State goes to court over possible Hershey Foods sale

HARRISBURG, Pa. -- The state went to court Tuesday to try to block any attempt by the charitable trust that controls Hershey Foods Corp. to sell the chocolate maker, warning that such a deal could lead to major layoffs in the town that bears the company's name.

Lawyers for the $5.9 billion Hershey Trust Co., which benefits a school for disadvantaged children, argued the state lacks the authority to stop the sale of the nation's largest candy maker.

The trust controls 77 percent of Hershey Foods' shareholder votes and 31 percent of its common stock. In July it announced that it had ordered company executives to seek bids for Hershey. Analysts say the price could be as high as $15 billion.

Attorney General Mike Fisher sued to block any sale, contending that the loss of jobs and tax revenue could devastate the Hershey area, where about 6,200 people work for the company.

Judge Warren Morgan met briefly with attorneys for both sides after adjourning the hearing, but did not immediately rule on Fisher's request for a temporary injunction.