Kraft Heinz Fair Fund
Frequently Asked Questions
1. Who is eligible to participate in the distribution of the Fair Fund?
On September 3, 2021, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) issued the Order instituting and simultaneously settling cease-and-desist proceedings (the “OIP”) against The Kraft Heinz Company (“Kraft Heinz”) and Eduardo Pelleissone. In the OIP, the Commission found that Kraft Heinz engaged in various types of accounting misconduct that resulted in Kraft Heinz reporting inflated earnings metrics during the period from 2015 through 2018.
The OIP ordered Kraft Heinz to pay a civil money penalty in the amount of $62,000,000, and created a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 (the “Kraft Heinz Fair Fund”) to be used to distribute the penalty to investors harmed by the alleged misconduct. The Kraft Heinz Fair Fund also includes disgorgement and prejudgment interest of $14,211.31, and a civil penalty of $300,000, paid by Eduardo Pelleissone.
2. Who is eligible to participate in the distribution of the Fair Fund?
You may be eligible for compensation from the Kraft Heinz Fair Fund if you purchased or acquired Kraft Heinz Common Stock during the period from February 26, 2016 until the market close on February 21, 2019 (the “Relevant Period”).
3. What securities must have I purchased to be eligible to participate in the recovery?
Kraft Heinz common stock is the only security eligible for recovery under the terms of the Distribution Plan:
Kraft Heinz Common Stock
4. Who is not eligible to participate in the distribution of the Kraft Heinz Fair Fund?
You are not eligible to participate in the distribution of the Fair Fund if you are or were:
a.. The Respondents in this matter or the defendant in the SEC v. Hofmann, 21-CV-7407 (SDNY);
b. A Person who served at any time from July 2, 2015 through the end of the Relevant Period as an officer* or director of KHC;
c. An employee or former employee of KHC or any of its affiliates who has been disciplined, terminated, or has otherwise resigned, in connection with the conduct described in the Order;
d. A Person employed within the procurement division at KHC at any time from July 2, 2015 through the end of the Relevant Period;
fe Any Person who, as of the Claims Bar Date, has been the subject of criminal charges related to the conduct described in the Order or any related Commission action;
f. Any firm, trust, corporation, or other entity in which Respondents has or had a controlling interest;
g. Any Person, firm, trust, corporation, or other entity that beneficially owned more than 20% of KHC common stock at any time from July 2, 2015 through the end of the Relevant Period;
h. The Fund Administrator, its employees, and those Persons assisting the Fund Administrator in its role as the Fund Administrator;
i. Any assigns, creditors, heirs, distributes, spouses, parents, dependent children or controlled entities of any of the foregoing Persons or entities listed above; or
j. Any purchaser or assignee of another Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance or devise.
*An “officer “excluded under this paragraph is any officer of KHC required to file a Form 3, 4, or 5 with the Commission pursuant to Section 16 of the Securities Exchange Act of 1934 to report transactions in the Security during the Relevant Period.
5. I was a Kraft Heinz employee and acquired KHC through an employee benefit program. Do these shares qualify me for a payment?
If you transacted in shares of KHC stock through a Kraft Heinz sponsored 401k plan during the relevant time period, the 401k plan(s) will file a claim on behalf of all eligible plan participants. Once the Fair Fund processes a payment to the plan(s) you will receive additional communication on the proceeds to be distributed to you through the plan(s). Any participants that held shares of Kraft Heinz common stock directly (outside of an employee plan) must file a separate claim relating to those shares. The Fund Administrator’s customer service personnel are available to assist with all facets of the claim submission process. Please visit khcfairfund.com for more information.
If you participated in the 2016, 2017 or 2018 Kraft Heinz Bonus Swap Plans or if you received a vesting of Kraft Heinz Restricted Stock Units (“RSUs”) during the period from February 26, 2016 through February 21, 2019, Kraft Heinz has prepared this brief document as a short guide to assist you with filing a claim for compensation from the KHC Fair Fund.
6. Do shares purchased by reinvesting dividends qualify for recovery?
Yes, shares purchased by reinvesting dividends are potentially eligible for recovery. Note that you must provide an account statement or other documentation for each purchase, including the date of purchase and the number of shares.
