This is an interesting article that came out today. A watchdog group is accusing Attorney General and Republican nominee for governor Tom Corbett of stalling (to prectect political allies) in launching an investigation into the purchase of a golf course by the trust that oversees the Milton Hershey School. Representatives of the nonprofit Protect the Hersheys' Children Inc. said Corbett's office ignored concerns it had expressed over the acquisition of the golf course as far back as 2006 (the year the course changed hands). The investigation did not begin til this September. Earlier this month, The Philladelphia Inquirer reported that the trust paid an inflated price of $12M for the golf course, which is said to be operating at a loss. They also claim that the sale enabled several dozen local investors to profit.....one of them being Hershey's then CEO Richard Lenny. Corbett's office oversees Pennsylvania charities and confirmed last week that it had launched a non-criminal investigation of The Hershey Trust Co.
Read the full article here:
http://finance.yahoo.com/news/Hershey-school-watchdog-hits-apf-1936455721.html?x=0&.v=1
I failed to mention in my post that they claimed the reason for purchasing the golf-course was to create a buffer zone between the Milton Hershey School and the surrounding community. Here is another article on the subject that elaborates more on how investors benefit and the possible violation of Mr. Hershey's wishes. http://www.philly.com/inquirer/front_page/20101003_Hershey_school_s_purchase_of_golf_course_helped_investors.html
ReplyDeleteOne of the video's posted by Dr. Busija talks about the price that is paid requires a premium to be paid by the acquiring company and only 30%-40% of the price is based on current performance. The $12 million paid for the golf course seems like it has a premium built into it since current performance is not good since it is operating at a loss.
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