WILMINGTON, Del., Sept. 21, 2018 /PRNewswire/ -- Grant
& Eisenhofer won a jury verdict on behalf of a
whistleblower who exposed a scheme by Overstock.com (NASDAQ:
OSTK) to avoid reporting and remitting to Delaware millions of dollars in dormant gift
cards.
Stuart Grant, who recently
retired as managing director of Grant & Eisenhofer, led the
trial team, along with G&E director Mary S. Thomas and associate Laina M. Herbert.
Following a five-day trial in Delaware Superior Court, a
12-person jury found that Overstock failed to report and remit
unredeemed gift card balances that by law should have been reported
to the State of Delaware as
unclaimed property. As a result, Overstock was found to have
violated Delaware's False Claims
and Reporting Act over a four-year period (2010-13). The unanimous
verdict was handed down on September
20.
The aggregate amount of unreported gift card balances was just
under $3 million – under terms of
Delaware's whistleblower statute,
Overstock is liable for treble damages plus statutory fines and
attorneys' fees. Total damages will be determined by
presiding Superior Court Judge Paul R.
Wallace.
The lawsuit exposed a common occurrence in the gift card
industry – what happens when large numbers of cards go unused,
giving issuers essentially free cash. Over a period of time – five
years in Delaware – issuers are
required to turn over unredeemed amounts to the state.
Jurors found that Overstock entered into a contract with
Ohio-based company CardFact
Ltd. (now known as Card Compliant) attempting to avoid its
obligations to Delaware to report
and remit dormant gift card balances to Delaware. The Jurors rejected Overstock's
claim that the unused gift card balances were transferred to
CardFact and therefore should have been reported and remitted to
Delaware after five years for
safekeeping.
"We are not surprised that the jurors had no trouble seeing
through the scam that Overstock tried to pull," Mr. Grant said.
This case was simple and straight-forward. Overstock had a legal
obligation to report and turn over almost $3
million dollars from unused gift cards to the State. The
Company knew the law and instead of following it, they
intentionally tried to evade their obligation. We are pleased
that the jury saw through the CardFact scheme and held Overstock
accountable."
Grant & Eisenhofer represented whistleblower William Sean French, a former employee of
CardFact. Under Delaware's False
Claims Act, by reporting Overstock's scheme to the State, Mr.
French is entitled to receive a portion of the recovery.
The case is captioned: The State of
Delaware ex. rel. William Sean
French v. Overstock.com, Inc. (Superior Court of
Delaware C.A. No. N13C-06-289 PRW CCLD).
About Grant & Eisenhofer P.A.
Grant & Eisenhofer is one of the nation's leading
litigation firms, with a highly successful track record
representing plaintiffs in complex litigation and arbitration
matters. The firm has offices in Wilmington (Delaware), New York, and Chicago,
and an international docket of high-profile cases. G&E's
clients include institutional investors, whistleblowers and other
stakeholders in securities class actions, derivative lawsuits,
consumer class actions, antitrust suits, bankruptcy litigation and
whistleblower cases involving the False Claims Act. The firm has
recovered more than $28 billion for clients and has twice
been cited by RiskMetrics for securing the highest average investor
recovery in securities class actions. G&E has been named one of
the country's top plaintiffs' law firms by The National Law
Journal for more than a decade, and was named one of the
nation's "Most Feared Plaintiffs Firms" as well as one of
Delaware's "Regional Powerhouses
for 2018" by Law360. For more information,
visit www.gelaw.com.
From:
|
Allan Ripp
212-262-7477 arippnyc@aol.com
|
|
Elise Martin
302-622-7004 emartin@gelaw.com
|
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SOURCE Grant & Eisenhofer P.A.