7. What is considered my official date of purchase (or sale) of my shares?
The “trade date” or “contract date” is the official date to use as the date of your transaction for purchases and/or sales. Many broker transaction statements provide both a “trade date” and a “settlement date”. The trade date is the correct date to use for purposes of completing a claim form. All fees and commissions are excluded.
8. I inherited (or received as a gift) shares of Kraft Heinz common stock. Am I eligible to file a claim?
The eligibility of a claim is dependent upon when the shares of Kraft Heinz common stock were originally purchased. The receipt of shares of Kraft Heinz common stock by gift or inheritance, for example, does not constitute a purchase for purposes of determining eligibility. If the original owner of the Kraft Heinz common stock purchased the shares during the relevant period, you may be eligible to recover for those inherited or gifted shares.
You must include copies of broker statements or other documentation evidencing the original purchase of the Kraft Heinz common stock with your claim. In addition, you must provide documentation of the transfer of the shares to you, such as the broker statements for the period in which the transfer occurred. In the case of an inheritance, you should attach copies (please do not send originals) of any legal documentation showing you are the legal recipient of these shares.
If the original owner purchased the shares of Kraft Heinz common stock outside of the relevant period, the shares would not be eligible for recovery.
9. The Plan of Allocation includes something called the Market Loss Limitation. What does that mean?
The Plan of Allocation (“POA”) requires us to not only identify the amount of claimant’s Recognized Loss in accordance with the calculation detailed in the POA, but also to identify what a claimant actually lost from their transactions in Kraft Heinz common stock on a cash-in, cash-out basis during the Relevant Period. This is the Market Loss Limitation.
If the amount a claimant actually lost from their transactions in Kraft Heinz common stock during the Relevant Period on a cash-in, cash-out basis is less than the amount of their Recognized Loss as determined in accordance with the POA, then the amount of the claim will be equal to the amount of the actual loss (or gain).
For example, if a claimant realized a market gain from their transactions in Kraft Heinz common stock during the Relevant Period, the claimant would not be eligible for compensation because they did not suffer a loss (even if the calculation of Recognized Loss under the POA shows a loss).
Generally, the Market Loss Limitation is intended to help direct the recoveries from the Fair Fund to compensate those investors that actually suffered out of pocket losses as a result of their transactions in Kraft Heinz common stock.
10. The Distribution Plan provides that the Relevant Period for purposes of eligibility is February 26, 2016 through February 21, 2019. Why does the Claim Form require me to list purchases and sales through and including May 22, 2019?
The POA in this case requires that in determining a claimant’s eligibility we must look at all transactions that occurred during the Relevant Period, as well as all transactions that took place during the 90-day period that extends after the end of the Relevant Period (February 22, 2019 through May 22, 2019).
While an eligible claimant must have purchased Kraft Heinz common stock during the Relevant Period, the POA requires that all sales until May 22, 2019 be considered in determining eligible losses. By taking into account any sales that occurred during the 90-day period, we are able to account for the proceeds of any sales during the period. Accounting for these sales will enable us to determine the actual losses for each claimant.
This is yet another measure that is implemented to try to ensure that recoveries from the Fair Fund are directed to compensate those investors that actually suffered an out of pocket loss as a result of trading during the Relevant Period when the misinformation was in the marketplace.
If you would like more information, please see the Plan of Allocation that can be found as Exhibit A to the Distribution Plan.
The Claim Form
11. How do I apply to participate in the Kraft Heinz Fair Fund? How do I file a claim?
If you would like to apply to participate in the Kraft Heinz Fair Fund, you must submit a completed claim form that is postmarked on or before June 21, 2023. You may submit your claim form in one of the following ways:
You can file your claim using our online claims system here. You will enter all of your information directly into the online claim form, scan your supporting documentation, and upload the supporting documentation to your claim form. If you are unable to scan your supporting documentation, you can mail the supporting documentation directly to the Fund Administrator at the address provided herein. If mailing supporting documentation, you will be directed to print off a cover sheet from the website to include with your mailing. This will ensure your documentation is included with the appropriate claim.
If you prefer to complete and mail a paper claim form, you can download and print one here. Read and complete all required fields in the claim form, attach all necessary supporting documentation and mail the completed to:
Kraft Heinz Fair Fund P.O. Box 6977 Syracuse, NY 13217-6977
You can ask the Fund Administrator to mail you a claim form by calling toll free (800) 218-5449, sending an email request to [email protected] or by writing to the address included above. Remember to provide your complete name and mailing address. Upon receipt, read and complete all required fields in the claim form, attach all necessary supporting documentation and mail the completed claim form to the Fund Administrator.
