John Gebhardt, Et Al. V. Conagra Foods, Inc., Et Al. 01-CV-00427

F1L^u (^ U.S. DISTRICT COURT UIS ' iCT OF hESRASKA G2 .);{N I I Fi4 1:33 GARY D. McFA AND CLERK

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

JOHN GEBHARDT, Individually And On CASE NO..O I CV427 Behalf Of All Others Similarly Situated,

Plaintiff, AMENDED CLASS ACTION vs. COMPLAINT FOR VIOLATIONS 01: FEDERAL SECURITIES LAWS CONAGRA FOODS INC., BRUCE C. ROHDE, JAMES P. O'DONNELL, KENNETH W. DIFONZO, and JAY D. BOLDING, JURY TRIAL DEMANDED

Defendants.

Plaintiffs Jemmco Investment Management LLC and Plumbers and Pipefitters National

Pension Fund, who were appointed as Lead Plaintiffs by Order dated November 13, 2001, have alleged the following based upon the investigation of plaintiffs' counsel , which included a review of United States Securities and Exchange Commission ("SEC") filings by ConAgra Foods Inc.,

("ConAgra" or the "Company"), as well as regulatory filings and reports, securities analysts reports

and advisories about the Company, press releases and other public statements issued by the

Company, and media reports about the Company. The investigation of plaintiffs' counsel also

included interviewing numerous individuals - including former employees of defendant ConAgra

and/or subsidiaries thereofwho worked at the Company (and its subsidiaries) during the Class Period

(defined herein) - who are knowledgeable about ConAgra's business, operations, accounting and

conaL"I

{ I) business practices, and/or about the industry and markets in which ConAgra operated during the

Class Period.

NATURE OF THE ACTION

1. This is a federal class action on behalfofpurchasers of the common stock ofConAgra on the open market between August 28, 1998 and May 23, 2001, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The

Class is more specifically defined below.

2. Defendant ConAgra has publicly admitted that, during the Class Period, the Company disseminated numerous false financial statements which overstated corporate profits for fiscal years

1998, 1999 and 2000 by more than a combined $120 million. The false financial statements included: (i) improperly recorded and fictitious sales; (ii) rebate payments which were improperly recognized as revenue; and (iii) grossly understated bad debt reserves. ConAgra's fiscal 1998, 1999 and 2000 false financial statements were ultimately restated in May 2001.

3. After the restatement, defendant Bruce Rohde ("Rohde"), ConAgra's Chairman and

Chief Executive, publicly and misleadingly attempted to divert blame for ConAgra' s manipulated financials away from the Company and the Individual Defendants (defined herein) and onto others, due to the fraud investigations being conducted by the SEC and the Company' s current and former shareholders. According to defendant Rohde, the accounting irregularities - which circumvented generally accepted accounting principles ("GAAP") and violated ConAgra' s corporate policy - would no longer be tolerated.

4. In particular, ConAgra and the Individual Defendants named herein have attempted to convey the false impression that the Company's major financial problems merely resulted from the actions of a few rogue employees at ConAgra's United Agri Products ("UAP") subsidiary c al -2- manning the shop several thousands of miles away from ConAgra's executive offices in Omaha,

Nebraska. In fact, according to several former employees who held finance, accounting and vice president and other positions at UAP divisions during the Class Period, the accounting improprieties at UAP and other subsidiaries during at least fiscal years 1998, 1999 and 2000 were known to and even directed by ConAgra senior executives in Omaha (including, but not limited to, the individual defendants named herein during the Class Period).

5. Not only did these defendants have actual knowledge ofthe accounting fraud and the

falsity of the reported financial statements, but they also had a powerful motive to conceal the truth.

In August 2000, ConAgra was able to consummate a $2.9 billion stock and cash acquisition of

International Home Foods, Inc. ("IHF") and used 40 million shares of inflated ConAgra stock to reduce the amount of shares needed for the exchange. Only after the IHF merger was effectuated, did ConAgra purport to investigate and eventually disclose previously known accounting

improprieties.

JURISDICTION AND VENUE

6. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the Exchange Act [15 U.S.C. §§ 78j(b) and 781(a)] and Rule lOb-5 promulgated thereunder by the

Securities and Exchange Commission [17 C.F.R. § 240-10b-5).

7. This Court hasjurisdiction over the subject matter of this action pursuant to 28 U.S.C.

§§ 1331 and 1337 and Section 27 of the Exchange Act [15 U.S.C. § 78aa].

8. Venue is proper in this District pursuant to Section 27 of the Exchange Act, and 28

U.S.C. § 1391(b). Many of the acts charged herein, including the preparation and dissemination of materially false and misleading information, occurred in substantial part in this District.

cometal - 3. Additionally, defendants maintain their chiefexecutive offices and principal place ofbusiness within this District.

9. In connection with the acts alleged in this complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, the mails, interstate telephone communications and the facilities of the national securities markets.

PARTIES

10. By Order of the Court dated November 13, 2001, Jemmco Investment Management

LLC and Plumbers and Pipefitters National Pension Fund were appointed as Lead Plaintiffs. As set forth in the certifications previously filed with the Court in connection with their motion for appointment as Lead Plaintiffs (cenifica tions incorporated by reference herein), each of the Lead

Plaintiffs purchased the common stock ofConAgra during the Class Period and have been damaged thereby.

11. Defendant ConAgra is a Delaware corporation with its principal executive offices located at One ConAgra Drive, Omaha, Nebraska 68102. ConAgra is a foodservice supplier to restaurants, institutions, and concessionaires, and also sells food products through retail channels.

12. The individual defendants identified below (the "Individual Defendants"), served at all times material to the claims set forth herein, as senior officers and/or directors of ConAgra in the positions set forth opposite their names:

Conagral -4- Name Position

Bruce C. Rohde President since August 1996, Chief Executive Officer since September 25, 1997, Chairman of the Board of Directors since September 24, 1998, and Executive Committee Member in 1998, 1999, 2000 (Chairman of the Executive Committee) and 2001.

James P. O'Donnell Executive Vice President, Chief Financial Officer and Corporate Secretary.

Kenneth W. DiFonzo Senior Vice President.

Jay D. Bolding Vice President and Controller.

13. In addition to the allegations of actual knowledge set forth herein, because of the

Individual Defendants' positions with the Company, they had access to the adverse undisclosed information about its business, operations, products, operational trends, financial statements, markets and present and future business prospects via access to internal corporate documents (including the

Company's operating plans, budgets and forecasts and reports of actual operations compared thereto), conversations and communications with other corporate officers and employees, attendance at management and Board of Directors meetings and committees thereof, including "Monday

Morning Meetings," and via reports and other information provided to them in connection therewith.

14_ It is appropriate to treat the Individual Defendants as a group for pleading purposes and to presume that the false, misleading and incomplete information conveyed in the Company's public filings, press releases and other publications as alleged herein are the collective actions of the narrowly defined group of defendants identified above. Each of the above-listed officers of

ConAgra, by virtue of their high- level positions with the Company, directly participated in the management of the Company, was directly involved in the day-to-day operations of the Company at the highest levels and was privy to confidential proprietary information concerning the Company

cw,aKra I - 5 - and its business, operations, products, growth, financial statements, and financial condition, as alleged herein. The Individual Defendants were involved in drafting, producing, reviewing andior disseminating the false and misleading statements and information alleged herein, were aware or recklessly disregarded, that the false and misleading statements were being issued regarding the

Company, and approved or ratified these statements, in violation of the federal securities laws.

15. As officers and controlling persons ofa publicly-held company whose common stock was, and is, registered with the SEC pursuant to the Exchange Act, traded on the New York Stock

Exchange (the NYSE"), and governed by the provisions of the federal securities laws, the

Individual Defendants each had a duty to disseminate promptly, accurate and truthful information with respect to the Company's financial condition and performance, growth, operations, financial statements, business, products, markets, management, earnings and present and future business prospects, and to correct any previously-issued statements that had become materially misleading or untrue, so that the market price of the Company's publicly-traded common stock would be based upon truthful and accurate information. The Individual Defendants' misrepresentations and omissions during the Class Period violated these specific requirements and obligations.

16. The individual Defendants participated in the drafting, preparation, and/or approval of the various public and shareholder and investor reports and other communications complained of herein and were aware of, or recklessly disregarded, the misstatements contained therein and omissions therefrom, and were aware of their materially false and misleading nature. Because of their Board membership and/or executive and managerial positions with ConAgra, each of the

Individual Defendants had access to the adverse undisclosed information about ConAgra's business prospects and financial condition and performance as particularized herein and knew (or recklessly

Comgn - 6 - disregarded) that these adverse facts rendered the positive representations made by or about ConAgra and its business issued or adopted by the Company materially false and misleading.

17. The Individual Defendants, because of their positions of control and authority as officers and/or directors ofthe Company, were able to and did control the content ofthe various SEC filings, press releases and other public statements pertaining to the Company during the Class Period.

Each Individual Defendant was provided with copies of the documents alleged herein to be misleading prior to or shortly after their issuance and/or had the ability and/or opportunity to prevent their issuance or cause them to be corrected. Accordingly, each of the Individual Defendants is responsible for the accuracy of the public reports and releases detailed herein and is therefore primarily liable for the representations contained therein.

