Gerald Barrett, Esq. SBN: 005855

WARD, KEENAN & BARRETT, P.C.

2141 E. Camelback Rd., Suite 100

Phoenix, AZ 85016

Tel: 602-279-1717

Fax: 602-279-8908

Email: gbarrett@wardkeenanbarrett.com

Richard A. Acocelli

Michael A. Rogovin

Kelly C. Keenan

WEISSLAW LLP

1500 Broadway, 16th Floor

New York, New York 10036

Tel: (212) 682-3025

Fax: (212) 682-3010

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

BYRON H. RUBIN, On Behalf of Himself 

and All Others Similarly Situated,

Plaintiff,

v.

INVENTURE FOODS, INC., TERRY 

MCDANIEL, TIMOTHY A. COLE, 

ASHTON D. ASENSIO, MACON BRYCE 

EDMONSON, PAUL J. LAPADAT, and 

JOEL D. STEWART, 

Defendants.

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Civil Action No.

CLASS ACTION 

COMPLAINT FOR 

VIOLATION OF THE 

FEDERAL SECURITIES LAWS

JURY TRIAL DEMANDED

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 1 of 20
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Plaintiff Byron Rubin (“Plaintiff”), by and through his undersigned counsel, for his 

complaint against defendants, alleges upon personal knowledge with respect to himself, and 

upon information and belief based upon, inter alia, the investigation of counsel as to all other 

allegations herein, as follows:

NATURE OF THE ACTION

1. This is a class action brought on behalf of the public stockholders of Inventure 

Foods, Inc. (“Inventure Foods” or the “Company”) against Inventure Foods and its Board of 

Directors (the “Board” or the “Individual Defendants”) for their violations of Sections 14(d)(4), 

14(e) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 

78n(d)(4), 78n(e), 78t(a), and U.S. Securities and Exchange Commission (“SEC”) Rule 14d-9, 

17 C.F.R. §240.14d-9(d) (“Rule 14d-9”) and to enjoin the expiration of a tender offer (the 

“Tender Offer”) on a proposed transaction, pursuant to which Inventure Foods will be acquired 

by Utz Quality Foods, LLC (“Utz”) through its indirect wholly-owned subsidiary Heron Sub, 

Inc. (“Merger Sub”) (the “Proposed Transaction”).

2. On October 26, 2017, Inventure Foods and Utz issued a joint press release 

announcing that they had entered into an Agreement and Plan of Merger (the “Merger 

Agreement”) to sell Inventure Foods to Utz. Under the terms of the Merger Agreement, Utz will 

acquire all outstanding shares of Inventure Foods for $4.00 in cash per share of Inventure Foods’ 

common stock (the “Offer Price”). Pursuant to the Merger Agreement, Utz, through Merger 

Sub, commenced the Tender Offer on November 15, 2017. The Tender Offer is scheduled to 

expire one minute after 11:59 p.m., New York City Time on December 13, 2017. The Proposed 

Transaction is valued at approximately $165 million.

3. On November 15, 2017, Inventure Foods filed a Solicitation/Recommendation 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 2 of 20
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Statement on Schedule 14D-9 (the “Recommendation Statement”) with the SEC. The 

Recommendation Statement, which recommends that Inventure Foods stockholders tender their 

shares in favor of the Proposed Transaction, omits or misrepresents material information 

concerning, among other things: (i) Inventure Foods management’s forecasts, utilized by the 

Company’s financial advisor, Rothschild Inc. (“Rothschild”), in its financial analyses; (ii) the 

data and inputs underlying the financial valuation analyses that support the fairness opinion 

provided by Rothschild; and (iii) the background process leading up to the Proposed Transaction. 

The failure to adequately disclose such material information constitutes a violation of Sections 

14(d), 14(e) and 20(a) of the Exchange Act as Inventure Foods stockholders need such 

information in order to make a fully informed decision whether to tender their shares in support 

of the Proposed Transaction or seek appraisal. 

