Fuhu Tablet Settlement

Frequently Asked Questions

  1. How do I know if I am affected by the Settlement?
  2. What is the lawsuit about?
  3. What do Plaintiffs seek to recover in the lawsuit?
  4. Why is this case being settled?
  5. What is the Settlement?
  6. What can I get in the Settlement?
  7. How do I make a claim?
  8. What do Plaintiffs and their lawyers get?
  9. What claims are released by the Settlement?
  10. How do I exclude myself from the Settlement?
  11. How do I object to the Settlement?
  12. When will the Court decide if the Settlement is approved?
  13. How do I get more information?
  14. How do I find my claim number?
  1. How do I know if I am affected by the Settlement?

    This case involves the following Nabi® tablets: Nabi 2, Nabi 2S, Nabi XD, Nabi Jr. (including Nabi Jr. S) and Nabi DreamTab (“Tablets").

    The Court has conditionally certified the following Class: “All persons who purchased, in the United States, a Nabi 2, Nabi 2S, Nabi XD, Nabi Jr. (including Nabi Jr. S) or Nabi DreamTab tablet, except persons who purchased for resale or returned such tablet for a full refund or non-defective replacement."

    The following are not members of the Class:

    1. the Honorable Christina Snyder, the Honorable Gerald Rosen, and the Honorable Christopher Sontchi;
    2. any member of their immediate families;
    3. any government entity;
    4. Fuhu and its affiliated debtors Arctic Sentinel  Holdings, Inc. formerly known as Fuhu Holdings, Inc., Arctic Sentinel Direct, Inc. formerly known as Fuhu Direct, Inc. and Sentinel Arctic, Inc. formerly known as Nabi, Inc. (collectively, the “Debtors”);
    5. any entity in which Debtors have a controlling interest;
    6. any of Debtors’ subsidiaries, parents, affiliates, officers, directors, employees, legal representatives, heirs, successors, or assigns;
    7. Mattel, Inc. and its subsidiaries, parents, affiliates, and officers, directors, employees, legal representatives, heirs, successors, or assigns;
    8. counsel for the parties; and
    9. any persons who timely opt-out of the Class.

    If the settlement is not approved or does not become effective, then the bankruptcy case will proceed as if the settlement had not been made. The Court previously certified a class in the bankruptcy case, with certain exceptions, of “All persons, who between July 3, 2010 and September 30, 2015 purchased, in the United States, a Nabi 2, Nabi 2S, Nabi XD, Nabi Jr. (including Nabi Jr. S) or Nabi DreamTab tablet."

    Top

  2. What is the lawsuit about?

    In July 2014, Scott Miller filed a lawsuit in California against Fuhu, Inc. Miller alleged that Fuhu engaged in false advertising, breach of warranty and other unfair practices with respect to its Nabi® brand tablets for children, because they contained a defective charging system. Miller sought to represent a class of all purchasers. Fuhu denied that there was any factual or legal basis for the lawsuit and denied liability. In 2015, James Griffin IV notified the court that he wished to join the lawsuit.

    In December 2015, while the lawsuit was pending, Fuhu filed a petition for relief in Delaware under Chapter 11 of the Bankruptcy Code. In the bankruptcy, Fuhu’s assets were sold to Mattel, Inc. and in January 2017 all remaining assets and liabilities of the Debtors were transferred to the Trust for final liquidation and distribution to creditors in accordance with the Bankruptcy Code.

    In July 2016, Miller and Griffin received permission from the Bankruptcy Court to file a bankruptcy claim on behalf of the Class. They filed that claim in the amount of approximately $455 million.

    Others who were owed money by Fuhu also filed claims in the Bankruptcy Court. Among these claimants were a company that manufactured some of the Tablets, Wistron Corporation (“Wistron”) and a company that distributed some of the Tablets, D&H Distributing Company (“D&H”). Wistron filed a claim in the bankruptcy for an unliquidated amount in excess of $30 million and D&H filed a claim for approximately $44 million. In addition, claims totaling approximately $24 million were submitted by certain limited partnerships organized by Morgan Stanley (“Morgan Stanley”) that bear the name North Haven Expansion Capital Co-Investment Vehicle LP and North Haven Expansion Capital LP, which lent money to Fuhu. Others also have filed claims in the bankruptcy, some of which may remain subject to review and validation; those claims currently total another approximately $51 million (as of September 30, 2018).

    The amount available in the bankruptcy estate held by the Trust for distribution to creditors is far less than the total amount of claims. As of December 6, 2018, less than $7 million was available for distribution to creditors. In addition, some of the creditors with senior priority claims may have a right under the Bankruptcy Code to obtain payment from the Trust before the Trust distributes any money to the Class, D&H or Wistron.

