Whiskey Giant MGP Escapes Investor Lawsuit as Judge Rules Its Actions Were ‘Poorly Handled,’ Not Fraud
A logo sign outside of a facility occupied by MGP Ingredients, Inc., also known as Midwest Grain Products, in Lawrenceburg, Indiana on July 2, 2017. (Sipa via AP Images)
A U.S. judge has dismissed a lawsuit accusing MGP Ingredients executives of securities fraud, ruling that the company’s actions were more likely mismanagement than intentional deception, according to The Spirits Business.
The case was brought by pension funds and retirement systems that purchased shares in the contract distiller. Plaintiffs alleged that former CEOs David Colo and David Bratcher, along with CFO and interim CEO Brandon Gall, concealed negative information about the company’s business from investors.
The judge rejected those claims, finding that the plaintiffs failed to show violations of securities laws.
“The non-fraudulent inferences proposed by defendants are more compelling,” the judge said, according to The Spirits Business. “Given the corporate structure, business practices, compensation schemes of MGPI, and the actions of the individual defendants, it is far more likely that defendants poorly handled quickly changing circumstances and market conditions affecting their business.”
The dispute centered on MGP’s Distilling Solutions division, which produces bourbon, rye and other American whiskeys for third-party brands. The segment accounted for more than half of the company’s revenue in 2022 and 2023.
Plaintiffs argued that MGP increased production during pandemic-era demand but did not scale back as consumption slowed. They alleged the company failed to disclose rising inventory levels and weakening demand.
In October 2024, MGP lowered its full-year earnings outlook and acknowledged elevated inventory levels were weighing on performance. The announcement led to a sharp drop in the company’s stock price.
Julie Francis, who became CEO in July 2025, was not named in the lawsuit.
According to The Spirits Business, MGP’s most recent financial results showed sales declined by nearly 25%.
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