4. In short, the Proposed Transaction will unlawfully divest Inventure Foods’ public 

stockholders of the Company’s valuable assets without fully disclosing all material information 

concerning the Proposed Transaction to Company stockholders. To remedy defendants’ 

Exchange Act violations, Plaintiff seeks to enjoin the expiration of the Tender Offer unless and 

until such problems are remedied. 

JURISDICTION AND VENUE

5. This Court has jurisdiction over the claims asserted herein for violations of 

Sections 14(d)(4), 14(e) and 20(a) of the Exchange Act and SEC Rule 14d-9 promulgated 

thereunder pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1331 

(federal question jurisdiction). 

6. This Court has jurisdiction over the defendants because each defendant is either a 

corporation that conducts business in and maintains operations within this District, or is an 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 3 of 20
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individual with sufficient minimum contacts with this District so as to make the exercise of 

jurisdiction by this Court permissible under traditional notions of fair play and substantial justice.

7. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Plaintiff’s 

claims arose in this District, where a substantial portion of the actionable conduct took place, 

where most of the documents are electronically stored, and where the evidence exists. Inventure 

Foods is incorporated in Delaware and is headquartered in this District. Moreover, each of the 

Individual Defendants, as Company officers or directors, either resides in this District or has 

extensive contacts within this District. 

PARTIES

8. Plaintiff is, and has been at all times relevant hereto, a continuous stockholder of 

Inventure Foods. 

9. Defendant Inventure Foods is a Delaware corporation with its principal executive 

offices located at 5415 East High Street, Suite 350, Phoenix, Arizona 85054. Inventure Foods’ 

common stock is traded on the NASDAQ under the ticker symbol “SNAK.” 

10. Defendant Terry McDaniel (“McDaniel”) has been Chief Executive Officer 

(“CEO”) and a director of the Company since May 2008. Defendant McDaniel previously 

served as Chief Operating Officer of the Company from April 2006 to April 2008.

11. Defendant Timothy A. Cole (“Cole”) has been Interim Chairman of the Board 

since January 2017 and a director of the Company since May 2014.

12. Defendant Ashton D. Asensio (“Asensio”) has been a director of the Company 

since February 2006. 

13. Defendant Macon Bryce Edmonson (“Edmonson”) has been a director of the 

Company since July 2006. 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 4 of 20
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14. Defendant Paul J. Lapadat (“Lapadat”) has been a director of the Company since 

May 2013. 

15. Defendant Joel D. Stewart (“Stewart”) has been a director of the Company since 

January 2017.

16. Defendants identified in paragraphs 10-15 are collectively referred to herein as 

the “Board” or the “Individual Defendants.”

OTHER RELEVANT ENTITIES

17. Utz is a Delaware limited liability company with its principal executive offices 

located at 900 High Street, Hanover, Pennsylvania 17331. Utz was founded in 1921 and is the 

largest privately-held and family-managed branded salty snack company in the United States.

18. Merger Sub is a Delaware corporation and an indirect wholly-owned subsidiary of 

Utz.

CLASS ACTION ALLEGATIONS

19. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal 

Rules of Civil Procedure on behalf of all persons and entities that own Inventure Foods common 

stock (the “Class”). Excluded from the Class are defendants and their affiliates, immediate 

families, legal representatives, heirs, successors or assigns and any entity in which defendants 

have or had a controlling interest.

20. Plaintiff’s claims are properly maintainable as a class action under Rule 23 of the 

Federal Rules of Civil Procedure.

21. The Class is so numerous that joinder of all members is impracticable. While the 

exact number of Class members is unknown to Plaintiff at this time and can only be ascertained 

through discovery, Plaintiff believes that there are thousands of members in the Class. As of 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 5 of 20
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November 6, 2017, there were approximately 19,827,000 shares of Company common stock 

issued and outstanding. All members of the Class may be identified from records maintained by 

Inventure Foods or its transfer agent and may be notified of the pendency of this action by mail, 

using forms of notice similar to those customarily used in securities class actions.