12. What is the deadline for submitting the claim form?
The claim form must be postmarked on or before June 21, 2023.
13. Do I need to submit supporting documents with my claim form?
Yes. You must provide with your completed claim form documentation of (a) the number of shares you held as of the opening of trading on February 26, 2016, if any; (b) all purchases and sales of Kraft Heinz common stock between February 26, 2016 through and including February 21, 2019; and (c) the number of shares you held as of May 22, 2019, if any. Please be sure the documentation confirms the details provided in your claim form.
All documentation must include adequate identifying information (i.e., your name and account number must appear on all documentation submitted). Handwritten modifications to the documentation or self-generated schedules or statements will not be accepted. Please do not send the originals of your supporting documentation; be sure to provide copies. Documentation should list the security, type of transaction, date of transaction, number of shares, and total amount of the transaction.
The types of documents that should be submitted to support your claim include:
- monthly brokerage or other investment account statements;
- trade confirmation slips; or
- a signed letter from your broker on firm letterhead verifying the information you have provided in the claim form.
If you do not submit documents with your claim form to verify your holdings and transactions in Kraft Heinz common stock during the Relevant Period, we will be unable to validate your claim. Notices detailing any deficiencies in your claim will be mailed at a later date and you will have an opportunity to submit additional supporting documentation at that time.
14. What if I cannot provide all the supporting documents with my claim form?
It is very important that you provide documentation in support of the holdings and transactions listed on your claim form. Failure to do so may invalidate your claim. If you cannot locate these documents within your personal records, contact your broker or other account representative and request copies of the documents you need.
15. Will my information be kept confidential?
16. Why does the claim form ask for my phone number and email address?
The Fund Administrator will likely need more information in order to process your claim form. The claim form asks for your phone number and email address so you can be contacted promptly if additional information is needed. The Fund Administrator will not voluntarily release this information to any person or entity not involved with the Fair Fund.
17. Why does the claim form ask for my Social Security Number (“SSN”), Tax Identification Number (“EIN”) or Passport ID Number?
The Fund Administrator needs this information to administer your claim during the claim administration process. These identifying items are necessary for a number of reasons, including enabling the Fund Administrator to ensure payments from the Fair Fund are not directed to prohibited participants listed on the U.S. Treasury’s Office of Foreign Asset Control’s (OFAC) records.
We recognize the importance of keeping your personal information secure, and we do everything under our control to ensure this data is protected. This personal information will only be used as necessary to administer your claim during the claim administration process.
18. I purchased shares of Kraft Heinz common stock, but they were held in my broker’s name. Who should complete the claim form?
The beneficial owner of the shares of Kraft Heinz common stock should complete the claim form. If you purchased the shares but they were registered in your broker’s name, you are the beneficial owner.
19. I held shares of Kraft Heinz common stock in more than one account. Should I file a separate claim form for each account?
You should include all of your transactions in Kraft Heinz common stock during the Relevant Period in one claim form, even if they were purchased or held using different brokerages or representatives. However, if you held shares of Kraft Heinz common stock in accounts that were different account types or held under different legal capacities (e.g., an individual account and a partnership account), you should complete a separate claim form for each.
20. If I was a co-owner of Kraft Heinz common stock, do we both need to sign the claim form?
Yes, all owners must sign. However, if your co-owner is deceased, please read the next question below.
21. What should I do if the investor has died? How should the claim form be completed?
If the beneficial owner of the shares of Kraft Heinz common stock has died, and would have otherwise met the eligibility requirements of the Kraft Heinz Fair Fund, the estate or the legal heirs may be eligible for a distribution. The executor or administrator of the estate should sign and submit the claim form denoting his or her title (for example, “Executor of the Estate of John Doe”) on the signature page.
If no estate was opened, or if the estate is now closed, all the legal heirs of the investor should sign their names on the claim form, and add the word “Heir”. In either circumstance, you must attach copies (please do not send originals) of any legal documentation providing evidence you are the executor or Fund Administrator of the estate, or the legal heir of the deceased.
If you had a co-owner of the shares of Kraft Heinz common stock who has died, you should sign the claim form yourself, and send copies of documents that show:
The co-owner has died (for example, a copy of the death certificate); and
You are legally entitled to the co-owner’s interest in the shares of Kraft Heinz common stock.
