Embattled Kraft Heinz is facing a class action lawsuit questioning why an affiliate of controlling shareholder and co-owner 3G Capital transferred US$1.23bn of stock six months before the US food giant announced a $15.4bn writedown and a $12.6bn quarterly loss.

Shareholder Steve Walling filed the lawsuit – Walling v Kraft Heinz Co. et al – in the US District Court, Western District of Pennsylvania, this week.

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It claims Kraft Heinz executives formerly employed at 3G Capital artificially raised the food giant’s stock price to allow an unnamed 3G affiliate to sell the shares, a practice commonly known as ‘pump and dump’ in the US.

Walling has accused Kraft Heinz, chief executive officer Bernardo Hees, chief financial officer David Knopf, 3G and other named individuals – Paulo Basilio, Vince Garlati, Christopher Skinger and George Zoghbi – of concealing damage to Kraft Heinz’s brands and internal controls.

Class actions are most common where the allegations involve a large number of people who have been ‘injured’ by the same defendant in the same way and allow for the matter to be resolved in a single proceeding through the efforts of a representative plaintiff.

3G, a private-equity fund, co-owns Kraft Heinz with investor Warren Buffett’s Berkshire Hathaway fund.

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Kraft Heinz’ share price sank 27.5% last Friday (22 February) after the company revealed it had taken a $15.4bn writedown, primarily on its Kraft and Oscar Mayer brands and Canadian assets.

After announcing a fourth-quarter loss of $12.6bn, the company further revealed it has faced a US Securities and Exchange Commission probe related to its purchasing and accounting practices.

Kraft Heinz had not replied to just-food’s requests for a response to the lawsuit’s claims at the time of writing.