22. Questions of law and fact are common to the Class and predominate over 

questions affecting any individual Class member, including, inter alia:

(a) Whether defendants have violated Section 14(d)(4) of the Exchange Act 

and Rule 14d-9 promulgated thereunder;

(b) Whether the Individual Defendants have violated Section 14(e) of the 

Exchange Act;

(c) Whether the Individual Defendants have violated Section 20(a) of the 

Exchange Act; and

(d) Whether Plaintiff and the other members of the Class would suffer 

irreparable injury were the Proposed Transaction consummated. 

23. Plaintiff will fairly and adequately protect the interests of the Class, and has no 

interests contrary to or in conflict with those of the Class that Plaintiff seeks to represent. 

Plaintiff has retained competent counsel experienced in litigation of this nature.

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

adjudication of this controversy. Plaintiff knows of no difficulty to be encountered in the 

management of this action that would preclude its maintenance as a class action.

25. Defendants have acted on grounds generally applicable to the Class with respect 

to the matters complained of herein, thereby making appropriate the relief sought herein with 

respect to the Class as a whole.

SUBSTANTIVE ALLEGATIONS

Company Background

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 6 of 20
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26. Inventure Foods markets and manufactures healthy/natural and indulgent 

specialty snack food brands. The Company operates in two segments: frozen products and snack 

products. The frozen products segment produces frozen fruits, vegetables, beverages and 

desserts for sale primarily to grocery stores, club stores and mass merchandisers. All frozen 

products are considered part of the healthy/natural food category. The snack products segment 

produces potato chips, kettle chips, potato crisps, potato skins, pellet snacks, sheeted dough 

products and extruded products for sale primarily to snack food distributors and retailers. The 

snack products are considered part of both, the indulgent specialty snack category and the 

healthy/natural food category. For the year ended December 31, 2016, the healthy/natural food 

category represented 85.8% of the Company’s net sales. 

27. Inventure Foods owns manufacturing facilities in Bluffton, Indiana and Goodyear, 

Arizona, as well as a farming facility in Lynden, Washington. The Company operates 

Willamette’s two plants in Salem, Oregon and Fresh Frozen Foods’ two plants in Jefferson and 

Thomasville, Georgia.

28. On July 27, 2016, the Company initiated a process to consider strategic 

alternatives for the Company.

29. Inventure Foods entered into non-disclosure agreements (“NDAs”) with 55 

potential counterparties interested in a potential transaction with the Company, including 44 

counterparties, excluding Utz, interested in the strategic review process of the Company and 11 

parties interested in a private investment in public equity (“PIPE”) transaction with respect to the 

Company. The Recommendation Statement fails to disclose whether these NDAs contain 

“don’t-ask-don’t-waive” (“DADW”) standstill provisions that are currently precluding any of 

these parties from making topping bids for the Company.

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 7 of 20
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30. Following two formal rounds of bidding, on March 23, 2017, Inventure Foods 

announced that it had sold its Frozen Foods Business to Pictsweet for $23.7 million. On 

September 12, 2017, the Company announced that it, along with its wholly-owned subsidiaries, 

Rader Farms, Inc. and Willamette Valley Fruit Company, had sold its Frozen Fruit Business to 

Oregon Potato Company for $50.0 million.

31. On August 25, 2017, the Company entered into an exclusivity agreement with 

Utz.

32. The Company and Utz negotiated the terms of the Merger Agreement and 

Proposed Transaction throughout September and October 2017.

33. At an October 25, 2017 Board meeting, Rothschild rendered its fairness opinion 

and the Board approved the Merger Agreement. Utz and the Company then executed the Merger 

Agreement.