    In 2017, Taylor Sanchez (“Sanchez”), Carlos Munoz (“Munoz”), Vanessa Floerke (“Floerke”), Jill Aguilera (“Aguilera”), and Nell Baker (“Baker”) threatened to file lawsuits on behalf of the Class against Wistron and D&H, for their actions in connection with the Tablets.

    The Court has not determined (1) whether any of the claims in the bankruptcy by the Class, Wistron or D&H should be allowed; (2) the proper amounts of those claims; or (3) whether other claims filed in the bankruptcy should be allowed or in what amounts. There also has been no decision by any court as to whether Wistron or D&H would be liable to the Class in any amount, if purchasers of the Tablets filed lawsuits against those companies.

    Top

  3. What do Plaintiffs seek to recover in the lawsuit?

    Plaintiffs allege that the Tablets were deceptively marketed as “rechargeable” and “suitable for children” and that the problems with the charging system should have been disclosed. Plaintiffs contend that by these actions, Fuhu and D&H caused people to purchase the Tablets at an inflated price. They also contend D&H and Wistron have the obligation to indemnify Fuhu and the purchasers for their losses. Plaintiffs contend that, based on their experts’ analysis of the “cost to repair” the Tablets, each purchaser may be owed up to approximately $100. D&H and Wistron each dispute Plaintiffs’ allegations and deny any fault, wrongdoing or liability.

    Top

  4. Why is this case being settled?

    This case has been pending since July 2014. Since then, Plaintiffs’ counsel has investigated the manufacturing, marketing, and labeling of the Tablets. Plaintiffs’ counsel has reviewed hundreds of thousands of pages of documents and has taken and defended numerous depositions. Plaintiffs’ counsel also retained experts and deposed Fuhu’s experts.

    Without a settlement, the Class would first need to convince the Bankruptcy Court to approve its claim of $455 million. The Court could reject or decrease the amount of the claim once it sees and hears the evidence, including expert testimony. It could find that the Tablets were not falsely advertised or not defective, or that the purchasers did not prove that the Tablets were sold at an inflated price. Even if the Court approved the full $100 claim per Tablet purchased, the actual amount distributed to purchasers would be small—perhaps less than $2 per Tablet—because there is only a small amount of money available in the Trust to be distributed to creditors.

    Plaintiffs would also need to initiate separate lawsuits against D&H and Wistron. Once again, Plaintiffs might not persuade a court to accept their evidence about the false advertising, the defects, or the amount of money lost by the Class. They also might not be able to prove that either D&H or Wistron was responsible for any misconduct or is obligated to pay for it.

    In January 2018, the Trust, the Class, D&H and Wistron participated in a two-day mediation conducted by the Honorable Judge Gerald Rosen (retired) at JAMS in New York, New York. In the mediation, the parties agreed to this settlement.

    In November 2018, the Trust and Morgan Stanley reached agreement regarding Morgan Stanley’s claims. Morgan Stanley agreed to support the settlement that had been reached among the Trust, the Class, D&H and Wistron.

    After taking into account the risks and costs of further litigation, Plaintiffs and their counsel believe that the terms and conditions of the settlement are fair, reasonable, adequate, and equitable, and that the settlement is in the best interest of the Class members.

    Top

  5. What is the Settlement?

    Prior to this settlement, the Court had approved a Plan of Liquidation (the “Plan”) to govern how the remaining assets of the bankruptcy estates would be distributed among creditors with valid claims. Under the Plan, money is distributed to creditors only after the Court decides whether each creditor’s claim should be allowed and if so, in what amount. The Plan also organizes the creditors’ claims into categories (for example, secured, priority, and unsecured).  All the claims in the first category are paid first, before the next category is paid. If not enough money is left to pay all the claims in a particular category, then the distribution to the claims in that category is proportional. For example, if there are $500 million in unsecured claims, and only $5 million available to pay those claims, each claimant will receive payment of only one cent ($.01) per dollar value of his or her claim. To obtain a copy of the Plan, visit http://www.kccllc.net/fuhu.

