Point Blank Solutions Inc. (PBSOQ)’s acting chief executive officer, James Henderson, was sued by the former CEO’s brother, an investor in the bankrupt military contractor who claims Henderson failed to conduct proper audits.
Jeffrey Brooks filed the complaint today in New York state Supreme Court in Manhattan. He is the brother of cofounder and former CEO David H. Brooks, who was convicted last year of committing a $185 million fraud involving the company, along with Sandra Hatfield, the firm’s former chief operating officer.
Jeffrey Brooks accuses Henderson of failing to obtain financial audits for the past two years in violation of regulatory obligations. Misconduct by Henderson and other company officers led Point Blank to apply for deregistration, “a step that could cause trading in the company’s equity securities to cease and deprive plaintiff and the company’s other shareholders of all liquidity in their investments,” according to the complaint.
While the company, which makes body armor, hasn’t been listed on a national stock exchange since 2006, it has an aggregate market capitalization of $20 million and continues to be traded over the counter, according to the complaint. Jeffrey Brooks said he holds 2.4 million shares in Point Blank.
The complaint seeks more than $7 million in damages, including punitive damages.
Glenn Wiener, a spokesman for Pompano Beach, Florida-based Point Blank, didn’t immediately respond to a phone call and e-mail after regular business hours.
The U.S. Securities and Exchange Commission sued three former directors of the company on Feb. 28. The SEC accused directors Jerome Krantz, Cary Chasin and Gary Nadelman of being “willfully blind” to accounting fraud by David Brooks.
Point Blank, formerly known as DHB Industries Inc., filed for bankruptcy last year and has proposed a plan for reorganization.
The case is Brooks v. Henderson, 650781/2011, New York state Supreme Court (Manhattan).
To contact the editor responsible for this report: David E. Rovella at firstname.lastname@example.org