18. Each ofthe defendants is liable as a participant in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of ConAgra common stock by disseminating materially false and misleading statements and/or concealing material adverse facts.

The scheme: (i) deceived the investing public regarding ConAgra's business, finances, financial statements and the intrinsic value of ConAgra common stock; and (ii) caused plaintiffs and other members of the Class to purchase ConAgra common stock at artificially inflated prices.

PL INTIFI~S' CLASS ACTJON ALLEGATIONS

19. Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise acquired the common stock of ConAgra on the open market between August 28, 1998 and May 23,

2001, inclusive, and who were damaged thereby. Excluded from the Class are defendants, the officers and directors of the Company, at all relevant times, members of their immediate families

Conagsa - 7 - and their legal representatives, heirs, successors or assigns and any entity in which defendants have or had a controlling interest.

20. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, ConAgra had approximately 490 million shares of common stock outstanding which were actively traded on the NYSE. While the exact number of Class members is unknown to plaintiffs at this time and can only be ascertained through appropriate discovery, plaintiffs believe that there are hundreds, if not thousands, of members in the proposed

Class. Record owners and other members of the Class may be identified from records maintained by ConAgra or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions.

21. Plaintiffs' claims are typical of the claims of the members of the Class, as all members of Class were affected by defendants' wrongful violations of federal laws complained of herein.

22. Plaintiffs will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation.

23. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by defendants' acts as alleged herein;

(b) whether statements made by defendants to the investing public during the

Class Period misrepresented material facts about the business, operations, financial statements of

ConAgra; and

Cenagro 1 . 8 - (c) to what extent the members of the Class have sustained damages and the

proper measure of damages.

24. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

SUBSTANTIVE ALLEGATIONS

25. ConAgra is North America's largest foodservice supplier and the nation's second largest retail food supplier. The Company supplies a wide variety of food products, ranging from agricultural feed to branded consumer products . The Company traces its roots to 1919, when it was called Nebraska Consolidated Mills Company, and changed its name to ConAgra in 1971.

26. ConAgra's UAP subsidiary distributes seed, fertilizer, and agricultural chemicals to

the agricultural production community. UAP is one of three businesses which are reported in the

Company' s Agricultural Products reporting segment. In fiscal 1998 through 2000, UAP represented

approximately 13% of total Company sales and approximately 9% of total Company operating

profit.

27. At all times relevant to this litigation , ConAgra was the parent company and sole

shareholder of UAP, and ConAgra's senior management exercised direct authority over UAP

employees. From 1995 to 2001, several of ConAgra's most senior executives sat on UAP's board

of directors and, as further detailed herein, witnessed growing credit problems at UAP. As a

substantial wholly-owned subsidiary of ConAgra, UAP's financial performance was a material part

congnt -9- ofConAgra's publicly reported financial results that were disclosed to shareholders and regulators.'

Defendants' Admissions

28. On May 23, 2001, ConAgra issued a press release announcing that it would be restating its financial statements for fiscal years 1998, 1999 and 2000. The Company attributed the restatement to "accounting and conduct matters" at its UAP subsidiary. The press release stated:

for fiscal 1998, revenues will be reduced from $24,271 million to $24,192 million, profit before tax will be reduced from $1,041 million to $1,014 million and fully-diluted earnings will be reduced from $ 1.35 per share to $1.32 per share;

for fiscal 1999 , revenues will be reduced from $25,020 million to $24,924 million, profit before tax will be reduced from $ 1,123 million to $1,086 million and fully-diluted earnings will be reduced from $1.46 per share to $1.41 per share;

for fiscal 2000, revenues will be reduced from S25,805 million to $25,631 million, profit before tax will be reduced from $1,288 million to $1,229 million and fully-diluted earnings will be reduced from $1.67 per share to $1.60 per share;

for fiscal 2001, revenues will be increased by $350 million, profit before tax will be reduced from S127 million and fully-diluted earnings will be increased to $.15per share.

29. Defendant Rohde commented in the May 23, 2001 press release as follows:

"Certain matters were discovered that warranted an investigation into several accounting practices at UAP. Our preliminary findings indicate that certain conduct at UAP circumvented generally accepted accounting practices and violated ConAgra Foods' corporate policy. Those actions will not be tolerated . I have directed that the control systems at UAP be strengthened and that we take additional actions, as appropriate , including personnel changes to deal with circumstances requiring corrective measures. These actions have the full support of our Board ofDirectors."

' In particular, as noted in ConAgra' s Form 10-K for the year ended May 28, 2000, the results of UAP, and all majority- owned subsidiaries, are consolidated with those of ConAgra on the basis UAP's fiscal year ending in February. corn, -10- 30. The May 23, 2001 press release further revealed that the Company's Audit

Committee had commenced an investigation into accounting matters at UAP in November 2000, stating in pertinent pan, as follows:

The investigation has identified improper accounting practices that have financial statement impact in three areas:

1. Revenue recognition for deferred delivery sales and associated vendor rebates 2. Recognition of advance rebate income 3. Accruals for bad debt reserves

31- With respect to revenue recognition, the press release stated:

After reviewing the results of the investigation, the Company has determined that UAP improperly recorded revenues on deferred delivery sales transactions- The investigation identified sales contracts for fiscal 1999 and 2000 that were not considered binding on the customer as well as instances of fictitious sales contracts at various UAP locations. Further, the investigation identified noncompliance for fiscal 1998, 1999 and 2000 with certain accounting requirements for deferred delivery transactions in other sales contracts. Accordingly, ConAgra Foods will revise its reporting of deferred delivery sales transactions for fiscal 1998, 1999 and 2000 so that such revenue is reported upon transfer of title and shipment of the products. As a result of these circumstances, associated vendor rebate income was also incorrectly accrued.

ConAgra Foods also reviewed the estimating process used by UAP in the recognition of vendor rebates on a quarterly basis. The review indicated that UAP used inconsistent estimating processes on a quarterly and annual basis. As part of the restatement, ConAgra Foods will adopt a consistent quarterly estimating process for the recognition of UAP vendor rebates. The impact of the new process will result in a larger portion of vendor rebates being recognized later in the UAP fiscal year.

These revenue recognition matters are expected to have the following financial statement impact:

-- for fiscal 1998, revenue will be reduced by $79 million and profit before tax will be reduced by $22 million;

- for fiscal 1999, revenue will be reduced by $84 million and profit before tax will be reduced by S7 million;

-- for fiscal 2000, revenue will be reduced by $162 million and profit before tax will be reduced by $30 million;

Conagr. I

/.. - for fiscal 2001 , revenue will be increased by 326 million and profit before tax .will be increased by $63 million;

In light of the preliminary results of the investigation, and in order to avoid future compliance issues with deferred delivery accounting requirements , ConAgra Foods is adopting a change in its accounting practices . Effective with fiscal year 2001, UAP will book revenue for all sales transactions upon transfer of title and shipment of the product.

32. With respect to adverse rebate income, the press release stated:

The investigation identified instances in which UAP prematurely recognized certain rebate payments as income in the fiscal year in which they were received, rather than the fiscal year in which they were earned. As a result, the Company is making an adjustment for recognition of advance rebate income which is expected to have the following financial statement impact:

for fiscal 1999, revenue and profit before tax will be reduced by $12 million;

-- for fiscal 2000, revenue and profit before tax will be reduced by $12 million; and

-- for fiscal 2001, revenue and profit before tax will be increased by $24 million.

33. Finally, with respect to bad debt reserve, the press release stated,

The investigation indicated that UAP accrued insufficient bad debt reserves in fiscal 1998, 1999 and 2000. UAP substantially increased the write-off of its accounts receivable and increased its bad debt reserves during fiscal 2001. The investigation indicated that certain of the increased write-offs in fiscal 2001 should have been taken in prior fiscal years and, accordingly, adjustments will be made as part of the restatement. ConAgra Foods believes the UAP reserves recorded are now adequate.

The Company 's preliminary estimate of the financial statement impact of changes in the bad debt accruals is:

-- for fiscal 1998, expenses will be increased and profit before tax will be reduced by $5 million;

- for fiscal 1999, expenses will be increased and profit before tax will be reduced by $18 million;

-- for fiscal 2000, expenses will be increased and profit before tax will be reduced by $17 million; and co"F,i -12- -- for fiscal 2001, expenses will be reduced and profit before tax will be increased by $40 million.

34. On June 22, 2001, the Company issued another press release confirming the three year restatement. According to the June 22nd press release, the SEC, as well as the Company and

ConAgra's Audit Committee, were continuing their respective investigations into the accounting improprieties.

35. According to the June 22, 2001 press release, the effect of the restatement related to

UAP matters was as follows:

-- for fiscal 1998, revenues are reduced by $42 million, income before taxes is reduced by $16 million, and diluted earnings per share are reduced by S.02;

-- for fiscal 1999, revenues are reduced by $84 million, income before taxes is reduced by $47 million, and diluted earnings per share are reduced by 5.06;

-- for fiscal 2000, revenues are reduced by $161 million, income before taxes is reduced by $48 million, and diluted earnings per share are reduced by $.06; and

-- for fiscal 2001, revenues are increased by $324 million, income before taxes is increased by $127 million, and diluted earnings per share arc increased by $.16.