The Proposed Transaction 

34. On October 26, 2017, Inventure Foods and Utz issued a joint press release 

announcing the Proposed Transaction. The press release stated, in relevant part: 

PHOENIX, AZ and HANOVER, PA, October 26, 2017 — Inventure Foods, Inc. 

(NASDAQ: SNAK) (“Inventure Foods” or the “Company”), a leading specialty 

food marketer and manufacturer, and Utz Quality Foods, LLC (“Utz”), the largest 

privately-held and family-managed branded salty snack manufacturer and 

marketer in the United States, today announced they entered into a merger 

agreement pursuant to which Utz has agreed to acquire all of the Company’s 

outstanding shares of common stock in an all-cash transaction.

Under the terms of the merger agreement, an indirect subsidiary of Utz will 

commence a tender offer to acquire all of the outstanding shares of the 

Company’s common stock at a price of $4.00 per share in cash, for a total 

purchase price of approximately $165 million, including the assumption of 

approximately $75 million of debt and debt-like items, net of cash, approximately 

$8 million of the Company’s estimated closing costs and approximately $3 

million due to equity award holders. The acquisition is structured as an all-cash 

tender offer for all of the outstanding shares of Inventure Foods common stock, to 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 8 of 20
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be followed by a merger in which each remaining untendered share of Inventure 

Foods will be converted into the right to receive the same $4.00 per share cash 

price paid in the tender offer.

The transaction, which was unanimously approved by the Boards of both 

Inventure Foods and Utz, is subject to the tender of more than 50 percent of the 

fully diluted shares of Inventure Foods common stock, the receipt of certain 

regulatory approvals and other customary closing conditions. The transaction is 

not subject to a financing contingency and is expected to close by the end of the 

fourth quarter of 2017. The tender offer is expected to commence within ten 

business days.

“This transaction is the result of diligent analysis and thoughtful strategic 

deliberations by our Board of Directors and the result of the strategic and 

financial review we initiated in July 2016,” stated Terry McDaniel, Chief 

Executive Officer of Inventure Foods. “Our Board, with the advice of 

independent advisors, determined that this transaction will deliver immediate and 

certain cash value to our stockholders and new opportunities for our snack 

brands.”

“We are tremendously excited about the opportunity to acquire Inventure Foods,” 

said Dylan Lissette, Chief Executive Officer of Utz Quality Foods. “The 

Company’s specialty snack food products and brands, as well as its geographic 

footprint, customer relationships and distribution strengths, are highly 

complementary to our business and we look forward to continuing 

Inventure’s strong heritage of innovation in both healthy and indulgent snacking. 

We have also been extremely impressed with the team at Inventure, and look 

forward to working together going forward.”

Insiders’ Interests in the Proposed Transaction

35. Utz and Inventure Foods insiders are the primary beneficiaries of the Proposed 

Transaction, not the Company’s public stockholders. The Board and the Company’s executive 

officers are conflicted because they will have secured unique benefits for themselves from the 

Proposed Transaction not available to Plaintiff and the public stockholders of Inventure Foods. 

36. Notably, the Company’s Chief Financial Officer, Steve Weinberger 

(“Weinberger”), has secured employment for himself upon consummation of the Proposed 

Transaction. According to the Recommendation Statement, Weinberger has entered into a 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 9 of 20
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consulting agreement with Utz for which he will be paid a monthly consulting fee of $27,500, for 

a period of four to six months after closing of the merger.

37. Additionally, Company insiders stand to reap a substantial financial windfall for 

securing the deal with Utz. Upon consummation of the Proposed Transaction, each Company 

stock option, restricted stock unit (“RSU”) award and performance share unit (“PSU”) award 

will automatically vest and convert into the right to receive cash payments. The following table 

sets forth the aggregate amount of equity payments each executive officer stands to receive: 

Name 

Shares

subject

to

Options

to be

Cashed

Out (1)

(#) Value of

CashedOut

Options (2)

($) 

Shares

subject

to

RSUs to

be

Cashed

Out (3)

(#) Value of

CashedOut

RSUs (4)

