Wal-Mart’s Shareholders Are Set To File A Class Action Lawsuit Against The Company

Wal-Mart’s Shareholders Are Set To File A Class Action Lawsuit Against The Company

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All indications suggest that Wal-Mart Stores would soon be facing a litigation battle. According to a report that was published earlier by Reuters, Wal-Mart Stores will face its shareholders in the court. The company will have to defend itself against a lawsuit, which was leveled by the shareholders. These individuals feel that Wal-Mart defrauded them because it hid its unlawful practices for long, knowing that it was unethical.
The company did not disclose to the shareholders about the alleged bribery to Mexican officials in order to enhance its operations in Mexico. While ruling on the Wal-Mart case, Susan Hickey posited that a pension fund based in Michigan did not have a liable cause. This is because it did not suffer tangible financial losses as occasioned by the company’s shares. Susan is a U.S. District Judge from Fayetteville.
According to the ruling, investors are at liberty to launch a lawsuit, under a class action, against Wal-Mart and its former CEO, Mike Duke. Unlike an ordinary lawsuit, a class action lawsuit will have gross financial ramifications against the company. On her ruling, Susan expounded that the class action status would play an instrumental role in enhancing judicial efficiency and economy. She made this decision considering that all stakeholders would be having small claims against the company and its leadership. This way, it would be prudent to combine all these claims and have a consistent outcome that would not have large weight on the judicial system. It would be easier for the court to decide on one case than multiple cases against the same defendant. This decision was well received by the investors who have been battling the company in the courts for long.
In a quick statement to Reuters, representatives from Wal-Mart asserted that in this case, class action would not be a viable option. The company argued that it would appeal the court’s ruling in coming days. This ruling will make it a herculean task for Wal-Mart to ignore claims made by Michigan Pension Fund. The fund claimed that the chain inflated its shares value by exploiting the alleged Mexican payoffs. It is suspected that the company made payments to enhance the development of Mexican stores.
Michigan Pension Fund believes that Mike Duke and the board members did not investigate the claims even after being informed about the same in 2005. It is for this reason that investors believe the management was fully aware of the bribery.

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