Unilever plc (UL) Failed to Disclose its Resolution to End Sales of its Ice Cream in “Occupied Palestinian Territory” and the Risks Associated with the Board’s Decision
A class action on behalf of all persons and entities that purchased or otherwise acquired Unilever (NYSE: UL) American Depository Receipts (ADRs) September 2, 2020 and July 21, 2021, for violations of the Securities Exchange Act of 1934. Unilever is one of the world’s largest consumer goods companies.
According to the complaint, in 2000, Ben & Jerry’s sold the company to Unilever for $326 million. In July 2020, Ben & Jerry’s independent board passed a resolution to end sales of Ben & Jerry’s products in areas that the Ben & Jerry’s Board considers to be Palestinian territories illegally occupied by Israel. However, Ben & Jerry’s CEO did not “operationalize” the resolution immediately.
On July 19, 2021, Unilever “operationalized” the Ben & Jerry’s Board’s resolution to boycott Israel. On that day, Ben & Jerry’s announced that, upon the expiration of the current licensing agreement by which its products had been distributed in Israel for decades, it would end sales of its ice cream in “Occupied Palestinian Territory” but purportedly continue to sell its products in Israel. However, in a separate response reported by NBC News, the Ben & Jerry’s Board disputed that Ben & Jerry’s would remain in Israel and that Unilever had any authority to make such a promise.
The class action alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that in July 2020, Ben & Jerry’s board passed a resolution to end sales of its ice cream in “Occupied Palestinian Territory” as well as the risks attendant to the board’s decision. Additionally, Unilever’s description of its legal risks was materially false and misleading because Unilever acknowledged that complying with all applicable laws and regulations was important but omitted discussing Ben & Jerry’s boycott decision, which risked adverse governmental actions for violations of laws, executive orders, or resolutions aimed at discouraging boycotts, divestment, and sanctions of Israel adopted by 35 U.S. states (“Anti-BDS Legislation”).
In response to the boycott, Texas and Florida announced it was examining Ben & Jerry’s action in connection with the states’ Anti-BDS Legislation, with Florida’s CFO stating in a letter to Ben & Jerry’s CEO that refusal to do business in Israel will result in Ben & Jerry’s being placed on the Scrutinized Companies that Boycott Israel list and that Florida would then be prohibited from investing in Ben & Jerry’s or Unilever. On this news, the price of Unilever ADRs closed down over 5%.
Ultimately, the states of New York, New Jersey, Florida, Texas, Illinois, Colorado, and Arizona announced decisions to divest their pension fund investments in Unilever due to violations of their Anti-BDS Legislation.
Next Steps: If you acquired your shares of Unilever plc ADRs between September 2, 2020 and July 21, 2021, you have until August 15, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.