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Delaware judge rules McDonald's case against fired CEO Steve Easterbrook can continue.

Judge rules McDonald’s case against fired CEO can continue

Former CEO Steve Easterbrook had sought dismissal of severance package lawsuit in Delaware court

A Delaware judge on Tuesday rejected fired McDonald’s Corp. CEO Steve Easterbrook’s bid to dismiss a lawsuit that accuses him of lying about sexual relationships with employees and seeks the return of millions of dollars in severance payments.

Chicago-based McDonald’s in August sued Easterbrook in the Court of Chancery of the State of Delaware to recover compensation and severance benefits — a cash, bonus and stock award package reportedly worth more than $37 million.

“With the court’s denial of Steve Easterbrook’s motion to dismiss, we can now move forward with our case seeking the return of his severance payment and to hold him accountable for his lies and his efforts to destroy evidence,” McDonald’s Corp. said in a statement emailed Wednesday.

“He violated the company’s policies, disrespected its values, and abused the trust of his co-workers, the board, our franchisees and our shareholders,” the company said. “We look forward to bringing the evidence of Easterbrook’s misconduct before the court and to proving our case.”

McDonald’s ousted Easterbrook in November 2019, citing the employee relationship. But in its August lawsuit, the company said it would not have approved Easterbrook’s severance package if it had it known about several other physical relationships with employees and other allegations that came to light after the firing. McDonald’s alleged fraud and breach of fiduciary duty.

On Tuesday, Joseph Slights, vice chancellor of the Delaware Chancery Court, denied Easterbrook’s motion to dismiss the case. Easterbrook had contended the case should be heard in Illinois courts, where McDonald’s is based, and said the company had information about the other relationships when it negotiated his severance in 2019.

“As part of the investigation, Easterbrook turned over his company phone to be searched,” Slights was quoted by the Chicago Tribune. “While this search revealed nothing, it later became evident that Easterbrook had deleted incriminating evidence from his phone. This active concealment makes it at least reasonably conceivable the company had no way of knowing the full extent of Easterbrook’s misconduct.”

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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