Sale of Stock in a Closely-Held Business to an “ESOP” (2016)

This program will focus on key practical and strategic aspects of employee stock ownership plans (ESOPs).

An ESOP provides a highly tax-efficient vehicle for a business owner to sell all or a portion of his business that may be otherwise illiquid or has no established market, thereby permitting the business owner to diversify his asset holdings and significantly reduce investment risk. An ESOP is also an employee benefit plan that allows a business owner to attract and retain key personnel. Alone among qualified employee benefit plans, an ESOP can also borrow money from or on the credit of the employer, provided the ESOP uses the money to buy employer stock. Depending on structure, an ESOP-owned company can become a nontaxable entity and use money that would have otherwise been paid to taxes, to amortize the debt used to finance the transaction.

In this program, a highly experienced faculty from diverse professional backgrounds will explain the overall structure of a leveraged ESOP transaction, including the objectives in establishing an ESOP, the tax benefits available in an ESOP transaction, the financing aspects of an ESOP transaction and the special ESOP valuation requirements.

 

Trusts and estates attorneys will learn how to use ESOPs as a business succession strategy and how to integrate an ESOP transaction with estate planning techniques. Corporate and Business attorneys will learn how an ESOP sale can be an alternative to an M&A transaction and will be updated on financing options in the current business environment. ERISA attorneys will learn the fiduciary rules under ERISA applicable to ESOP transactions. Tax attorneys will learn the special tax rules applicable to ESOP transactions.