending that Weber should have disclosed that its pre-IPO sales were a function of a “pull-forward” of replacement grill sales that would not continue after the pandemic.
Davis Polk immediately moved to dismiss, arguing that Weber’s offering materials had disclosed the very trends and risks that the plaintiff claimed were omitted. Davis Polk’s motion also zeroed in on the key statistical comparison that the plaintiff offered in support of his theory that Weber did not sufficiently disclose information about its replacement grill sales. Using publicly filed documents referenced in the complaint, Davis Polk was able to show that the plaintiff had misread two distinct sets of sales data and that the key comparison in his complaint was mathematically and logically flawed.
On September 27, 2023, less than two months after the motion to dismiss was fully briefed, Judge Elaine E. Bucklo of the U.S. District Court for the Northern District of Illinois issued a memorandum opinion and order dismissing the complaint in its entirety. The court accepted Davis Polk’s arguments in all material respects. First, Judge Bucklo agreed that Weber’s disclosures had adequately warned investors of a potential post-pandemic sales decline. Judge Bucklo also agreed that the plaintiff’s statistical comparison was a misguided attempt to compare “apples-to-oranges” in a fashion that did “not support his allegation[s].”
The Davis Polk team includes partners Edmund Polubinski and Brian M. Burnovski, counsel Patrick W. Blakemore, associates Adam M. Greene and Cortnay Cymrot and former associate Christopher Johnson. All members of the Davis Polk team are based in the New York office.