JELD-WEN Holding, Inc. Class Action Lawsuit
- Company Name
- JELD-WEN Holding, Inc.
- Stock Symbol
- Class Period
- January 26, 2017 to October 15, 2018
- Eastern District of Virginia
On February 19, 2020, the JELD-WEN Holding, Inc. securities class action lawsuit was filed charging JELD-WEN Holding, Inc. (“JELD-WEN”), certain of its officers, and Onex Corporation and its affiliated funds (“Onex”) with violations of the Securities Exchange Act of 1934. The JELD-WEN securities class action lawsuit was commenced in the Eastern District of Virginia on behalf of purchasers of JELD-WEN common stock between January 26, 2017 and October 15, 2018 (the “Class Period”) and is captioned Cambridge Retirement System v. JELD-WEN Holding, Inc., et al., No. 20-cv-00112.
JELD-WEN is one of the world’s largest door and window manufacturers. Among JELD-WEN’s “highest volume products” are interior molded doors, which are produced by joining two door skins between a wood frame filled with a hollow or solid core. Door skins are the principal component of interior molded doors, accounting for up to 70% of the cost to manufacture a molded door.
The JELD-WEN securities class action lawsuit alleges that during the Class Period, defendants made false statements and/or failed to disclose adverse information regarding JELD-WEN’s business and operations, including that JELD-WEN was engaged in a scheme to fix the prices of interior molded doors and door skins with one of its major competitors, Masonite Corporation. According to the complaint, throughout the Class Period, JELD-WEN stated that its products, including doors, competed against those of other manufacturers based on price and described the market in which JELD-WEN sells its doors as “highly competitive.” JELD-WEN also repeatedly attributed its strong margins and anticipated margin growth to legitimate business factors, such as “strategic pricing decisions” and an increased emphasis on “pricing optimization.” These and similar statements made by defendants during the Class Period were false and misleading because defendants knew that JELD-WEN was engaged in a price-fixing conspiracy. As a result of defendants’ misrepresentations, shares of JELD-WEN ’s common stock traded at artificially inflated prices of more than $42 per share during the Class Period.
On February 15, 2018, a jury in a lawsuit brought by one of JELD-WEN’s customers, Steves and Sons, Inc., found that JELD-WEN violated federal antitrust laws by conspiring with Masonite to manipulate the price of door skins and awarded Steves over $58 million in damages, which, when trebled, totaled more than $175 million. However, defendants continued to conceal the true extent of JELD-WEN’s misconduct and the financial impact it was having on JELD-WEN’s business, including by continuing to assure investors that it participated in a highly competitive market. Then, on August 7, 2018, J.P. Morgan slashed estimates for JELD-WEN’s earnings in 2018 and 2019 and lowered its price target for JELD-WEN’s stock based, in part, on liability from the “ongoing Steves and Sons litigation.” On this news, the price of JELD-WEN stock fell 10% to close at $23.71 per share.
Months later, on October 5, 2018, the court in the Steves litigation ruled that, as part of the resolution of the case, JELD-WEN would be required to divest one of its door skin manufacturing facilities. Then, on October 15, 2018, JELD-WEN announced it would take a $76.5 million charge related to the Steves litigation. That same day, JELD-WEN announced the sudden resignation of its CFO, defendant L. Brooks Mallard. As a result of these disclosures, the price of JELD-WEN common stock declined 19% to close at $17.28 per share on October 16, 2018.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.