Delaware Decision in Dole Highlights Importance of Robust Process in Review of Strategic Transactions
|Area||Corporate Finance and Securities|
In November 2013, Dole Food Co., Inc. ("Dole") was taken private by its long-time Chairman and Chief Executive Officer, David Murdock. Before the transaction, Murdock owned 40% of Dole’s outstanding common stock and was its de facto controller. Murdock acquired the remaining 60% for $13.50 per share in a transaction that was approved by the independent directors of Dole and by an affirmative vote of holders of a narrow majority of the unaffiliated shares. In a recent decision, the Delaware Chancery Court held Murdock, together with Dole’s former General Counsel and COO, Michael Carter, personally liable for damages of $148 million for breaching their fiduciary duties in connection with the transaction. The Court found that Murdock and Carter had engaged in fraud, frustrated the ability of Dole’s independent directors to negotiate the transaction on a fully informed basis, and deprived Dole’s shareholders of the opportunity to receive the best price for their shares.