On October 18, 2024, Walmart Inc. (WMT, Financial) announced a settlement agreement designed to resolve certain shareholder derivative claims relating to the Company’s distribution and dispensing of prescription opioids. This agreement, which is subject to court approval, is intended to address allegations that certain current and former directors and officers of Walmart have breached their fiduciary duties.

The derivative suits, which include Ontario Provincial Council of Carpenters’ Pension Trust Fund v. Walton and other related cases, accused Walmart’s leadership of failing to adequately monitor 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.

Under the proposed settlement, the insurance carriers are expected to pay Walmart $123 million, less any attorneys’ fees and litigation costs awarded by the court. In addition, Walmart has agreed to maintain certain corporate governance practices for at least five years. It is important that the settlement does not include an admission of liability and that the defendants expressly deny any wrongdoing.

The terms of the settlement are set forth in the Settlement, Compromise and Release Provision and Agreement. The Delaware Chancellor’s Court has ordered Walmart to provide shareholders with a notice of the proposed settlement, which will be available on the company’s investor relations website.

This development represents a significant step for Walmart as the company seeks to navigate these legal challenges and strengthen its commitment to corporate governance and compliance.

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