A class action lawsuit has been filed against the nation's largest sugar cane producer for allegedly breaching its fiduciary duties to employee shareholders. The lawsuit was filed in Federal Court in West Palm Beach, Florida on behalf of more than 4,000 current and former employees.
Current and former employees who owned 38 percent of the company's shares in 2005 could only sell their shares back to the company, which offered up to $204 per share. However, in 2005 and again in 2007, US Sugar was offered $575 million to sell the business, or about $293 per share. The deal was rejected both times by the company Board of Directors, yet employee shareholders were never told about either offer.
The class action claims descendants of the company's founders hid the offers from their employees so they could continue to buy back shares for the undervalued rate and maintain operating control of the company.
US Sugar farms about 160,000 acres around the Everglades, produces about 700,000 tons of sugar a year and has 1,700 employees.