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Hershey Trust Company

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Hershey Trust Company
Company typePrivate
IndustryTrust administration, Investment, Real Estate
FoundedApril 28, 1905; 119 years ago (1905-04-28)
in Hershey, Pennsylvania, U.S.
FoundersMilton S. Hershey
Harry Lebkicher
John E. Snyder
Headquarters
Hershey, Pennsylvania
,
U.S.
Key people
Maria T. Kraus (board chair)[1]
OwnerMilton Hershey School Trust
Websitehersheytrust.com

The Hershey Trust Company is an American trust company based in Hershey, Pennsylvania, established in 1905. Its sole business is the management of several charitable trusts endowed by Milton S. Hershey. The largest is the Milton Hershey School Trust, which has $17.4 billion of assets as of 2021, including Hershey Entertainment and Resorts Company and a controlling stake in The Hershey Company.

History

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On April 28, 1905, the Pennsylvania Department of State issued a charter creating the Hershey Trust Company, which was incorporated by Milton S. Hershey, Harry Lebkicher and John E. Snyder.[2] It provided banking services and mortgages to residents of Hershey and the surrounding Derry Township.[3] In 1909, when Hershey founded the Milton Hershey School, he appointed Hershey Trust as administrator of the school trust.

In 1925, Hershey Trust established Hershey National Bank as a subsidiary to handle its commercial banking business, allowing the parent company to focus on the growing demands of managing the school trust.[3][4]

Milton Hershey died in 1945 and bequeathed the stock of Hershey Trust to the Milton Hershey School Trust.[5]

The company sold the Hershey Bank to PNC Financial in 1986.[6]

Hershey Trust began growing its private wealth management business in the 1980s, eventually gaining 500 clients with $1.1 billion of managed assets.[3][7] The wealth management business was sold to Bryn Mawr Trust Co. in 2011 for $18 million.[8]

2011 investigation of the Hershey Trust Company

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In February 2011, Robert Reese (grandson of H. B. Reese the inventor of Reese's Peanut Butter Cups),[9] a former board member and president of the Trust,[10] filed a lawsuit against the Hershey Trust Company alleging that board members had been improperly using the Trust's money.[11] One particular issue was the purchase of the Wren Dale Golf Course, in which the Hershey Trust overpaid for the property, to the benefit of board members who were both owners of the Wren Dale Golf Course and on the Hershey Trust board.[12][13] Reese withdrew the lawsuit in April 2011, due to deteriorating health. Reese suggested the Pennsylvania Attorney General had enough cause to investigate the Hershey Trust.[14]

In 2013, Kathleen Kane,[15] the Pennsylvania Attorney General, announced the conclusion of a two-year investigation into the operations of the Hershey Trust Company, in which the Office of Attorney General and the Hershey Trust Company agreed that there was a finding of no wrongdoing, but reforms were required of the trust company.[16][17]

2016 developments

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In May 2016, the state attorney general asked the company to remove three members from the ten-person board. The attorney general said that the three had allowed "apparent violations" of the 2013 agreement. At about the same time, in an unrelated investigation, John Estey, former chief of staff to Governor Ed Rendell and a high-ranking executive of the company, was charged with wire fraud, having pocketed $13,000 that an FBI sting operation had given to him in an investigation into illegal lobbying of legislators.[18][19]

Trusts

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Milton Hershey School Trust

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Hershey Trust serves as the trustee of the Milton Hershey School Trust. The trust provides the funding for the 2,000+ student Milton Hershey School, which provides education for lower-income children.[20] As of 2021, the trust had $17.4 billion of assets.[21] Its assets include Hershey Entertainment and Resorts Company, a controlling stake in the Hershey Company, and ownership of the Hershey Trust Company itself.

The trust was created in 1909 by a deed of trust from Milton and Catherine Hershey, granting 486 acres (197 ha) of land in Hershey for the establishment of the Milton Hershey School.[22][23] In 1918, Milton Hershey quietly donated to the trust the bulk of his fortune, $60 million of stock in Hershey Chocolate Company (now the Hershey Company).[24]

Milton S. Hershey Foundation

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The company administers the Milton S. Hershey Foundation, which operates:

The foundation also endowed the Penn State Milton S. Hershey Medical Center through a gift using funds provided by the Milton Hershey School Trust.

Other trusts

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Hershey Trust also serves as trustee of the Hershey Cemetery Perpetual Care Maintenance Trust.

