The insurance coverage litigation arising from the settlement of the shareholder claims filed in connection with the Dole Food Company’s November 2013 “going private” transaction continues to grind on. In the latest development in the coverage dispute, a Delaware Superior Court judge has entered a number of interesting rulings, deciding among other things that an underlying determination that an insured committed fraud does not make the claim uninsurable as a matter of Delaware law. Delaware Superior Court Judge Eric Davis’s March 1, 2018 opinion in the Dole Foods coverage litigation can be found here.  
Continue Reading Insurance for Fraudulent Misconduct Does Not Violate Delaware Public Policy

delawareIn an August 27, 2015 post-trial opinion (discussed here), Delaware Vice-Chancellor Travis Laster found that Dole Foods CEO David Murdock, and the company’s General Counsel and Chief Operating Officer, C. Michael Carter, had committed “fraud” in connection with a November 2013 “going private” transaction. However, according to a December 21, 2016 Delaware Superior Court decision in the subsequent insurance coverage litigation, because Laster’s findings of fraud were not part of the subsequent post-settlement final judgment in the case, the fraud exclusion in Dole’s D&O insurance program did not preclude coverage for the settlement. Anyone interested in understanding how the fraud exclusion in a D&O policy operates will want to read this opinion. A copy of the Delaware Superior Court opinion can be found here.

Continue Reading D&O Insurance: Despite Trial Court “Fraud” Determination, Fraud Exclusion Not Triggered

doleThe November 1, 2013 transaction in which David Murdock, Dole Food Company’s Chairman and CEO, acquired the Dole shares he did not already own has already been the subject of extensive litigation. Indeed, in 108-page August 27, 2015 post-trial opinion (here), Delaware Court of Chancery Vice Chancellor Travis Laster found that and Murdock and C. Michael Carter, Dole’s COO and General Counsel, had employed “fraud” to drive down the Dole’s share price to lower the amount Murdock paid in the deal. Laster entered a damages award against Murdock and Carter, jointly and severally, of $148.1 million, as discussed here.  On December 7, 2015, Murdock and Dole reached an agreement to pay the shareholders a total (including interest) of $113.5 million, with the remainder of the judgment amount to be paid to the plaintiffs in a separate appraisal action, as discussed here. As part of the settlement, the defendants gave up their right to appeal the Chancery Court rulings and judgment.

The recent settlement seemingly brought an end to the shareholder litigation over the November 2013 transaction. However, it now appears that there may be another round of litigation  yet to go.

On December 9, 2015, a plaintiff shareholder filed a securities class action lawsuit in the federal court in Delaware, against Dole, Murdock, and Carter. A copy of the plaintiff’s complaint can be found here. The lawsuit was filed on behalf of a class of Dole shareholders who sold their shares between January 2, 2013 and October 31, 2013. As might be expected, the complaint quotes extensively from Laster’s opinion. Notwithstanding the overlap between the Delaware Chancery suit and the new complaint, there are important differences between the cases. As discussed below, the securities class action complaint also presents a number of interesting issues and questions.
Continue Reading Dole Shareholders File Securities Suit Based on Executives’ Share Price Deflating Conduct Prior to Going Private Deal