Labaton Sucharow LLP, as co-lead counsel, announced 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.
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 ensuing years, Labaton Sucharow, with assistance from co-lead counsel and bankruptcy counsel, 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 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 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.
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 Classact@Gilardi.com 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 can contact Labaton Sucharow at 888-219-6877 (or firstname.lastname@example.org).
Labaton Sucharow and 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. The case is In re DHB Industries, Inc. Class Action Litigation, Inc., No. 05-cv-04296 (E.D.N.Y.).