The company was trustee of the Milton S. Hershey Testamentary Trust until 2012.[25] This trust was established in 1945 upon Milton Hershey's death, endowed with his remaining fortune of $900,000, for the benefit of the Derry Township School District.[26] The trust assets grew to $24 million as of 2012, supporting an annual payment to the school district of $1.8 million.[26]

References

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  1. ^ "Board of Directors Hershey Trust Company". Hershey Trust Company. Retrieved 18 May 2024.
  2. ^ "Trust Co. At The Chocolate Plant". Harrisburg Telegraph. 28 April 1905. p. 1.
  3. ^ a b c "History of Hershey Trust Company" (PDF). Hershey Trust Company. Retrieved 8 September 2024.
  4. ^ "Hershey Trust pays $100,000 for property". The Evening News. Harrisburg, PA. 15 June 1925 – via Newspapers.com.
  5. ^ In re Milton Hershey School Trust, 807 A.2d 324, 328 (Pa. Cmmw. Ct. 2002) ("By his Will, Mr. Hershey gave the stock of the Hershey Trust Company to the School Trust.").
  6. ^ "PNC Financial is acquiring Hershey Bank". The Tribune. Scranton, PA. UPI. 12 March 1986 – via Newspapers.com.
  7. ^ Nick Malawskey (6 May 2011). "Hershey Trust, Bryn Mawr Trust deal expected to close by end of May". The Patriot-News. Harrisburg, PA. Retrieved 8 September 2024.
  8. ^ Nick Malawskey (27 May 2011). "Bryn Mawr Trust completes purchase of Hershey Trust Co. assets". The Patriot-News. Harrisburg, PA. Retrieved 8 September 2024.
  9. ^ "The Reese's Revolution". The Sun. 17 February 2011. Retrieved 18 April 2018.
  10. ^ "Board Vs. Board". The Sun. 10 February 2011. Retrieved 18 April 2018.
  11. ^ "Hershey Charity Scandal: Robert Reese, Ex-Hershey Official, Claims Wrongdoing". The Huffington Post. 11 February 2011 – via The Associated Press. A former official involved with the multibillion-dollar charitable trust that controls the Hershey candy company is claiming in a court filing that board members used the trust's considerable assets to pad their bank accounts and treat themselves to luxury hotel stays, limousine rides and free golf.
  12. ^ Fernandez, Bob (3 October 2010). "Hershey school's purchase of golf course helped investors". The Philadelphia Inquirer. Retrieved 13 November 2015.
  13. ^ Fernandez, Bob (11 February 2011). "Ousted Hershey Trust president tells court of serious financial irregularities". The Philadelphia Inquirer. Retrieved 13 November 2015. Reese, a scion of the peanut-butter cup fortune and a former senior executive of the Hershey Co., seeks to have Hershey trustees reimburse the charity $22 million for purchasing the Wren Dale course at an inflated price and improperly commingling funds in Hershey Trust that led to remedial action after the trust company alerted the Securities and Exchange Commission.
  14. ^ Fernandez, Bob (5 April 2011). "Court action against Hershey is pulled". The Philadelphia Inquirer. Retrieved 13 November 2015. Just as the legal battle was heating up, a former insider at the multibillion-dollar Hershey charity has withdrawn his court action that claimed the misuse of millions of dollars meant for educating poor children. Robert Reese, a former Hershey trustee and president of the Hershey Trust Co., took the action Monday, saying deteriorating eyesight made it impossible for him to pursue the case. He added that he believed the Attorney General's Office would investigate his claims, which were filed Feb. 8 in Dauphin County Orphans Court.
  15. ^ "Ex-Hershey Trust official Robert Reese gives $100K to AG candidate Kathleen Kane". Penn Live. 29 October 2012. Retrieved 18 April 2018.
  16. ^ Malawskey, Nick (8 May 2013). "Pennsylvania's attorney general: No penalties, but reforms for Hershey Trust". Patriot News. Retrieved 27 October 2015.
  17. ^ "Hershey Trust Company Reaches Agreement with Attorney General on Reforms to Better Serve the Milton Hershey School Mission". PRNewswire. 8 May 2013. Retrieved 13 November 2015.
  18. ^ Fernandez, Bob (3 May 2016). "AG wants to remove 3 leaders of Hershey Trust". The Philadelphia Inquirer. Retrieved 3 May 2016.
  19. ^ "Few details available in Estey bombshell". The Philadelphia Inquirer. 1 May 2016. Retrieved 3 May 2016.
  20. ^ Staff Writers (8 July 2023). "Hershey Community Partnerships Family History". Milton Hershey School. Archived from the original on 1 July 2023. Retrieved 8 July 2023.
  21. ^ Keith, Charlotte (25 June 2021). "How the state's richest charity spends its money: The Milton Hershey School, by the numbers". Spotlight PA. Retrieved 8 September 2024.
  22. ^ "Milton Hershey School Second Restated Deed of Trust" (PDF). 15 November 1909. Retrieved 8 September 2024.
  23. ^ "From 10 students to 2,000, Milton Hershey School established 110 years ago: vintage photos". The Patriot-News. Harrisburg, PA. 15 November 2019. Retrieved 8 September 2024.
  24. ^ "Founders Day: Giving the Gift of Stock". Milton Hershey School. Retrieved 8 September 2024.
  25. ^ "Derry Township School Board meeting minutes" (PDF). 19 June 2012. pp. 4–6. Retrieved 21 September 2024.
  26. ^ a b "One Last Gift". Hershey Community Archives. 1 February 2012. Retrieved 21 September 2024.
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