12-27: US Employee ownership news — ESOP’s, a new one and an allegedly defrauded one

Today there is news from the U.S.A. about employee ownership. Two stories about ESOP’s, one new and one allegedly defrauded.

The first story is from the Nashville Ledger.

Churchill Mortgage shifts partial ownership to employees

In a move designed to give employees more of a stake in the company while also ensuring a smooth exit for founder Mike Hardwick, Churchill Mortgage and its parent company, Churchill Holdings Inc. have become an employee-owned company.

The Brentwood-based mortgage lender has established an Employee Stock Ownership Plan (ESOP).

I could go on about the inequity of the sole shareholder reaping all profits for decades and now selling the future rights to the fruits of their own productivity to the wage-slaves, but that would be unseemly. Instead — Congratulations to the employee-owners of Churchill Mortgage. As a (related) side note, apparently Churchill Mortgage won the Nashville Business Journal “Best in Business” award in the 101 to 500 employees division. Again, Congratulations to the employee-owners of Churchill Mortgage.

The other story, from Indiana, is another indictment of the US [non] justice system being a day late and a dollar short. It appears that PBI Bank, as trustee of Miller’s Health Systems Inc.‘s employee stock ownership plan, committed fraud, six years ago, and the US Labor Dept. plans to get that money back someday. Is “better late than never” or “justice delayed is justice denied” more appropriate here? That would probably best be answered by those 3,000 employees in Indiana. Perhaps none of them needed any of that money over the last six years and don’t mind that the bank was making use of those funds.

Labor Department sues trustee of nursing home company’s stock ownership plan

 Warsaw-based Miller’s Health Systems owns and operates Miller’s Merry Manor, a group of 32 residential nursing homes with more than 3,000 employees in Indiana.

Louisville, Ky. based PBI Bank Inc., the trustee, authorized a $40 million payment for company stock on behalf of the employee stock ownership plan, or ESOP, six years ago.

The Labor Department alleges that bank officials should have known the sale price was “an amount far in excess of the fair market value of the stock” for various reasons outlined in the court filing.

Federal officials say a series of maneuvers from September 2007 rewarded four members of the Miller family and some members of the company’s executive management team at the expense of workers.

It appears fraud is both a style of capitalism and a style of democracy.


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