Pizza Chain Papa Murphy’s Must Face Investor Suit on MTY Merger

Papa Murphy’s Holdings Inc. lost a round in a would-be class suit alleging it misled investors ahead of a 2019 merger, after a federal judge in Washington state agreed the complaint’s allegations were sufficient to move forward.

The take-and-bake pizza chain’s former shareholders properly alleged that Papa Murphy’s made misleading statements and acted negligently, the U.S. District Court for the Western District of Washington said in an order adopting a magistrate judge’s recommendations.

MTY Food Group acquired Papa Murphy’s when the deal closed in 2019. The pizza chain’s investors accused it of misleading them ahead of the merger about ...