Illegal conduct in one industry sector does not provide a credible basis for shareholders to allege wrongdoing or mismanagement against a specific company, the Delaware Court of Chancery has ruled.
In Louisiana Municipal Police Employees' Retirement System v. Hershey, the court issued the opinion when it dismissed a lawsuit filed by the Louisiana Municipal Police Employees' Retirement System alleging that Hershey Co. relies upon West African farms using illegal child labor to harvest cocoa beans. While the court conceded that child labor in the chocolate industry is a serious problem, it concluded that LAMPERS presented no evidence that Hershey had violated the law or relied upon child labor for its cocoa.
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