Cambridge Retirement System v. JELD-WEN Holding, Inc.

Court: United States District Court for the Eastern District of Virginia
Case Number: 3:20-cv-112
Class Period: 01/26/2017 - 10/15/2018
Case Contacts: Avi Josefson, Michael D. Blatchley

On February 19, 2020, Bernstein Litowitz Berger & Grossmann filed a class action lawsuit for violations of the federal securities laws in the U.S. District Court for the Eastern District of Virginia against JELD-WEN Holding, Inc. (“Jeld-Wen” or the “Company”), certain of the Company’s current and former senior executives, and controlling shareholder Onex Corporation and certain of its affiliated entities (collectively, “Defendants”), on behalf of investors in Jeld-Wen common stock between January 26, 2017 and October 15, 2018, inclusive (the “Class Period”).

BLB&G filed this action on behalf of its client, Cambridge Retirement System, and the case is captioned Cambridge Retirement System v. JELD-WEN Holding, Inc., No. 3:20-cv-00112 (E.D. Va.). The complaint is based on an extensive proprietary investigation and a careful evaluation of the merits of this case. Click here to view the complaint, or click on the Case Documents tab on the left-hand side of the page.

Jeld-Wen’s Alleged Fraud

Jeld-Wen is one of the world’s largest door and window manufacturers. Among the Company’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 claims asserted in this case arise from Jeld-Wen’s role in a scheme to collude with one of its major competitors, Masonite Corporation (“Masonite”), to fix prices of interior molded doors and door skins.

Throughout the Class Period, 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.” The Company 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 throughout 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 had on the Company’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.” Months later, on October 5, 2018, the court in the Steves litigation ruled that, as part of the resolution of that case, Jeld-Wen would be required to divest one of its door skin manufacturing facilities. Then, on October 15, 2018, Jeld-Wen announced that it would take a $76.5 million charge related to the Steves litigation. That same day, the Company also announced the sudden resignation of its CFO, defendant L. Brooks Mallard. As a result of these disclosures, the price of Jeld-Wen’s common stock declined precipitously.

If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than April 20, 2020, which is the first business day on which the U.S. District Court for the Eastern District of Virginia is open that is 60 days after the publication date of February 19, 2020. Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Michael D. Blatchley of BLB&G at 212-554-1281, or via e-mail at michaelb@blbglaw.com.

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