In re Dole Food Co., Inc., Stockholder Litigation

Murdock (defendant), Dole's 40%-owner chairman and CEO, proposed buying out the remaining public shares at $12 per share, subject to review by an independent committee and majority approval of unaffiliated stockholders; before the offer, his confidant Carter (defendant) had misrepresented potential cost-saving figures to the board and canceled a stock buyback program for questionable reasons that depressed Dole's stock price right before Murdock's offer, and during the committee's review Carter fed the committee artificially low financial projections while giving Murdock more accurate, higher figures. The committee negotiated the price up to $13.50 per share, independent counsel found that price fair, and both the committee and 50.9% of unaffiliated stockholders approved the deal; unaffiliated stockholders (plaintiffs) sued Murdock and Carter for breach of fiduciary duty.