Texans may be interested in a lawsuit involving Lululemon Atletica Inc. In a corporate dispute, the athletic clothing manufacturer has been accused of hiding information about known defects in a popular line of yoga pants. The lawsuit put forth by two investors is also accusing the company of concealing the chief executive's retirement plans. After the company's shares fell 17.5 percent in one day, investors claim that they lost hundreds of thousands of dollars.
In March, a top-selling style of Lululemon yoga pants was recalled because of a defect. Crafted of the company's own Luon fabric, the black pants were thought to become too sheer when worn. Lululemon had previously been known for creating quality athletic clothing made from strong and long-lasting fabrics. Three months after the recall, the chief executive of the company stepped down from her position.
What began as two lawsuits filed by two separate investors is expected to become a class-action lawsuit by shareholders. To work out the details, one of the investors has hired a law firm with a great deal of experience in shareholder class-action lawsuits. In order to negotiate a settlement for all of the shareholders, one lead plaintiff will negotiate.
Investers and shareholders can lose a lot of money when a company makes sudden and unexpected business moves. If shareholders feel that they have lost money because of a company's deception, they may wish to file a lawsuit in order to recover compensation. Because a class-action lawsuit can be very complicated, a lawyer with experience in commercial litigation may gather evidence and witness testimony to present in court.
Source: Reuters , "Lululemon lawsuit over sheer yoga pants gets lead plaintiff", Jonathan Stempel, October 01, 2013