New York City Files Derivative Suit Versus Wal-Mart Stores Inc-Reuters

Reuters reported that New York City's pension funds became the latest group to file a derivative lawsuit against Wal-Mart Stores Inc based on reported allegations of bribery in Mexico and a possible cover-up by Wal-Mart officials. The suit, filed in Delaware Chancery Court, alleges that Wal-Mart's officers and board of directors breached their fiduciary duty to both the company and shareholders by failing to properly handle claims of alleged bribery and apparently attempting to cover up details of the issue. The lawsuit comes after the California State Teachers' Retirement System, or CALSTRS, filed a derivative lawsuit in Delaware Chancery Court in early May. In total, 11 derivative complaints were filed in April and May in Delaware and Arkansas tracking the allegations in the New York Times story, Wal-Mart previously said. A securities lawsuit was also filed by the City of Pontiac General Employees Retirement System in Tennessee. In a derivative lawsuit, plaintiffs seek a recovery for the company, not shareholders. The pension funds are seeking to essentially stand in the shoes of Wal-Mart and sue the company's executives and directors for damage they have done to the retailer. Such lawsuits often result in changes in corporate governance. The bribery issue is also being investigated by the U.S. Department of Justice, the U.S. Securities and Exchange Commission and a number of government agencies in Mexico.