California State Teachers' Retirement System v. Alvarez (Wal-Mart Derivative Litigation)
Status: Ongoing Case
We filed a shareholder derivative suit in connection to Wal-Mart's violations of the Foreign Corrupt Practices Act
On May 3, 2012, Labaton Sucharow filed a derivative lawsuit on behalf of plaintiff California State Teachers' Retirement System against certain current and former directors and officers of Wal-Mart Stores, Inc. (Wal-Mart).
The plaintiff alleges that, in 2005 and 2006, top-level management and directors of Wal-Mart concealed evidence that executives of Wal-Mart's profitable foreign subsidiary Wal-Mart de México had paid hundreds of illegal bribes to foreign government officials in order to secure competitive advantages for the company. The defendants' conduct, first publicly revealed on April 21, 2012 in an article in The New York Times, has damaged and will continue to damage the company's reputation and market capitalization. The plaintiff also alleges that the defendants have exposed the company to steep penalties for violating provisions of the U.S. Foreign Corrupt Practices Act of 1977, which prohibits the payment of bribes to foreign officials in order to obtain or retain business. The plaintiff further alleges that a majority of Wal-Mart's Board of Directors lacks independence or is not disinterested as to the claims asserted, and thus cannot impartially decide whether to seek redress for the company and shareholders.
On May 13, 2016, the court dismissed the amended complaint because a federal court in Arkansas had previously dismissed a similar complaint in a case involving different plaintiffs. We are appealing this decision to the Supreme Court of Delaware and expect to have oral argument some time in late 2016 or early 2017.
The case is California State Teachers' Retirement System v. Alvarez (Wal-Mart Derivative Litigation), No. 7490 (Del. Ch.). The plaintiff is California State Teachers' Retirement System. The defendant is Wal-Mart's current board of directors, certain of Wal-Mart's current officers, certain of Wal-Mart's former board of directors, and certain of Wal-Mart's former officers.