Boston, MA 06/10/2014 (wallstreetpr) – Office Depot Inc (NYSE:ODP) decided to include a mediator in its 5-year-old lawsuit which was filed by a former employee. David Sherwin, a former business account manager, alleged the company of overcharging the government agencies. He died at the age of 59 years on March 16, 2014, but other two plaintiffs in this lawsuit- the state of California as well as David Sherwin’s estate are still continuing the case.
Voluntary Mediation
All the parties included in the lawsuit have decided to voluntarily go for mediation on June 25, 2014. Office Depot Inc (NYSE:ODP) recently filed a petition for the same with U.S. Securities and Exchange Commission (SEC). In case there is no settlement reached on the case, the trial will go to the California Superior Court in July 2015. Office Depot said that it denied any kind of allegations that were put on the company and therefore it decided to defend the case vigorously.
Background of the Case
There are allegations on the company that it violated the contract for furniture, calendars, notepads, finders as well as other office supplies during the period from 2001 to 2011. The lawsuit was filed against the company for overcharging all the government agencies. Under the contract, the company provided the office supplies to school districts, counties, cities as well as certain other public entities.
SEC Filing by the Company and the Warning
Office Depot Inc (NYSE:ODP) has warned that David Sherwin’s estate as well as California might also demand payments during the process of mediation, and this would lead to adverse effects on the cash flows as well as operations of the company. Office Depot, it must be noted, is already trying for stabilisation of its position in the market after having lost two years of money. As a result of this, the new CEO of the company Roland Smith, in May 2014 announced that the company was about to close 400 stores in the U.S. by the year 2016.
