(CN) — Georgia Senator David Perdue said he did not intend “to ignite anything at all” when, as CEO and chairman of Dollar General in 2006, he approached private equity firms and spoke to them about the company.
On Thursday, Courthouse News acquired a redacted transcript of Perdue’s 2008 deposition that has sat under seal in a court in Nashville, Tennessee, an approximately 180-page document where he answered questions about his involvement in the 2007 sale of Dollar General to a private equity firm.
Perdue said Dollar General was trying to get information about how private equity firms viewed the company and the sector in which it did business months before it announced its sale to a private equity firm in March 2007.
“In retrospect, we might have been a little naïve in going into the market,” Perdue said during the deposition. “I think our timing was miserable. I mean … there was such a frenzy out there in their world that we really weren’t aware of.”
Today, Perdue, seeking reelection to the U.S. Senate in a Georgia runoff election flowing with campaign cash, has cited his time running the chain of stores selling low-priced, often-purchased wares as part of his bona fides for holding office. He has specifically cited adding almost 20,000 jobs and opening 2,000 stores under his leadership.
That race between Perdue, the Republican, and his Democrat challenger Jon Ossoff — and the control of the U.S. Senate — will be decided in days as Georgia voters head to the polls Jan. 5.
But speaking to voters on the campaign trail is a different forum than the one that began late morning of Aug. 25, 2008 at the downtown Nashville offices of the firm Bass, Berry & Sims that contained, as one lawyer noted in the transcript, squeaky chairs.
Perdue had never been involved in a transaction with private equity before, he said. And when he spoke with the private equity firm Kohlberg Kravis Roberts and Co. at an October 2006 meeting, Perdue said the firm was interested in getting the company’s confidential information to determine a valuation of Dollar General.
“When we went to the private equity and the investment bankers, there was no hidden intent to go anywhere. Our intent was to defend ourselves, frankly, and primarily from the hedge fund environment that was so active at that point in time in early and mid-’06,” Perdue said.
After that meeting, Perdue said he had then gone to Dollar General’s board regarding KKR’s interest.
“I wasn’t expecting to get the first request for information, let alone this request,” Perdue said.
Perdue was answering questions as a defendant for a second time in litigation where he was accused of breaching fiduciary to Dollar General’s shareholders. He spoke under oath.
About a year before, Dollar General announced it would be purchased by KKR, which prompted shareholders to file lawsuits in Tennessee state court challenging the sale. Initial lawsuits accused Perdue and other members of Dollar General’s board of personally benefiting from the sale and not disclosing information to shareholders.
The parties eventually settled the case in Davidson County Circuit Court for $40 million.
The lawyers for the shareholders wanted to re-depose Perdue because, according to a memorandum in the case, Perdue said in his first deposition the company wasn’t for sale until the board voted to sell the company in March 2007.
However, an email sent between a KKR executive and partner said Perdue said he wanted to exclusively pursue a transaction with them in August 2006. This raised questions.
Courthouse News acquired the redacted deposition Thursday because it filed on Dec. 3 a motion to unseal the more than 90 documents sealed during the shareholder litigation with the help of the Reporters Committee for the Freedom of Press’ local reporting initiative.
In a reply, Paul McAdoo, staff attorney for the Reporters Committee for Freedom of the Press, wrote that an expedited review of the deposition transcript ahead of the runoff election would serve the public interest by “permitting the public an opportunity to read Senator Perdue’s own words related to the case in which he was alleged to have breached his fiduciary duty.”
At a hearing on Dec. 18, Judge Thomas Brothers ordered the parties in the case hand over a redacted version of the transcript of Perdue’s second deposition while the parties had an extension to respond to the motion. The defendants in the litigation had argued they would not have an opportunity to meaningfully review the document.
Brothers reasoned the documents sealed in the case were done so under stipulation — not sealed after a hearing, not sealed by court order. The court only approved the agreement between the lawyers and plaintiffs, the judge noted.
And that stipulation said disagreements over the designation of information should be resolved quickly and in good faith, Brothers said.
The judge said the defendants had until Dec. 31 to give McAdoo a redacted version of the document.
“Right now, you simply will provide him with whatever you as defendants come to the agreement should be unsealed,” Brothers said at the Dec. 18 hearing. “And I don’t find that to be an onerous and burdensome task during these times.”
By the time Perdue sat for the deposition in 2008, he said he was retired and sat on the boards of Reliant Energy Corp. and Jo-Ann Corp.
Perdue said he was not given the opportunity to invest his equity in Dollar General once it was taken private.
He said he had hoped to remain on as CEO of Dollar General but he was told “very late in the process” he would be CEO until the deal went through in July 2007.
It was a decision that disappointed but did not surprise him because of how similar sales went through, he said.
Perdue said he told the Dollar General board that he did not make a deal with KKR during a fall 2006 meeting when the board formed a strategic planning committee. Perdue “emphatically said” he did not discuss his compensation either.
And he did not tell the Dollar General board he was willing to stay with the company after the sale because it “would have been nonsensical” to ask about those long-term plans.
“I was committed to the turnaround and I was committed to Dollar General,” Perdue said.
In a statement responding to a list of questions Courthouse News sent the campaign, John Burke, communications director for Perdue’s reelection campaign, said the senator would not be distracted by “attempts by the media to twist the facts.”
“By any measurement, Senator Perdue’s tenure at Dollar General was a tremendous success as the company better fulfilled its mission of helping families get from payday to payday,” Burke said.