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How did Milton S. Hershey close the ownership loop of his business enterprises?

Mr. Hershey created three trusts: two during his lifetime and one upon his death. He designated Hershey Trust Company the trustee of the three trusts. Hershey Trust Company is a Pennsylvania state bank which he founded in 1909 and which he owned 100%.  So any issue that comes before the three trusts comes back to Hershey Trust Company, as trustee.

One of the three trusts, and by far the largest, is the Milton Hershey School Trust which he created in 1909. Into this trust he transferred the vast majority of his business assets and named Hershey Trust Company trustee. Since he owned 100% of Hershey Trust Company, in essence, he still controlled his business empire through the Hershey Trust Company.

Upon his death in 1945, his will gave his shares of the Hershey Trust Company to the same Milton Hershey School Trust, and with Hershey Trust Company being the trustee of the trust, it effectively owns itself.  Also with this arrangement, no one can buy or takeover any of the assets in the Milton Hershey School Trust without Hershey Trust Company’s agreement, including the sale or takeover of the Hershey Trust Company itself.

The Hershey Trust Company is ultimately governed by a board of directors to oversee the three trusts.  It is a self-perpetuating board, meaning the remaining members of the board select people to fill any vacancies on the board.