Dole Food Co. Inc., Westlake Village, Calif., agreed to pay $74 million to settle claims it misled investors in a 2013 deal to take the company private.
The lawsuit, filed in a U.S. District Court in Wilmington, Del., in June, argued that Dole executives artificially drove down the price of the company's common stock in 2013 so Chairman and CEO David H. Murdock could obtain outstanding shares at a discount.
Materially false and misleading statements on the company's health caused “Dole stock to fall as low as $9.27 per common share on June 4, 2013, before defendant Murdock made his initial lowball offer of $12 per share (and ultimately raised to $13.50) to acquire all shares of the company that he did not already own,” according to lawsuit, filed by the $2.8 billion San Antonio Fire & Police Pension Fund, among other investors.
“Class members, including lead plaintiffs, have suffered substantial financial losses by selling Dole's common stock at artificially depressed prices during the class period as a result of defendants' wrongdoing,” according to the lawsuit. The class period ran from Jan. 2, 2013 to Oct. 31, 2013.
The settlement comes almost two years after a Delaware judge concluded that Mr. Murdock and Michael Carter, Dole's former president chief counsel, should pay $148 million to investors who were shortchanged in the buyout of the 40% of the company Mr. Murdock didn't already own.
Meryl Young, a lawyer for Dole, didn't immediately return phone call and email messages Wednesday seeking comment on the accord.
Dole executives have denied any wrongdoing. A Dole spokeswoman could not immediately be reached for comment.
U.S. District Judge Sue Robinson granted preliminary approval to the settlement on March 16. She will consider final approval on July 18.
Bloomberg contributed to this story.
