Public Employees' Retirement System of Mississippi v. Mohawk Industries, Inc.

Lead Plaintiff Has Settled the Action for $60 Million

The Court-appointed Lead Plaintiff Public Employees’ Retirement System of Mississippi (“Mississippi”), on behalf of itself and the Court-certified Class (as defined below), has reached a proposed settlement of this securities fraud class action (the “Action”) for $60,000,000 in cash (the “Settlement”). If approved, the Settlement will resolve all claims in the Action.

The Court-certified Class consists of all persons or entities who purchased or otherwise acquired publicly traded common stock of Mohawk Industries, Inc. (“Mohawk”) between April 28, 2017 and July 25, 2019, inclusive, and who were damaged thereby (subject to certain exclusions).

On January 13, 2013, the parties entered into a Stipulation and Agreement of Settlement (the “Stipulation”) setting forth the terms of the Settlement. On January 20, 2023, Lead Plaintiff filed a motion seeking preliminary approval of the Settlement, which the Court granted by Order entered on February 6, 2023 (the “Preliminary Approval Order”). Pursuant to the Preliminary Approval Order, a notice of the proposed Settlement was mailed to potential Class Members beginning in early March 2023 and a Court hearing on final approval of the Settlement is scheduled for May 31, 2023 at 10:00 a.m.

Please read the Notice to fully to understand your rights and options. Copies of the Notice and the Claim Form can be found under the Case Documents section of this webpage. You may also visit the Settlement website, www.MohawkIndustriesSecuritiesLitigation.com, for more information about the Settlement.

If you are a member of the Class, in order to be potentially eligible to receive a payment from the Settlement, you must submit a Claim Form with adequate supporting documentation to the Claims Administrator either by mail or online, in accordance with the instructions set forth in the Claim Form. If mailed, the Claim Form must be postmarked no later than July 5, 2023 and mailed to the address stated in the Claim Form. If submitted online at www.MohawkIndustriesSecuritiesLitigation.com, the Claim Form must be submitted no later than July 5, 2023.

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing. Please be patient, as this process will take some time to complete.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:
SUBMIT A CLAIM FORM (IF SUBMITTED BY MAIL, POSTMARKED NO LATER THAN JULY 5, 2023; IF SUBMITTED ONLINE, SUBMITTED NO LATER THAN JULY 5, 2023).	This is the only way to be eligible to receive a payment from the Settlement Fund. If you are a Class Member and you remain in the Class, you will be bound by the Settlement as approved by the Court and you will give up any Released Plaintiff’s Claims (defined in paragraph 39 of the Notice) that you have against Defendants and the other Defendants’ Releasees (defined in paragraph 40 of the Notice), so it is in your interest to submit a Claim Form.
EXCLUDE YOURSELF FROM THE CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION (IF SUBMITTED BY MAIL, POSTMARKED NO LATER THAN MAY 10, 2023; IF SUBMITTED BY EMAIL, SUBMITTED NO LATER THAN MAY 10, 2023).	If you exclude yourself from the Class, you will not be eligible to receive any payment from the Settlement Fund. This is the only option that may allow you to ever be part of any other lawsuit against Defendants or Defendants’ Releasees concerning the Released Plaintiff’s Claims.
OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION NO LATER THAN MAY 10, 2023.	If you do not like the proposed Settlement, the proposed Plan of Allocation, and/or the requested attorneys’ fees and Litigation Expenses, you may object by writing to the Court and explaining why you do not like them.  You cannot object unless you are a member of the Class and do not exclude yourself from the Class.
ATTEND A HEARING ON MAY 31, 2023, AT 10:00 A.M. E.T., AND FILE A NOTICE OF INTENTION TO APPEAR NO LATER THAN MAY 10, 2023.	Filing a written objection and notice of intention to appear by May 10, 2023, allows you to speak in Court, at the discretion of the Court, about the fairness of the proposed Settlement, the Plan of Allocation, and/or the request for attorneys’ fees and Litigation Expenses. In the Court’s discretion, the May 31, 2023, hearing may be conducted by telephone or videoconference (see paragraph 65-66 of the Notice). If you submit a written objection, you may (but you do not have to) participate in the hearing and, at the discretion of the Court, speak to the Court about your objection.
DO NOTHING	If you are a member of the Class and you do not submit a valid Claim Form, you will not be eligible to receive any payment from the Settlement Fund. You will, however, remain a member of the Class, which means that you give up your right to sue about the claims that are resolved by the Settlement, and you will be bound by any judgments or orders entered by the Court in the Action.

 

The Litigation

The Action alleges claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Mohawk and its CEO, Jeffrey S. Lorberbaum (together with Mohawk, “Defendants”).

On March 18, 2020, the Court issued an Order appointing Mississippi as Lead Plaintiff and approving Mississippi’s selection of BLB&G as Lead Counsel.

On June 29, 2020, Lead Plaintiff filed their Consolidated Class Action Complaint For Violation Of The Securities Laws (the “Complaint”). The Complaint alleges that Mohawk engaged in a fraudulent scheme to fabricate revenues through fictitious “sales” of products that were not delivered to customers and that Defendants made repeated false statements to mispresent and conceal the truth about the quality of Mohawk’s LVT and the reasons for the Company’s rising inventory levels and slowing inventory turnover. The Complaint further alleges that the price of Mohawk common stock was artificially inflated as a result of Defendants’ allegedly false and misleading statements and declined when the truth was allegedly revealed.

Defendants moved to dismiss the Complaint on October 27, 2020, briefing on the motion to dismiss closed on January 27, 2021, and the Court largely denied Defendants’ motion to dismiss on September 29, 2021. Lead Plaintiff moved for class certification on January 26, 2022, briefing on the class certification motion closed on June 8, 2022, and the Court granted the class certification motion on November 29, 2022.