In a lawsuit filed at the Delaware Chancery Court that was made public today, an investment fund claimed that DuPont Co's company directors promoted herbicide-resistant crop traits knowing the fact that they do not work. According to the lawsuit of the Ironworkers District Council of Philadelphia & Vicinity Retirement & Pension Plan, some of the past and current DuPont directors had wasted corporate assets in fraudulently peddling GAT, a specific gene trait that could make plants more resistant, therefore potentially increasing crop yields. The investment fund is reportedly seeking a billion dollars in damages, Bloomberg said.
Court papers have indicated that the lawyers of the plaintiffs first issued a legally-defined demand on DuPont's board for the latter to conduct a probe and take action against its own directors and executives.
In the Ironworkers Fund's lawsuit, the plaintiffs argued that DuPont had took licenses from Monsanto Co to use the latter's Roundup Ready trait, which would help crops fight the harmful effects of the latter's herbicide. DuPont allegedly developed its own trait in 2005, which would allow crops to tolerate weedkillers known as ALS herbicides. The fund claimed that the field trials of glyphosate acetolactate synthase tolerance seeds produced disappointing results, and that DuPont opted to conceal them and publicly hype the trait.
Bloomberg noted that the lawsuit sprung from a disagreement shareholders of DuPont over the evaluation committee report, which the fund said did not provide an objective analysis on the company's action to add Monsanto genetic technology to further improve its crop genetic trait for marketing. Bloomberg said Monsanto decided to see DuPont in court due to the move, which resulted in a billion-dollar award to the company's rival. DuPont is being accused of civil fraud, negligent and intentional misrepresentation, waste of corporate assets and breach of fiduciary duties.
DuPont spokesman Dan Turner said today in response to the lawsuit, "(S)everal months ago, DuPont's Board of Directors unanimously rejected the shareholder derivative claims (following an independent investigation by former Delaware Chancellor William Chandler and two independent DuPont directors. Turner said they concluded the claims) were not supported by the facts or the law and that pursuing those claims would not be in the best interest of DuPont."
