Summary
This Form 8-K filing by Target Corporation announces the dismissal with prejudice of shareholder derivative lawsuits stemming from the 2013 data breach. These lawsuits alleged that current and former directors and officers breached their fiduciary duties and wasted corporate assets by failing to implement adequate internal controls and by allegedly concealing the full scope of the breach. Following an extensive investigation by a Special Litigation Committee (SLC) appointed by the Board of Directors, the SLC concluded that pursuing these claims would not be in the best interest of the Company. Consequently, both the Federal Court and the State Court have ordered the dismissal of these derivative actions.
Key Highlights
- 1Target Corporation's 2013 data breach led to multiple shareholder derivative lawsuits against current and former directors and officers.
- 2Shareholder derivative actions alleged breach of fiduciary duties and waste of corporate assets related to data security oversight.
- 3A Special Litigation Committee (SLC), comprised of independent legal and academic experts, was formed to investigate the claims.
- 4The SLC conducted an exhaustive, approximately 21-month independent investigation.
- 5The SLC concluded that pursuing the derivative claims was not in the best interest of Target Corporation.
- 6Both the Federal Court and the State Court have dismissed the derivative actions with prejudice, based on the SLC's findings.
- 7Target Corporation has no liability for these claims, other than a potential payment of attorneys' fees, which the company will have the right to oppose.
Frequently Asked Questions
This Form 8-K is filed to inform shareholders and interested parties about the dismissal with prejudice of shareholder derivative lawsuits related to the 2013 data breach. This action was taken based on the recommendation of a Special Litigation Committee.
The lawsuits alleged that Target's current and former directors and officers breached their fiduciary duties and wasted corporate assets by failing to implement a sufficient system of internal controls to protect customer data and by allegedly concealing the full extent of the 2013 data breach from customers and investors.
The SLC was established to independently investigate the allegations made in the shareholder derivative actions. It was granted full authority to determine whether pursuing claims against the company's directors and officers related to the 2013 data breach was in the best interest of Target Corporation.
Target Corporation has no liability with respect to the dismissed claims themselves. The only potential financial impact is a possible payment of attorneys' fees to the plaintiffs' counsel, should such a request be made and approved by the courts. Target reserves the right to oppose any such fee applications.