36. Defendants have now unequivocally acknowledged that they issued materially false and misleading financial statements and press releases concerning ConAgra' s revenues, income and earnings per share during the Class Period.

Defendants' Knowledge of the Class Period Misrepresentat ons

37. According to several former UAP employees in positions to have knowledge of relevant facts, defendants Rohde and Bolding and other senior ConAgra executives had actual knowledge that UAP was violating accounting principles and the Company's own corporate policies regarding, among other things, deferred delivery sales, rebates, and bad debt reserves and even cw.gI - 13 - mandated the processes by which UAP was to conduct its financial reporting on these and other

issues,

38. For example, one of the accounting improprieties at issue relate to L'AP's deferred

delivery sales. Deferred delivery sales are sales that are recognized before a product is shipped. At

UAP, deferred delivery sales were recognized when customers contracted for product that they

would receive at a later date. Generally, a company recognizes sales revenue when title passes and the product is delivered to a customer. In most cases, a customer buys a product and walks out of

the store with it, and there is no issue about the timing of the revenue recognition. In limited

situations, the selling company may use deferred delivery or "bill and hold" sales and recognize revenue prior to delivery ofthe product if(and only if) certain accounting requirements are met, such

as passing risk of ownership to the buyer, segregating the sold product from the seller's other

inventory and having a fixed delivery schedule. See section detailing ConAgra's False Financial

Reporting at 1175-118, herein.

39. According to a UAP-Southwest former employee who had accounting and financial

responsibilities during the Class Period , improper "bill and hold" sales were a standard and pervasive

practice at UAP because most of UAP' s customers did not have the room nor the space to

immediately take the products which were sold by UAP in massive amounts. According to this same

fonner employee, defendants Rohde, Bolding and ConAgra corporate internal auditors from Omaha

told UAP employees to structure the deferred delivery sales as "bill and holds" and mandated the

continued use of these types of contracts and paperwork throughout fiscal 1998, 1999 and 2000,

knowing that these "bill and hold" practices violated both GAAP and the Company's corporate

policy since bill and hold requirements were not met. Defendant DiFonzo, along with other senior

ConAgra executives, received copies ofcorrespondence and numerous memoranda from UAP which

comErai - 14- attached copies of actual contracts or communicated contract terms. ConAgra conducted weekly

"Monday Morning Meetings" in which each division, including UAP, would report to Omaha its

P&L figures for the previous week, and its estimates for the upcoming month, quarter and year.

"Monday Morning Meetings" were run by ConAgra's Chairman, defendant Rohde.

40. Additionally, UAP's improper use of "bill and hold" sales, in part, resulted in

problems with collecting outstanding receivables. As admitted by the Company in 2001, UAP failed

to maintain adequate reserves for bad debt during fiscal 1998, 1999, and 2000. According to the

former UAP-Southwest employee, UAP would prepare bad debt reserves based upon formulas provided by ConAgra at the corporate level. Monthly, quarterly and year-end bad debt reserve numbers were provided to corporate management in Omaha and corporate management regularly

and systematically manipulated and revised these bad debt reserve figures downward. According to this former employee, defendant Rohde personally mandated that UAP employees manipulate

UAP's bad debt reserves downward throughout the C l ass Period in order to improperly boost UAP's

financial performance. Defendant Bolding participated with defendant Rohde in manipulating bad

debt reserves, which manipulations were done at the behest of defendant Rohde.

41. According to Larry Hoffner ("Hoffner"), a former UAP Vice President of Credit,

credit problems mounted at 'UAP from 1995 to 2001 and totaled as much as $40 million. In a

lawsuit Hoffner filed on November 15, 2001 against ConAgra and UAP in Weld District Court in

Greeley, Colorado entitled Larry Honer v. United Agri Products. Inc. and ConAera Foods. Inc.

alleging breach of contract and retaliatory discharge claims after senior ConAgra and UAP officials

forced him to doctor the books and then fired him for doing so, Hoffner alleges that he continually

warned senior UAP executives of the growing bad debt beginning in 1999, who then informed

ConAgra' s senior management.

conagn 15 42. According to Hoftner, those same UAP senior executives had been under constant pressure from ConAgra corporate to report double digit profit growth every year. In 1998 , defendant

Rohde established performance expectations with two senior UAP executives, Charlie Blue ("Blue") and Randy Cook ("Cook"). Defendant Rohde informed both Blue and Cook in a confidential memorandum to each that he expected them to generate an annual return on income ("ROE") at UAP of at least 18%. Defendant Rhode further informed Blue and Cook that their personal compensation would be directly tied to whether they met or failed to meet his 18% "ROl" figure. According to

Hoffner, Rhode knew of serious credit problems faced by UAP at the same time that he was demanding that UAP achieve an annual ROI of at least 18%.

43. In January 1999, Hoffner explicitly warned UAP, through a memo to Blue and Cook, of UAP's mounting credit problems. "With write offs and [bad debt] reserves increasing," said

Hoffner, its was critical that something be done to fix the serious "problem" created by UAP's decentralized credit operations. In approximately May and June of 1999, in response to Hoffner's warnings, Hoffner was asked by UAP senior management to assess overall credit problems within

UAP.

44. In a June 1999 internal memo to Cook, Hoffncr reported on UAP's combined credit

problems with particular emphasis on UAP's northwest operations. In the memo, Hoffner advised

that he had completed a detailed credit analysis of the JOC account receivables. The purpose ofthe

analysis, Hoffner reminded, was "to give management an idea ofthe condition ofthe accounts, good

or bad... "

45. Hoffner confirmed that the condition ofUAP's accounts receivable was indeed very

bad. The bad debt problems, Hoffner reported, were "very disturbing and hidden." "[I]t's important

that you know," Hoffner told Cook, that "projected realistic numbers for loses [are] in the area of

CM4-481 - 16 -

t "... $32 million." That number, Hoffner reported, could actually be higher upon further analysis. Later,

Hoffner teamed that the amount of bad debt being carried at UAP was closer to $40 million.

46. Hoffner then put the $40 million problem bluntly to Cook: "[W]here do we go from here?" and "[H]ow do we handle the [bad debt] problem?" Hoffner further reported to Blue and

Cook directly, and to ConAgra' s senior managers sitting on UAP's board, indirectly, that reserves for the $40 million of "hidden" and "disturbing" bad debt were completely inadequate.

47. Hoffner further reported to Blue and Cook directly, and to ConAgra' s senior managers sitting on UAP's board, indirectly, that the $40 million of "hidden" and "disturbing" bad debt was a problem that apparently had been growing for several years.

48. Blue and Cook discussed the mounting had debt crisis faced by UAP with ConAgra's senior management through quarterly and other periodic meetings. In that regard, Hoffner reported that ConAgra's senior management, from at least 1995 forward, had known of and were specifically informed about UAP's bad debt problems as they continued to mount. In fact, Hoffner reported that more and more information about UAP's bad debt crisis was fed to ConAgra as the problem grew worse.

49. According to Hoffner, UAP's credit problems were regularly disclosed to ConAgra senior management through:

(i) quarterly reviews , interviews and reports by ConAgra' s internal audit team;

(ii) follow-up meetings with ConAgra's internal auditors regarding a growing number ofuncollectible accounts and inadequate reserves for bad debt;

(iii) UAP annual credit meetings; and

(iv) at least one face to face meeting between Hoffner and ConAgra's Senior Vice President of Credit. con,gn 1 -17- 50. In addition, according to Hoffner, ConAgra's senior-most managers received the following warnings from their own internal audit team (emphasis in bolded italics):

"[C]redit and accounts receivable [problems at UAP] require management's immediate attention";

"(RJeserves fare] understated";

"Management should improve controls and procedures that prohibit sales to customers beyond established credit limits";

"Past due accounts and notes receivable indicate[]a weakness in granting credit and obtaining necessary security and collateral for customers with large balances due";

"[R]epeat observations [include] customer accounts exceeding credit limits";

"$3.6 M[illion] [at one IOC alone]...past due 180 days or more";

"$6.0M[illion] [at another IOC]...ovcr 180 days past due";

"[M]anagement [must] develop and document a plan of action to address credit and collection issues" which require "prompt attention";

"Credit limits [are] bypassed by sales and invoicing personnel and...not enforced by management."

"A total of 134 customer account balances [in one UAP region] exceed [] assigned credit limits";

"Twenty-eight /past due] notes, totaling $13.6 million (in one IOC region alone], had no significant reduction in their balances... additional reserves needed";

"fMJanagement /must) do a thorough review of (all! accounts and note/s] receivable as we feel that... bad debt reserve(s) tare] not sufficient."

