New York-based hedge fund Third Point LLC and former Campbell Soup Co. board member George Strawbridge Jr. have filed a lawsuit against each of the members of company’s current board of directors.New York-based hedge fund Third Point LLC and former Campbell Soup Co. board member George Strawbridge Jr. have filed a lawsuit against each of the members of company’s current board of directors.
The suit alleges members of the board have “breached their fiduciary duties” to shareholders by withholding information needed for shareholders to properly assess how to vote in Campbell’s upcoming annual shareholders meeting Nov. 29.
Third Point, led by investor Daniel Loeb, has encouraged Campbell shareholders to vote the current board of directors out in favor of a Third Point-nominated slate of “independents.”
“New Jersey law demands of directors the utmost fidelity in dealing with a corporation and its stockholders,” said the suit, filed Thursday in State Superior Court in Camden. “One aspect of a director’s fidelity to stockholders is the duty to disclose fully and fairly all material information in the board’s control when a stockholder vote is sought.
“Rather than comply with this bedrock duty, [the board], aided by the company, have disseminated misleading and incomplete information relevant to their re-election campaign in a series of communications to stockholders in an effort to secure their votes.”
The suit asked the court to block Campbell from holding the Nov. 29 meeting until the board corrects what Third Point called misstatements and omissions.
It alleges the board has sent materials that misstate or fail to disclose information regarding the summer’s board-led strategic review of the company; the abrupt departure of former CEO Denise Morrison in May; the qualifications of current board members Bennett Dorrance, Mary Alice Dorrance Malone, and Archbold Dorrance van Beuren, who collectively own 37 percent of voting shares; and the business pursuits of Bennett Dorrance.
According to the lawsuit, Dorrance pledged nearly 14 million shares as collateral for undisclosed loans, and hasn’t complied with the board’s policy to reduce those pledged shares over the past year.
Dorrance, Dorrance Malone, and Dorrance van Beuren are all descendants of Campbell soup inventor John Dorrance.
Campbell is “vigorously contesting the Third Point lawsuit,” according to a Campbell representative via email.
Third Point provided no further comment.