Newsline: SEC Probes Dean, Kraft's Involvement with Distributo
DALLAS-Dean Foods Co. says Securities and Exchange Commission (SEC) regulators are considering civil charges against the company alleging that it assisted bankrupt Fleming Companies with questionable bookkeeping entries. Regulators believe Dean provided Fleming with correspondence that allowed Fleming to characterize two payments made to it by Dean as current income rather than deferred revenue to be recognized over future periods. Kraft Foods, Northfield, Ill., is also being investigated relative to Fleming's practices, according to the Chicago Tribune.
The SEC has made no allegations about Dean or Kraft's own financial statements. It said Dean expensed the payments, which totaled $2.7 million, when they were made in the second and third quarters of 2002.
In related news, Dean's quarterly earnings surged, helped by a one-time gain from the sale of its frozen pre-whipped topping business. The firm reported third-quarter profits of $122.2 million, or 76 cents a share, up from $68.7 million, or 45 cents a share, a year earlier.