Port operator faces $21M in damages over buyout dispute

Sep 19, 2022, 3:48 AM | Updated: 3:52 pm

DOVER, Del. (AP) — The company that privatized operations at the port of Wilmington several years ago owes more than $21 million in damages for breaching an agreement to buy the port’s former stevedoring firm, a Delaware judge ruled Monday.

Vice Chancellor Lori Will also found GT USA Wilmington in contempt for violating a court confidentiality order by using materials it obtained in defending itself in a 2018 lawsuit filed by Murphy Marine Services to negotiate a deal with one of Murphy Marine’s largest customers.

Monday’s ruling came more than a year after a different Chancery Court judge ruled that GT was bound by the terms of a 2018 letter agreement regarding the purchase and sale of 100% of the equity interest of Murphy Marine.

Will ruled Monday that GT violated the binding letter agreement by refusing to negotiate a definitive purchase agreement with Murphy Marine. She also said GT improperly used information obtained from Murphy Marine during the lawsuit to negotiate its own stevedoring contract with Dole Fresh Fruit Company.

Officials with GT USA Wilmington did not immediately respond to an email seeking comment.

GT USA Wilmington is a subsidiary of port management company Gulftainer, which is based in the United Arab Emirates. In 2018, it obtained the rights to operate the Wilmington port for 50 years in exchange for agreeing to make significant upgrades and to pay the state at least $3 million annually in concession fees.

Murphy Marine is a family-owned business that was purchased in 2006 by a former longshoreman and three of his cousins through trusts, which are the company’s stockholders.

Will awarded the trusts more than $21.4 million direct damages for the loss of fair market value that GT agreed to pay for Murphy Marine’s stock. She also said the plaintiffs are entitled to pre- and post-judgment interest at a rate of 7.5%, compounded quarterly, from September 2018 to the date of payment.

Will also ordered GT to pay the legal fees and expenses incurred by Murphy Marine regarding its motion to find GT in contempt for violating a confidentiality order governing the exchange of documents in the lawsuit. According to the ruling, GT used revenue and financial information for various Murphy Marine customers to negotiate its own stevedoring contract with Dole, which had been a customer of Murphy Marine.

“That violation was not a technical one,” the judge wrote. “Rather, it is more likely than not that GT used a competitor’s obviously confidential information to negotiate with a then-current Murphy Marine customer against Murphy Marine.”

Under a privatization deal signed with Gov. John Carney’s administration in 2018, Gulftainer agreed to take over operations at the port for 50 years and invest almost $600 million in port upgrades and a new container-handling terminal at Edgemoor.

State officials did not require GT to buy Murphy Marine, but both companies have said they felt “pressure” from the state to make a deal. The companies finalized the letter agreement in April 2018 and agreed shortly thereafter that KPMG would conduct a valuation analysis of Murphy Marine.

KPMG estimated Murphy Marine’s equity value to be between $21.5 million and $26.1 million.

GT officials were not happy with those numbers and asked KPMG to “fix its analysis,” according to court records. A key concern for GT was that the effect of the port privatization was not included in KPMG’s valuation, even though the parties agreed that privatization would not be considered.

Vice Chancellor Sam Glasscock III noted in a ruling last year that, if GT did not acquire Murphy Marine, its privatization of the port would have a “drastically detrimental effect” on Murphy Marine’s value.

“GT, which is the largest privately-owned port operator in the world, could have started its own stevedoring business and shuttered Murphy Marine’s business entirely by denying it access to the port,” he noted.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


OpenAI CEO Sam Altman speaks in Abu Dhabi, United Arab Emirates, Tuesday, June 6, 2023. Altman on T...

Associated Press

OpenAI CEO suggests international agency like UN’s nuclear watchdog could oversee AI

Artificial intelligence poses an “existential risk” to humanity, a key innovator warned during a visit to the United Arab Emirates

8 hours ago

Mt. Rainier death...

Associated Press

Missing Mount Rainier climber’s body found in crevasse; he was celebrating 80th birthday

Search crews on Mount Rainier have found the body of a man matching the description of an 80-year-old solo climber reported missing

1 day ago

Washington gun restrictions...

Associated Press

Judge rejects attempt to block new Washington state gun restrictions

A federal judge on Tuesday rejected a request to block a new Washington state law banning the sale of certain semi-automatic rifles

2 days ago

FILE - A man walks past a Microsoft sign set up for the Microsoft BUILD conference, April 28, 2015,...

Associated Press

Microsoft will pay $20M to settle U.S. charges of illegally collecting children’s data

Microsoft will pay a fine of $20 million to settle Federal Trade Commission charges that it illegally collected and retained the data of children

2 days ago

FILE - OpenAI's CEO Sam Altman gestures while speaking at University College London as part of his ...

Associated Press

OpenAI boss ‘heartened’ by talks with world leaders over will to contain AI risks

OpenAI CEO Sam Altman said Monday he was encouraged by a desire shown by world leaders to contain any risks posed by the artificial intelligence technology his company and others are developing.

3 days ago

FILE - The draft of a bill that President Joe Biden and House Speaker Kevin McCarthy of Calif., neg...

Associated Press

Debt deal imposes new work requirements for food aid and that frustrates many Democrats

Democrats are deeply conflicted about the debt ceiling deal, fearing damage has been done to safety net programs

4 days ago

Sponsored Articles

Medicare fraud...

If you’re on Medicare, you can help stop fraud!

Fraud costs Medicare an estimated $60 billion each year and ultimately raises the cost of health care for everyone.

Men's Health Month...

Men’s Health Month: Why It’s Important to Speak About Your Health

June is Men’s Health Month, with the goal to raise awareness about men’s health and to encourage men to speak about their health.

Internet Washington...

Major Internet Upgrade and Expansion Planned This Year in Washington State

Comcast is investing $280 million this year to offer multi-gigabit Internet speeds to more than four million locations.

Compassion International...

Brock Huard and Friends Rally Around The Fight for First Campaign

Professional athletes are teaming up to prevent infant mortality and empower women at risk in communities facing severe poverty.

Emergency Preparedness...

Prepare for the next disaster at the Emergency Preparedness Conference

Being prepared before the next emergency arrives is key to preserving businesses and organizations of many kinds.

SHIBA volunteer...

Volunteer to help people understand their Medicare options!

If you’re retired or getting ready to retire and looking for new ways to stay active, becoming a SHIBA volunteer could be for you!

Port operator faces $21M in damages over buyout dispute