Walmart is guilty, just not guilty enough, according to Chancellor Andre Bouchard of the Court of Chancery in Wilmington, Delaware. Bouchard. Bouchard dismissed a lawsuit by Wal-Mart Stores Inc. shareholders who accused the board of the world's largest retailer of trying to cover up bribes paid by company executives in Mexico, according to Tom Hals writing in Wal-Mart wins dismissal of Mexico bribery lawsuit for Reuters. In explaining Bouchard's ruling, Hals writes:
The litigation stemmed from a 2012 New York Times investigation that found Wal-Mart had engaged in a multi-year bribery campaign to build its Wal-Mart de Mexico business. According to the newspaper, Wal-Mart sent investigators to Mexico City and found a paper trail of suspect payments totaling more than $24 million. However, top executives shut down the internal probe and did not notify U.S. or Mexican law enforcement until after the newspaper had informed Wal-Mart that it was looking into the issue. The Delaware lawsuit sought to hold Wal-Mart directors liable for damages they caused the Bentonville, Arkansas-based retailer, in what is known as a derivative lawsuit. Successful derivative cases usually result in corporate governance changes. While the Delaware shareholders were fighting for company documents to bolster their case, a federal judge dismissed a parallel derivative case in Arkansas for failing to prove the board was too conflicted to investigate itself. That ruling has been appealed. In his 60-page decision, Bouchard said the Arkansas plaintiffs' strategy "does not rise to the level of litigation management that was so grossly deficient as to render them inadequate representatives" of Wal-Mart shareholders.So, Walmart executives were bad boys, just not bad enough. (I don't usually comment on the choice of art with stories, but this case has to be among the strangest I've come across, particularly for an organization like Reuters. Is there a hidden message here, or was no one simply paying attention?) Jeff Hess: Have Coffee Will Write.