Materially False And Misleading Statements Made During The Class Period

51. The Class Period begins on August 28, 1998 , when ConAgra filed its Form 10-K for

fiscal year ending May 30,1998 with the SEC, which was signed by defendants Rohde, O'Donnell, and DiFonzo, among others. The 1998 10-K reported earnings of $1.36 per share and purported to

Conayrs 1 - 18 - contain audited financial statements. Excluding restructuring and restructuring related charges

(which charges were taken by the Company at a later in the Class Period), ConAgra reported net sales of $24 billion, operating income of $1.57 billion, income (before income taxes) of $1.04 billion, and net income of $627 million-

52. On September 23, 1998, ConAgra issued a press release announcing its fiscal results

for the first quarter of 1999, the period ending August 30, 1998. The Company reported net sales

of $6,483,400,000, and net income of $109,300,000, or $0.23 basic earnings per share. Defendant

Rohde commented on the results, in pertinent part, as follows:

Most ConAgra businesses continued to perform well, as indicated by double digit operating growth in our Grocery & Diversified Products and Food Inputs & Ingredients segments.

The September 23, 1998 press release further stated that "ConAgra's major crop inputs business,

United Agri Products, enjoyed substantial sales and operating profit growth in fiscal 1999's first

quarter." (Emphasis added).

53. On October 13, 1998, ConAgra filed its Form l 0-Q with the SEC for the first quarter

of 1999, the period ending August 30, 1998, which was signed by defendants O'Donnell and

DiFonzo, and confirmed the previously announced financial results. In addition, with respect to the

financial statements contained therein, the Form 10-Q stated:

The unaudited interim financial information included herein reflects the adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented.

54. On December 23, 1998, ConAgra issued a press release announcing its financial

results for the second quarter and first half of its fiscal year 1999, the period ending November 29,

1998. For the second quarter of 1999, the Company reported net sales of $6,404,400,000, and net

ralugral -19- income of $219,000,000, or $0.47 basic earnings per share. For the first half of fiscal 1999,

ConAgra reported net sales of $12,887,800,000, and net income of $328.,300,000 or $0.70 basic earnings per share. The December 23, 1998 press release stated that "ConAgra's major crop inputs business, United Agri Products, increased operating profit in fiscal 1999's second quarter and first half."

55. On January 12, 1999, the Company filed a Form 10-Q with the SEC for the second quarter of 1999, the period ending November 29,1998, which was signed by defendants O'Donnell

and DiFonzo and confirmed the previously announced financial results. In addition, with respect to

the financial statements contained therein, the Form 10-Q stated:

56. On March 25, 1999, ConAgra issued a press release announcing its financial results

for the third quarter and nine months of its fiscal year 1999, the period ending February 28, 1999.

For the third quarter of 1999, the Company reported net sales of $5,693,300,000, and net income

of $171,400,000, or $0.36 basic earnings per share. For the first nine months of its fiscal 1999,

ConAgra reported net sales of $18,581 , 100,000, and net income of $499,700,00 or $1. 06 basic

earnings per share. The March 25, 1999 press release stated that "ConAgra's major crop inputs

business, United Agri Products, increased operating profit substantially in fiscal 1999's third quarter

and first nine months." (Emphasis added.)

57. On April 14 1999, the Company filed its Form 10-Q with the SEC for the third

quarter of 1999, the period ending February 28,1999, which was signed by defendants O'Donnell

co„gpl -20- and Bolding and confirmed the previously announced financial results. In addition, with respect to the financial statements contained therein, the Form 10-Q stated:

58. On July 1, 1999, ConAgra issued a press release announcing its financial results for the fourth quarter and fiscal year-ended May 30,1999. For the fourth quarter of 1999, the Company reported net sales of $6,013,200,000, and a net loss (including non-recurring charges) of

$141,300,000, or a net loss of $0.30 basic earnings per share. For its fiscal 1999, the Company reported net sales of $24,594,300,000, and net income of $358,400,000 or $0.76 basic earnings per share. Defendant Rohde commented on the results in pertinent part as follows:

Our strengths across multiple segments of the food chain proved to be a strategic advantage. We began fiscal 1999 in the midst of difficult conditions. U.S. and international markets and economic conditions were affected by decelerating Asian demand, and the protein markets were depressed due to an abnormally high supply of protein- .. I am very pleased that we closed the year on a strong note. Although the first half of fiscal 1999 resulted in a 2.8 percent decline in diluted earnings per share, earnings per share in the second half rebounded with 20.3 percent growth before non-recurring charges and changes in accounting. (Emphasis added.)

The July 1, 1999 press release went onto state that "United Agri Products, ConAgra's core crop inputs business, extended its record ofstrong growth in operatingprofit with double-digit growth in fiscal 1999." (Emphasis added.)

59_ On August 25, 1999, ConAgra filed its Form 10-K for fiscal year ending May 30,

1999 with the SEC, which was signed by defendants Rohde, O'Donnell and Bolding, among others, and confirmed the previously announced financial results and purported to contain audited financial statements. Excluding restructuring and restructuring related charges (which charges were taken by the Company at a later date in the Class Period), ConAgra reported net sales of$25 billion, operating

Cmugral - 21 income of $1.7 billion, income (before income taxes) of $1.12 billion, and net income of $696 million. In 2001, the Company admitted that the financial results reported in its 1999 10-K were false when made, as detailed herein.

60. On September 21, 1999, ConAgra issued a press release announcing its financial results for the first quarter of2000, the period ending August 29, 1999. For the first quarter of 2000, the Company announced net sales of$6,593,600,000, and net income ofS 101,800,000 or $0.22 basic earnings per share. Defendant Rohde commented on the results as follows:

We are very pleased by the strong results in our first quarter of fiscal 2000. We have been picking up momentum with strong operating results in the third and fourth quarters of our recently completed fiscal year, and entering fiscal 2000 we planned and are achieving double-digit earnings growth (before non-recurring charges and other restructuring-related items).

61. On October 15, 2000, the Company filed its Form 10-Q with the SEC for its first quarter of2000, the period ending August 29,1999, which was signed by defendants O'Donnell and

DiFonzo, and confirmed the previously announced financial results. In addition, with respect to the financial statements contained therein, the Form 10-Q stated:

62. On December 21, 1999, ConAgra issued a press release announcing its financial results for the second quarter and first half of its fiscal year 2000, the period ending November 28,

1999. For the second quarter of 2000, the Company reported total sales of $6,602,900,000, operating profit of $554,700,000, and diluted earnings per share of $0. 53. For the first half of its fiscal 2000, ConAgra reported total sales of $13,196,500,000, operating profit of$941,000,000, and diluted earnings per share of $0.80. Defendant Rohde commented on the results as follows: coEn 1 -22- We continue to achieve significant sales and earnings momentum. All three of our operating segments, Packaged Foods, Refrigerated Foods and Agricultural Products improved their margins and achieved earnings performance increases in the second quarter.

63. On January 11, 2000, the Company filed its Form 10-Q with the SEC for the second quarter of2000, the period ending November 28, 1999, which was signed by defendants O'Donnell and Bolding and confirmed the previously announced financial results. In addition, with respect to the financial statements contained therein, the Form 10-Q stated:

64. On March 23, 2000, ConAgra issued a press release announcing its financial results for the third quarter and nine months of 2000, the period ending February 27, 2000. For the third quarter of 2000, the Company had total sales of 55,797,800,000, operating profit of S468,600,000, and diluted earnings per share of $0.41. For the first nine months of its fiscal 2000, ConAgra reported total sales of$18,994,300,000, operating profit of $1,408,600,000, and diluted earnings per share of S1.21.

65. On April 11, 2000, the Company filed its Form l0-Q with the SEC for the third quarter of 2000, the period ending February 27, 2000, which was signed by defendants O'Donnell and Bolding and confirmed the previously announced financial results. In addition, with respect to the financial statements contained therein, the Form 10-Q stated:

cotig l -23- 66. On June 29, 2000, ConAgra issued a press release announcing its financial results for the fourth quarter and fiscal year of 2000, the period ended May 28, 2000. For the fourth quarter of

2000, the Company reported total sales of $6,391,500,000, operating profit of 5501,000,000, and earnings per share of $0.46. For its fiscal 2000, ConAgra reported total sales of $25,385,800,000, operating profit of $1,909,700,000, and diluted earnings per share of $1.67.

67. On August 25, 2000, ConAgra filed its Form 10-K for fiscal year ending May 28,

2000 with the SEC which was signed by defendants Rohde, O'Donnell and Bolding, among others.

The Form 10-K reported the Company' s fiscal year 2000 sales as $25 ,385,800,000 , and net income of $413,000,000, or $0.87 basic earnings per share, and represented that the financial statements included in the Form 10-K were audited.

68. The statements referenced above in paragraphs 51-67 were each materially false and misleading when made because they failed to disclose:

(a) that UAP was engaged in improper accounting practices which had the effect of materially overstating ConAgra's reported earnings (specifically detailed in the section below entitled ConAgra's False Financial Reporting);

(b) that ConAgra's financial statements issued during the Class Period were not prepared in accordance with GAAP and ConAgra' s corporate policy (as detailed in the section below entitled ConAgra' s False Financial Reporting) and were therefore materially false and misleading; and

(c) that UAP' s business was deteriorating such that its management was employing and/or had actual knowledge ofor recklessly disregarded improper accounting practices in an effort to conceal this negative trend,

cowail -24- 69. On February 13, 2001, ConAgra issued a press release announcing that it was

"altering the company's near-term earnings outlook-" The Company falsely blamed its reduction in earnings to rising energy costs. With respect to ConAgra's crop input business, which includes

UAP, the Company represented that a "variety of factors" had "changed management's outlook for the crop input business over the balance of the fiscal year" and noted that it expected these "factors" to reduce second-halfpre-tax profits by SI 10 million, or $0.13 per share.

