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Lululemon Athletica Inc. directors Feb. 3 dodged shareholder claims that they breached their fiduciary duties by not investigating former chairman and founder Dennis Wilson’s trading activities ( Laborers' Dist. Council Constr. Indus. Pension Fund v. Bensoussan , 2017 BL 33396, Del., 358, 2016, 2/3/17 ).
The Delaware Supreme Court upheld a lower court’s dismissal of the action, on the grounds that the claims had been resolved in another jurisdiction.
Two pension funds said in the lawsuit that Wilson suspiciously sold the athletic apparel retailer’s stock under a trading plan just days before the resignation of then-Chief Executive Officer Christine Day was publicly announced.
The Delaware Chancery Court dismissed the action in June 2016, concluding that Lululemon stockholders were adequately represented in a similar lawsuit filed in New York federal court.
The New York action involved various claims, including that Wilson breached his fiduciary duties by selling shares while in possession of insider information. The U.S. District Court for the Southern District of New York dismissed the lawsuit in April 2014. The ruling was affirmed by the U.S. Court of Appeals for the Second Circuit in April 2015.
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