Hydrofruit, Inc.: Ripe for Harvest or Rotten Tomato?

10 Pages Posted: 10 Jun 2009

See all articles by Timothy Boswell

Timothy Boswell

University of Virginia - Darden School of Business

Jenny Mead

University of Virginia - Darden School of Business

R. Edward Freeman

University of Virginia - Darden School of Business

Abstract

This case details the various issues, dilemmas, and complexities of immigration as it relates both to business and American society in general. MegaBank manager Judson Dillon is on the verge of finalizing a $65 million equity investment in the world's largest tomato greenhouse, HydroFruit, Inc., which he believes is an attractive investment opportunity. At the same time, he suspects that the company is an employer of illegal immigrants. Immigration was currently a politically, socially, and legally hot topic in the United States. Laws had been enacted to ensure that employers did not hire illegal immigrants, yet many in the United States said that getting rid of all illegal immigrants was an impossible and, for the U.S. agricultural economy, destructive move. On the surface, HydroFruit was in compliance with all minimum legal requirements, but that didn't mean that some illegals didn't slip through the cracks, and the company's CFO had admitted to Dillon one night that “Without illegals, our industry stops dead.” In Dillon's mind, this comment reinforced his suspicion that HydroFruit was no different from many other employers in the agricultural industry, as well as his belief that it simply wouldn't be practical for Congress to disrupt such an important segment of the U.S. economy. Yet MegaBank could not invest in a company that it knew—or suspected of—acting illegally.

Excerpt

UVA-E-0320

Rev. Aug. 18, 2010

HYDROFRUIT, INC.: RIPE FOR HARVEST OR ROTTEN TOMATO?

It was a clear, cool night in May 2006. Judson Dillon was sitting alone at the table in the 25th-floor conference room of MegaBank, one of the world's largest financial institutions. He looked out the window and watched as the city lights slowly expired one by one. The lights on his own floor had turned off automatically several hours before, and he had gone through what had become an all-too-familiar routine of calling the building administrator and requesting a few more hours of electricity. As he washed down yet another Chinese dinner with his daily ration of Pepto-Bismol, Dillon contemplated the recent public demonstrations by millions of Latinos throughout the United States. The U.S. Congress was mired in what promised to be a highly sensitive debate regarding immigration reform, and while it was unlikely that Congress would take any action prior to the midterm elections later in 2006, the protests reminded him of the gravity of the issue, which had been weighing heavily on his conscience.

Dillon was preparing for a meeting the next morning in which he was to finalize a $ 65 million equity investment in the world's largest tomato greenhouse, HydroFruit, Inc. The project had consumed him for the past six months, and he expected to serve on the company's board of directors for several years to come. Dillon firmly believed that HydroFruit, located 100 miles from the Mexican border in Arizona, represented an attractive investment opportunity for MegaBank, but he also suspected that the company frequently employed illegal immigrants.

“A Day Without Immigrants”

. . .

Keywords: business ethics, stakeholder management, immigration, equity investment, law, values, diversity

Suggested Citation

Boswell, Timothy and Mead, Jenny and Freeman, R. Edward, Hydrofruit, Inc.: Ripe for Harvest or Rotten Tomato?. Darden Case No. UVA-E-0320, Available at SSRN: https://ssrn.com/abstract=1417190 or http://dx.doi.org/10.2139/ssrn.1417190

Timothy Boswell

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

R. Edward Freeman (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-924-0935 (Phone)
804-924-6378 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/freeman.htm

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