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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    ERISA

Date & Time
  • event Date

    Wednesday, October 18, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will provide ERISA counsel, ESOP trustees, selling shareholders, and plan sponsors guidance on employee stock ownership plan (ESOP) transactions and compliance issues in light of the recent IRS notice on ESOPs. The panel will discuss (1) rules and procedures governing fiduciary duties of trustees in ESOP transactions, (2) the SECURE 2.0 provisions applicable to ESOPs, (3) the recent IRS News Release on ESOPs, and (4) best practices in satisfying fiduciary duties in ESOP transactions and avoiding litigation.

Faculty

Renee P. Lewis
Partner
Holland & Knight LLP

Ms. Lewis is a partner in Holland & Knight's Chicago office and a member of the firm's Financial Services Practice Group. She is the co-chair of the firm's ESOP (Employee Stock Ownership Plans) practice. Ms. Lewis advises company executives and owners on strategically structuring complex financing transactions. Her practice focuses on counsel for financial institutions, privately held companies and trustees in the structuring, negotiation and documentation of ESOP transactions, which may entail leveraged buyouts, equity repurchases and corporate reorganizations.

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David N. Pardys
Partner
Holland & Knight LLP

Mr. Pardys is an employee benefits and executive compensation attorney in Holland & Knight's Philadelphia office. He is the co-chair of the firm's ESOP (Employee Stock Ownership Plans) practice. He focuses his practice on ESOP, the Employee Retirement Income Security Act (ERISA) and executive compensation. Mr. Pardys represents private companies, selling shareholders, financial institutions and independent fiduciaries in all facets of an ESOP transaction. He handles ESOP transactions in a wide range of industries, including manufacturing, food service, insurance, travel services, financial services and healthcare.

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Description

An ESOP can be a useful financing and liquidity strategy in addition to providing tax and employee benefits. However, the DOL heavily scrutinizes the design and structure of ESOP transactions, and the IRS recently indicated that it will continue to undertake enforcement strategies to ensure compliance with tax law requirements by employers sponsoring an ESOP.

Under SECURE 2.0, key provisions impacting ESOPs include: (1) amending Section 1042 of the IRC to allow limited application of tax deferral on a sale of stock to S corporation ESOPs; (2) amending Code Section 401(a)(35) to change the definition of "publicly traded" for diversification requirements; (3) directing the DOL to create an Employee Ownership Initiative; and (4) directing the DOL to release formal guidance on ESOP valuation standards.

Finally, on Aug. 9, 2023, the IRS announced that it will continue to undertake enforcement strategies to ensure compliance with tax law requirements, with a focus on specific ESOP transactions. Knowledge of transaction structures will allow ESOP counsel to achieve the goals and objectives of the parties involved while also complying with applicable regulations.

Listen as our panel discusses rules and regulations impacting ESOP transactions, DOL guidance, and other critical issues associated with structuring ESOP transactions.

Outline

  1. Overview of rules and procedures governing fiduciary and compliance duties of trustees and advisers in ESOP transactions.
  2. The SECURE 2.0 ESOP provisions applicable to ESOPs
  3. The recent IRS New Release on ESOPs
  4. Best practices in satisfying fiduciary duties in ESOP transactions and avoiding litigation

Benefits

The panel will discuss these and other key issues:

  • Navigating SECURE 2.0 rules affecting ESOPs
  • Understanding the recent IRS News Release on ESOPs
  • Recognizing rules and procedures governing fiduciary duties of trustees in ESOP transactions
  • Understanding best practices in satisfying fiduciary duties in ESOP transactions and avoiding litigation