NEW YORK–(BUSINESS WIRE)–Robbins Geller Rudman & Dowd LLP and Labaton Sucharow LLP (“Co-Lead
Counsel”) are pleased to announce the upcoming distribution of a fund of
more than $73 million to DHB Class Members with previously
recognized claims in In re DHB Industries, Inc. Class Action
Litigation. This amount represents more than 89.5% of
the $81,540,718.81 in recognized claims in the original class action
settlement, approved almost 11 years ago. Co-Lead Counsel estimate that
distribution of those funds, which are more than double
the original cash settlement benefit, will begin in July, after the
funds are transferred by the Government and Class Members with
recognized claims have had an opportunity to confirm or update their
contact and address information.
This case, which is pending in the United States District Court for the
Eastern District of New York, originally settled in 2008. That
settlement created a cash settlement fund of $34.9 million, less
attorneys’ fees and expenses, plus 3,184,713 shares of DHB common stock
for the benefit of the Class.
A series of unanticipated events, however, threatened the viability of
the original settlement and prevented its implementation. Those events
included an appeal in a companion shareholder derivative action, DHB’s
bankruptcy filing, and the criminal prosecution of company founder David
H. Brooks and other senior executives. These events resulted in
disagreements among the settling parties and numerous ancillary lawsuits
and proceedings that interfered with the original settlement.
In the many ensuing years, Co-Lead Counsel, with the assistance of
bankruptcy counsel at Lowenstein Sandler LLP, have worked diligently to
protect the interests of Class Members and preserve and even improve the
original settlement. On August 18, 2015, the Court approved a proposed
supplemental settlement agreement (the “Supplemental Settlement”). The
Supplemental Settlement resolved many of the material disputes among key
parties to the original settlement and the DHB bankruptcy estate and
created a mechanism for sharing any additional future funds that might
become available to either the Class or the DHB bankruptcy estate, which
was deemed to be a victim of David Brooks’ fraud.
Even then there were major obstacles to the completion of the
settlement. Although Brooks was not a party to the Supplemental
Settlement, and was serving a 17-year sentence in federal prison for
securities fraud and other offenses, he filed an appeal of the order
approving the Supplemental Settlement in September 2015. His estate
continued to prosecute that appeal after Brooks died in prison in
October 2016 and agreed to voluntarily dismiss it only in June 2017.
Later that same year, the principal stakeholders with a claim to Brooks’
assets restrained in connection with the federal criminal proceeding,
including Co-Lead Counsel on behalf of the Class, came together in an
effort to achieve a global settlement. That effort culminated in a
Global Settlement Agreement on October 25, 2018.
To be able to receive its share of the funds negotiated and made
available through the Global Settlement Agreement, the Class, through
Co-Lead Counsel, petitioned the Department of Justice for a “remission”
award from the assets restrained by the Government and ultimately
forfeited for the benefit of victims. That remission award was approved
in an amount of $73,089,224.23. This amount, less only a cost reserve of
$71,581 for the claims administrator’s estimated costs to distribute the
fund (as approved by the Government), will be awarded to Class Members,
on a pro rata basis, who submitted valid, recognized claims in the Class
Action on or before January 26, 2018.1
“We are pleased to announce this outstanding result for the Class,” said
Samuel H. Rudman of Robbins Geller. “Through hard work and perseverance
over the course of more than a decade, we were able get investors a
remarkable 90% of their recognized losses.” Added Ira A. Schochet of
Labaton Sucharow: “This result became possible only through the
unrelenting efforts of Co-Lead Counsel and bankruptcy counsel on behalf
of the Class.”
Because eligible Class Members have already been found to be
entitled to a settlement award, they do not need to take any further
action to receive their share, but may wish to update or confirm their
contact information on file with the claims administrator, including
their mailing address. To do so, they should email the
claims administrator at [email protected]
no later than Monday, July 8, 2019. When contacting the Claims
Administrator, each Class Member should provide as much information as
possible, including the member’s claim number(s) if available, the name
and mailing address listed on the member’s claim(s), and the member’s
current mailing address. If any Class Member is requesting a change of
the claimant name originally listed on a claim for payment purposes, the
member should also provide supporting documentation for that request.
Class Members with questions about the case should contact Robbins
Geller at 800-449-4900 or Labaton Sucharow at 888-219-6877 (or [email protected]).
Co-Lead Counsel represent lead plaintiffs George Baciu and the NECA-IBEW
Pension Fund, as well as the certified Class, in the litigation, which
is pending before the Honorable Joanna Seybert.
In re DHB Industries, Inc. Class Action Litigation, Inc., No.
2:05-cv-04296-JS (E.D.N.Y.).
Robbins Geller Attorneys
Samuel H. Rudman
Mark T. Millkey
Labaton Sucharow Attorneys
Ira A. Schochet
Nicole M. Zeiss
Practice Areas
Securities Fraud
1 There are 50 eligible Class Members who have tax or other
financial obligations to the Government. After the deduction of those
liabilities, the Government will distribute any remaining awards
directly to those 50 Class Members.
Contacts
Robbins Geller Rudman & Dowd LLP
Samuel H. Rudman, 800-449-4900
