Corporate Governance

Special Litigation Committee of Chiquita Files Motions

By Sean Harrell

On February 25, 2009, the Special Litigation Committee ('SLC') of nominal defendant Chiquita Brands International, Inc. ('Chiquita') filed motions to dismiss, to hold oral arguments in support of dismissal, and to file under seal unredacted portions of the Special Litigation Committee Report ('Report').  Judge Marra granted the motion to file under seal unredacted portions of the SLC Report.  The unredacted portions of the report will remain sealed until further order of the court.  The motion seeking to keep parts of the Report under seal was itself filed under seal, and Judge Marra's order does not disclose what types of information were redacted from the Report. 

The SLC also filed a joint declaration ('Declaration') of its three members in support of Chiquita's motion to dismiss.  The Declaration briefly highlights portions of the Report and contains three attached exhibits.  Exhibit A is the Report detailing the investigation, findings, and determinations of the SLC as to the plaintiffs' claims against 26 current and former Chiquita directors and officers.  Exhibit B is a copy of the resolution of Chiquita's board, dated April 3, 2008, creating the SLC and authorizing its investigation.  Finally, Exhibit C is a copy of Chiquita's Form Def 14-A, filed April 15, 2008, which states that each member of the SLC is an independent director. 

The three members of the SLC are Howard W. Barker Jr., William H. Camp, and Dr. Clare M. Hasler.  Mr. Barker has chaired the Audit Committee for Chiquita since September 2007, and was a partner with Peat, Marwick, Mitchell & Co., which became KPMG LLP.  Mr. Camp served honorably in the U.S. Navy until 1972, and is currently chairman and CEO of Accelegrow Technologies, Inc.  Dr. Hasler earned her dual Ph.D. in Environmental Toxicology and Human Nutrition from Michigan State University in 1990.  Dr. Hasler is the Executive Director of the Robert Mondavi Institute.

In the Declaration the SLC states that it considered factual and legal merits of the plaintiffs' claims, including possible defenses to the claims, and additional factors relevant to determining whether the Derivative Action should be brought on behalf of Chiquita.  The Declaration requests Judge Marra to grant the motion to dismiss, stating that dismissal is in the best interests of Chiquita and its shareholders.

Chiquita based its motion to dismiss upon the SLC Report, which will be covered in more detail in a future post.

The primary materials for this post are available on the DU Corporate Governance Website.

Full post as published by The Race to the Bottom on April 17, 2009 (boomark / email).