After Your Claim Form is Submitted
22. Will I be notified whether my claim was received by the Fund Administrator?
If you submit your claim using the on-line claim filing option, you will receive an electronic confirmation and corresponding claim ID immediately.
If you mail a claim form directly to the Fund Administrator, you will not receive confirmation of receipt from the Fund Administrator. We would encourage you to either use the online claim filing option, or to utilize a mailing option or courier service that will provide you with proof of delivery and receipt of the claim form by the Fund Administrator. The burden to prove receipt of the claim by the Fund Administrator will be upon the potential claimant.
23. Will I be notified whether my claim is accepted, rejected or deficient?
Yes. A determination notice will be mailed to all claimants that filed a claim form. The determination notice will provide each claimant with the status of their claim: approved, deficient or ineligible. If your claim is deficient, we will provide an explanation of the deficiency and an instruction regarding what is required to cure the deficiency. If your claim is determined to be ineligible, the determination notice will provide the reason for such denial. All information submitted in response to a determination notice, either attempting to cure a deficient claim or requesting reconsideration of a rejected claim, must be postmarked no more than 30 days after the date of your determination notice.
24. How much will I be paid if I am eligible?
Until all claims have been fully processed, it is not possible to determine the amount of any individual payment because the amount will depend on a variety of factors; including, the number of eligible claims processed, the total dollar amount of the eligible claims, and the eligible loss amount of your Kraft Heinz common stock transactions.
If you are determined to be eligible, the amount of your recovery will be based on the plan of allocation loss methodology that was approved by the Commission. The plan of allocation analyzes the reaction of the price of Kraft Heinz common stock to the misstatements and omissions alleged in the SEC’s OIP in order to assess the inflation of the price of Kraft Heinz common stock as a result of the conduct at issue.
Your eligible loss will be calculated in accordance with the plan of allocation. Please note that your eligible losses will be used to determine the amount of your distribution payment from the Kraft Heinz Fair Fund; however, if the aggregate losses of all claimants exceeds the value of the Kraft Heinz Fair Fund, the Kraft Heinz Fair Fund will be distributed to eligible claimants proportionately based upon the ratio of the eligible losses of each claimant to the aggregate eligible losses of all eligible claimants.
You can read a more detailed explanation of the plan of allocation in the Distribution Plan which is available on this website.
25. Will I have to pay taxes on my payment?
We cannot provide tax or other legal advice on this matter. It is your responsibility to determine and pay any federal, state or other taxes you may owe on recoveries you receive from the Kraft Heinz Fair Fund. Therefore, we recommend that you consult your tax advisor.
26. What should I do if I move after I submit my claim form?
If you move after you file your claim form, please be sure to provide your new address to ensure that we are able to contact you in the event you are eligible to receive a distribution payment. You can update your address by calling (800) 218-5449, sending an email to [email protected], or writing to:
Kraft Heinz Fair Fund
P.O. Box 6977
Syracuse, NY 13217-6977
Effects of Submitting Claim
27. Am I giving up any legal rights by filing a claim form?
No. By submitting a claim form, you are not forfeiting any rights or claims you may have against Kraft Heinz, its past and present directors, officers, advisors or agents.
28. Is this case a class action?
No. This Fair Fund settlement is the result of an enforcement action brought by the U.S. Securities and Exchange Commission.
29. I am an institutional filer; may I file my claim electronically?
Yes. The Fund Administrator has established a procedure to enable institutional filers to submit claims electronically. The electronic filing template is available here.
30. Will the Fund Administrator ship blank claim forms to an institutional filer in bulk so that the institutional filer can mail them directly to clients?
No. The Fund Administrator will not mail bulk quantities of blank claim forms or other materials to an institutional filer. The claim form and all other relevant material can be downloaded directly from the Kraft Heinz Fair Fund website here, or you may direct your clients to submit their claim using the online claim filing option available here.
Getting More Information
31. I still have some questions. Who can I contact?
If you have additional questions, you may:
- Call Toll-Free (800) 218-5449 (Domestic) or (315) 671-5772, Monday through Friday between 8:30am and 5:00pm, Eastern Standard Time;
- Send an email to us at [email protected]; or
- Write to:
Kraft Heinz Fair Fund
P.O. Box 6977
Syracuse, NY 13217-6977
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