Judge declines to dismiss Grove Farm suit
Shareholders have sued over the sale of the land company to Steve Case
LIHUE » A lawsuit over the sale of Kauai's Grove Farm Co. in 2000 will likely go to trial, after motions for summary judgments were denied yesterday in Circuit Court.
The lawsuit, pitting members of the Wilcox family against each other after selling their former sugar plantation to AOL founder Steven Case, is set for trial on Oct. 23.
The defendants include ALPS Acquisitions, the company owned by Case; Grove Farm; and members of Grove Farm's board at the time of the purchase. In yesterday's proceedings, they argued that the two fraud counts of the five-count case should be dismissed.
Corey Park, lawyer for the defendants, said not enough evidence has been presented to the court that supports the fraud allegation and that the plaintiffs had to meet a certain burden of proof and it failed to do so. Evidence provided in documents to the court showed the board acted in a "reasonable and diligent" fashion when choosing the Case bid, Park said.
But Richard Wilson, lawyer for two of the nineteen plaintiffs, who are former shareholders of Grove Farm, said the burden of proof was met and the judge should decide that fraud occurred during the sale of Grove Farm. Wilson argued that board members knowingly withheld information and provided misinformation to get shareholders to sell their shares to Case for less than the company was worth.
"Shareholders were led to believed that this company is going to go bankrupt and we need to sell right now," Wilson said. The board also told the shareholders that Case's deal was the best they were going to get, but that wasn't true.
Judge Kathleen Watanabe decided that the arguments were better left to a jury to decide, and denied both motions for summary judgment.
One defendant, however, will avoid trial. In an earlier proceeding in June 2005, Judge George Masuoka accepted a motion to dismiss the counts against defendant Daniel Case, according to Case's lawyer Gary Grimmer. Grimmer said that the motion has yet to be finalized.
Daniel Case is not out of court yet, though. In another state suit involving the sale of Grove Farm, Daniel and Steven Case are named as defendants. That suit asks for nearly $3 billion in damages. There's also another suit in federal court over the sale. Trial dates have yet to be set for those cases.
Dan Case is a director of Oahu Publications Inc., publisher of the Star-Bulletin.
