UPDATE 11/22/2008: New Offer to Purchase U.S. Sugar
UPDATE 8/6/2008: Detailed Look at Florida's Purchase of 187,000 Acres of U.S. Sugar Land provides a detailed look at Florida's Purchase of the 187,000 Acres of Land Owned by U.S. Sugar Corp., including a review of the outstanding U.S. Sugar ESOP litigation.
UPDATE 7/2/2008: More US Sugar ESOP
UPDATE 6/25/2008: U.S. Sugar ESOP Update: Florida Purchasing U.S. Sugar Land discusses how Florida is purchasing land from U.S. Sugar Corp. and leasing it back for the next six years before turning over the land for conservation purposes, effectively shutting down the company.
Anaylsis
For purposes of our U.S. Sugar ESOP analysis, we will split the issues into ESOP perception issues and legal issues.
ESOP Perception Issues
Sugar workers say company cheated them on pensions was initially was posted Tuesday, May 27, 2008 on the International Herald Tribune, the global edition of the New York Times. On Wednesday the New York Times website posted an online article titled Sugar Workers, Given Shares Instead of Pension, Wonder Why Price Is So Low. Saving the most sensational headline for the print edition,
In Stock Plan, Employees See Stacked Deck appeared on the front page of the Thursday, May 29 edition of the New York Times.
The New York Times Attacks ESOPs discusses how the New York Times piece is an unbalanced article that ignores the Economic Performance of ESOP Companies and the benefits of ESOPs and employee ownership to employees, companies, and society. The post also discusses how the article is "potentially the most damaging we have seen for a very long time" and notes the influence of the New York Times on public policy:
The New York Times is very influential in New York City in shaping the opinions of public policy decision makers, one of whom is Congressman Charles Rangel (D-NY), Chair of the House Ways and Means Committee. We're sure his staff also faithfully read The New York Times.
The post also includes a copy of a letter to the editor from J. Michael Keeling, the President of the ESOP Association.
The media has a history of taking individual incidents and broadly applying them to the entire ESOP universe. A recent example of this is the sale of Bear Stearns. As with Bear Stearns, it is essential that members of the ESOP community Counter the Negative ESOP Coverage with the Facts.
If the media is looking for a balanced story, we often discuss ESOPs In the News. Here are some recent examples:
- In the News: Succession Planning, Empowering Employees, Improving Recruiting, Creating Selling Point, and Improving the Bottom Line
- In the News: More Responsibility and Better Decision-Making
- In the News: A Different Approach to Management and Compensation and Aligning Business Objectives with the Clients Objectives
- In the News: 2008 Innovations Award Winner, Three-Tier Reward System, 600 Hours of Management Training, and Two-Day Personal-Development Leadership Training
- In the News: Employee Retention, Distinguishing Themselves from Competition, Using Employee Input for Continuous Improvement
UPDATE 6/3/2008: The ESOP Community Comments on the U.S. Sugar ESOP shares commentary from members of the ESOP community:
- The New York Times Article Continued
- Dispatched With Prejudice
- Some comments on the U.S. Sugar story in The New York Times.
UPDATE 6/6/2008: Published Letter to the Editor Re: U.S. Sugar ESOP shares a Letter to the Editor
Legal Issues
The plaintiffs have created the US Sugar Class Action Lawsuit online case information resource, which includes an amended copy of Johnson, et al. v. White, et al., Case No. 08-80101-Civ-Middlebrooks/Johnson, and other court filings. ESOP not Sweet as Candy for Participants in U.S. Sugar ESOP provides some initial legal thoughts and contains some excellent comments from Corey Rosen, executive director of the National Center for Employee Ownership (NCEO). Rosen has also written The U.S. Sugar ESOP in Context, which discusses four key questions that the New York Times article neglected to ask:
- Should the participants have gotten the same price as the prior offer?
- Should the trustee have pushed for a sale of the company?
- Was the ESOP a "raw deal" for participants?
- Are ESOPs generally a good deal for employees?