70. The above-referenced statement was a partial disclosure that failed to disclose that the earnings shortfall at UAP was primarily related to the yet-to-be announced cessation of the improper accounting practices at UAP.

71. Following ConAgra's February 13, 2001 announcement, the price of ConAgra common stock dropped from $24.86 per share to $20.01 per share on very heavy trading volume - erasing billions of dollars of market capitalization. Then, after this partial disclosure but prior to the full disclosure on May 23, 2001, ConAgra stock had rebounded to a high of 521.69 per share.

72. It was not until the May 23, 2001 restatement announcement that the truth was revealed . After ConAgra announced the restatement of its financial statements and the true reasons for such restatement, the price of ConAgra common stock declined to $20.07 per share.

73. The market for ConAgra's common stock was open, well-developed and efficient at all relevant times. As a result of these materially false and misleading statements and failures to disclose, ConAgra's common stock traded at artificially inflated prices during the Class Period. The artificial inflation continued until May 23, 2001, when ConAgra acknowledged that it, along with the SEC, was conducting an internal investigation into its accounting practices and this admission was communicated to, and/or digested by, the securities markets. Plaintiffs and other members of the Class purchased or otherwise acquired ConAgra common stock on the open market relying upon ci -25- the integrity of the market price of ConAgra's common stock and market information relating to

ConAgra, and have been damaged thereby.

74. At all relevant times, the material misrepresentations and omissions particularized in this Complaint directly or proximately caused or were a substantial contributing cause of the damages sustained by plaintiffs and other members of the Class. As described herein, during the

Class Period, defendants made or caused to be made a series of materially false or misleading statements about ConAgra's business, prospects and operations. These material misstatements and omissions had the cause and effect of creating in the market an unrealistically positive assessment of ConAgra and its business, prospects and operations, thus causing the Company's common stock to be overvalued and artificially inflated at all relevant times. Defendants' materially false and misleading statements during the Class Period resulted in plaintiffs and other members of the Class purchasing the Company's common stock at artificially inflated prices, thus causing the damages complained of herein.

CONAGRA'S FALSE FINANCIAL REPORTING

75. At all relevant times during the Class Period, ConAgra represented that its financial statements were prepared in accordance with GAAP. GAAP are those principles recognized by the accounting profession as the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time. As set forth in Financial Accounting Standards Board

("FASB") Statement of Concepts ("Concepts Statement ") No. 1, one of the fundamental objectives of financial reporting is that it provide accurate and reliable information concerning an entity's financial performance during the period being presented. Concepts Statement No. 1, !l 42, states:

Financial reporting should provide information about an enterprise's financial performance during a period. Investors and creditors often use information about the past to help in assessing the prospects of an enterprise. Thus, although investment ru"0rre1 -26- and credit decisions reflect investors' and creditors' expectations about future enterprise performance, those expectations are commonly based at least partly on evaluations of past enterprise performance.

76. Regulation S-X [17 C.F.R. § 210.4-01(a)(1)] states that financial statements filed with

the SEC that are not prepared in conformity with GAAP are presumed to be misleading and

inaccurate.

77. The representations that ConAgra's financial statements were prepared in accordance with GAAP were materially false and misleading because the defendants knew, or recklessly ignored that the Company's UAP subsidiary repeatedly engaged fraudulent accounting practices which materially inflated ConAgra's operating results during the Class Period, which the Company has now admitted. These practices, which occurred over, at least, a three-year period and were

sanctioned by high level management at both UAP and ConAgra, included the improper recognition

ofrevenue, the failure of ConAgra to disclose its true policy ofrevenue recognition and the improper

failure to recognize expense on uncollectible receivables. Each of these misrepresentations, standing

alone, was a material breach ofGAAP. In the aggregate, they materially distorted ConAgra's actual

financial performance during the Class Period, as the Company has now admitted.

ConAgra's Improper Recognition, Accounting And Reporting Of Revenue and Cost of Revenue

78, GAAP generally provides that revenue should not be recognized until an exchange

has occurred, the earnings process is complete, and collection of the sales price is reasonably

assured. FASB Concepts Statement No. 5,1183; Accounting Principles Board ("APB") Opinion No.

10, 112. The conditions for revenue recognition under GAAP ordinarily are met when products and

services are exchanged for cash or claims to cash, and when the entity has substantially performed

the obligations which entitle it to the benefits represented by the revenue. Generally, a transfer of

coai,i -27- risk must occur in order to effect an "exchange" for purposes of revenue recognition under GAAP.

Further, revenue which arises from circumstances involving uncertainty as to possible gains should

not be recognized since to do so might result in gains being recognized on revenue prior to its

realization. FASB Statement of Financial Accounting Standards ("SFAS") No. 5, ¶ 12.

79. ConAgra's May 28, 2000 Form 10-K discloses that the Company recognizes revenue when title passes to the customer. Defendants knew or recklessly ignored that its representations in

its SEC filings were materially false and misleading as ConAgra's UAP subsidiary improperly

recognized hundreds of millions of dollars in revenue on: (1) fictitious orders to certain of its

customers who never agreed to purchase ConAgra's product; (2) "bill and hold" transactions; and

(3) vendor rebates.

Fictitious Sales

80. During the Class Period, the Company improperly recognized millions of dollars in

revenue on fictitious orders to certain of its customers who never agreed to purchase ConAgra's product. In doing so, ConAgra violated GAAP and its publicly stated policy on revenue recognition.

In facts, not only did ConAgra report revenue on fictitious orders, but it also reported revenue on

fictitious customers.

81. For example, according to a former UAP-Southwest employee who was employed

at UAP during the Class Period and who left the Company in disgust over the accounting

manipulations and blatant inaccuracies in UAP's accounting, a phony customer named "Snyder

Trading Corporation." Thereafter, UAP reported millions of dollars of fictitious sales to this

"customer."

82. Indeed, the actual creation of a customer account generally requires approval by the highest levels of management. These management approvals include, at least, sales department

can,,gmI -28- executives who approved the new customer agreements and accounting executives who approved the extension of credit to the fictitious customers. Since two different departments approved millions of dollars of sales to the fictitious company, collusion at the highest level of UAP's management was present.

83. Defendants have now admitted that ConAgra improperly recognized and reported revenue on sales contracts for fiscal 1999 and 2000 that were not considered binding on the customer as well as instances of fictitious sales contracts at various UJAP locations.

"Bill and Hold" Transactions 2

84. In December 1999, the SEC issued its Staff Accounting Bulletin ("SAB") No. 101 which summarized its staff's views in applying GAAP to revenue recognition in financial statements . SAB No. 101 summarizes the criteria previously articulated by the SEC and the accounting profession that must be followed in accounting for "Bill and Hold" transactions.3

These criteria are intended to establish , for purposes of revenue recognition , that the customer has taken title to and assumed the risks and rewards of ownership of the products specified in the customer's Bill and Hold purchase order or sales agreement.

2 A "Bill and Mold" transaction is generally a practice whereby a customer agrees to purchase goods but the seller retains possession until the customer requests shipment to designated locations. See, e. g., In the Matter ofArthur Andersen & Co., SEC Exchange Act Release No. 17878 (June 22 , 1981).

See. e.g. , In the Matter of Stewart Parness, Accounting and Auditing Enforcement (AAER) Release No. 108 (August 5, 1986); SEC v. Bollinger Industries, Inc., et al, Lit. Rel. No. 15093 (September 30, 1996); In the Matter of Laser Photonics, Inc., AAER No. 971 (September 30, 1997); In the Matter of Cypress Bioscience Inc., AAER No. 817 (September 19, 1996). Also see Concept Statement No. 5, ¶ 84(a), and the American Institute of Certified Public Accountants' Statement of Position No. 97-2, 1 22 conas" 1 - 29 -

I 85. Pursuant to the above-noted SEC accounting bulletin and releases, the following criteria must be met in order to properly recognize revenue on Bill and Hold transactions:

(a) The risks of ownership must have passed to the buyer;

(b) The customer must have made a fixed commitment to purchase the goods, preferably in written documentation;

(c) The buyer, not the seller, must request that the transaction be on a bill and hold basis . The buyer must have a substantial business purpose for ordering the goods on a bill and hold basis;

(d) There must be a fixed schedule for delivery ofthe goods . The date ofdelivery must be reasonable and must be consistent with the buyer's business purpose (e.g., storage periods are customary in the industry);

(e) The seller must not have retained any specific performance obligations such that the earnings process is not complete;

(f) The ordered goods must have been segregated from the seller 's inventory and not be subject to being used to fill other orders, and

(g) The equipment [product] must be complete and ready for shipment.

