8-KOther EventsExhibits & Filings

COSTCO WHOLESALE CORP /NEW 8-K Report, Corporate Update (Mar 7, 2011)

Filed March 7, 2011For Securities:COST

Summary

Costco Wholesale Corporation (COST) filed an 8-K on March 6, 2011, to report on a legal development. The company disclosed that on February 28, 2011, the United States District Court for the Western District of Washington entered an Order Preliminarily Approving Settlement and Providing for Notice in a derivative lawsuit. This settlement involves the dismissal of consolidated derivative actions with prejudice. As part of this preliminary approval, Costco has agreed to pay $4.85 million in attorneys' fees and costs to the plaintiffs' counsel. A settlement hearing is scheduled for June 10, 2011, to determine if the settlement is fair and in the best interests of the company and its shareholders. This filing serves to inform investors about the progress and terms of this legal matter.

Key Highlights

  • 1Costco reported a preliminary court approval of a settlement in a derivative lawsuit filed on behalf of the company.
  • 2The settlement will lead to the dismissal of consolidated derivative actions with prejudice.
  • 3Costco has agreed to pay $4.85 million in attorneys' fees and costs to the plaintiffs' counsel.
  • 4A settlement hearing is scheduled for June 10, 2011, to finalize the approval.
  • 5The court order requires Costco to disclose this settlement progress via a Form 8-K filing.
  • 6The lawsuit was initially filed by Pirelli Armstrong Tire Corporations Retiree Medical Benefits Trust.

Frequently Asked Questions

The legal action is a derivative lawsuit filed on behalf of Costco Wholesale Corporation. This means the suit was brought by shareholders (in this case, the Pirelli Armstrong Tire Corporations Retiree Medical Benefits Trust) to assert claims that should have been brought by the corporation itself.

The primary financial implication disclosed is Costco's agreement to pay $4.85 million to the plaintiffs' counsel for attorneys' fees and costs. The settlement itself involves the dismissal of the derivative actions, which means the company will not face further claims from these specific lawsuits.

The settlement is subject to final approval at a settlement hearing scheduled for June 10, 2011. The court will determine at this hearing whether the terms are fair, reasonable, and in the best interests of Costco and its shareholders before entering a final judgment.

Costco is filing this 8-K as required by the court's order to publicly disclose the preliminary approval of the settlement and the details related to the settlement hearing. This ensures transparency for investors regarding significant legal proceedings.