Lumber Liquidators Securities Litigation
Lumber Liquidators Securities Litigation
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The information contained on this web page is only a summary of information presented in more detail in the Notice of (I) Pendency of Class Action, Certification of Settlement Class, and Proposed Settlement; (II) Settlement Fairness Hearing; and (III) Motion for an Award of Attorneys’ Fees and Reimbursement of Litigation Expenses (the “Notice”), which you can access by clicking here. Since this website is just a summary, you should review the Notice for additional details.

 

Your Legal Rights Are Affected Whether You Act Or Do Not Act.  Please read the Notice carefully.

 

All persons who, from February 22, 2012, through February 27, 2015, inclusive (the “Settlement Class Period”) purchased or otherwise acquired the common stock of Lumber Liquidators Holdings, Inc. (“Lumber Liquidators”) (“Lumber Liquidators Common Stock”) or exchange traded call options on Lumber Liquidators Common Stock (“Lumber Liquidators Call Options”), or sold exchange traded put options on Lumber Liquidators Common Stock (“Lumber Liquidators Put Options”), and were damaged thereby (more PRECISELY defined in the notice as the “settlement class”), you may be entitled to a payment from a class action settlement.

 

IMPORTANT DATES AND DEADLINES

SUBMIT A CLAIM FORM

Postmarked no later than Saturday, November 19, 2016

EXCLUDE YOURSELF

The exclusion deadline has passed.

OBJECT TO THE SETTLEMENT

The objection deadline has passed.

SETTLEMENT HEARING

The Settlement Hearing occurred on November 17, 2016 at 10:00 a.m. The Settlement was approved.

DO NOTHING

Receive no payment

 


The Court’s Settlement Hearing 

The Court held a Settlement Hearing at 10:00 a.m. on November 17, 2016, before the Honorable Arenda L. Wright Allen at the United States District Court for the Eastern District of Virginia, Walter E. Hoffman United States Courthouse, 600 Granby Street, Norfolk, VA 23510.

At the hearing, the Honorable Arenda L. Wright Allen approved the Settlement as fair, reasonable and adequate. The Court also approved the motions for attorneys' fees, litigation expenses, and the proposed Plan of Allocation. 

What is this case about?

On November 26, 2013, the Action was commenced with the filing of a securities class action complaint in the United States District Court for the Eastern District of Virginia, Newport News Division, styled Kiken v. Lumber Liquidators Holdings, Inc., et al., No. 4:13-cv-00157-AWA-DEM. On September 17, 2014, City of Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust v. Lumber Liquidators Holdings, Inc., No. 4:14-cv-00154-AWA-DEM, was filed in the Alexandria Division, and was subsequently transferred to the Newport News Division. By Order dated March 23, 2015, the Court granted the joint motion of Kiken, Foster, Lorenzo and Hickman to consolidate the two actions, appointed Kiken, Foster, Lorenzo and Hickman as Lead Plaintiffs and approved Lead Plaintiffs’ selection of Pomerantz LLP and Bernstein Litowitz Berger & Grossmann LLP as Lead Counsel and Cohen Milstein, Sellers, & Toll, PLLC as Liaison Counsel. By the same Order, the Court amended the caption of the Action to be: In re Lumber Liquidators Holdings, Inc. Securities Litigation, No. 4:13-cv-00157-AWA-DEM. 


On April 22, 2015, Lead Plaintiffs filed and served their Consolidated Amended Complaint for Violations of the Federal Securities Laws (the operative complaint, or “Complaint”) asserting claims against Defendants Lumber Liquidators, Lynch, Terrell, Sullivan and Schlegel under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and against the Individual Defendants under Section 20(a) of the Exchange Act. The Complaint alleges, among other things, that Defendants made materially false and misleading statements and omitted material information about Lumber Liquidators’ (1) “sourcing initiatives” in China and basis for margin growth; (2) the existence of illegally high levels of formaldehyde in its flooring products; (3) the importation of flooring products made from illegally harvested wood in violation of the Lacey Act; (4) inadequate internal controls for ensuring compliance with regulations; and (5) the adequacy of the Company’s inventory and supply capabilities. The Complaint further alleges that the prices of Lumber Liquidators Securities were artificially inflated as a result of Defendants’ false and misleading statements and omissions, and declined when the truth was revealed through a series of corrective disclosures in 2013, 2014 and 2015.


On June 2, 2015, Defendants filed their motion to dismiss the Complaint, which Lead Plaintiffs opposed.


On December 21, 2015, the Court denied Defendants’ motion to dismiss in its entirety.


