NEW YORK (Legal Newsline) - The firm Robbins Geller will lead shareholder litigation against Dentsply, the world's largest producer of professional dental products.
New York federal judge John Cronan made that pick in a June 1 order. He chose Robbins Geller over Bleichmar Fonti & Auld and Berntein Litowitz, finding Robbins Geller's clients satisfied all requirements while also having the largest financial interest in the case.
Those clients are the City of Birmingham Retirement and Relief System, the El Paso Firemen & Policemen's Pension Fund and the Wayne County Employees' Retirement System.
The firm notes it published a statutory notice after the first complaint was filed, nearly two months before the San Antonio Fire and Police Pension Funds.
Robbins Geller says its clients lost approximately $3.8 million. SAFPPF, represented by the Bleichmar firm, said it lost $2.4 million.
Bernstein Litowitz says its clients, the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust and the Louisiana Sheriffs’ Pension & Relief Fund, lost more than $3.5 million. It adds that Miami was the first to sue.
The SAFPPF suit says Donald Casey and Jorge Gomez, the company's former CEO and CFO, respectively, manipulated the numbers to achieve maximum compensation for the first half of 2021 during the COVID pandemic.
Gomez said at a conference on June 9, 2021, that Dentsply's financial success was due, in part, to a go-to-market strategy that included sophisticated and strategic incentive plans.
When inventory levels increased, the company said that was due to lower-than-sales, SAFPPF’s suit says.
"These statements were materially false and misleading," it says. "In truth, Defendants Casey and Gomez had orchestrated a scheme to improperly recognize revenue in violation of (generally accepted accounting principles) and for Casey and Gomez to achieve their 2021 incentive-based compensation."
Gomez resigned April 11, 2022, and Casey was terminated from his position eight days later. The company's stock price dropped more than 13% to 42.20.
An audit, the start of which was announced May 10, questioned whether incentives to sell products to distributors in the second half of 2021 were properly accounted for in statements filed with the SEC. The audit committee also said it was investigating allegations that former and current senior management directed those incentives to boost their executive compensation, the suit says.