On October 18, 2024, Walmart Inc. (WMT, Financial) announced a settlement agreement aimed at resolving certain shareholder derivative actions related to the company's distribution and dispensing of prescription opioids. This agreement, pending court approval, seeks to address allegations that certain current and former directors and officers of Walmart breached their fiduciary duties.
The derivative actions, which include the Ontario Provincial Council of Carpenters’ Pension Trust Fund v. Walton and other related cases, accused Walmart's leadership of failing to adequately oversee the company's opioid distribution practices. In response, Walmart's Board of Directors established a Special Litigation Committee in May 2023 to investigate these claims and determine the best course of action for the company.
As part of the proposed settlement, insurance carriers are expected to pay Walmart $123 million, minus any attorneys’ fees and litigation expenses awarded by the court. Additionally, Walmart has agreed to maintain certain corporate governance practices for at least five years. Importantly, the settlement does not include any admission of liability, with the defendants expressly denying any wrongdoing.
The terms of the settlement are detailed in the Stipulation and Agreement of Settlement, Compromise, and Release. The Delaware Court of Chancery has directed Walmart to issue a notice to shareholders regarding the proposed settlement, which is available on the company's Investor Relations website.
This development represents a significant step for Walmart as it seeks to move past these legal challenges and reinforce its commitment to corporate governance and compliance.
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