Wal-Mart Accused of Breach of Fiduciary Duty by Small Pension Fund
Posted on Jan 01, 2016
A small union pension fund is leading the charge in a breach of fiduciary duty action against retail giant Wal-Mart Stores Inc. Wal-Mart has $253 billion in stock, and the pension fund holds merely $750,000 worth. The pension fund, the Indiana Electrical Workers Pension Trust Fund IBEW, alleges that Wal-Mart’s officers and directors breached their fiduciary duty to shareholders. They accuse the officers and directors of stifling an internal company investigation of an alleged bribery scheme in Mexico.
The Indiana pension fund’s involvement in the case began with its anonymous mailing of a cache of whistleblower documents to attorneys located in Delaware. The pension fund consists of 500 retirees along with 2,500 active electrical workers. The litigation over the matter began in April, after the New York Times published a story about the alleged bribery. According to the Times, Wal-Mart’s Mexican subsidiary bribed government officials in that country in order to facilitate the award of store permits. The company’s corporate headquarters conducted an internal “investigation,” but swept its findings under the rug.
As a result of the article, several large investors filed lawsuits against the company. The Indiana pension fund, however, attempted to conduct its own investigation by requesting thousands of internal company documents directly from Wal-Mart, outside of court. Shareholders in Delaware are entitled to inspect certain non-confidential books and records of a company. Wal-Mart is incorporated in Delaware. The documents that they received reportedly substantiated several of the facts reported in the Times’ article. The judge presiding over the shareholder lawsuits praised the pension fund for approaching the matter using the “right strategy.”
For more information about breach of fiduciary duty and other business litigation matters, contact a New York breach of fiduciary duty attorney today at (888) 497-3410.