St. Clair Shores (Mich.) Police and Fire Retirement System sued Unilever and its executives, alleging violations of federal securities laws in relation to Ben & Jerry's decision to end sales of its products in Palestinian territories it considers to be illegally occupied by Israel.
The complaint, filed June 15 in U.S. District Court in New York, claims Unilever made false and misleading statements during 2020 and 2021 by excluding customer, ethical and legal risks linked to Ben & Jerry's decision in its 6-K and 20-F SEC forms. Unilever's description of its customer risks were false and misleading because "Unilever acknowledged the importance of maintaining successful customer relationships with existing customers but omitted discussing that the B&J Board had already decided to end sales to existing Israeli customers, which risked reduced sales and a customer backlash," according to the complaint.
In July 2021, Ben & Jerry's announced it would end sales of its products in "Occupied Palestinian Territory" but continue sales in Israel after the expiration of a licensing agreement that had distributed its products in Israel for decades. Arizona, Colorado, Florida, Illinois, New Jersey, New York and Texas stated they would divest pension fund investments in Unilever following the news, citing anti-BDS legislation, the complaint claims.
The complaint describes the BDS movement as "a pro-Palestinian movement promoting boycotts, divestments, and economic sanctions against Israel." In response to Texas and Florida's re-evaluation of their Unilever investments, Unilever American depository receipts fell about 5.4%, according to the complaint.
Due to the alleged false and misleading statements, the Michigan pension fund and other potential class members "suffered significant losses and damages," the complaint said. Further, the pension fund "believes there are thousands of members in the proposed Class."
The complaint does not specify the fund's holdings in Unilever.
The pension fund seeks compensatory damages for "all damages sustained as a result of defendants' wrongdoing," case costs and expenses and "equitable and injunctive or other relief as the Court may deem just and proper."
Defendants have not filed a response, and company officials could not be reached for comment.
The fund reported $126 million in assets as of the end of June 2021, according to an annual report.
The case is City of St. Clair Shores Police and Fire Retirement System vs. Unilever PLC et al.