Dole execs' $148M fraud penalty 'conservative'
Dole execs' $148M fraud penalty 'conservative'
David H. Murdock, Dole Food Co. Inc.'s chief executive officer, and C. Michael Carter, former president and chief operating officer, have been ordered to pay shareholders more than $148 million for efforts to drive down the market price as well as fraud during the negotiations for Murdock's 2013 buyout of the company.
"Although facially large, the award is conservative relative to what the evidence could support," Vice Chancellor J. Travis Laster said in the decision.
In November 2013 Murdock paid $13.50 per share to acquire the 60 percent of the common stock of Dole that he did not already own; however, Laster said a fair value for the plaintiffs — former stockholders — was $16.24 per share, "significantly less than the maximum of $20.34 per share [the court] could have supported."
Murdock and Carter deprived the committee of the board of the ability to negotiate on a fully informed basis and potentially say no to the buyout. Likewise, the pair deprived the stockholders of their ability to consider the buyout on a fully informed basis and potentially vote it down.
"Murdock and Carter‘s conduct throughout the committee process, as well as their credibility problems at trial, demonstrated that their actions were not innocent or inadvertent, but rather intentional and in bad faith," Laster said.