    In the settlement, the parties have agreed to set values for the Class claim, the D&H claim and the Wistron claim, which are the three largest unsecured claims filed in the bankruptcy case. The Class’ claim will be valued at $154 million, the D&H claim will be valued at just over $44 million, and the Wistron claim will be valued at just over $27 million. When the bankruptcy assets are distributed to unsecured creditors, these three claims will be treated as a single “pooled” claim of just over $225 million, and the first $3 million of the amount distributed to pay that pooled claim will go entirely to the Class. Of the next $5 million distributed to pay the pooled claim, ten percent will go to the Class, and the other 90% will go to D&H and Wistron. Of any remaining amount distributed by the Trust to pay the pooled claim, one-third will go to the Class, and the other two-thirds will go to D&H and Wistron.  The settlement also sets a value for the claims by Morgan Stanley and a fixed distribution amount to Morgan Stanley to be paid within ten (10) days after the entry of a final and non-appealable order of the Bankruptcy Court approving the settlement. The distribution to Morgan Stanley is not expected to affect the amount to be distributed to the Class.

    The money received by the Class from the Trust will be used to pay: (1) the costs of administering the settlement, including providing notice to the Class, (2) attorneys’ fees, costs and incentives awarded by the Court, and (3) valid claims by Class members under this settlement. If there is money left over from the bankruptcy distribution to the Class after payment of these amounts, it will be transferred to Wistron and D&H.

    The liquidating trustee also has agreed to assign to the Class the Trust’s rights under a $1 million insurance policy issued by Lloyd’s of London. Lloyd’s refused to provide coverage to Fuhu for the Class claims, as it contended that that the policy does not apply. Plaintiffs’ Counsel and the liquidating trustee disagree with Lloyd’s position. Plaintiffs’ Counsel will be authorized to negotiate with Lloyd’s or file a lawsuit against Lloyd’s. Plaintiffs’ Counsel could try to obtain (1) reimbursement for the legal fees incurred by Fuhu in defending against the Class claim; (2) the $1 million policy limits; and (3) reimbursement for additional damages sustained by Fuhu because of Lloyd’s refusal to provide coverage when the Class lawsuit was filed. With respect to the additional damages, for example, Plaintiffs’ Counsel could try to argue that Lloyd’s should have to pay the Class $154 million, which was the amount of the Class claim allowed in the bankruptcy. There is no guarantee that any money will be obtained from Lloyd’s. If money is recovered from Lloyd’s, it will be added to the funds received by the Class from the Trust.  The money received by the Class from Lloyd’s will be used to pay: (1) any additional costs of administering the settlement that are not covered by funds received from the Trust, (2) any additional attorneys’ fees, costs or incentives awarded by the Court, and (3) valid claims by Class members under this settlement. No monies recovered from Lloyd’s will be transferred to Wistron or D&H.

    Top

  6. What can I get in the Settlement?

    If you timely file a valid claim that complies with the instructions on the claim form and in this notice, you will receive a cash payment. A claim can be filed for every Tablet purchased, even if the Tablet did not suffer from the defect. Each valid claim shall receive the same payment amount, except that the payment amount will be three times (3x) higher for claims where the Tablet suffered from a defect. The amount of the payment to each claimant will depend on (1) whether the tablet suffered from the defect, (2) how many other valid claims are filed; (3) how much money is actually received by the Class from the Trust and from Lloyd’s; and (4) how much of that money remains after payments are made to administer the settlement (including providing this notice) and to Plaintiffs and their lawyers (as approved by the Court). The maximum amount that will be paid on each claim out of the money received from the Trust is $30 per defective Tablet purchased, and $10 per each other Tablet purchased. The actual amount paid on each claim could be much lower than $30 per defective Tablet or $10 per other Tablet purchased. It also could possibly be higher than $30 per defective Tablet, or $10 per other Tablet purchased, if there are a small number of claims and/or a large recovery from Lloyd’s.

    Cash payments will be distributed only if the Court gives final approval to the proposed settlement and only after any appeals are resolved and only after distributions are made by the Trust in the ordinary course of validating and paying out other claims asserted in the bankruptcy case. If the Court does not approve the settlement, if the settlement is overturned on appeal, or if the settlement is terminated, no cash payments will be distributed.

    Top

  7. How do I make a claim?

    You may file a claim through this settlement website by clicking here. In your claim, you must demonstrate that you were the purchaser of the each Tablet for which you are submitting a claim by providing one of the following:
    (1) a claim number provided to you by the Claim Administrator, or show that you previously contacted Fuhu customer service about a defect with your Tablet;

    (2) the serial number for your Tablet;

    (3) an email confirmation from Fuhu showing online registration of your Tablet; or

    (4) an itemized retail sales receipt showing the model of Tablet and the date, place and amount of purchase.  

    To make a claim for a defective Tablet, then unless you submit the claim number described in (1) above, you must also indicate on the claim form that your Tablet was defective. You must submit the claim form under penalty of perjury and follow the other instructions on the claim form.

