Shareholder Sues Unilever After Subsidiary Stops Selling Sweets in Settlements, Sparking 7 States To Sell Shares, Sinking Stock

A Michigan pension fund, the City of St. Clair Shores Police and Fire Retirement System, has sued the London-based Unilever corporation for mishandling the decision of its Ben & Jerry’s subsidiary last July to stop selling ice cream in the West Bank and east Jerusalem and to sever its ties with its Israeli licensee, which rejected the ban. According to the class-action lawsuit, filed in the US District Court in Manhattan, Unilever improperly concealed the decision before it was announced, knowing that many US states might divest from companies that support anti-Israel boycotts. The price of Unilever American depositary receipts (ADRs), financial instruments that facilitate American investments in overseas companies, fell nearly 8% over six days, and seven US states divested their pension funds from Unilever, amid accusations that Ben & Jerry’s decision was antisemitic or hypocritical. At the time of its decision, Ben & Jerry’s said that selling ice cream in Israeli settlements was “inconsistent with our values.” The pension fund’s complaint says, “As a result of defendants’ wrongful acts and omissions, and the declines in the market value of Unilever ADRs, plaintiff and other class members have suffered significant losses and damages.” Ben & Jerry’s was also sued by the Israeli ice cream maker, American Quality Products Ltd. Last week, the two sides agreed to arbitration in that case.