Jeld-Wen Edges Toward Another Class SettlementJune 17th, 2021 by Drew Vass
A class of investors filed for preliminary approval after reaching a $40 million deal to settle a case with door and window manufacturer Jeld-Wen Inc. The case was originally filed in March 2020 on behalf of investors who purchased the company’s stock between January 26, 2017, and October 15, 2018, alleging their investments were devalued by the effects of undisclosed anticompetitive behaviors. Amid litigations ending in an antitrust ruling requiring Jeld-Wen to divest of its Towanda, Pa.-based manufacturing plant, investors say the company misled their investments by failing to disclose its anticompetitive conduct.
In the arguments against the class action suit, officials for Jeld-Wen previously said they did not make false statements, because they “accurately described their products’ quality and their pricing strategy and because the competitiveness statements do not specifically refer to the doorskin market,” court documents say. But Jeld-Wen’s statements, combined with its failure to disclose anticompetitive conduct, “would have misled a reasonable investor about the nature of” its securities, a court memo suggested.
The case was certified as a class action suit in April 2021. According to the original complaint, Jeld-Wen stated that its products, including doors, compete against those of other manufacturers based on price, and described the market in which the company sells its doors as “highly competitive.” Plaintiffs allege that they purchased the company’s stock at an inflated price, because defendants “lied about Jeld-Wen’s anticompetitive conduct and the legal risks that conduct posed to Jeld-Wen.” The company has agreed to pay $39.5 million, while another $500,000 will be paid to investors by Onex.
Through preliminary approval, the court would allow class representatives to be notified of the settlement’s terms and conditions, after which a final approval hearing would follow, allowing defendants and class members to argue their cases for and against the settlement.
If approved, the deal follows a recently approved $61.6 million settlement by Jeld-Wen and Masonite Corp., each agreeing to pay $30.8 million to end a separate class action suit against the two companies. The suit alleged that the two conspired to fix prices while holding approximately 85% of the market for certain interior doors.
Despite settlements, the company maintains that it committed no wrongdoing in either case.