I guess the Mott family really needs the money.
CLEWISTON, Fla. — Thousands of workers at U.S. Sugar thought they were getting a good deal when the company shelved their pension plan and gave them stock for their retirement instead. They had a heady sense of controlling their own destiny as they became the company’s biggest shareholders, Vic McCorvey, a former farm manager there, said.
Now that many U.S. Sugar workers are reaching retirement age, though, the company has been cashing them out of the retirement plan at a much lower price than they could have received. Unknown to them, an outside investor was offering to buy the company — and their shares — for far more. Longtime employees say they have lost out on tens of thousands of dollars each and millions of dollars as a group, while insiders of the company came out ahead.
Corporations loved these plans (ESOPs- Employee Stock Ownership plans) if for no other reason than that they allowed them an alternative to defined benefit plans. There were corporate tax breaks as well and owners could sell their otherwise illiquid stock to the plans. US Sugar took its stock off the public market when the ESOP was created in 1983.
Nearly 95 percent of the country’s 10,000 ESOPs (Employee Stock Ownership Plans) are now at privately held companies, like U.S. Sugar. Because their shares are not publicly traded, there is no market price. So workers cash out shares without knowing what the price would be on an open market.
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