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Grant & Eisenhofer Wins Jury Trial against Overstock.com
[September 21, 2018]

Grant & Eisenhofer Wins Jury Trial against Overstock.com


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 [email protected]


Elise Martin 302-622-7004 [email protected]


 

Cision View original content:http://www.prnewswire.com/news-releases/grant--eisenhofer-wins-jury-trial-against-overstockcom-300717015.html

SOURCE Grant & Eisenhofer P.A.


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