($) 

Shares

subject

to

PSUs

to be

CashedOut (5)

(#) Value of

CashedOut

PSUs (6)

($) Total

Value

($)

Executive Officers: Terry McDaniel 22,540 90,160 126,268 505,702 85,671 342,686 938,548

Steve Weinberger 11,730 46,920 45,453 181,812 30,840 123,358 352,090

E. Brian Foster 550 2,200 29,748 118,992 20,184 80,736 201,928

Steven Sklar 62,025 248,100 33,102 132,408 23,163 92,650 473,158

Non-Employee Directors: Ashton D. Asensio 700 2,800 9,435 37,740 — — 40,540

Timothy A. Cole — — 9,435 37,740 — — 37,740

Macon Bryce Edmonson — — 9,435 37,740 — — 37,740

Paul J. Lapadat — — 9,435 37,740 — — 37,740

Joel D. Stewart — — — — — — — 38. Moreover, if they are terminated in connection with the Proposed Transaction, 

Inventure Foods’s named executive officers are set to receive substantial cash payments, as set 

forth in the following table:

Name Cash

($) (1) Equity($) (2) Pension/

NQDC 

(3) Perquisites/

Benefits (4) Tax

 Reimbursement 

(5) Total

($)

Terry McDaniel

 643,377 938,548 — — — 1,581,925

Steve Weinberger

 381,816 352,090 — — — 733,906

E. Brian Foster

 33,283 201,928 — — — 235,211

Steven Sklar

 33,280 473,158 — — — 506,438

 The Recommendation Statement Contains Numerous Material Misstatements or Omissions

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39. On November 15, 2017, defendants filed the materially incomplete and 

misleading Recommendation Statement with the SEC and disseminated it to Inventure Foods’ 

stockholders. The Recommendation Statement fails to disclose material information 

stockholders need in order to make a fully informed decision with respect to tendering their 

shares, including, as discussed below, material information concerning: (i) Inventure Foods 

management’s forecasts, utilized by the Company’s financial advisor, Rothschild, in its financial 

analyses; (ii) the data and inputs underlying the financial valuation analyses that support the 

fairness opinion provided by Rothschild; and (iii) the background process leading up to the 

Proposed Transaction. 

Material Omissions Concerning Inventure Foods’ Management’s Forecasts

40. The Recommendation Statement omits material information regarding the 

Company’s financial forecasts that were relied upon by the Company’s financial advisor in 

performing its valuation analyses of the Company.

41. For example, according to the Recommendation Statement, in performing its 

Illustrative Discounted Cash Flow Analysis, “Rothschild calculated the estimated present value 

of the standalone, unlevered, after-tax free cash flows that the Company was forecasted to 

generate from the beginning of FY2017 through the end of FY2018 based on the Forecasts 

provided by the management of the Company.” The Recommendation Statement, however, 

wholly omits Inventure Foods management’s standalone, unlevered, after-tax free cash flows 

that the Company was forecasted to generate from the beginning of FY2017 through the end of 

FY2018, as well as the underlying line items used to calculate the unlevered free cash flows.

42. The Recommendation Statement discloses the Company performed a Liquidation 

and Restructuring Analysis (14D-9, 48-49) to assist the Board in reviewing strategic alternatives. 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 11 of 20
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However, the Recommendation Statement fails to disclose any of the variables and assumptions 

underlying these forecasts, including projections of (i) timing of a transaction or liquidation, (ii) 

results of operations for the fourth quarter of 2017, (iii) additional customer chargebacks and 

allowances, (iv) net liquidation value of inventory, (v) liquidation value of trade and other 

receivables, (vi) net liquidation value of assets of discontinued operations, (vii) liquidation value 

of other current assets, (viii) liquidation value of fixed assets, (ix) current and non-current 

liabilities, (x) liquidation value of trademarks and other intangibles; (xi) settlement payments to 

terminate the Company’s real estate lease obligations, (xii) settlement payments to terminate the 

Company’s obligations under its employment agreements, (xiii) settlement payments to 

terminate the Company’s production orders and letters of credit, (xiv) settlement payments to 

terminate the Company’s obligations under its vendor contracts, and (xv) legal, tax, accounting 

and related costs. Recommendation Statement at 49.

