Two Suppliers Named in Fleming Probe
NEW YORK -- The bankruptcy of grocery distributor Fleming Cos. Inc. could affect two major U.S. food companies, as Kraft Foods Inc. and Dean Foods Co. both acknowledged yesterday they received notices from the U.S. Securities and Exchange Commission regarding allegations that they helped Fleming inflate its revenue, according to a Reuters report.
According to the notices, employees at both companies signed documents that allowed now-bankrupt Fleming to book revenue as current income rather than as deferred revenue to be recognized in future periods.
Fleming is being investigated by the SEC for a host of issues, including its vendor trade practices, accounting for some sales transactions and its presentation of earnings.
Kraft and Dean said their own accounting for the transactions was not at issue, according to Reuters. Both said they planned to cooperate fully and respond to the SEC, which offers the companies an opportunity to explain why they should not have any action brought against them, the report stated.
According to the notices, employees at both companies signed documents that allowed now-bankrupt Fleming to book revenue as current income rather than as deferred revenue to be recognized in future periods.
Fleming is being investigated by the SEC for a host of issues, including its vendor trade practices, accounting for some sales transactions and its presentation of earnings.
Kraft and Dean said their own accounting for the transactions was not at issue, according to Reuters. Both said they planned to cooperate fully and respond to the SEC, which offers the companies an opportunity to explain why they should not have any action brought against them, the report stated.