An Apple shareholder has filed a lawsuit in California against CEO Tim Cook and several Apple executives and directors. In the filing it’s alleged that the parties involved “showed a reckless disregard for their duties” at Apple, therefore causing “significant damage” to the company in the process for the E-Book Price Fixing case.
The suit echoes many of the same problems that have come to light from the class-action lawsuit over the anticompetitive sales practices that involved five of the six major players in book publishing. After a tentative approval was given in the $450 million settlement between Apple and 33 states and territories, it appears that one shareholder believes that Apple is taking on damage it shouldn’t be responsible for.
The “derivative suit,” uncovered by Gigaom’s Jeff John Roberts, names Tim Cook, Eduardo Cue, Arthur Levinson, Ronald Sugar, Millard Drexler, Al Gore, Andrea Jung, William Campbell and 25 Does as being negligent in their duties to the company. The filing claims that the parties were involved in a “breach of fiduciary duty, waste of corporate assets, unjust enrichment, and indemnification and contribution” as a result of the e-book scheme.
While most of the claims are looking to be resolved by better policies and practices within the company, the suit asks that the parties mentioned foot the bill for the $450 million settlement on their own instead of with company funds. In the suit, the salaries and payments to each of the parties involved, with the exception of the Does, are stated as far back as 2009. In doing so, the suit is attempting to show that the defendants have no interest in stopping the sort of mismanagement that allowed the pricing fixing to occur.
Cook’s salary and bonuses were disclosed twice, in an attempt to show that “demand is futile” in his situation. It’s stated that Cook is “incapable of impartially considering a demand to commence and vigorously prosecute this action” because he is beholden to the board for his continued employment and compensation.
On top of paying out the damages as a result of the class-action settlement, the lawsuit wants the defendants to give up their compensation and bonuses that have been acquired dishonestly as a part of knowingly taking part of illegal activity. The funding is to be returned to Apple, as it should be considered a waste of company assets to pay out bonuses and compensation to parties that acted in bad faith on behalf of the company.
“Plaintiff, as a shareholder and representative of Apple, seeks restitution from these defendants, and each of them, and seeks an order of the Court disgorging all profits, benefits, and other compensation obtained by these defendants, and each of them, from their wrongful conduct and fiduciary breaches,” reads the suit.
In the prayer for relief, the plaintiff is also asking for “extraordinary equitable and/or injunctive relief” to be placed upon the defendants that would restrict proceeds earned from trading activities or other assets to ensure that an “effective remedy” is met. It’s also asked that the plaintiff is awarded the cost of filing the suit, including attorney, accountant and expert fees.
