In a recent pyramid scheme lawsuit that Herbalife Ltd. agreed to settle, few distributors who received notice of the US $17.5 million agreement filed claims to recuperate their losses and obtain product refunds.
Although notices were sent to more than 1.5 million individuals, fewer than 7,300 claims were filed, court records showed. The average claimant who meets certain criteria will receive roughly $1,100 from a $15-million cash settlement fund, according to court documents filed this month.
The claims rate of 0.47 percent “is a clear red flag that the class notice program was inadequate and unfair,” Douglas Brooks, a Massachusetts-based lawyer who represented 18 distributors objecting to the settlement, wrote in April 20 court papers.
Herbalife’s outside legal team on Monday countered that the majority of class members who declined to file a claim “confirmed the integrity of