Things truly could not get worse for Chipotle. After a major E. Coli outbreak and some of its worst quarters ever, the fast-casual Mexican food chain is being hit with another lawsuit. Shareholders have filed suit against the company in Denver District Court. According to Colorado Public Radio, the suit claims that “Chipotle’s executives and board of directors conspired to unjustly award themselves, ‘hundreds of millions of dollars through a corrupt stock incentive plan’ at the expense of investors, customers, and even the company itself.”
The suit alleges that execs “acted on insider information” and sold “tens of millions of dollars in shares” prior to the outbreaks of food borne illness in several of their restaurants. The suit calls out Chipotle’s founder and CEO, Steve Ells in particular, saying he “sold $78.3 million in company shares, ‘while the stock price was artificially inflated and before the fraud was exposed.'”
It also says that the company neglected to inform investors of “subpar food safety standards adhered to at various Chipotle restaurants, so that the market price of the Company’s common stock would be based upon truthful and accurate information.” They say that if investors had this information, customers could have been protected.
Every time it seems like things are looking up for what was once everyone’s favorite lunch place, something else happens. At this point, it may be impossible for the chain to recover.
Have a tip we should know? firstname.lastname@example.org