Wal-Mart Granted Expedited Appeal Of Invalidation of Proxy Omission

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By Michael Greene

Jan. 7 — Wal-Mart Stores, Inc. has filed an appeal with the U.S. Court of Appeals for the Third Circuit seeking to overturn a district court finding that Wal-Mart failed to comply with federal securities laws when it refused to include a shareholder proposal in its proxy materials that sought to provide more oversight and reporting regarding the guns sold at the chain's stores.

Wal-Mart had successfully argued to the Securities and Exchange Commission that it could properly exclude Trinity Wall Street's proposal from its proxy materials under SEC Rule 14a-8(i)(7) because it “deals with a matter relating to the company's ordinary business.”

In a Nov. 26 opinion, however, U.S. District Court for the District of Delaware Judge Leonard P. Stark disagreed, holding that the SEC was incorrect when it granted Wal-Mart no-action relief because the proposal was “carefully drafted” so that it did not relate to the company's ordinary business operations.

Third Circuit Judge Thomas I. Vanaskie Dec. 29 granted Wal-Mart's unopposed motion to expedite its appeal. Accordingly, Wal-Mart's opening brief is due Jan. 14 and the opposing brief Feb. 4.

To contact the reporter on this story: Michael Greene in Washington at mgreene@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

The notice of appeal is available at http://www.bloomberglaw.com/public/document/Trinity_Wall_Street_v_WalMart_Stores_Inc_Docket_No_1404764_3d_Cir.