New York, Sept. 12: Lawyers for the charitable trust that controls Hershey Foods argued in a Pennsylvania court Wednesday that a temporary injunction preventing the trust from selling the company should be overturned, contending that the injunction prevents the trustees from carrying out their obligation.
The appeal by the Hershey Trust Co. came less than a week after Judge Warren Morgan of the Dauphin County Orphans Court, which oversees charitable trust activities, decided to temporarily block the trust from selling Hershey after Pennsylvania’s attorney general argued that a sale would cause “irreparable harm” to the company's hometown.
The trust announced in July that it was considering selling its stake in Hershey Foods to diversify the trust’s $ 5.9 billion base of assets to protect the financing for its main beneficiary, the Milton Hershey School, which educates and shelters nearly 1,300 students. The announcement caused a storm of protests from local officials and employees.
The five-judge Commonwealth Court panel that listened to the trust’s appeal Wednesday did not indicate when it might rule. Most legal experts following the case suggested that the injunction would be overturned.
In court, Jack Stover, a lawyer for the trust, said that the attorney general, Mike Fisher, “has staged what we believe is an unprecedented attempt to exercise authority over a charitable trust in Pennsylvania.”
Fisher, who had originally suggested that the trust consider diversifying it assets before it ever decided to do so, has recently sought to block any sale, contending that court approval should be required for any deal and saying that a sale could devastate the town, where about 6,200 people work for the company.
“All we are asking is that the court and our office have the opportunity to be fully involved before any decision is made to sell Hershey Foods,” said Fisher, who is running for governor.
Judge Morgan criticised the Hershey Trust for considering a sale in his 16-page opinion, saying that the trustees showed “a capriciousness that is an abuse of their discretion”.