86. This list is not intended to be exhaustive and, in some instances, a transaction may meet all of the above factors and not meet the requirements for revenue recognition. For example, the SEC has noted that in applying the above criteria, financial statement preparers need also consider the following factors:

(a) The date by which the seller expects payment, and whether the seller has modified its normal billing and credit terms for this buyer;

(b) The seller's past experiences with and pattern of bill and hold transactions;

(d) Whether the seller's custodial risks are insurable and insured;

(e) Whether extended procedures are necessary in order to assure that there are no exceptions to the buyer's commitment to accept and pay for the goods conra1 -30- sold (i.e., that the business reasons for the bill and hold have not introduced a contingency to the buyer's commitment).

87. Accordingly, these criteria are significantly restrictive and limit the number of instances in which it may be appropriate to recognize revenue on "sales" prior to product shipment.

This is due to the generally accepted view that, for purposes of revenue recognition, a customer has not taken title to or assumed the risks and rewards of ownership of product until delivery occurs.

See e. e., SAB No. 101, the American Institute of Certified Public Accountants' ("A1CPA")

Statement of Position No. 97-2, and the ATCPA's Audit Issues on Revenue Recognition.

88. In furtherance of its scheme to inflate the Company's operating results during the

Class Period, the Company improperly recognized hundreds ofmillions ofdollars in revenue on Bill

and Hold transactions . In so doing, ConAgra violated GAAP and its publicly stated policy of

revenue recognition.

89. According to a former UAP-Southwest former employee with financial reporting

responsibilities , bill and hold transactions were the rule, not the exception , at UAP . In an attempt

to recognize revenue prematurely and inflate the Company's operating results during the Class

Period, improper Bill and Hold transactions became a standard and pervasive practice at UAP. In

fact, this former UAP employee said the UA.P sales employees were provided with form contracts

and "paperwork" which were supposed to be used to record Bill and Hold sales. The former UAP

employee also stated that many employees questioned the propriety of the sales practices employed

at UAP, but were reassured by members of ConAgra's internal audit department who approved the

bill and hold revenue recognition process and instructed UAP employees to use the form contracts

in an attempt to sanctify the improper recording of Bill and Hold sales.

c=V131 -3] - 90. For example, Defendants Rohde and Bolding and ConAgra internal auditors from

Omaha told UAP employees to structure the deferred delivery sales as "bill and holds" and mandated

the continued use of these types of contracts and paperwork throughout fiscal 1998, 1999 and 2000,

according to the former UAP employee.

91. Defendants have now admitted that ConAgra improperly recognized and reported a

material amount of revenue on bill and hold transactions during the Class Period. Indeed, the

Company has now disclosed that UAP "circumvented generally accepted accounting practices" and

"improperly recorded revenues on deferred delivery sales transactions" during Fiscal 1998, 1999, and

2000. The Company has now also admitted that "noncompliance" with certain accounting

requirements for deferred delivery transactions in sales contracts occurred during

fiscal 1998, 1999 and 2000.

Vendor Rebates

92. According to a former UAP-Southwest employee who participated in internal

auditing functions during the Class Period, UAP routinely ordered large volumes ofseed, pesticides,

and for fertilizer from vendors such as Monsanto, Delta Pineland, Stoneville Seed, Bayer, and

Novartis. UAP was entitled to manufacturer's rebates from these vendors based upon the volume

of product it purchased from these vendors. UAP was not entitled to receive these rebates until it

recorded bone-fide sales of these products to its customers.

93. As noted above, GAAP requires that UAP defer recording vendor rebates as revenue

until such time that the revenue was earned (i.e., when it consummated a bone-fide sale of these

products to its customers). The former UAP-Southwest employee referenced in the paragraph above

stated that UAP routinely and improperly recorded manufacturer's rebates as revenue upon the

improper recognition of revenue on the bill and hold and fictitious transactions noted above. In fact,

Conagral -32. this former employee stated that, in certain instances, UAP actually "double booked" improperly recorded vendor rebates as revenue by recording the rebates as revenue twice.

94. Defendants have now admitted that ConAgra improperly recognized and reported vendor rebates on improperly recorded bill and hold and fictitious sales transactions during the Class

Period. Indeed, the Company has now disclosed that as a result ofthe improperly recorded revenue on bill and hold and fictitious sales transactions, "associated vendor rebate income was also incorrectly accrued."

95, In addition, the Company has now also disclosed that it:

[R]eviewed the estimating process used by UAP in the recognition of vendor rebates on a quarterly basis . The review indicated that UAP used inconsistent estimating processes on a quarterly and annual basis.

96. GAAP, in APB Opinion No. 28, 111, provides that revenue should be recognized during an interim period on the same basis followed at year end. Accordingly, ConAgra 's financial statements filed on Forms IO-Q during the Class Period were false and misleading when made.

Advanced Vendor Rebates

97. In many instances, vendors such as Monsanto, Delta Pineland, Stoneville Seed,

Bayer, and Novartis paid UAP rebates forpurchases made in an accounting period prior to that when

UAP sold the product to its customers (i.e., advanced vendor rebates). UAP prematurely recorded vendor rebates as revenue when the rebates were received from vendors rather than when they were earned. In fact, the former UAP-Southwest employee who participated in internal audit functions during the Class Period at UAP stated the practice of prematurely recognizing vendor rebates as revenue became so abusive that employees at UAP commonly referred to them as "pre-bates."

98. ConAgra has now admitted that "UAP prematurely recognized certain rebate payments as income in the fiscal year in which they were received, rather than the fiscal year in

Conoual - 33 - which the were earned." In fact, the Company prematurely recorded tens of million of dollars in advanced vendor rebates as revenue during the Class Period, as Defendants knew, or recklessly ignored.

99. Indeed, at the time ConAgra reported its operating results during the Class Period,

Defendants knew or recklessly disregarded that it engaged numerous practices of improper revenue recognition which were in direct contravention of GAAP and its publicly stated policy of revenue recognition. Defendants have now admitted ConAgra's improper revenue recognition practices materially overstated the Company's reported Class Period revenues, income and earnings per share.

ConAgra's Financial Statements Failed to Fully Disclose Its Policy of Revenue Recognition

100. As noted above, ConAgra disclosed that the Company recognizes revenue when title passes to the customer. Defendants knew or recklessly ignored that its representations in its SEC filings were materially false and misleading as such representations omitted to disclose the material fact that ConAgra engaged in improper revenue recognition practices in direct contravention of

GAAP.

101. As noted in APB Opinion No. 12:

The accounting policies adopted by a reporting entity can affect significantly the presentation of its financial position and results of operations. Accordingly, the usefulness of financial statements for the purposes of making economic decisions about the reporting depends significantly upon the user's understanding of the accounting policies followed by the entity... .

When financial statements are issued purporting to present fairly the financial position and results of operations in accordance with generally accepted accounting principles, a description of all significant accounting policies of the reporting entity should be included as an integral part of the financial statements.

102. As noted in the AICPA' s 1998/99 Audit Risk Alert, the invoicing of goods prior to shipment (i.e., deferred delivery or bill and hold sales) is an example of unusual or complex revenue con7vai -34- transactions which presents a greater risk of material misstatement in financial statements. To the detriment ofunsuspecting investors, ConAgra's annual financial statements issued during the Class

Period failed to disclose it policy of recognizing revenue on vendor rebates or bill and hold transactions. Accordingly, investors were unaware that ConAgra engaged in the practice of recording revenue of bill and hold transactions, let alone the fact that it recorded hundreds of millions of dollars in revenue on such transactions, and, consequently, the increased risk of material financial misstatement ensuing from such practice.

ConAgra' s Uncollectible Accounts Receivable And Its Matt^ elation of Accounts Receivable Reserves

103. In furtherance of their scheme to misrepresent the Company's operating results, the defendants compounded ConAgra's misleading accounting and reporting of revenues by failing to timely and adequately reserve for uncollectible receivables.

104. GAAP requires that financial statements account for existing uncertainties as to probable losses. Such loss contingencies should be recognized and reported as a charge to income when: information existing at the date of the financial statements indicates that it is probable (ems, a likely chance) that an asset has been impaired or a liability has been incurred; and the amount of such loss can be reasonably estimated. SFAS No. 5, T 8.

105. GAAP also requires that financial statements disclose contingencies when it is at least reasonably possible e( ., a greater than slight chance) that a loss may have been incurred. SFAS

No. 5,11 10. The disclosure shall indicate the nature of the contingency and shall give an estimate of the possible loss, a range of loss or state that such an estimate cannot be made. Id.

106. The SEC considers the disclosure of loss contingencies to be so important to an informed investment decision that it promulgated Regulation S-X [17 C.F.R. § 210.10-01], which

C'onagnl - 35 - provides that disclosures in interim period financial statements may be abbreviated and need not duplicate the disclosure contained in the most recent audited financial statements, except that,

"where material contingencies exist, disclosure of such matters shall be provided even though a significant change since year end may not have occurred."

107. Defendants knew or recklessly disregarded the fact that ConAgra's receivables remained uncollected over an unusually long period oftime, and that GAAP required that ConAgra establish an adequate reserve in its financial statements to account for probable uncollectible receivables. Nonetheless, in violation ofGAAP, ConAgra's financial statements failed to adequately reserve for uncollectible accounts receivable.