43. The Company also prepared an Illustrative Chapter 7 Liquidation Analysis to 

estimate recoveries in a Chapter 7 liquidation. The Recommendation Statement fails to disclose 

the “unaudited book values as of September 2, 2017 and October 6, 2017, respectively, which, 

for purposes of this analysis, were assumed to be representative of the Company’s assets and 

liabilities at the commencement of a Chapter 7 liquidation process” on which these forecasts 

were based. Recommendation Statement at 50.

44. The omission of this material information renders the Recommendation 

Statement false and misleading, including, inter alia, the “Certain Unaudited Prospective 

Financial Information of Inventure Foods” section of the Recommendation Statement.

Material Omissions Regarding Rothschild’s Financial Valuation Analyses

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45. The Recommendation Statement describes Rothschild’s fairness opinion and the 

various valuation analyses performed in support of its opinion. However, the description of 

Rothschild’s fairness opinion and analyses fails to include key inputs and assumptions 

underlying these analyses. Without this information, as described below, Inventure Foods’ 

public stockholders are unable to fully understand these analyses and, thus, are unable to 

determine what weight, if any, to place on Rothschild’s fairness opinion in determining whether 

to tender their shares in connection with the Tender Offer or seek appraisal. This omitted 

information, if disclosed, would significantly alter the total mix of information available to 

Inventure Foods’ stockholders.

46. With respect to Rothschild’s Illustrative Discounted Cash Flow Analysis of the 

Company, the Recommendation Statement fails to disclose the key input into this analysis, 

Inventure Foods management’s standalone, unlevered, after-tax free cash flows that the 

Company was forecasted to generate from the beginning of FY2017 through the end of FY2018. 

The Recommendation Statement further fails to disclose: (i) the Company’s net debt; (ii) the 

inputs and assumptions underlying the calculation of the discount rate range of 13.5% to 15.5% 

used for Inventure Foods in the analysis; (iii) the terminal period used in calculating the range of 

estimated terminal values for the Company; (iv) the projected adjusted EBITDA of the Company 

in the terminal period; and (v) the implied perpetuity growth rates derived from the analysis.

47. With respect to Rothschild’s Selected Precedent Transactions Analysis, the 

Recommendation Statement fails to disclose the individual multiples for each of the selected 

transactions analyzed by Rothschild as well as any benchmarking statistics observed by 

Rothschild comparing Inventure Foods with the target companies.

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48. Similarly, with respect to Rothschild’s Selected Public Company Analysis, the 

Recommendation Statement fails to disclose the individual multiples and benchmarking metrics 

for each of the public companies analyzed by Rothschild.

49. The omission of this material information renders the Recommendation 

Statement false and misleading, including, inter alia, the following section of the 

Recommendation Statement: “Opinion of Inventure Foods’ Financial Advisor.”

Material Omissions Concerning the Background Process of the Proposed Transaction

50. In addition, the Recommendation Statement omits material information regarding 

the process leading to the Proposed Transaction.

51. Critically, in connection with the strategic review process, the Recommendation 

Statement sets forth that the Company entered into a total of 55 NDAs, excluding Utz, with both 

financial and strategic parties that contained standstill provisions. However, the 

Recommendation Statement fails to disclose whether the standstill provisions in the NDAs are 

still in effect or are DADW provisions that are presently preventing each and every one of these 

parties from making a superior acquisition offer for the Company. 

52. Without this information, stockholders may have the mistaken belief that, if these 

potentially interested parties wished to come forward with a superior offer, they are permitted to 

do so, when in fact they are contractually prohibited from doing so.

