No sweet deal for u.s. sugar employees

Should employee owners have a say in issues relating to the acquisition of the company they work for? That's a key inquiry in the stockholder class action lawsuit brought against U.S. Sugar by employees.

Legally, company management is inside its rights to exclude them from operations-related decisions, but according to experts interviewed by The New York Times in the substance, people are entitled to do what they want with the place they own; and worker-owned companies tend to have good results when employees have a say. But U.S. Sugar's employee shareholders remain unheard: they were banned from attention the company's annual meeting.

The class action lawsuit is acquiring a lot of media attending as attorneys and other interested parties followers the case are speech production out about the facts -- or their percept of them.

Here's the case in a nutshell: U.S. Sugar took its stock off the populace market in 1983 and created an employee stock ownership plan (ESOP). The company's paternalistic civilization soured when NAFTA came along, causation management to lower costs through methods including downsizing and eliminating the retired person health plan in order to compete with cheap sugar from other state with low wages. It's a familiar scenario, but according to the company's former accountant, management seemed to choose people with long work histories who had the most ESOP shares, The Times study.

The complainant charge that the company cashed out plan participants for far less money than they should have received, based on info that came out because of two offering to acquire the company. Because the shares were held indirectly through a retirement plan, employees were shut off from info about the company's finances and unable to challenge management's determination and assessment of stock value. Former workers complaint that insiders (descendants of the laminitis, wealthy industrialist Charles Steward Mott) enriched themselves by buying back employees' shares at a cheap price.

But to win the case, plaintiffs must prove that management's stock valuation doesn't represent fair market value; some ESOP experts see no indication that this is true. As the case winds its way through the court system, it may redefine the relationship between the Employee Retirement Income Security Act (ERISA) and ESOPs -- and strike fear among finance executives and others who have fiduciary responsibility for ESOPs at private companies.