## Facts

- A controlling stockholder completed a going-private merger of Dole Food Company, Inc. in November 2013 at $13.50 per share.
- Stockholder litigation produced a court-approved class settlement providing an additional $2.74 per share to class members.
- The merger consideration had been paid through the Depository Trust Company (DTC) system based on DTC’s centralized records, which reflected 36,793,758 outstanding shares at closing.
- Ownership was highly fluid immediately before closing, with over 32 million shares trading in the final three trading days.
- During settlement administration, brokers and other intermediaries submitted facially valid claims for 49,164,415 shares—about 12,370,657 more than the DTC-recorded outstanding share count.
- The mismatch could not be reconciled through the claims process and was attributed to intermediated holding mechanics that can generate duplicative claiming (e.g., over-reporting through layers of custodians and brokers).
- Class counsel moved to modify the plan of allocation so that settlement payments would be distributed consistent with, and limited by, DTC’s records rather than diluted across all facially valid claims.

## Issues

1. Whether the Court of Chancery may modify a previously approved settlement distribution method when an unforeseen structural claims-overage makes literal distribution impracticable or inequitable.
2. Whether the court may treat DTC’s ledger as the authoritative cap on settlement-eligible shares, even if some facially valid claims cannot be paid in full.
3. What equitable approach should govern allocation of a fixed settlement fund when claimed shares materially exceed outstanding shares.

## Decision

- The court granted the motion to modify the plan of allocation.
- The court approved a distribution methodology anchored to DTC’s share records as of the merger closing.
- The court authorized the settlement administrator to pay the additional $2.74 per share consistently with the DTC-capped share count rather than spreading the fund over an inflated aggregate of claims.
- The court found individualized tracing of beneficial ownership through intermediaries infeasible and inconsistent with efficient administration.

## Legal Principles

- The Court of Chancery retains equitable authority to supervise and adjust the implementation of an approved class settlement to address post-approval administrative defects, so long as the modification preserves the settlement’s essential economic terms.
- When intermediated ownership produces excess, duplicative, or otherwise irreconcilable share claims, the court may use objective market infrastructure records (such as DTC’s ledger) as a practical limit for eligibility and distribution.
- In distributing a fixed settlement fund, equity permits measures that prevent dilution of recoveries tied to outstanding shares and avoids rewarding duplicative claiming generated by recordkeeping layers.
- A change to distribution mechanics can be permissible where it effectuates the settlement’s core promise (a per-share recovery for outstanding shares) rather than altering the substantive bargain.

## Conclusion

The court modified the settlement distribution to cap eligible shares at the DTC-recorded outstanding share count, concluding that equitable supervision of settlement administration allowed adjustment of the allocation method to prevent dilution caused by irreconcilable over-claiming in the intermediated shareholding system.


In re Dole Food Co., C.A. No. 8703-VCL, 2017 WL 624843 (Del. Ch. Feb. 15, 2017)