53. Moreover, the Recommendation Statement omits material information as to 

potential conflicts of interest faced by Inventure Foods management and the Board. The 

Recommendation Statement sets forth:

Parent expects that the Surviving Corporation will enter into a consulting 

agreement with Mr. Weinberger following the closing of the Merger pursuant to 

which Mr. Weinberger would provide transition services to the Surviving 

Corporation for a period of four to six months after the closing of the Merger. 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 14 of 20
15

Under such arrangement, Mr. Weinberger would be paid a monthly consulting fee 

equal to $27,500, which is his current monthly base salary with Inventure Foods.

It is possible that Parent, Merger Sub or their respective affiliates may enter into 

employment or other arrangements with other officers or directors of Inventure 

Foods in the future.

However, the Recommendation Statement completely fails to set forth any of the employmentrelated discussions and negotiations that occurred between Utz, Weinberger, and any other 

Inventure Foods executive officers, including who participated in all such communications, 

when they occurred, and their content. The Recommendation Statement further fails to disclose 

whether any of Utz’s prior indications of interest mentioned management retention. In the press 

release, Dylan Lissette, CEO of Utz, was quoted as stating: “We have also been extremely 

impressed with the team at Inventure, and look forward to working together going forward.”

54. Communications regarding post-transaction employment and merger-related 

benefits during the negotiation of the underlying transaction must be disclosed to stockholders. 

This information is necessary for stockholders to understand potential conflicts of interest of 

management and the Board, as that information provides illumination concerning motivations 

that would prevent fiduciaries from acting solely in the best interests of the Company’s 

stockholders.

55. The omission of this material information renders the Recommendation 

Statement false and misleading, including, inter alia, the “Background of the Offer and Merger 

Agreement; Reasons for Recommendation” section of the Recommendation Statement.

56. The Individual Defendants were aware of their duty to disclose this information 

and acted negligently (if not deliberately) in failing to include this information in the 

Recommendation Statement. Absent disclosure of the foregoing material information prior to 

the expiration of the Tender Offer, Plaintiff and the other members of the Class will be unable to 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 15 of 20
16

make a fully-informed decision whether to tender their shares in connection with the Proposed 

Transaction or seek appraisal and are thus threatened with irreparable harm warranting the 

injunctive relief sought herein.

CLAIMS FOR RELIEF

COUNT I

Class Claims Against All Defendants for Violations 

of Section 14(d) of the Exchange Act and SEC Rule 14d-9 

57. Plaintiff repeats all previous allegations as if set forth in full.

58. Defendants have caused the Recommendation Statement to be issued with the 

intention of soliciting Inventure Foods stockholders to tender their shares in the Tender Offer.

59. Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9 promulgated 

thereunder require full and complete disclosure in connection with tender offers.

60. The Recommendation Statement violates Section 14(d)(4) and Rule 14d-9 

because it omits material facts, including those set forth above, which omission renders the 

Recommendation Statement false and/or misleading.

61. Defendants knowingly or with deliberate recklessness omitted the material 

information identified above from the Recommendation Statement, causing certain statements 

therein to be materially incomplete and therefore misleading. Indeed, while defendants 

undoubtedly had access to and/or reviewed the omitted material information in connection with 

approving the Proposed Transaction, they allowed it to be omitted from the Recommendation 

Statement, rendering certain portions of the Recommendation Statement materially incomplete 

and therefore misleading.

62. The misrepresentations and omissions in the Recommendation Statement are 

material to Plaintiff and the Class, who will be deprived of their right to make an informed 

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 16 of 20
17

decision whether to tender their shares or seek appraisal if such misrepresentations and 

omissions are not corrected prior to the expiration of the Tender Offer. Plaintiff and the Class 

have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can 

Plaintiff and the Class be fully protected from the immediate and irreparable injury that 

defendants’ actions threaten to inflict.

