Point Blank Solutions Inc., who claims to be the leading manufacturer of body armor, filed for bankruptcy protection on April 14, 2010. Citing Court filings, Reuters reports that the Florida-based (Pompano Beach) company “supplies more than 80 percent of the U.S. military’s soft body armor vest requirements . . .”
Claiming mounting legal bills in the trial of former CEO David Brooks – currently on trial in New York for securities fraud and other related crimes – Point Blank Inc. and three affiliates filed for Chapter 11 protection in US Bankruptcy Court in Wilmington, Delaware. Tom Hals reports that “former CEO, David Brooks, was listed as the company’s largest shareholder with a 22.6 percent stake. The company has also been investigated by the Securities and Exchange Commission, is the subject of a shareholder lawsuit, and spends about $600,000 a month on legal fees, according to court documents.”
The South Florida Business Journal reports that Point Blank CEO and Chairman of the Board, James Henderson issued a news release stating that “We have won several key contracts, paid down a substantial amount of our debt and realigned our business to return to profitability. Without a financing facility and with mounting legacy expenses, however, we had to take this step to reorganize.”
The South Florida Business Journal goes on to report that “in 2007, Point Blank sued its former CEO (Brooks) for the return of more than $4 million and other company assets. Also, in 2008, the company settled a class action lawsuit and a shareholder derivative suit for $34.9 million in cash and 3.18 million shares of its common stock.”
Formerly known as DHB Industries, Point Blank was also cited for supplying body armor to the Marines in 2004 that didn’t meet specifications. As reported by Nathanial Helms for Defense Watch, “as early as July 19, 2004, according to memos obtained by the Army Times newspaper, the Marine Corps found ‘major quality assurance deficiencies within Point Blank.’ One month later, on August 24, 2004, the military rejected two orders from Point Blank after tests revealed that the vests did not meet safety requirements. Faced with a severe shortage of body armor the Army decided that nine Point Blank orders that did not meet safety requirements would be sent to troops overseas anyway, according to court records. On May 4, 2005, the U.S. Marine Corps recalled 5,277 Interceptor vests manufactured by Point Blank Body Armor.” Despite the fact that Point Blank had been consistently supplying the U.S. Marines with substandard equipment, on July 20 Point Blank received an additional $10.1 million contract from the U.S. government.” Go figure.
It does seem grossly negligent that the US Army and Defense Department continues to employ contractors whose very public financial problems, questionable integrity and lax quality standards should be allowed to bid upon body armor contracts let alone supply our troops with critical protective gear. SFTT, families of troops serving in Iraq and Afghanistan and the media have been questioning US military body armor procurement practices for years. At every step of the way, we have been stonewalled.
The October 2009 GAO report recommending independent body armor testingconfirms what everyone knows: there is something rotten in the State of our military procurement process. Why should our frontline troops and their families continue to suffer because our military leadership has for so long turned a blind eye to this situation? Will the bankruptcy of Point Blank finally bring about needed changes?
If past history is any indication, our military leadership will coddle Point Blank through their bankruptcy reorganization. Our military leadership needs to make a clean break with Point Blank and get our troops the body armor they deserve. Let’s hope they do, but we will be vigilant.
Richard W. MayShare