Employee Stock Ownership Plans

Representative Experience

• Designed and implemented Employee Stock Ownership Plans (ESOPs) for a food manufacturer, a manufacturer of agricultural equipment, grocery retailers, restaurant companies, and agribusiness lenders.
• Successfully defended client in a class action lawsuit that alleged Employee Retirement Income Security Act (ERISA) fiduciaries breached their duties and engaged in prohibited transactions by selling their shares in an ESOP for more than adequate consideration.
• Assisted in engineering an ESOP for a large architectural firm, while adding a stock appreciation rights plan to provide additional incentives to the employees.
• Assisted in the $170 million ESOP acquisition of the East St. Louis, Illinois, Casino Queen, a first in the gaming industry.
• Assisted 100 percent ESOP-owned S corporation with selling its real estate to a REIT. The sale substantially reduced the client’s debt and rent expenses and helped avert potential default on its loans.
• Acted as project manager and consultant in connection with first-, second- and third-stage ESOP transactions for clients, including bank holding companies.
• Advised large regional retailer in an ESOP buyout, a 1042 tax-deferred transaction. This was viewed as a partial alternative to a buyout by an investment banker in order to secure the tax advantages.
• Provided guidance on election of S status to companies partially or wholly owned by ESOPs, including bank holding companies.
• Structured leveraged ESOPs for public companies to gain maximum advantage of the IRC 404(k) dividend deduction and used suspense share appreciation to offset the company's 401(k) match.
• Established a new 100 percent ESOP-owned S corporation that acquired the assets of an operating division of a public company using rollovers from a 401(k) plan.
• Successfully represented employers in connection with IRS and Department of Labor audits of ESOPs, including allegations related to valuation of employer stock.
• Advised clients on establishing and maintaining ESOPs partially funded by elective employee investments.
• Established and maintained ESOPs for public companies.
• Represented large institutional trustees of ESOPs.
• Represented a cooperative grocery wholesaler in selling a retail subsidiary to an ESOP created for the subsidiary and negotiating a long-term supply contract between our client and the sub. The sub became an S corporation, so the ESOP structure enabled it to avoid paying any income taxes.
• Organized a coalition and represented technical service providers, including Nelnet Inc., TD Ameritrade, U.S. Assets, Home Instead, Nannonation, Hudl, and Nebraska Global to achieve passage of a corporate apportionment formula and sourcing rules for sales of intangibles and services.
• Assisted the Texas Assisted Living Association with almost every major policy initiative affecting assisted living providers in Texas including securing tort reform for assisted living providers in Texas, securing private accreditation of assisted living communities in Texas, negotiating the scope of practice of skilled nursing in assisted living communities, and began reforms to informal dispute resolution program for assisted living communities. This work routinely involves interaction with the Texas Legislature and lead officials of Texas’ healthcare agencies.