Dole Food CEO, lawyer ordered to pay almost $150 million for fraud

A Delaware judge on Thursday said David Murdock, the billionaire chief executive of Dole Food Co, is liable to shareholders for $148.2 million of damages for having shortchanged them when he took the fruit and vegetable producer private in 2013.

“These actions primed the market for the freeze-out by driving down Dole’s stock price and undermining its validity as a measure of value”, Laster wrote.

Morgan Evans, a Dole Food spokeswoman, said the company had no comment on the ruling.

Lawyers for Murdock and Carter did not immediately respond to email messages seeking comment.

Deutsche Bank AG, which advised Murdock on the buyout, was cleared of liability because it did not knowingly participate in wrongdoing.

Judge Laster also ruled that Carter should be held personally accountable for losses incurred by investors in connection with the buyout. Murdock is worth $3.4-billion, Forbes magazine said.

Laster ordered the two men to make up the difference.

Stuart Grant, an attorney representing shareholders in the litigation, noted that the judge concluded that shareholders were entitled not only to a fair price, but to “a fairer price designed to eliminate the ability of the defendants to profit from their breaches of the duty of loyalty”. “It wakes insiders and investment banks on their proper roles in a management-led buyout, and shows that management can’t dictate the terms and the flow of information”, he said in an interview.

“On the second day of trial, Murdock tried a different approach: He became evasive and attempted to cast himself as an uninvolved CEO who lacked any meaningful knowledge about what was going on at his company”.

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By taking Dole private, Murdock was able to buy back the 60% stake in the company that he sold to the public in 2009.

“By dint of his prodigious wealth and power, he has grown accustomed to deference and fallen into the habit of characterizing events however he wants”, Laster wrote.