The facts of this case are described in this chapter’s opening scenario. Dole shareholders sued Murdock and Carter, alleging that they had violated both the duty of care and the dutyof loyalty under the business judgment rule and were, therefore, personally liable for the difference between the price Murdock paid for Dole stock and a “fair” price.

Murdock and Carter argued that they were not liable because the price was fair and also because Dole’s charter had an exculpatory clause providing that “no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.” 

Questions:

1. Did Murdock pay a fair price for the Dole stock? Were Murdock and Carter liable under the business judgment rule?

2. What duties to Dole did Murdock breach?

3. Why did he do this?

4. How did he get the Committee to approve the sale?

5. Murdock also relied on an exculpatory clause in Dole’s corporate charter which provided that “no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.” Did the court apply this exculpatory clause?

6. What about Carter? Was he liable?

7. How much was the damages award? How much will Murdock and Carter have to pay?