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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, February 7, 2024

  • 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

The CLE course will examine the growing use of leveraged employee stock ownership plans (ESOPs) in structuring acquisitions, divestitures, and private equity sales in the challenging market times that we all are facing, particularly with today’s higher interest rates. The panel will discuss the advantages and challenges of selling all or part of a business to an ESOP trust and best practices for structuring the transaction.

Faculty

David R. Johanson
Senior Partner
Hawkins Parnell & Young

Mr. Johanson assists clients in general corporate matters and in employee ownership, benefit, ERISA, and related business matters, with an emphasis on executive compensation, equity incentive plans, non-qualified deferred compensation, ESOPs, ESOP transactions, mergers and acquisitions and related tax planning, and business succession and estate planning. He defends ERISA fiduciaries, plan sponsors, selling shareholders, and investment advisers in ERISA litigation matters involving ESOPs and business transactions in federal and state courts throughout the country in a wide range of controversies covering ERISA fiduciary responsibilities, ESOP valuation disputes, disclosure obligations, investment issues, and tax matters. He has extensive experience in negotiating ESOP, ERISA, and other issues with government regulatory agencies and in representing ERISA fiduciaries in litigation. Recognized nationally for his experience and expertise in the ESOP and executive compensation field, he is a past chair of the legislative and regulatory advisory committee of The ESOP Association. 

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Anthony J. Jacob
Partner
Hinshaw & Culbertson LLP

Mr. Jacob is engaged in general corporate practice, including various aspects of private merger, acquisition, divestiture and employee benefit matters. His practice also includes secured and unsecured lending transactions, asset securitization and structured finance, ESOP loans, initial debt and equity offerings, primary and secondary debt offerings, corporate reorganizations and restructuring, joint ventures and syndicated commercial financing transactions.

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Description

ESOPs provide an alternative strategy for selling a business. ESOPs allow company owners to cash out of their businesses and receive pre-tax dollars that are deferred from taxation, while simultaneously rewarding the employees who helped build the business. When structuring a deal, counsel should consider the advantages and risks of using leveraged ESOPs as an option for transitioning the ownership of a business. Counsel must also understand the mechanics of structuring a leveraged ESOP transaction.

The benefits of using ESOPs in structuring deals include the opportunity to execute a partial rather than complete sale, significant tax advantages, increased cash flow, strong employee benefits and the ability to attract seller financing, including SBA loan incentives for eligible businesses. Drawbacks to the ESOP structure are the increased regulatory and compliance mandates that need to be addressed by an ESOP company and the potential for ESOP litigation.

Listen as our authoritative panel discusses the latest developments in the use of leveraged ESOPs as an option to move acquisitions, divestitures, and private equity sales forward in today’s market. The panel will discuss the pros and cons of the structure and considerations for counsel when structuring deals with ESOPs.

Outline

  1. Current trends in the use of ESOPs to structure deals
  2. Tax advantages of ESOP transactions to selling shareholders, employees, and ESOP plan sponsors
  3. Non-tax benefits and risks of the ESOP structure
  4. Best practices for structuring the transaction including private equity parties

Benefits

The panel will discuss these and other key issues:

  • What are the latest trends in the use of ESOPs in structuring acquisitions, divestitures, and private equity sales?
  • What are the tax and other benefits of using leveraged ESOPs in structuring deals? What are the downsides of the ESOP structure?
  • What are the mechanics of structuring a leveraged ESOP transaction?