Delaware Chancery Court Awards Compass Lexecon Clients $148 Million in Damages

Compass Lexecon was retained by Stuart Grant of Grant & Eisenhofer P.A., Randall Baron of Robbins, Geller, Rudman & Dowd LLP, and Michael Wagner of Kessler, Topaz, Meltzer & Check, LLP on behalf of the plaintiff class in litigation before the Delaware Chancery Court challenging the fairness of the sale of Dole Food Company, Inc. (“Dole”) to its controlling shareholder David H. Murdock (“Murdock”) for $13.50 per share. Compass Lexecon was also retained by Kevin Abrams of Abrams & Bayliss LLP on behalf of Merion Capital Group and Magnetar Capital and Mr. Grant on behalf of Hudson Bay Capital Management and Fortress Investment Group, LLC in a statutory appraisal proceeding also before the Delaware Chancery Court. The combined appraisal and entire fairness action was tried before Vice Chancellor J. Travis Laster over nine days. Compass Lexecon expert Kevin Dages submitted opening and rebuttal reports and testified live before Vice Chancellor Laster at trial regarding the fair value of Dole and the reasonableness of the financial projections prepared by Dole management. In particular, Mr. Dages opined that the management projections failed to accurately reflect certain investments that the record clearly indicated were planned at the time of the sale to Murdock. In ruling for the plaintiffs, Vice Chancellor Laster found that Mr. Dages was “more helpful because his work demonstrated how different assumptions and inputs affected Dole’s value” while the defense expert “did little more than provide a second fairness opinion using pro-defendant assumptions.” The court further ruled that Murdock and Michael Carter, Dole’s COO and General Counsel, had deprived the Special Committee of the ability to negotiate on a fully informed basis by, among other things “provid[ing] the Committee with lowball management projections” and found them jointly and severally liable for damages of $148 million representing an incremental value of $2.74 per share. The $2.74 per share award reflected $0.87 per share for the value of the planned farm purchases and $1.87 per share for the value of the cost savings that were not properly reflected in the management projections. Mr. Dages was supported by a team in Compass Lexecon’s Chicago office which included George Hickey, Tim McAnally, Jennifer Milliron, Cliff Ang and Ed Crane.