Home Depot has settled several lawsuits brought by shareholders. The company will adopt a sweeping array of corporate governance reforms to settle the combined shareholders’ suits filed in Fulton County Superior Court in 2006, as well as three suits originally filed in U.S. District Court that were later added. The suits were filed in response to revelations that the company’s board of directors had:
Nardelli resigned in January 2007, accompanied by a retirement package worth an estimated $200 million. The suits also accused founding director Kenneth G. Langone of packing the board with corporate cronies, including Nardelli, who shared memberships on several corporate boards and provided other benefits to each other. As a result, the suits charged, the company falsified reports provided to federal regulators, and shareholders suffered multimillion-dollar losses. Shareholders also were upset when, at the 2006 shareholders’ meeting, no board members attended and Nardelli — after skipping the usual speech — gave attendees a one-minute limit to ask questions. Apparently, eight shareholder resolutions were ignored and rejected. The settlement was approved and signed by Fulton County Superior Court Judge Craig Schwall on April 3rd. In addition to paying all legal fees and expenses, the company also agreed to 13 corporate governance changes. As a result, Home Depot will:
A settlement hearing to finalize the order will be scheduled within 60 days to allow any other documents or objections from Home Depot shareholders to be filed. The agreement includes a provision mandating that, in case the settlement deadline is not met or the plaintiffs lawyers fees are reduced or modified on appeal, the money will be refunded to the company.
Source: Fulton County Daily Report
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