March 30, 2021
A Virginia federal court has certified a class of investors alleging that doormaker Jeld-Wen Inc. manipulated its stock price by concealing that it had violated antitrust law through an anti-competitive merger and other conduct.
U.S. District Judge John A. Gibney Jr. issued an order Monday certifying a class of Jeld-Wen investors and appointing Robbins Geller Rudman & Dowd LLP and Labaton Sucharow LLP to serve as class counsel, with Cohen Milstein Sellers & Toll PLLC serving as liaison counsel.
The judge said in an opinion for the order that among Jeld-Wen’s arguments against certification was that an October 2018 announcement contained no new information for the market, even though it disclosed an expected $76.5 million in liability from a lawsuit being brought by a rival doormaker, Steves and Sons Inc.
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Investors filed suit in February 2020, alleging they purchased Jeld-Wen stock at inflated prices as a result of the company concealing its involvement in an illegal antitrust conspiracy aimed at eliminating competition for interior molded doors and doorskins, which are used to make the doors.
The conduct at issue allegedly started with Jeld-Wen’s purchase of rival doorskin maker CraftMaster Manufacturing Inc. in 2012 and its convincing of enforcers at the U.S. Department of Justice that the deal should not be blocked. Steves eventually sued Jeld-Wen alleging the deal violated antitrust law, winning a landmark order in 2018 forcing Jeld-Wen to sell a Pennsylvania factory acquired with the CraftMaster purchase.
The Fourth Circuit upheld that decision in February, in what is seen as a major boon to private antitrust enforcement.
After the purchase, Jeld-Wen also allegedly started working with another rival, Masonite Corp., to raise the price of doorskins and interior doors. Similar claims have also led to price-fixing allegations against the companies in Virginia federal court.
The investors contend that Jeld-Wen insisted throughout the class period that it was operating in a competitive business environment and attributed its success to favorable pricing and strategy, when it was actually engaged in an illegal scheme to reduce competition. The case survived a dismissal bid from Jeld-Wen in October.