The U.S. Sixth Circuit Court of Appeals has lifted an injunction that prevented former Dollar General Corp. Chief Financial Officer Brian Burr from suing the company for causing him to get into big trouble with the Securities and Exchange Commission. Reversing a July 2009 order from District Judge William J. Haynes Jr., a three-judge panel ruled that a consent decree Burr entered into with the S.E.C. did not preclude him from suing Dollar General. The Sixth Circuit opinion, handed down today and available at this link, dismissed parts of Dollar General's argument for the injunction as "preposterous." Burr's claim arose from legal action taken by the S.E.C. after Dollar General restated its 1998-2000 earnings, reduced pre-tax income by roughly $143 million. Burr, then-CEO Cal Turner and other top execs ended up paying millions to settle the charges. The court summarized the case as follows:
In February 2006, Burr filed suit in Tennessee Circuit Court against Dollar General based on the facts that led to the SEC’s suit against Burr and Dollar General. In that action, Burr alleged that Dollar General defrauded him in leading him to believe that he could cash in his stock options “in compliance” with all applicable regulations. Burr sought to recover damages related to his settlement with the SEC, including the value of the loss of the stock options, loss of income, attorney’s fees, punitive damages, and interest. Dollar General contended that Burr’s pursuit of a state court action was in contravention of the terms of Burr’s Consent Judgment, which prohibited Burr from seeking indemnification from any co-defendant. Dollar General filed a motion in the district court to enforce Burr’s Consent Judgment and enjoin the state court lawsuit.
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