DuPont Shareholder Sues Board Over $1 Billion Court Loss
By Steven Church & Phil Milford - Jan 17, 2013 10:11 AM ET
A DuPont Co. (DD) shareholder sued company directors and Chief Executive Officer Ellen Kullman, claiming mismanagement of the seed business caused a $1 billion court loss that threatens to wipe out the company’s cash.
The company lost a patent lawsuit related to the Monsanto Co. (MON) weed killer Roundup, and a jury awarded $1 billion, a figure that could grow to $3 billion if so-called punitive damages are added, according to the lawsuit.
In a complaint filed yesterday in U.S. District Court in Wilmington, Delaware, shareholder Robert Zomolosky asked a judge to force Kullman and the board of directors to pay any damages related to the patent lawsuit.
“The DuPont board lost sight of its mandate and its responsibilities, and acquiesced in unlawful legal maneuvers and deceptive public statements in conscious disregard of its obligations,” Zomolosky claimed in his lawsuit.
DuPont planned to appeal the patent loss, according to the lawsuit.
In an e-mailed statement, company General Counsel Thomas L. Sager said DuPont handled the Monsanto patent case appropriately.
“We are confident in the appropriateness of all our actions and the points raised in this lawsuit are simply a repetition of those we have repeatedly addressed in the course of the Monsanto litigation,” Sager said in the statement.
The patent case grew out of the company’s effort to compete with Monsanto’s Roundup Ready crop business, which held 90 percent of the market for soybean and cotton seeds as of 2008, according to the lawsuit.
Because DuPont’s research wasn’t producing results, company managers used Monsanto’s technology to try to create seeds that could resist Roundup, a key requirement for farmers, the shareholder suit claims.
Monsanto sued in 2009 and won its case in August, when a federal jury in Missouri, where Monsanto is based, ruled against DuPont.
The complaint, filed on behalf of the company as a so- called derivative lawsuit, seeks a jury trial, corporate governance improvements and unspecified damages from directors.
The case is Zomolosky v. Kullman, U.S. District Court, District of Delaware (Wilmington).
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