108. For example, according to a former UAP Vice President of Credit, senior UAP executives manipulated UAP bad debt reserve so that it could artificially inflate its operating results.

During the Class Period, this former Vice President of Credit determined that UAP's 540 million or more in receivables recorded were uncollectible. As a result, the former Vice President reported to UAP and ConAgra senior managers that UAP 's reserve for uncollectible accounts was

"completely inadequate." In addition, this former Vice President maintains that the material facts concerning UAP uncollectible accounts receivable during the Class Period were then known to

ConAgra's senior management.

109. In a blatant violation of GAAP, ConAgra's financial statements during the Class

Period failed to adequately reserve for uncollectible accounts receivable. Indeed, ConAgra 's failure to adequately reserve for uncollectible receivables was due to an attempt to fraudulent manipulate the Company ' s operating results.

congn1 -36- ConAgra's Further Admissions That It Issued False Financial Statements DurinL The Class Period

110. As a result of the accounting manipulations noted above, and its failure to comply with GAAP and its publicly disclosed accounting policies, ConAgra was able to report earnings falsely during the Class Period. The magnitude, duration and myriad of fraudulent accounting practices noted above resulted in the restatement of numerous balance sheet and income statement items during, at least, three fiscal years and evidence defendants ' intent to manipulate ConAgra's operating results during the Class Period.

111. Had ConAgra complied with GAAP, its reported financial results would have been materially different. In fact, ConAgra has now admitted that its net income was inflated by more than 8% during both fiscal 1999 and 2000. Defendants positive statements fueled the price of

ConAgra's securities during the Class Period to the detriment of unsuspecting investors.

112. GAAP provides that previously issued financial statements which are materially misstated are to be retroactively restated . See. e .g. , APB Opinion No. 20, APB Opinion No. 9 and the AICPA's Statement on Auditing Standards No. 53. ConAgra has now admitted that, at least, its interim and annual 1998, 1999 and 2000 financial statements were materially false and misleading when issued.

113. In furtherance of Defendants attempt to deceive suspecting shareholders, on

February 13, 2001, ConAgra announced that "sharply higher energy costs and a slowing economy" were altering the Company's near-term earnings outlook. In fact, Defendant Rohde said that "a variety of factors, including harsh winter weather, uncertainty over farm policy, and other farming-related factors" were effecting the outlook of the Company's business.

Conabral .37- 114. In truth, at the time of such announcement , defendants knew of UAP 's fraudulent accounting practices noted above. In fact, on May 23, 2001, ConAgra announced that:

In November 2000, the Audit Committee of the Board of Directors of ConAgra Foods commissioned an investigation ofaccounting matters at UAP. The Audit Committee engaged an outside law firm, and they in turn obtained the assistance of forensic accountants, to perform the investigation. Prior to this, the Company had commenced a review ofUAP revenue recognition practices and subsequent to that, received an informal inquiry from the staff of the SEC regarding UAP accounting matters. [Emphasis Added.]

115. Moreover, ConAgra' s financial manipulations were NOT limited to the UAP subsidiary alone. For example, according to a former Vice President at Hunt-Wesson Foodservice

(a ConAgra subsidiary), Omaha's expectations became increasingly difficult to attain. When

ConAgra was not generating its expected operating results, it was not uncommon for Omaha to go to its crown jewel, which was Hunt-)Wesson, and ratchet the numbers up higher and higher during the Class Period. Word would come to Hunt-Wesson from Corporate (Omaha) 30 days before month close, that Omaha needed another x million of dollars. Figure out a way to do it, said Omaha, and so Hunt-Wesson started pushing money.

116. According to the former Hunt-Wesson Vice President, ConAgra's practice ofpushing incurred expenses into subsequent quarters made period to period comparisons difficult. Serious problems then escalated from year to year, at all times relevant to this litigation.

117. Moreover, according to a former manager who participated in marketing functions at UAP during the Class Period, accounting manipulations were at the core of ConAgra 's corporate culture and were not limited to UAP. Accounting manipulations at other subsidiaries, including

Lamb- Weston, Inc. (ConAgra' s potato processing division), and were encouraged by ConAgra's

Omaha offices.

ca u t -38- 118, Asa result ofthe foregoing accounting improprieties, ConAgra presented its financial results during the Class Period in a manner which violated numerous provisions of GAAP. In

addition to the accounting improprieties stated above, ConAgra presented its financial statements

during the Class Period in a manner which also violated at least the following provisions of GAAP:

(a) The concept that financial reporting should provide information that is useful

to present and potential investors and creditors and other users in making rational investment, credit

and similar decisions (Concepts Statement No. 1, ¶ 34);

(b) The concept that financial reporting should provide information about the

economic resources of an enterprise, the claims to those resources, and the effects of transactions,

events and circumstances that change resources and claims to those resources (Concepts Statement

No. 1, 140);

management of an enterprise has discharged its stewardship responsibility to owners (stockholders)

for the use of enterprise resources entrusted to it. To the extent that management offers securities

of the enterprise to the public, it voluntarily accepts wider responsibilities for accountability to

prospective investors and to the public in general (Concepts Statement No. 1, ¶ 50);

(d) The concept that financial reporting should provide information about an

enterprise 's financial performance during a period. Investors and creditors often use information

about the past to help in assessing the prospects of an enterprise- Thus, although investment and

credit decisions reflect investors ' expectations about future enterprise performance, those

expectations are commonly based at least partly on evaluations of past enterprise performance

(Concepts Statement No. 1, ¶ 42);

Conagrul -39- (e) The concept that financial reporting should be reliable in that it represents what it purports to represent. That information should be reliable as well as relevant is a notion that is central to accounting (Concepts Statement No. 2, 1158-59);

(f) The concept of completeness, which means that nothing is left out of the information that may be necessary to ensure that it validly represents underlying events and conditions (Concepts Statement No. 2, 179);

(g) The concept that conservatism be used as a prudent reaction to uncertainty to try to ensure that uncertainties and risks inherent in business situations are adequately considered.

The best way to avoid injury to investors is to try to ensure that what is reported represents what it purports to represent (Concepts Statement No. 2, 14,195, 97).

SCIENTER ALLEGATIONS

Actual Knowledge/Conscious Be!avior/Keckless Disreeard

119. As alleged in great detail herein, defendants acted with scienter in that defendants knew or recklessly disregarded that the Company was engaging in fraudulent accounting practices and that the public documents and statements issued or disseminated in the name of the Company were materially false and misleading; knew or recklessly disregarded that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially participated or acquiesced in the issuance or dissemination of such statements or documents as primary violations of the federal securities laws. As set forth elsewhere herein in detail, defendants, by virtue of their receipt of information reflecting the true facts regarding ConAgra, their control over, and/or receipt and/or modificationofConAgra's allegedly materially misleading misstatements and/or their associations with the Company which made them privy to confidential proprietary rol*g.l -40- information concerning ConAgra, participated or recklessly disregarded in the fraudulent scheme alleged herein.

Motive - Acquisition of IHF

120. During the Class Period, defendants utilized in excess of 5800 million worth of

ConAgra's artificially inflated stock to negotiate and fund a significant portion of the Company's

acquisition of IHF, which was consummated in August 2000. In this regard, approximately 40

million shares of ConAgra stock, artificially valued at $20.11 per share, were utilized as the stock

component ofthe consideration for the stock/cash deal which totaled $2.9 billion. IHF shareholders

received $11 in cash and 0.546 of a ConAgra share in return for each share of W. ConAgra also

assumed $1.3 billion in existing IHF debt.

121. ConAgra's ability to report strong financial results and then use the Company's stock

as currency to fund a very significant acquisition was critical to ConAgra's ability to stay

competitive in its businesses. The IHF transaction was ConAgra's most important acquisition since

the Company's 1991 purchase of packaged-food company Beatrice Foods for $3.2 billion, maker

of Hunt's Ketchup and Orville Redenbacher popcorn. For example, the IHF acquisition gave

ConAgra six brands that each generate more than $100 million in annual sales, including Chef

Boyardee line of canned pasta, Bumble Bee tuna, Gulden's Mustard and Pam cooking spray.

122. According to defendant Rohde, the Company was on the prowl for retail food brand

acquisition targets. In a June 26, 2000 Wall Street Journal article discussing the IHF acquisition,

defendant Rohde was quoted as stating: "We're a company of hunters." Defendants knew it was

essential that ConAgra's stock trade at high levels so that they could cause shareholders of target

companies (such as IHF) to approve acquisitions and to make such acquisitions non-dilutive by using

as few shares as possible in exchange for other companies.

conalp1 - 41 Applicability of Presumption Of Reliance: Fraud-On-The-Market Doctrine

123. At all relevant times, the market for ConAgra' s common stock was an efficient market for the following reasons, among others:

(a) ConAgra' s stock met the requirements for listing, and was listed and actively traded on the NYSE Stock Exchange, a highly efficient and automated market;

(b) As aregulated issuer, ConAgra filed periodic public reports with the SEC and the NYSE;

(c) ConAgra regularly communicated with public investors via established market communication mechanisms, including through regular disseminations of press releases on the national circuits ofmajor newswire services and through other wide-ranging public disclosures, such as communications with the financial press and other similar reporting services; and

(d) ConAgra was followed by several securities analysts employed by major brokerage firms who wrote reports which were distributed to the sales force and certain customers of their respective brokerage firms. Each of these reports was publicly available and entered the public marketplace.

