Lawsuit: U.S. Sugar rejected a sweet buyout offer

U.S. Sugar Corp. rejected a $575-million buyout offer and kept it secret from shareholders because selling the Clewiston, Fla.-based agricultural giant didn't serve the founding Mott family's personal interests, a federal lawsuit filed Thursday claims.

Three former U.S. Sugar workers who own shares of its stock under an employee retirement plan claim chairman William S. White rejected a $293-per-share offer in 2005 and again in 2007 even though it was nearly $100-per-share more than the company was paying employees for cashed-in stock. White allegedly fired CEO Robert Dolson after learning of the negotiated offer and then wired him a $10-million "pay-off" so that he wouldn't leak the offer to shareholders.

The suit claims White rejected the offer so that the descendants of founder Charles Stewart Mott, including White's own spouse, could retain their high-paying positions within the company and continue to increase their stake in it via employee stock sales. U.S. Sugar -- the country's largest producer of refined cane sugar as well as a substantial citrus grower -- is privately held, and the only way its retirees can monetize their stock is by selling it back to the company or as part of a corporate acquisition.

According to the complaint, retired U.S. Sugar employees are the company's largest shareholder at 38 percent, but have no representation on the company's board of directors and were not apprised of the buyout offer. A majority of the retirees were said to be former farmworkers, equipment operators or mechanics.

-- Scott Barancik, Times Staff Writer