Bentonville, Ark., An Arkansas judge Tuesday dismissed a large part of Wal-Mart Stores Inc.’s lawsuit against its former vice chairman Tom Coughlin, saying the executive and the company had agreed not to sue one another over any events that happened during Coughlin’s tenure. 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.
Wal-Mart had sued Coughlin this summer, saying he misspent company money before he retired in January. Coughlin remained on the board. He resigned from the board in March, when Wal-Mart disclosed it was handing documents over to the Justice Department showing that $500,000 had been misspent. Wal-Mart filed suit against Coughlin in July alleging fraud in connection with efforts to misappropriate money through bogus expenses and the unauthorized use of company gift cards.
The judge said Wal-Mart can 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.
“We grant Coughlin’s motion to dismiss that part of Wal-Mart’s complaint of all allegations occurring prior to signing the mutual release,” Finch said. “With regard to Wal-Mart’s post-release allegations, we deny Coughlin’s motion to dismiss.”