id: 422, Created by Stan Vick, Scout
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- Company agreed to pay compensation to its investors, to avoid further litigation
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25 Apr 2019Class period Start
28 Oct 2019Class period End
02 Feb 2023Claim deadline
City of Pontiac General Employees' Retirement System, et al. v. Grubhub Inc., et al.
Grubhub (GRUB) agreed to pay $42 million to settle a securities class action lawsuit accusing the Company and its Leaders of multiple suspected felonies.
The Complaint alleged that the Company and its Leaders failed to disclose, among other things, that:
- customer orders were actually declining, despite the massive investments the Company had made to spur demand for and use of its platform;
- Grubhub’s new customer additions were generating significantly lower revenues as compared to historic cohorts because these customers were more prone to using competitor platforms;
- Grubhub’s vaunted business model under which it secured exclusive restaurant partnerships had failed, and Grubhub needed to engage in the same aggressive non-partnered sales tactics embraced by its competitors to generate significant revenue growth;
- Grubhub was required to spend substantial additional capital in order to grow revenues and retain market share in the face of heightened competitive dynamics and market saturation, eviscerating the Company’s profitability;
- Grubhub was tracking tens of millions of dollars below its revenue and earnings guidance and such guidance lacked any reasonable basis.
Grubhub (GRUB) agreed to settle with investors to avoid further litigation.
City of Pontiac General Employees' Retirement System
AsherKelly (Southfield, MI) Robbins Geller Rudman & Dowd LLP (Chicago, IL)
Hon. Matthew F. Kennelly
Gilardi & Co LLC
Court hearing date
12 January 2023
+$42,000,000Total Settlement Amount