COUNT II

Class Claims Against All Defendants for Violations of Section 14(e) of the Exchange Act 

63. Plaintiff repeats all previous allegations as if set forth in full.

64. Defendants violated Section 14(e) of the Exchange Act by issuing the 

Recommendation Statement in which they made untrue statements of material facts or failed to 

state all material facts necessary in order to make the statements made, in light of the 

circumstances under which they are made, not misleading, or engaged in deceptive or 

manipulative acts or practices, in connection with the Tender Offer.

65. Defendants knew that Plaintiff would rely upon their statements in the 

Recommendation Statement in determining whether to tender his shares pursuant to the Tender 

Offer.

66. As a direct and proximate result of these defendants’ unlawful course of conduct 

in violation of Section 14(e) of the Exchange Act, absent injunctive relief from the Court, 

Plaintiff has sustained and will continue to sustain irreparable injury by being denied the 

opportunity to make an informed decision in deciding whether or not to tender his shares or seek 

appraisal.

COUNT III

Class Claims Against the Individual Defendants for 

Violation of Section 20(a) of the Exchange Act

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 17 of 20
18

67. Plaintiff repeats all previous allegations as if set forth in full.

68. The Individual Defendants acted as controlling persons of Inventure Foods within 

the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions 

as officers or directors of Inventure Foods and participation in or awareness of the Company’s 

operations or intimate knowledge of the false statements contained in the Recommendation 

Statement filed with the SEC, they 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 Plaintiff contends are false and misleading.

69. Each of the Individual Defendants was provided with or had unlimited access to 

copies of the Recommendation Statement and other statements alleged by Plaintiff to be 

misleading prior to or shortly after these statements were issued and had the ability to prevent the 

issuance of the statements or cause the statements to be corrected.

70. In particular, each of the Individual 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. The Recommendation Statement at issue 

contains the unanimous recommendation of each of the Individual Defendants to approve the 

Proposed Transaction. They were, thus, directly involved in the making of this document.

71. In addition, as the Recommendation Statement sets forth at length, and as 

described herein, the Individual Defendants were each involved in negotiating, reviewing, and 

approving the Proposed Transaction. The Recommendation Statement purports to describe the 

various issues and information that they reviewed and considered — descriptions which had 

input from the Individual Defendants.

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 18 of 20
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72. By virtue of the foregoing, the Individual Defendants have violated section 20(a) 

of the Exchange Act.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment and preliminary and permanent relief, 

including injunctive relief, in his favor on behalf of Inventure Foods, and against defendants, as 

follows:

A. Ordering that this action may be maintained as a class action and certifying 

Plaintiff as the Class representative and Plaintiff’s counsel as Class counsel;

B. Preliminarily and permanently enjoining defendants and all persons acting in 

concert with them from proceeding with, consummating, or closing the Proposed Transaction;

C. In the event defendants consummate the Proposed Transaction, rescinding it and 

setting it aside or awarding rescissory damages to Plaintiff and the Class;

D. Awarding Plaintiff the costs of this action, including reasonable allowance for 

Plaintiff’s attorneys’ and experts’ fees; and

E. Granting such other and further relief as this Court may deem just and proper.

JURY DEMAND

Plaintiff demands a trial by jury on all claims and issues so triable.

Dated: November 22, 2017

WARD, KEENAN & BARRETT, P.C.

/s/

Gerald Barrett

2141 E. Camelback Rd., Suite 100

Phoenix, AZ 85016

Tel: 602-279-1717

Fax: 602-279-8908

Email: gbarrett@wardkeenanbarrett.com

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 19 of 20
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WEISSLAW LLP

Richard A. Acocelli

Michael A. Rogovin

Kelly C. Keenan

1500 Broadway, 16th Floor

New York, New York 10036

Tel: (212) 682-3025

Fax: (212) 682-3010

Attorneys for Plaintiff

Case 2:17-cv-04295-JZB Document 1 Filed 11/22/17 Page 20 of 20