    You have the option to either submit the claim form online, or you can print it and mail it to the claim administrator at: Fuhu Tablet Settlement Claim Administrator, P.O. Box 404002, Louisville, KY 40233-4002. If submitted online, claim forms must be submitted no later than August 20, 2019. If mailed, claim forms must be received by the Claim Administrator (not just postmarked), no later than August 20, 2019.  You can locate your claim number on the postcard you received as shown:FUM - Claim Form Landing Insert

    Top

  8. What do Plaintiffs and their lawyers get?

    To date, Plaintiffs’ lawyers have not been compensated for any of their work on this case. Plaintiffs’ lawyers will present evidence to the Court that they have spent more than 4,500 hours litigating this case, for which they are owed more than $4 million at their normal hourly rates. Plaintiffs’ lawyers also will present evidence that they have paid out-of-pocket expenses (including expert fees, transcript fees, court reporter fees, filing fees, service costs, copying costs, and travel expenses) of more than $200,000. None of these expenses has yet been reimbursed.

    As part of the Settlement, Plaintiffs’ lawyers will apply to the Court to award them attorneys’ fees and expenses.  The parties have agreed not to contest an award of up to $1,500,000.00 in attorneys’ fees to be paid to Plaintiffs’ lawyers out of the first $3 million distributed from the bankruptcy assets to the Class. If additional funds are received by the Class, for example, from a recovery from Lloyd’s, Plaintiffs’ lawyers may seek an additional award of their actual costs, plus attorneys’ fees not greater than 40% of the amount recovered. You will not be provided separate notice of any such application, although a copy of the application will be posted on the Settlement Website.

    In addition, the named Plaintiffs have received no compensation for their time and effort on the case, and the risks they undertook in bringing it. Plaintiff Miller oversaw the litigation for more than a year in the California court, and then when the bankruptcy petition was filed, he was appointed to the Unsecured Creditors Committee and then to the Liquidating Trustee Advisory Committee, where he supervised the bankruptcy lawyers to try to maximize the recovery by creditors. He has spent more than 600 hours working on this case, for which he has not been paid, and which he would be owed $180,000 at his normal hourly rate. Plaintiff Griffin has had more limited involvement, but has spent more than 5 hours working on this case. Plaintiffs Sanchez, Munoz, Floerke, Aguilera, and Baker have each spent at least 2 hours working on this case.

    As part of the Settlement, Plaintiffs will apply to the Court for incentive awards to compensate them for their time and effort and for agreeing to a release of their claims that is broader than the claims of other members of the Class.  The parties have agreed not to contest an award of up to $75,000.00 to Plaintiff Miller, out of the first $3 million distributed from the bankruptcy assets to the Class. Plaintiff Griffin will seek an award of up to $3,000.00. Plaintiffs Sanchez, Munoz, Floerke, Aguilera and Baker will each seek an award of up to $1,000.00.  Plaintiffs do not anticipate seeking any additional incentive awards even if there are additional recoveries, unless Plaintiffs are required to initiate litigation against Lloyd’s.  You will not be provided separate notice of any such application, although a copy of the application will be posted on the Settlement Website.

    Plaintiffs and their lawyers will file a motion with the Court on or before July 30, 2019 in support of their applications for attorneys’ fees, costs, and expenses and payments to the Plaintiffs. A copy of that motion will be available on the settlement website. The Court will determine what amounts of fees, costs, expenses, and Class representative payments to award.

    Top

  9. What claims are released by the Settlement?

    The settlement releases all claims by members of the Class against the Trust, D&H, Wistron or any other released party  that relate to the sale, marketing or warranties of the Tablets.  However, it does not release claims for personal injury or claims for damage to property (other than damage to the Tablets themselves). This release includes claims that may not yet be known or suspected. This means that, in exchange for being eligible for the cash benefits as a Class member, you will not be able to sue, continue to sue, or be part of any other lawsuit against the released parties that involves the settled claims. For further information, please see Sections 20 and 28of the Stipulation of Settlement.

    Separate from the settlement, claims against Fuhu and certain affiliated entities will be released automatically by operation of bankruptcy law.  This will occur whether or not the settlement is approved.

    Top

  10. How do I exclude myself from the Settlement?

    You can exclude yourself from the Class if you wish to retain the right to sue separately for the claims released by the settlement. If you exclude yourself, you cannot file a claim or object to the settlement.

    To exclude yourself, you must complete and submit the online form at the settlement website or mail a request to exclude yourself from the settlement to the claim administrator at Fuhu Tablet Settlement Claim Administrator, P.O. Box 404002, Louisville, KY 40233-4002. If mailed, the exclusion request must contain your name, address, the words “I wish to be excluded from the Fuhu Tablet Class Action Settlement,” and your signature.

