Part of Wal-Mart Suit Is Dismissed
An Arkansas judge Tuesday dismissed a large part of Wal-Mart Stores Inc.’s multimillion-dollar lawsuit against former Vice Chairman Tom Coughlin, saying the parties had agreed not to sue each other over events that happened during Coughlin’s tenure.
Wal-Mart said it would amend its lawsuit and try again to void Coughlin’s retirement deal. It said Coughlin negotiated a lavish deal last year knowing he had misused $500,000 in Wal-Mart cash and property.
The decision in the civil case does not affect a federal grand jury in Fort Smith, Ark., that is looking into possible federal crimes based on Wal-Mart’s allegations against Coughlin.
Benton County Circuit Judge Jay Finch said Wal-Mart failed to show that Arkansas law required a company officer to disclose any improprieties before signing a general release from liability.
“A plain reading of the mutual release indicates that Wal-Mart must have considered the possibility that Coughlin’s actions were potentially problematic when it released him of all known or unknown claims,” Finch wrote in his order.
Finch said Wal-Mart could still pursue losses that occurred after Jan. 22, when the company and Coughlin waived their right to sue over past events. Wal-Mart says it gave Coughlin $400,000 in April because of a benefits calculation error and wants the money returned.
Wal-Mart had sued Coughlin this summer after referring its allegations to federal prosecutors.
But an agreement between the 28-year company veteran and Wal-Mart said they would release each other “from any and all liability from claims, causes of actions, demands, damages, attorneys fees, expenses, compensation or other costs or losses of any nature whatsoever, whether known or unknown.”
Coughlin in August filed a motion to dismiss the lawsuit, saying the release barred Wal-Mart from acting against him. Wal-Mart’s lawyers countered that Coughlin was obliged as a high-ranking officer to disclose any wrongdoing and that by not doing so, he had defrauded Wal-Mart into signing the pact.
