Attorneys for Plaintiffs in Jeld-Wen Lawsuit to Receive Nearly $3MDecember 22nd, 2022 by Travis Rains
A federal judge in Delaware ruled that law firm Bernstein Litowitz Berger & Grossmann LLP, along with firms Levi & Korsinsky LLP and Robbins LLP, are entitled to a portion of the settlement fund with respect to allegations of insider trading and anti-trust violations by Jeld-Wen upper management.
In February 2021, plaintiff Jason Aldridge, derivatively on behalf of Jeld-Wen Holding Inc., filed a verified stockholder derivative complaint alleging violations of securities laws, breach of fiduciary duty, waste of corporate assets and unjust enrichment. The original complaint has since been amended but is currently sealed. Plaintiffs now also include Shieta Black and the Board of Trustees of the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust.
The complaint, filed in U.S. District Court for the District of Delaware, notes that the allegations stem from Jeld-Wen’s acquisition of Craftmaster Manufacturing Inc. and Masonite’s exit from the doorskins market. According to the complaint, those developments left Jeld-Wen as the market’s “sole supplier” of doorskins to independent door manufacturers.
According to court documents, the plaintiffs’ breach of fiduciary duty and unjust enrichment claims brought on behalf of Jeld-Wen Holdings Inc. (the Company) stemmed from “sustained anticompetitive conduct resulting in significant financial and business consequences to Jeld-Wen. In the action, plaintiffs allege that defendants failed to prevent the company from engaging (and allowed it to engage) in sustained and systematic business strategies involving the challenged anticompetitive conduct, engaged in inside trading based on information provided to fiduciaries in their roles as directors, officers and controllers, and made public misstatements and omissions concerning the underlying antitrust misconduct.”
In October 2018, door maker Steves & Sons won an order of divestiture against Jeld-Wen, and, as part of the order, the latter was required to sell its doorskin plant in Towanda, Penn. At the same time, the complaint alleges, the company “admitted” via a filing with the SEC that it would face “significant judgment” with respect to the lawsuit.
It was then alleged that the above developments marked the first time individual defendants, comprised of upper management, disclosed that an adverse reaction could come from the litigation.
In September 2022, the parties in the case reached a $13.5 million settlement. Judge Richard G. Andrews this week ruled that plaintiffs’ attorneys are entitled to 22% of the settlement fund, or approximately $2.9 million.
“Lead counsel shall allocate the attorneys’ fees awarded amongst plaintiffs’ counsel in a manner which it, in good faith, believes reflects the contributions of such counsel to the institution, prosecution and settlement of the action,” the Judge ruled.