The litigation, pending in the Southern District of New York, centers on allegations that executives failed to disclose material information regarding the OWYN acquisition. According to the complaint, a raw material sourcing decision involving pea protein led to significant taste and texture degradation in products as they aged. This issue, which predated the acquisition's closing, resulted in negative consumer feedback and a subsequent downturn in sales growth.
Simply Good Foods Investors Face October Deadline in Securities Lawsuit
Investors who suffered losses in Simply Good Foods Company stock between October 2024 and April 2026 have until October 13 to seek lead plaintiff status. The class action lawsuit alleges the company concealed critical flaws following its $280 million acquisition of the OWYN brand, triggering a sharp decline in share value.
The company’s financial disclosures in October 2025 and April 2026 revealed the depth of the trouble. Following the initial disclosure of the quality issues and lowered 2026 sales guidance, share prices dropped more than 17%. The situation worsened in April 2026 when the company reported a 17% year-over-year contraction in OWYN sales and recorded a $187 million impairment charge, causing a further 27% decline in stock value over two trading days. Kahn Swick & Foti, LLC, representing the plaintiffs, is now gathering investors to join the action against the company.
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