Alfred I. Du Pont - Lawsuit and Departure From E.I. Du Pont de Nemours

Lawsuit and Departure From E.I. Du Pont De Nemours

Through the early 1910s, Alfred du Pont was engaged in fierce debate over the future of the family's business with Coleman and Pierre du Pont, whose support for du Pont's first wife had extended to building her and her children a home after their eviction from Swamp Hall. The struggle became bitter after Coleman du Pont decided to leave the company for health concerns in 1914.

As he was departing, ill and in need of money for another business transaction, Coleman du Pont decided to sell 20,000 shares in the company to key company employees, but when Alfred du Pont and Pierre du Pont disagreed on the proper pricing and handling of the transaction, wound up selling considerably more shares (over 77,000 shares combined of common and preferred stock) to Pierre du Pont and five associates, who had formed the DuPont Securities Company. This secret and swift transaction gave Pierre du Pont, 60% owner of DuPont Securities, considerable control over the family business. While the value of the shares greatly increased due to the success of the company during World War I, Alfred du Pont and other minority shareholders launched a lawsuit against Pierre du Pont, alleging that he had acted as an agent of the E.I. du Pont de Nemours company, who should be rightful holders of the shares.

The suit was extremely well publicized and acrimonious. In 1916, shortly after company shareholders voted to remove Alfred du Pont from its board of directors, the United States District Court found that Pierre du Pont had operated in bad faith, ordering a stockholder vote to determine if the stock holders (aside from those who owned the disputed shares) wished to purchase the disputed shares. By a share ratio of 33:13, shareholders did not, and, accordingly, in 1918, the court dismissed the action. Alfred du Pont brought an appeal which ended unsuccessfully in March 1919.

No longer involved in running E.I. du Pont de Nemours, du Pont instead began to invest in newspapers, as a publisher of which he successfully opposed Coleman du Pont's bid for presidency and Henry A. du Pont's third run for Senate. According to the du Pont Trust, he also "established an investment firm Nemours Trading Corporation, and an import-export business in New York" and acquired a majority interest in the Delaware Trust Company.