Structuring Options for ESOP Transactions: Advanced Techniques for ERISA Counsel and Plan Sponsors

Description

A variety of transaction planning methods for employee stock ownership plans (ESOP) are available to plan sponsors and fiduciaries to address specific needs while also meeting regulatory requirements. Knowledge of advanced transaction structures will allow ERISA counsel to develop the most effective methods for an ESOP transaction inclusive of alternatives to achieve the goals and objectives of the parties involved.

An ESOP can be a useful financing and acquisition tool in addition to the tax and employee benefits it provides. The DOL heavily scrutinizes the design and structure of ESOP transactions with significant oversight. Examination of ESOP transactions by regulatory authorities involves a thorough review of the financial structure of the deal, any value adjustments after that, and potential conflicts of interest leading to a breach of fiduciary duties. To achieve the objective of an ESOP transaction and acquire the advantages thereof, counsel must consider all available options in accord with federal rules and regulations.

Advanced structuring alternatives for ESOP transactions involve a careful analysis of the key objectives of shareholders and plan sponsors, available financing options, the use of incentive arrangements for management, clawbacks, earn-outs, and other provisions essential to structuring the ESOP transaction.

Listen as our panel discusses rules and regulations impacting ESOP transactions, DOL guidance, financial structuring alternatives, options for post-transaction adjustments, and other critical issues associated with structuring ESOP transactions.