Following lengthy, arm’s length, and mediated negotiations, on April 26, 2016, the Parties reached an agreement in principle to settle the Action in return for (1) a cash payment of twenty-six million dollars ($26,000,000.00) (the “Settlement Cash”); and (2) one million (1,000,000) shares of Lumber Liquidators common stock (the “Settlement Stock” and, together with the Settlement Cash, the “Settlement Amount”). On June 15, 2016, the Parties entered into the Stipulation and Agreement of Settlement (the “Stipulation”) setting forth the terms and conditions of the Settlement. The Stipulation can be viewed at www.LumberLiquidatorsSecuritiesLitigation.com. The Stipulation provides that, among other things, certain of Lumber Liquidators insurance carriers will file an Interpleader Action with the Court, pursuant to which the carriers will submit to the registry of the Court twenty-six million dollars ($26,000,000), which constitutes the remaining limits of liability under the Insurance Policies (the “Insurance Proceeds”). Defendants will request and advocate to the Court for payment of all Insurance Proceeds towards the Settlement Fund in this Action, subject to a pass through structure related to the Federal Derivative Actions. In the event that the money to fund the Settlement Cash does not become available through the Interpleader Action described herein and further described in the Stipulation, Defendants have the option, but not the obligation, to fund the Settlement Cash. The Settlement is conditioned on receipt of both the Settlement Cash and the Settlement Stock.

 

On July 8, 2016, the Court entered an order preliminarily approving the Settlement, authorized this Notice to be disseminated to potential Settlement Class Members, and scheduled the Settlement Hearing to consider whether to grant final approval to the Settlement.


The Settlement Benefits

Subject to Court approval and satisfaction of other conditions, Lead Plaintiffs, on behalf of themselves and the Settlement Class, have agreed to settle the Action in exchange for $26,000,000 in cash  and 1,000,000 shares of Lumber Liquidators Common Stock. The Net Settlement Fund (i.e., the Settlement Amount plus any and all interest earned thereon (the “Settlement Fund”) less (a) any Taxes, (b) any Notice and Administration Costs, (c) any Litigation Expenses awarded by the Court, and (d) any attorneys’ fees awarded by the Court) will be distributed to Settlement Class Members according to a Court-approved plan of allocation.


Based on Lead Plaintiffs’ damages expert’s estimate of the number of shares of Lumber Liquidators Common Stock purchased during the Settlement Class Period that may have been affected by the conduct at issue in the Action, and assuming that all Settlement Class Members elect to participate in the Settlement, the estimated average recovery (before the deduction of any Court-approved fees, expenses and costs as described herein) is $1.00 of Settlement Cash and 0.04 shares of Settlement Stock per affected share of Lumber Liquidators Common Stock. Settlement Class Members should note, however, that the foregoing average recovery per share is only an estimate. Some Settlement Class Members may recover more or less than this estimated amount depending on, among other factors, when and at what prices they purchased or sold their shares, and the total number of valid Claim Forms submitted. Distributions to Settlement Class Members will be made based on the Plan of Allocation set forth in paragraphs ¶¶ 42-69 of the Notice or such other plan of allocation as may be ordered by the Court.


The Rights of Members of the Settlement Class

If you are a member of the Settlement Class, you have the following options:

Submit a Proof of Claim Form

If you are a member of the Settlement Class, in order to be potentially eligible to receive a payment under the proposed Settlement, you must submit a Proof of Claim Form, which can be found here, postmarked no later than November 19, 2016. If you are a member of the Settlement Class and do not submit a proper Proof of Claim Form, you will not be eligible to share in the distribution of the net proceeds of the Settlement but you will nevertheless be bound by any judgments or orders entered by the Court in the Action related to the Settlement.


Exclude yourself from the Settlement Class

If you are a member of the Settlement Class and wish to exclude yourself from the Settlement Class, you must submit a request for exclusion such that it is received no later than October 27, 2016, in accordance with the instructions set forth in the Notice. If you properly exclude yourself from the Settlement Class, you will not be bound by any judgments or orders entered by the Court in the Action related to the Settlement and you will not be eligible to share in the proceeds of the Settlement. 


 

Object to the Settlement

Any objections to the proposed Settlement, the proposed Plan of Allocation, or Lead Counsel’s motion for attorneys’ fees and reimbursement of Litigation Expenses, must be filed with the Court and delivered to Lead Counsel and Defendants’ Counsel such that they are received no later than October 27, 2016, in accordance with the instructions set forth in the Notice.


Further Information:

This website and the Notice summarizes the proposed Settlement.  For more details regarding this Settlement please reference the Stipulation dated June 15, 2016, or other documents filed in the case under the “Court Documents” link on the left.  You may also contact the Claims Administrator or Lead Counsel for further information regarding this Settlement:


Claims Administrator:

 

In re Lumber Liquidators Holdings, Inc. Securities Litigation
c/o A.B. Data, Ltd.
P.O. Box 173013
Milwaukee, WI 53217
info@LumberLiquidatorSecuritiesLitigation.com

www.LumberLiquidatorsSecuritiesLitigation.com

 

 Lead Counsel:

 

Jeremy A. Lieberman, Esq.
POMERANTZ LLP
600 Third Avenue
20th Floor
New York, NY 10016
(212) 611-1100
jalieberman@pomlaw.com
David R. Stickney, Esq.
BERNSTEIN LITOWITZ BERGER GROSSMANN LLP
12481 High Bluff Drive
Suite 300
San Diego, CA 92130
(866) 648-2524
blbglaw.com

 

If you have questions, you may call the Lumber Liquidators Holdings, Inc. Securities Litigation Help Line at 877-234-5462 or email info@LumberLiquidatorsSecuritiesLitigation.com.

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