Jury rejects lawsuit over Grove Farm sale
The jurors took only five hours to clear the company's former board of all allegations
LIHUE » There was nothing wrong with the 2001 sale of the family-owned Grove Farm Co. to AOL founder Steve Case, according to a jury verdict reached yesterday.
After a four-week trial, jurors took only five hours to clear the five former board members of Grove Farm and the company of any wrongdoing in the $26 million sale, which pitted former shareholders and, at one point, cousins against each other. Former Grove Farm shareholder Michael Sheehan had sued the company and the board, as well as Case's Alps Acquisition Co., saying the board members had given Case a sweetheart deal.
Sheehan's attorney Richard Wilson had argued that the board members had kept information from their fellow shareholders so that the Case deal would go through.
But the board members' lawyers, Pamela Bunn and Corey Park, had argued that the case was just buyer's remorse after the company, which had said it was in dire financial shape, became profitable after the sale in 2001.
The defendants' lawyers also argued that the board members had shares in the company as well, and stood to lose more money than Sheehan if the deal had not been the best one.
The five board members and their families said they were elated after spending nearly a month in court.
"It's been a long one," Park said after the decision. "It's a shame the defendants had to go through this trial."
Sheehan's lawyer Richard Wilson said he and his client were "obviously very disappointed," but said that "certain evidentiary issues" may make grounds for an appeal. Still, he said Park and Bunn deserved praise for their work, and that Judge Kathleen Watanabe, who presided over the trial, "was incredible."
Warren Haruki, current president of Grove Farm, said in a statement that the company "was saved from the brink of bankruptcy by the merger." He also called the suit "a waste of time and money."
Park and Haruki said they hoped that the jury's decision would sway other former shareholders to drop their lawsuits over the sale. Cases in federal and state court are scheduled for next year at the earliest.