124. As a result of the foregoing, the market for ConAgra's common stock promptly digested current information regarding ConAgra from all publicly available sources and reflected such information in ConAgra' s stock price. Under these circumstances, all purchasers of ConAgra's common stock during the Class Period suffered similar injury through their purchase of ConAgra's common stock at artificially inflated prices and a presumption of reliance applies.

Conagro 1 -42- NO SAFE HARBOR

125. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking statements"

when made. To the extent there were any forward-looking statements, there were no meaningful

cautionary statements identifying important factors that could cause actual results to differ materially

from those in the purportedly forward-looking statements. Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are

liable for those false forward-looking statements because at the time each of those forward-looking

statements was made, the particular speaker knew that the particular forward-looking statement was

false, and/or the forward-looking statement was authorized and/or approved by an executive officer

of ConAgra who knew that those statements were false when made.

FIRST CLAIM Violation Of Section 10(b) Of The Exchange Act Against And Rule IOb-5 Promulgate Thereuader Against All Defendants

126. Plaintiffs repeat and reallege each and every allegation contained above as if fully set

forth herein.

127. During the Class Period, ConAgra and the Individual Defendants, and each of them,

carried out a plan, scheme and course of conduct which was intended to and, throughout the Class

Period, did: (i) deceive the investing public, including plaintiffs and other Class members, as alleged

herein; (ii) artificially inflate and maintain the market price of ConAgra's common stock; and (iii)

cause plaintiffs and other members of the Class to purchase ConAgra's common stock at artificially

Ccnarat - 43 - inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions set forth herein-

128. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and (iii) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company's common stock in an effort to maintain artificially high market prices for ConAgra's common stock in violation ofSection 10(b) ofthe Exchange

Act and Rule I Ob-5. All defendants are sued either as primary participants in the wrongful and

illegal conduct charged herein or as controlling persons as alleged below.

129. In addition to the duties of full disclosure imposed on defendants as a result of their

making of affirmative statements and reports, or participation in the making of affirmative

statements and reports to the investing public, defendants had a duty to promptly disseminate truthful

information that would be material to investors in compliance with the integrated disclosure

provisions of the SEC as embodied in SEC Regulation S-X (17 C.F.R. Sections 210.01 et seq.) and

Regulation S-K (17 C.F.R. Sections 229.10 et seq .) and other SEC regulations, including accurate

and truthful information with respect to the Company ' s operations , financial condition and earnings

so that the market price of the Company's common stock would be based on truthful. complete and

accurate information.

130. ConAgra and the Individual Defendants, individually and in concert, directly and

indirectly, by the use, means or instrumentalities ofinterstate commerce and/or ofthe mails, engaged

and participated in a continuous course ofconduct to conceal adverse material information about the

business, operations and future prospects of ConAgra as specified herein.

c gal -44- 131. These defendants employed devices, schemes and artifices to defraud, while in possession of material adverse non-public information and engaged in acts, practices, and a course ofconduct as alleged herein in an effort to assure investors of ConAgra's value and performance and continued substantial growth, which included the making of, or the participation in the making of, untrue statements of material facts and omitting to state material facts necessary in order to make the statements made about ConAgra and its business operations and future prospects in the light of

the circumstances underwhich they were made, not misleading, as set forth more particularly herein,

and engaged in transactions, practices and a course of business which operated as a fraud and deceit

upon the purchasers of ConAgra's common stock during the Class Period.

132. Each ofthe Individual Defendants' primary liability, and controlling person liability,

arises from the following facts: (i) the Individual Defendants were high-level executives and/or

directors at the Company during the Class Period and members ofthe Company's management team

or had control thereof; (ii) each of these defendants, by virtue of his responsibilities and activities

as a senior officer and/or director of the Company was privy to and participated in the creation,

development and reporting of the Company's internal budgets, plans, projections and/or reports;

(iii) each of these defendants enjoyed significant personal contact and familiarity with the other

defendants and was advised of and had access to other members of the Company's management

team, internal reports and other data and information about the Company's finances, operations, and

sales at all relevant times; and (iv) each of these defendants was aware of the Company's

dissemination of information to the investing public which they knew or recklessly disregarded was materially false and misleading.

133. The defendants had actual knowledge of the misrepresentations and omissions of material facts set forth herein, or acted with reckless disregard for the truth in that they failed to cWWE,,M1 -45- ascertain and to disclose such facts, even though such facts were available to them. Such defendants' material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose and effect of concealing ConAgra's operating condition and future business prospects from the investing public and supporting the artificially inflated price of its common stock. As demonstrated by defendants' overstatements and misstatements of the Company's business, operations and earnings throughout the Class Period, defendants, if they did not have actual knowledge of the misrepresentations and omissions alleged, were reckless in failing to obtain such knowledge by deliberately refraining from taking those steps necessary to discover whether those statements were false or misleading.

134. As a result of the dissemination of the materially false and misleading information and failure to disclose material facts, as set forth above, the market price of ConAgra's common stock was artificially inflated during the Class Period. In ignorance of the fact that market price of

ConAgra's publicly-traded common stock were artificially inflated, and relying directly or indirectly on the false and misleading statements made by defendants, or upon the integrity of the market in which the securities trade, and/or on the absence of material adverse information that was known to or recklessly disregarded by defendants but not disclosed in public statements by defendants during the Class Period, plaintiffs and the other members of the Class acquired ConAgra common stock during the Class Period at artificially high prices and were damaged thereby.

135. At the time of these misrepresentations and omissions, plaintiffs and other members of the Class were ignorant of their falsity, and believed them to be true. Had plaintiffs and the other members of the Class and the marketplace known of the true financial condition and business prospects of ConAgra, which were not disclosed by defendants, plaintiffs and other members of the

Class would not have purchased or otherwise acquired their ConAgra common stock, or, ifthey had tonga1 -46- acquired such common stock during the Class Period, they would not have done so at the artificially inflated prices which they paid.

136. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange

Act, and Rule I Ob-5 promulgated thereunder.

137. As a direct and proximate result of defendants' wrongful conduct, plaintiffs and the other members ofthe Class suffered damages in connection with their respective purchases and sales of the Company's common stock during the Class Period.

SECOND CLAIM

Violation Of Section 20(a) Of The Exchange Act Against Individuals Defendants

138. Plaintiffs repeat and reallege each and every allegation contained above as if fully set forth herein.

139. The Individual Defendants acted as controlling persons of ConAgra within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level positions, and their ownership and contractual rights, participation in and/or awareness of the

Company's operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had the power to influence and control and did influence and control, directly or indirectly, the decision- making of the Company, including the content and dissemination of the various statements which plaintiffs contend are false and misleading. The Individual Defendants were provided with or had unlimited access to copies of the Company's reports, press releases, public filings and other statements alleged by plaintiffs to be misleading prior to and/or shortly after these statements were

Conagra1 -47- issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected.

140. In particular, each of these defendants had direct and supervisory involvement in the day-to-day operations of the Company and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same.

141- As set forth above, ConAgra and the Individual Defendants each violated Section

10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of their positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act. Asa direct and proximate result of defendants' wrongful conduct, plaintiffs and other members of the Class suffered damages in connection with their purchases of the Company's common stock during the Class Period.

WHEREFORE, plaintiffs pray for relief and judgment, as follows:

(a) Determining that this action is a proper class action and certifying Lead Plaintiffs as class representatives under Rule 23 of the Federal Rules of Civil Procedure and plaintiff's counsel as Lead Counsel;

(b) Awarding compensatory damages in favor of plaintiffs and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding plaintiffs and the Class their reasonable costs and expenses incur ed in this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

Conagra 1 -48- JURY TRIAL DEMANDED

Plaintiffs hereby demand a trial by jury in Omaha, Nebraska.

Dated: January 11, 2002

Continental Building 209 South 19th Street, Suite 300 Omaha, Nebraska 68102-1705 (402) 346-5700

Plaintiffs' Liaison Counsel

MILBERG WEISS BERSHAD HYNES & LERACH LLP Sanford P. Dumain One Pennsylvania Plaza - 49th Floor New York, NY 10119 (212) 594-5300 - and - Lori G. Feldman 1001 Fourth Avenue, Suite 2550 Seattle, WA 98154 (206) 839-0730

SCHIEFRIN & BARROWAY, LLP David Kessler Michael K. Yarnoff Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004 (610) 667-7706

Plaintiffs' Co-Lead Counsel

CAULEY GELLER BOWMAN & COATES Paul Geller 2255 Glades Road, Suite 421A Boca Raton , FL 33431 (561) 750-3000

ROSEN & ASSOCIATES Robert Rosen 555 South Flower, Suite 4600 Los Angeles, CA 90071 (213) 362-1000 Attorneys for Plaintiff

ronagnt -49-49 -