    If submitted online, exclusion requests must be submitted by August 20, 2019. If mailed, exclusion requests must be received by the Claim Administrator (not postmarked) by August 20, 2019.

    Excluding yourself from the settlement will not permit you to retain claims that are released automatically by operation of bankruptcy law, such as claims against Fuhu.

    Unless you exclude yourself from the settlement, you will be deemed to have consented to the Court’s jurisdiction and authority to enter a final order upon the settlement.

    Top

  11. How do I object to the Settlement?

    You can ask the Court to deny approval of the settlement, or to reject or reduce the award of attorneys’ fees, costs or incentives to Plaintiffs and their lawyers.  To do so, you must timely file your objection in Court using the ECF filing system, or you must timely submit an objection to the Claim Administrator, who will then forward to the parties for filing with the Court. In your objection, you can’t ask the Court to order a larger settlement; the Court can only approve or deny the settlement or decide the amount of the award of attorneys’ fees, costs and incentives. If the Court denies approval to the entire settlement, no cash payments will be sent out, and the bankruptcy proceeding will continue as if no settlement had been reached.

    You may also appear at the final approval fairness hearing, either in person or through your own attorney. If you appear through your own attorney, you are responsible for paying that attorney. If you want to raise an objection to the settlement at the final approval fairness hearing, you must first submit that objection in writing in accordance with the instructions contained in the notice.

    Any objection must include:  (1) the case name and number In re Artic Sentinel, Inc., Case No. 15-12465-CSS (Bankr. D. Del.); (2) your name, address, and telephone number; (3) documents, or testimony under penalty of perjury, sufficient to establish that you are a member of the Class; (4) a statement of your objection(s) and the basis for your objection(s); (5) a statement as to whether you are requesting the opportunity to appear and be heard at the final approval fairness hearing; (6) the name(s) and address(es) of all counsel (if any) who (a) are representing you in making the objection; (b) will appear on your behalf at the final approval fairness hearing; and/or (c) may be entitled to compensation in connection with your objection; (7) the name(s) and address(es) of all persons (if any) who will be called to testify in support of your objection; (8) copies of any papers, briefs, or other documents upon which your objection is based if not already in the court file; (9) a list of any other objections you or your counsel have submitted to any class action in any state or federal court in the United States in the previous five years (or affirmatively stating that no such prior objection has been made); and (10) your signature as objector, in addition to the signature of your attorney, if an attorney is representing you with the objection.  Failure to include any element of this information and documentation may be grounds for overruling and rejecting or striking your objection.

    All the information listed above must be electronically filed via the Court’s ECF system, or delivered to the Claim Administrator by mail or express mail such that the objection is received by the Claim Administrator (not just postmarked or sent) on or before August 20, 2019.  By submitting an objection, you consent to the jurisdiction of the Court, including to any order of the Court to produce documents or provide testimony prior to the final approval fairness hearing.

    If you object to the settlement but still want to submit a claim in the event the Court approves the settlement, you must still submit a timely claim according to the instructions described above.

    Top

  12. When will the Court decide if the Settlement is approved?

    The Court will hold a hearing on September 10, 2019 at 10:00 a.m. Eastern to consider whether to approve the settlement. The hearing will be held in the in the courtroom of the Honorable Christopher Sontchi, United States Bankruptcy Court for the District of Delaware, 824 N. Market St, Wilmington, DE 19801. The hearing is open to the public. This hearing date may change without further notice to you. Please check this settlement website periodically, or PACER, at ecf.deb.uscourts.gov, for updated information on the hearing date and time.

    Top

  13. How do I get more information?

    You can inspect the documents connected with this settlement on the Case Documents tab of this settlement website.  Other papers related to the bankruptcy proceeding are available at http://www.kccllc.net/fuhu.  Additional papers filed in the underlying California lawsuit by the Class are available through PACER, the online service for the United States District Courts, at pacer.uscourts.gov.

    You can contact the Claim Administrator by calling 1-844-269-3030 or writing to Fuhu Tablet Settlement Claim Administrator, P.O. Box 404002, Louisville, KY 40233-4002.

    You can also obtain additional information by contacting Plaintiff’s Counsel at Fuhu Settlement, Gutride Safier LLP, 100 Pine Street, Suite 1250, San Francisco, CA 94111, www.gutridesafier.com.

    Do not call or contact the Court concerning this notice, the settlement or the lawsuit.

    Top

  14. How do I find my claim number?

    Your personal claim number, unique to each class member, can be found in the upper left portion of the notice you received via email.  If you did not receive an email, you may still file a claim but you must select the option to file your claim without using your claim number.

    Top