Diamond Foods' explanation of recent payments to some walnut growers being questioned by those growers, who say they didn't intend to deliver their 2011 crops to the company
December 12, 2011
Diamond Foods Inc.'s explanation of recent payments to some walnut growers is being questioned by those growers, who say they didn’t intend to deliver their 2011 crops to the company, The Wall Street Journal reported Dec. 12.
Diamond Foods has said that a sizable payment to its walnut growers in September was an advance on their 2011 crop. But three growers said they told the company that they didn't intend to deliver this year’s crops to Diamond, yet were assured by company representatives that they could cash the checks anyway.
The checks were to top up payments for their 2010 crops, the growers were told.
The company is the subject of shareholder suits that claim Diamond might have used the payments to shift costs from the fiscal year that ended July 31 into the current year, padding earnings for the previous year.
The checks to the growers are the subject of an investigation by Diamond's board and have become a sticking point in the company's deal to buy the Pringles snack brand from Procter & Gamble Co.
The primary source of this article is The Wall Street Journal, New York, New York, on Dec. 12, 2011.