The employee-owned parent of Piggly Wiggly Carolina is now essentially worthless, and former workers will not receive stock payouts this year, according to a letter from the head of the once-prominent supermarket chain.
"The company has no positive value," said David R. Schools, president of Mount Pleasant-based Greenbax Enterprises, in a recent mailing to participants in the employee stock ownership plan.
Schools said an outside firm determines the value of the business each year and, because of financial obligations of Greenbax and the negative value of its assets, "there will be no ... distribution this year based on share value."
Joe Pinto, a former employee of Piggly Wiggly for nearly 40 years, said he wasn't surprised that the value of the stock has been nearly wiped out.
"We are terribly, terribly disappointed," the West Ashley resident said Tuesday.
Pinto declined to say how much he has lost with the company's collapse, but he noted at one point Greenbax shares were valued at more than $700 each.
While he continues to earn an income by working for a different company, he said he feels sorry for all of the Piggly Wiggly employees who counted on the stock plan for retirement and now have nothing.
"This is all so many had," Pinto said.
The letter to shareholders comes a year after a group of former employees sued the grocer in federal court, seeking millions of dollars in lost retirement money and alleging poor decisions and inaction by top company executives, including Schools, led to the company's ruin.
The pending case, representing a group that could be larger than 1,000 people, alleges that senior officials with the grocer and Greenbax enriched themselves while the value of the employee-owned stock plan plummeted by nearly 90 percent over eight years, “devastating the retirement accounts of thousands of company employees.”
Schools declined further comment on the stock shares' negative value Tuesday.
The 83-page lawsuit, which is seeking class-action status, estimates that the stock value skidded from $88.7 million in 2008 to $9 million in 2015. The CEO's letter puts the stock plan's value at just under $457,000 for the annual period that ended March 31, 2016.
The employee-owned Piggly Wiggly franchise - with a tagline of "Local Since Forever" in recent years - was established in downtown Charleston 60 years ago. The beginning of the end came in 2013, when the company began selling assets and closing stores after encountering serious financial problems. Bi-Lo and Harris Teeter, longtime rivals of Piggly Wiggly, acquired most of the chain's Lowcountry supermarkets. The last remaining company-owned store in the Charleston area - in Hollywood - was sold last spring.
Also last year, Greenbax sold 14 shopping centers in South Carolina and Georgia, including three in the Charleston area, to a Virginia-based real estate company for $71 million.
"Most assets have been liquidated," Schools said in his letter. "Remaining are partnerships in two real estate parcels and restricted cash."
Details about the land are not included in the letter. The restricted cash refers to $4 million held mostly by the S.C. Workers' Compensation Commission as collateral to service open claims. The rest of the money is with the Board of Workers' Compensation in Georgia, where Piggly Wiggly operated some stores.
Schools said Greenbax applied to the South Carolina agency to release all or some of the cash collateral because it believed the amount being held was "excessive based on our claim liability," but that request was denied.
The inability to tap into those funds "greatly reduced the value of Greenbax," Schools said in the letter. The company can request that the money be released just once every 12 months, so it must wait until the fall to reapply, he said.
Schools also said Greenbax continues to incur expenses such as real estate leases, including rent payments for stores that are now closed.
"The leases are those for which we tried to negotiate reasonable exits, but were unable to do so," he said.
Schools said the company and its subsidiaries will continue to sell off assets "to wind-down the business." He also said Greenbax will try to eliminate its overhead expenses "so that, possibly, distributions can be made to ... participants in the future."