Supreme Court of Delaware Decision
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Supreme Court of Delaware Decision
While the COVID-19 pandemic may still be front and center, state courts continued working and rendering crucial decisions. The Supreme Court of Delaware recently rendered a decision that could have a significant effect on both venue and the meaning of fraud coverage. With so many corporations being incorporated in Delaware, there could be a national impact.
In March 2021, the Supreme Court of Delaware issued a ruling in RSUI Indemnity Company v. Murdock. This specific dispute arose from events that occurred in 2013. David Murdock, Dole’s Chief Executive Officer, took the company private via a merger that allowed Murdock to acquire all of Dole’s stock. Following this privatization, stockholders filed multiple lawsuits alleging a breach of fiduciary duty against Murdock and Dole’s Chief Operating Officer and General Counsel, Michael Carter.
Stockholders alleged that Murdock and Carter drove down the stock price through multiple fraudulent acts. The Delaware Court of Chancery found that Murdock and Carter breached their fiduciary duties and engaged in fraudulent acts. Prior to settlement in that case, a federal securities class action was filed based on the findings of the Court of Chancery-both cases were settled.
