Chiquita Faces Suit Over Colombia Terrorism

Chiquita Faces Suit Over Colombia Terrorism
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Chiquita Faces Suit Over Colombia Terrorism
Chiquita Brands the second largest banana producer in the world faced a string of civil suits for its ties to terrorist groups in Colombia. Between 1989 to 2004, Chiquita brands financed terrorist groups through security payments and did not disclose such information to its shareholders (The Global Report, 2010). The payment was made in exchange for protection against guerilla fighters in Colombian banana fields. In reality, the money was used to finance illegal activities including drug trafficking and terrorist activities and even perpetuated civil war (The Global Report, 2010).
Chiquita agreed to five-year corporation probation and received a fine of twenty-five million dollars. Shareholders filed a case accusing the directors of breaching their fiduciary duties by making payments to terrorist groups without their approval. According to the fiduciary duty requirements, the fact that Chiquita fraudulently recorded in their corporate books payment made to terrorist groups as the cost of doing business to protect their interests in Colombia means they had breached their fiduciary duties (The Global Report, 2010).
The directors were liable for the offense, but the company could still conduct its business in Colombia so long as they work within the required regulations (Melitsky, 2013). Even though the directors argued that they wer...