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New Details Revealed in Hagens Berman Investigation of Green Mountain Coffee Roasters

According to filings with the U.S. Securities and Exchange Commission, two key executives at Green Mountain Coffee Roasters subsidiaries exercised large amounts of stock options in the weeks just prior to announcing to investors on Sept. 28, 2010 that the company was the subject of an investigation by the SEC into its "revenue recognition practices and the Company's relationship with one of its fulfillment vendors."

Michelle Stacy, president of Green Mountain Coffee Roasters subsidiary Keurig Inc., exercised 30,000 Green Mountain Coffee Roasters stock options and sold them at $30.95 per share on Aug. 18, 2010. She exercised another 5,000 options and sold them at $35.40 per share on Sept. 13, 2010 and, finally, exercised 5,000 options at $37 per share on Sept. 21, 2010. Total proceeds for the three stock sales amounted to about $1.3 million, SEC filings show.

R. Scott McCreary, president of Green Mountain Coffee Roasters subsidiary Specialty Coffee Business Unit, exercised 200,000 Green Mountain Coffee Roasters stock options and sold them at $33.08 per share on Aug. 18, 2010, filings with the SEC show. Total proceeds for the stock sales amounted to about $6.6 million.

A class-action lawsuit has already been filed in U.S. District Court in Vermont. The lawsuit alleges that Green Mountain artificially inflated the company's stock price by issuing inaccurate and unreliable financial statements, which were not prepared in accordance with Generally Accepted Accounting Principles and SEC rules.

Investors who purchased Green Mountain Coffee Roasters common stock between July 28, 2010 and Sept. 29, 2010, inclusive (the "Class Period" ) and who wish to move to be a lead plaintiff, must file a motion with the court by Nov. 29, 2010. You may contact our attorneys below to discuss this matter. Hagens Berman's investigation goes back to 2007.

Hagens Berman's investigation focuses on the SEC's inquiry concerning "certain revenue recognition practices and the Company's relationship with one of its fulfillment vendors." Neither the SEC nor Green Mountain Coffee Roasters management will disclose details of the investigation.

However, since Green Mountain Coffee Roasters' largest fulfillment vendor, M. Block & Sons Inc., warehouses physical inventory of Keurig machines and K-Cups, takes orders from retail customers, ships the products and collects receivables, it is possible that it concerns the propriety of so-called "bill-and-hold" transactions. Under Financial Accounting Standards Board rules, if M. Block & Sons initiated such transactions due to inadequate warehouse capacity, the transactions may be proper. However, if the transactions were initiated by Green Mountain Coffee Roasters solely for the purpose of accelerating revenue, then they would be misleading.

Following the close of trading on Sept. 28, 2010, shareholders learned of the SEC's inquiry into Green Mountain Coffee Roaster's revenue recognition, that it had been notified by the SEC of this investigation as early as Sept. 20, 2010, and that the company was expected to take a restatement charge in the near term - rendering the company's prior reported financial statements and reports unreliable, false and materially misleading. Following this announcement, shares of the company fell from $37 per share to a low of $27.47 per share.

Hagens Berman seeks confirmation of the allegations made in the class-action lawsuit filed in U.S. District Court in Vermont. If you want to consider moving to be a lead plaintiff, and you bought Green Mountain Coffee Roasters shares between 2007 and Sept. 28, 2010, you are encouraged to call Reed R. Kathrein at 510-725-3000 for a personal consultation, or contact the Hagens Berman legal team at GMCR@hbsslaw.com. Details of the investigation can be found at http://www.hbsslaw.com/cases-and-investigations/GMCR.

About Hagens Berman

Seattle-based Hagens Berman Sobol Shapiro LLP represents whistleblowers, investors and consumers in complex litigation. The firm has offices in Boston, Chicago, Colorado Springs, Los Angeles, Phoenix, San Francisco and Washington, D.C. Founded in 1993, HBSS continues to successfully fight for investor rights in large, complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com.

Firmani + Associates Inc.
Mark Firmani, 206-443-9357
mark@firmani.com