Kehoe Law Firm, P.C. is Investigating Potential Claims on Behalf of Investors of Molson Coors Brewing Company
Investors of Molson Coors Brewing Company (“Molson Coors” or “the Company”) (NYSE: TAP) are advised to contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]irm.com, [email protected]. The investigation concerns whether Molson Coors and certain of its officers and/or directors may have breached their fiduciary duties, issued materially misleading statements to investors or engaged in other unlawful business practices.
On February 12, 2019, Molson Coors announced that it would restate its financial statements for fiscal years 2016 and 2017 after the audit committee found errors in Molson Coors’ financial reporting. Following this disclosure, Molson Coors’ stock price fell more than 7% in pre-market trading and continued to fall sharply during intraday trading on February 12, 2019.
According to Molson Coors’ Form 8-K:
As part of preparing its 2018 financial statements, [Molson Coors] identified errors in the accounting for income taxes related to the deferred tax liabilities for its partnership in MillerCoors, LLC (“MillerCoors”). Upon the closing of the acquisition of the remaining interest in MillerCoors (the “Acquisition”) in the fourth quarter of 2016 and completion of the related deferred income tax calculations, the Company did not reconcile the outside basis deferred income tax liability for the investment in the partnership to the book-tax differences in the underlying assets and liabilities within the partnership. As a result of completing this reconciliation as part of preparing its 2018 consolidated financial statements, the Company identified a difference related to historical financial statements and concluded that the previously issued 2017 and 2016 consolidated financial statements were misstated.Accordingly, the Company is restating its consolidated financial statements as of and for the year ended December 31, 2016 to increase its deferred tax liabilities and deferred tax expense by $399.1 million, with a corresponding decrease in net income and earnings per share. The Company’s consolidated financial statements as of and for the year ended December 31, 2017 are also being restated to reflect the revaluation of such deferred liabilities due to the U.S. Tax Cuts and Job Act of 2017 and to correct further insignificant income tax errors resulting in a decrease to deferred tax liabilities and deferred tax expense of $151.4 million, resulting in corresponding increases to the Company’s net income and earnings per share. These adjustments resulted in an aggregate $247.7 million increase to the Company’s deferred tax liabilities and corresponding decrease in retained earnings and total equity as of December 31, 2017. (Emphasis added)
Further, Molson Coors stated:
In connection with the restatement, management of the Company has determined that a material weakness existed in the Company’s internal control over financial reporting as of December 31, 2018 relating to the design and maintenance of effective controls over the completeness and accuracy of the accounting for and disclosure of the income tax effects of acquired partnership interests. Specifically, [Molson Coors] did not design appropriate controls to identify and reconcile deferred income taxes associated with the accounting for acquired partnership interests. As a result, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2018, and the Company’s management has concluded that its internal control over financial reporting was not effective as of December 31, 2018. (Emphasis added)
If you are a Molson Coors investor and would like more information about the investigation or have questions about your legal rights, you are encouraged to contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]
Kehoe Law Firm, P.C., with offices in New York and Philadelphia, is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors from securities fraud, breaches of fiduciary duties, and corporate misconduct. Combined, the partners at Kehoe Law Firm have served as Lead Counsel or Co-Lead Counsel in cases that have recovered more than $10 billion on behalf of institutional and individual investors.