Archive: esop

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Alternative Liquidity Options: Leveraged ESOP

Market Dynamics M&A activity and public company valuations across the Defense and Government Services industry have rebounded from 2013 lows. Trump-related spending tailwinds in the DOD and IC sectors, in particular, should drive similar if not increased buyer interest in the sector in 2017 and 2018 once a more definitive spending plan is established. In […]
February 7, 2017
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  • Aronson

Valuation Hindsight Challenged in Recent ESOP Case

A recent U.S. District Court opinion has reiterated the principle that valuations should be based on information known or knowable as of the valuation date. In the case of Fish, et al. v. GreatBanc Trust Company, et al., Case No. 1:09-cv-01668 (N.D. Ill. Sept. 1, 2016), a valuation expert’s opinion was rejected because it relied […]

Significant Changes to Form 5500 Proposed

The Internal Revenue Service “IRS”, the Department of Labor “DOL” and the Pension Benefit Guaranty Corporation “PBGC” (the agencies) recently proposed significant changes to the Form 5500 requirements for employer sponsored benefit plans. If approved, the changes would be the most significant since implementing the EFAST2 electronic filing system in 2009. As such, the filing […]

Significant Changes to Form 5500 Proposed

The Internal Revenue Service “IRS”, the Department of Labor “DOL” and the Pension Benefit Guaranty Corporation “PBGC” (the agencies) recently proposed significant changes to the Form 5500 requirements for employer sponsored benefit plans. If approved, the changes would be the most significant since implementing the EFAST2 electronic filing system in 2009. As such, the filing […]

M&A Shop Talk – Employee Stock Ownership Plan

If you own a small, profitable business and are looking for an alternate exit strategy, an employee management buyout via a leveraged Employee Stock Ownership Plan (ESOP) might be ideal for you. For general background information on how an ESOP buyout mechanically works, including the financing arrangement intricacies, please visit the National Center for Employee […]

M&A Shop Talk VII

The most recent M&A Shop Talk highlighted the major tax advantages of completing a leveraged ESOP buyout transaction as an exit strategy for S corporation structured small businesses with no liquidity except its workforce. Now, we’ll cover a parallel discussion in the context of a C corporation target. Currently, IRC Section 1042 tax provisions allow owners with […]

M&A Shop Talk VI

If you own a small, profitable business and are looking for an alternate exit strategy, an employee management buyout via a leveraged Employee Stock Ownership Plan (ESOP) might be ideal for you. For general background information on how an ESOP buyout mechanically works, including the financing arrangement intricacies, please visit the National Center for Employee […]
May 19, 2016

ESOP Valuations: Are You Performing Your Fiduciary Responsibilities?

Employee Stock Ownership Plans (ESOPs) are increasingly becoming a target for review by the Department of Labor (DOL) due to the additional degree of difficulty and complex structure associated with these benefit plans. Aronson recently attended the annual conference for the National Center for Employee Ownership (NCEO) which confirmed one of the significant areas drawing […]

The New Govconomy: Strategize | Optimize | Realize

With sequestration and continuing resolutions dominating government contracting for several years now, contractors have been plagued by spending uncertainty. When a budget was finally approved by Congress last year, the business community breathed a collective sigh of tentative relief. Even though the budget is tighter and sequestration still looms overhead, contractors in the Mid-Atlantic region […]

Does it Make Sense for an LLC Owner to Exit via Sale to an ESOP?

There are many tax reasons why a small business organized as a limited liability company (LLC) chooses to operate as a flow-through partnership or disregarded entity taxed as a Schedule C filer on Form 1040. What happens, however, if you have successfully operated your business as an LLC, but have reached a point in your […]
October 28, 2013