Real-Life 'Wonderful Life' Boss Gives Business to Employees

[no_hypocrisy]

Grocery mogul Joe Lueken, 70, literally is giving away the store, to his 400 employees.

After 46 years running Lueken's Village Foods, he and his family will start transferring ownership of the three-store chain on January 1 to an ESOP (Employee Stock Ownership Program), in which each employee will own stock. The number of shares will be based on their salary and years of service.

-more-


http://gma.yahoo.com/real-life-wonderful-life-boss-gives-business-employees-162546267--abc-news-money.html

[catnhatnh]

1. It's a nice story....

...but unfortunately not nearly true. He WILL sell the stores to the employees and finance the deal over 3-5 years, but I think we can agree that is far from "giving". Reading the story, he decides this after his sons express no interest in the business. The story implies other chains want to buy them but I saw no offer listed...

[jtuck004]

2. As Obama said several times in the campaign, "... anybody can make it if you just try ..."

From the link...

"... Brent Sicard, an employee who started at Village Foods in 1998 as night janitor, will be the company's new CEO and president. ..."

Now it just needs to happen 312 million more times and we won't need a jobs program. Then we invest in all the other countries.

Also...

... The program will pay off the Lueken family in three to five years and leave employees with shares based on length of service and salary, at no cost to them. If the company keeps growing, the shares' value will too, and the group is obligated to repurchase shares of any employee who leaves or retires...."

So a gift of sorts, though he and the family take cash and leave an indebted business for the employees to share. And it's a grocery, which is one damn rough business. (Are they protected from nearby Walmarts, or do they have a niche?) And given that this is a new ESOP structure, that debt will drag until it is paid, and probably a much more favorable tax treatment for the family than an outright sale and gifts, if they really could have sold the business. And their pensions or 401K's are likely collateral.

So, we know for sure HE and his family got paid. Whether the employees will get "a gift" remains to be seen, especially if their pension plan wasn't fully funded, like many aren't. Have to check back in 5 to 10 years. The company is required to buy their shares back, but I suspect it is protected from a rush at the teller's window because of the debt.

So not that it wasn't nice, even though he and the family got paid and left everyone else with a potential liability or profit. But just to be on the safe side the employees might want to get together and research whether they can finance into a different venture, walk away with a profit and dump it on someone else. Although their current debt probably negates that route, unless they can find a junk bond firm to provide private equity...one never knows.

And, I can't find anything about training. How does one know how to be an owner and run a business without training? I mean, all the rich folk do it. Hell, it's a damn obsession with them. Shouldn't most other people? Or maybe that's why they are rich...