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Dole Food Company, Inc.



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The Shareholder Forum determined that it would not provide support for Dole appraisal rights because of the risks created by disorderly investor competition for interests. The buyout was approved on October 31, 2013 by only 50.9% of the company's unaffiliated shareholders, and it was subsequently reported that claims for appraisal rights exceeded the number of legally eligible shares.



Forum distribution:

Another court decision addresses obsolete processes for recording stock ownership rights


For the court decision reported in the article below, see

For views of public interests in the need for technology adaptations in the management of shareholder voting addressed below, see


Source: Law360, February 15, 2017 article

Chancery Lets Stockholders Amend $116M Dole Settlement

By Rick Archer


Law360, New York (February 15, 2017, 7:08 PM EST) -- The Delaware Chancery Court on Wednesday granted a motion by class counsel to amend the distribution mechanism of Dole Food Co.’s $115.7 million stockholder settlement, saying a flurry of short sales days before the company went private in 2013 hopelessly confused the ownership of millions of shares.

Vice Chancellor J. Travis Laster said the distribution terms for the settlement — which resolved claims company officials depressed stock prices leading up to the going-private transaction — needed to be changed because the settlement administrator received “facially eligible” claims for approximately 49.2 million shares when the class members were known to have held only 36.8 million shares at the time the settlement was reached in 2015.

“Without obtaining detailed records about the millions of trades that took place during the three days leading up to the closing, it is impossible to determine who owned the shares as of closing. And obtaining those records is not realistically achievable,” he said.

The suit accused top Dole officers of fraudulently pushing down the company’s price before selling it into private ownership for $1.6 billion in late 2013. The parties settled in early December 2015.

The problem with the settlement claims arose because of extensive short selling in the days leading up to the close of the deal, Vice Chancellor Laster said.

“The shorting resulted in additional beneficial owners who received the merger consideration, who fell within the technical language of the class definition, and who could claim the settlement consideration. Meanwhile, the lenders of the shares, not knowing that the shares were lent, also could claim the settlement consideration,” he said.

Resolving the situation would require auditing records from the more than 4,600 claimants and more than 800 banks and brokerages, followed by resolving the additional ownership disputes that would likely arise from such a review, he said.

“The journey down the rabbit hole would require mapping the whole warren,” he said.

Instead, the judge said he agreed with the class counsel that the better method would be to have the settlement distributed by the Depository Trust Company that handled distribution of the consideration Dole paid to the shareholders for going-private transaction, which had been structured as a merger.

“Under this method, it will be up to the DTC participants and their client institution to resolve in the first instance any issues over who should receive the settlement consideration. Shifting the burden to them is efficient because they already had to address these issues for purposes of allocating the merger consideration,” he said.

Class counsel did not immediately respond to requests for comment Wednesday.

The shareholders are represented by Stuart M. Grant, Nathan A. Cook, Kimberly A. Evans, Michael T. Manuel of Grant & Eisenhofer PA, Randall J. Baron, A. Rick Atwood Jr., David T. Wissbroecker, Edward M. Gergosian and Maxwell Huffman of Robbins Geller Rudman & Dowd LLP, and Marc A. Topaz, Lee D. Rudy, Michael C. Wagner and Justin O. Reliford of Kessler Topaz Meltzer & Check LLP.

Dole and the individual defendants are represented by Bruce L. Silverstein, Elena C. Norman and James M. Yoch Jr. of Young Conaway Stargatt & Taylor and J. Clayton Athey of Prickett, Jones & Elliott PA.

The cases is In re: Dole Food Co. Inc. Stockholder Litigation, case number 8703 in the Delaware Court of Chancery.

--Additional reporting by Matt Chiappardi, Kat Greene and Jeff Montgomery. Editing by Orlando Lorenzo


© 2017, Portfolio Media, Inc.



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