Judge Slams Hershey Trust

October 16, 2002 (PLANSPONSOR.COM) - A Pennsylvania judge criticized the Hershey Trust Co. for what he viewed as actions against the intentions for which it was formed.

Dauphin County Orphans Court Judge Warren Morgan, in a written opinion, said that members of the trust are no longer interested in carrying on the charitable message for which the trust was formed, according to Reuters.

The judge expressed his opinions as part of technical ruling that  dismissed his previous injunction barring the sale of the Hershey Foods stake , saying the injunction was “moot” since the sale process was terminated.   However, in issuing the ruling, the judge also ordered the trust to give “prompt written notice” to the Pennsylvania Attorney General’s office of any intention to sell the controlling stake, a move requested by that office.

The Orphans Court, which on September 4 th had granted an injunction preventing the sale, oversees trusts, deeds and fiduciaries, and has jurisdiction over Hershey Foods because the company’s voting rights are held by the $5.4 billion Milton Hershey School Trust for disadvantaged children.   The Hershey Trust holds a 77% voting stake in the Hershey Company,

The Trust had been overwhelmed by an outcry of protest from the community since the July announcement that it was considering selling its voting stake in the chocolate maker to diversify the Trust’s $5.4 billion asset base, which protects the financing for its main beneficiary, the Milton Hershey School. 

The opinion went on to call for a “reconstituting” of the trust, which could lend moral support to community groups who have been seeking a change in the Trust’s management, even after the September 17 th cancellation of a buyer proposal.

Also included were explicit instruction for the Trust to notify the Pennsylvania

Attorney General for permission to consider a sale in the future.

The written opinion was part of technical ruling that replaced the previous ruling barring the sale of the Trusts’ voting stake, saying the injunction was “moot” since the sale process was terminated.