Former Point Blank’s settlement with $20 million in plan funding OK’d

By Kali Hays

New York, July 10 – SS Body Armor I, Inc., formerly Point Blank Solutions, Inc., obtained approval of a lawsuit settlement that will provide the company with a $20 million loan to fund a Chapter 11 plan, according to a Thursday order from the U.S. Bankruptcy Court for the District of Delaware.

The settlement, which was initially proposed in November 2014, resolves a securities class action lawsuit, as well as a consolidated derivative lawsuit.

As previously reported, after a delay of a Dec. 16, 2014 hearing to consider the settlement, the company’s official committee of equity security holders objected to the proposal, claiming that any possible recovery for the equity creditors was being handed over as part of the agreement.

SS Body Armor said that the $20 million in plan funding will be in the form of an interest-free, non-recourse loan from escrowed funds, which are currently the subject of multiple litigation issues.

The settlement will also aid in the resolution of competing claims to roughly $180 million of funds restrained or forfeited in connection with a criminal action against David H. Brooks.

According to the motion, the U.S. District Court for the Eastern District of New York ruled that Point Blank and the class plaintiffs were victims of David Brooks’ criminal conduct and are entitled to restitution.

The debtors have asserted a restitution claim in excess of $117 million, while the class plaintiffs have asserted a restitution claim of about $186 million.

A 50/50 allocation of the restitution and forfeiture awards is called for in the settlement, with the interest-free loan to be repaid from the debtors' portion of the shared recovery.

Point Blank is a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military. The company filed for bankruptcy on April 14, 2010. Its Chapter 11 case number is 10-11255.

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