Case: In re Dole Food Co. Facts: Dole Food Co. was one of the world's largest producers of fresh fruit and vegetables. D

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Case In Re Dole Food Co Facts Dole Food Co Was One Of The World S Largest Producers Of Fresh Fruit And Vegetables D 1 (20.75 KiB) Viewed 9 times

Case: In re Dole Food Co. Facts: Dole Food Co. was one of the world's largest producers of fresh fruit and vegetables. David Murdock was a controlling shareholder, chairman, CEO, and comptroller. Michael Carter served as president, COO, and general counsel. Murdock offered to buy out the other shareholders for $12.00 per share. Under Delaware law, a purchase offer from a controlling shareholder had to be approved by a committee of the independent members of the company's board (the Committee) and also by the other shareholders. Murdock and Carter immediately began efforts to make the purchase offer look good by driving down Dole's share price with the release of false information. To the public, Carter announced substantially worse cost estimates than the two men truly expected. To the Committee, he presented five-year financial projections that he had manipulated to look worse than they were. The false predictions did, indeed, cause Dole's stock price to fall. The Committee, the board, and 50.9 percent of the other shareholders voted in favor of the sale. But some Dole shareholders sued Murdock and Carter, alleging that the two men had violated the business judgment rule and were, therefore, personally liable for the difference between the price Murdock paid for Dole stock and a "fair" price. Discuss: Did Murdock and Carter violate the business judgment rule? Did Murdock pay a fair price for the Dole stock? Specify reasoning.