Walmart reaches opioid shareholder settlement

Walmart (WMT) announced that it has reached a proposed settlement agreement about its distribution of prescribed opioids, according to a filing with the U.S. Securities and Exchange Commission on Friday. As the company has previously disclosed, three shareholders of the company filed a derivative action in the Delaware Court of Chancery alleging that certain current and former directors and officers breached their fiduciary duties by failing to adequately oversee the company’s distribution and dispensing of prescription opioids. This action is Ontario Provincial Council of Carpenters’ Pension Trust Fund, et al. v. Walton, et al., Delaware Court of Chancery, Case No. 2021-0827-JTL. Also as previously disclosed, other shareholders of the company filed two derivative actions alleging that certain current and former directors and officers breached fiduciary duties and violated federal securities laws in connection with the company’s distribution and dispensing of prescription opioids. These actions are Abt v. Alvarez, et al., U.S. District Court for the District of Delaware, Case No. 21-cv-00172-CFC and Nguyen v. McMillon, et al., U.S. District Court for the District of Delaware, Case No. 21-cv-00551-CFC. On May 5, 2023, the Walmart Board of Directors adopted resolutions creating a special litigation committee to investigate, review, and analyze the facts and circumstances surrounding the claims and allegations in the Derivative Actions and determine whether the prosecution of such claims is in Walmart’s best interest. The parties to the Ontario Action and the Special Litigation Committee have reached an agreement that would resolve the Derivative Actions and release other potential derivative claims. If the Delaware Court of Chancery approves the proposed settlement: (i) insurance carriers would pay the company $123M, less any attorneys’ fees and litigation expenses awarded by the Court to plaintiffs’ counsel; and (ii) the company would maintain certain corporate governance practices for a period of at least five years. The settlement does not include any admission of liability, and the defendants expressly deny any wrongdoing. The terms and conditions of the proposed settlement are contained in the Stipulation and Agreement of Settlement, Compromise, and Release.