DGSE Companies, Inc. (NYSE MKT: DGSE), a leading wholesaler and retailer of jewelry, diamonds, fine watches, and precious metal bullion and rare coin products (the “Company” or “DGSE”), announced today that the United States District Court for the Northern District of Texas has granted final approval of the previously announced proposed settlement of class action and derivative litigation relating to the Company’s previously disclosed accounting irregularities and subsequent restatement of financial results.
The approved settlements resolve all issues which were pending before the United States District Court for the Northern District of Texas, in the two filed cases entitled Grant Barfuss, on behalf of himself and all others similarly situated vs. DGSE Companies, Inc.; L. S. Smith, John Benson and William Oyster (Civil Action No. 3:12-cv-3664), and Jason Farmer, Derivatively on Behalf of Nominal Defendant DGSE Companies, Inc., Plaintiff, v. William H. Oyster, James D. Clem, William Cordeiro, Craig Alan-Lee, David Rector, L. S. Smith, and John Benson, Defendants, and DGSE Companies, Inc., Nominal Defendant (Civil Action No. 3:12-cv-3850).
As previously disclosed, the defendants have agreed to pay $2 million to resolve all claims in both suits (including obligations to pay plaintiffs’ attorneys’ fees). The Company has also incurred its own attorneys’ fees and expenses associated with finalizing the settlement. It is expected that approximately 90% of the total settlement amount and related expenses will be paid from insurance proceeds.
“We are pleased to have this issue resolved and behind us,” stated James Vierling, Chief Executive Officer and Chairman of the Board. “DGSE has experienced tremendous change in the last few years, and we are pleased to conclude this legacy issue from prior management enabling us to focus even more on the Company's going-forward operations. With a solid plan for sustainable, profitable growth, an experienced leadership team and strong strategic partner, we look optimistically to the future.”