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1
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ORDER
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EXTRACTED KEY WORDS
PROSPECTUS PLAINTIFF FACTS ALLEGES CIR COURT TREND PYRAMID SECURITIES ACT DISMISS GROWTH SALES EARNINGS REGULATION S-K DUTY EXTREME DEPARTURE DEFENDANTS IPO LITIG COMPLAINT STOCK VERIFONE DISTRICT PARTIES CRAFT BEERS STANDARD PRIOR CIRCUIT |
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
JEFFREY D. STECKMAN, on behalf of ) Civil Case
himself and all others similarly ) No. 96-1077-K (RBB)
situated ))
Plaintiff, ) ORDER GRANTING
) DEFENDANTS' MOTION
v. ) TO DISMISS
)
HART BREWING, INC.; GEORGE HANCOCK )
JOHN STODDARD; DON BURDICK; JOHN E. )
MORSE, PETER T. MORSE; JOHN T. BRYCE)
MARCIA L. ELLIS; JANET MORSE; PAINE )
WEBBER INCORPORATED; and DEAN )
WITTER REYNOLDS, INC. ))
Defendants. )
____________________________________)
Defendants collectively move to dismiss Plaintiff's claim
under F.R.C.P. 12(b)(6) for failure to state a claim upon which
relief can be granted. Plaintiffs oppose. Both parties are
represented by counsel.
1
I. Factual Background
Defendant Pyramid is in the business of brewing and
distributing specialty beers, known as craft beers. Pyramid's
shipments of craft beer grew at a compound annual growth rate of
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2
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COMPLAINT
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EXTRACTED KEY WORDS
SALES PLAINTIFF SECURITIES ACT CLASS ACTION JOHN PROSPECTUS MORSE TRENDS UNFAVORABLE IMPACT SAN DIEGO DEAN WITTER REGISTRATION STATEMENT EARNINGS PAINEWEBBER GEORGE HANCOCK PETER OPERATING INCOME DEFENDANT JOHN STODDARD HBI COMMON STOCK IPO VIOLATIONS ANNUAL GROWTH RATE REPRESENTATIVES NET SALES CALIFORNIA ACTION COMPLAINT DISCLOSURE JANET MORSE |
James C. Krause, Esq., SBN 066478
Patrick N. Keegan, Esq., SBN 167698
KRAUSE & KALFAYAN
1010 Second Avenue, Suite 1521
San Diego, CA 92101
(619) 232-0331
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
JEFFREY D. STECKMAN, on behalf of ) Case No. 961077 K RBB
himself and all others similarly situated, )) CLASS ACTION COMPLAINT
FOR
Plaintiff, ) VIOLATIONS OF THE
FEDERAL
) SECURITIES LAWS
vs. ))
HART BREWING, INC.; GEORGE )
HANCOCK; JOHN STODDARD; )
DON BURDICK; JOHN E. MORSE; )
PETER T. MORSE; JOHN T. BRYCE; )
MARCIA L. ELLIS; JANET MORSE; )
PAINE WEBBER INCORPORATED; )
and DEAN WITTER REYNOLDS, )
INC., ))
Defendants. )
___________________________________________)
i
TABLE OF CONTENTS
I. NATURE OF THE ACTION
...............................................1
II. JURISDICTION AND VENUE
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3
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DOCKET
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EXTRACTED KEY WORDS
ENTRY MOTION DEFENDANT JOHN MORSE DISMISS STECKMAN HART BREWING COUNSEL T/W PRF BRYCE JUDGE JUDITH GEORGE HANCOCK DEFENDANT GEORGE DEFENDANT JOHN STODDARD BURDICK ELLIS PRF SVC SUPPORT DEFENDANT PETER DEFENDANT MARCIA JANET MORSE PLAINTIFF JEFFREY DFTS BROOKS MEMORANDUM OPPOSITION CONF COURT ACR |
Case docket was last updated on: 09/27/99.
Docket as of September 27, 1999 7:08 pm Page 1
Proceedings include all events. TERMED
3:96cv1077 Steckman v. Hart Brewing Inc, et al
TERMED
U.S. District Court
Southern District of California (San Diego)
CIVIL DOCKET FOR CASE #: 96-CV-1077
Steckman v. Hart Brewing Inc, et al Filed:
06/14/96
Assigned to: Judge Judith N. Keep
Referred to: Magistrate Judge Ruben B Brooks
Demand: $0,000 Nature of Suit: 850
Lead Docket: None Jurisdiction: Federal
Question
Dkt# in other court: None
Cause: 28:1331 Fed. Question: Securities Violation
JEFFREY D STECKMAN, himself James C Krause
and all others similarly (619)232-4019
situated [COR LD NTC]
plaintiff Krause and Kalfayan
1010 Second Avenue
Suite 1750
San Diego, CA 92101
(619)232-0331
v.
HART BREWING INC Shirli Fabbri Weiss
defendant [COR LD NTC]
Gray Cary Ware and Freidenrich
401 B Street
Suite 1700
San Diego, CA 92101-4297
(619)699-2700
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4
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OPINION
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EXTRACTED KEY WORDS
SALES MATERIALITY REASONING DISCLOSURE PYRAMID ALLEGATIONS SECURITIES STECKMAN CIR STANDARD COMPLAINT DECLINE SECURITIES ACT MANAGEMENT OPERATING INCOME FACTS REGISTRANT UNCERTAINTY SLOWDOWN CAPACITY BARRELS PRICE COURT DECREASE ARGUES SUPPORT EXTREME DEPARTURE REGULATION S-K |
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JEFFREY D. STECKMAN, and all ) No. 97-55199
others similarly situated, )) D.C. No. CV-96-01077-JNK
Plaintiff-Appellant, ) OPINION
v. )) [filed May 14, 1998]
HART BREWING, INC.; GEORGE )
HANCOCK; JOHN STODDARD; DON )
BURDICK; JOHN E. MORSE; PETER T. )
MORSE; JOHN T. BRYCE; MARCIA L. )
ELLIS; JANET MORSE; PAINE )
WEBBER, INC.; DEAN WITTER )
REYNOLDS, INC., ))
Defendants-Appellees. )
________________________________________ ))
BACKGROUND
Pyramid Breweries Inc., formerly Hart Brewing Inc., a maker of craft beers, conducted an
initial public offering on December 13, 1995, less than three weeks before the end of the
fourth quarter. Shares were priced at $19, netting the company $34.2 million.
According to Pyramid's uncontested prospectus, gross sales grew at a compound annual
rate of around 88% from 1990 to the end of the third quarter 1995. Operating income
grew at a compound annual rate of 200% from 1990 through 1994. The prospectus also
disclosed that income was merely 83% higher for the first three quarters of 1995
compared to the same period in 1994, thus suggesting a slowdown at Pyramid.
Pyramid's annual production capacity grew from 9,300 barrels in 1990 to almost 160,000
barrels at the time of the offering. The company had an annual capacity of 87,000 in 1994
and 72,100 barrels were shipped (83% of capacity); its capacity for the first three quarters
of 1995 was 152,300 barrels, of which 89,100 were shipped (58.5% of capacity). Id. at
15. In other words, the company disclosed in its selected financial data that it had nearly
doubled capacity in 1995, and that the amount of beer it produced was not increasing
proportionately. It announced in its prospectus that its annual production capacity would
be further increased to 290,000 barrels by the end of 1996.
The company also included four pages of risk factors in the prospectus, which warned
investors, among other things, that "there is no assurance that the same level of sale and
operating margins can be maintained in existing markets or achieved in new markets."
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