Case Study : Employee Stock Ownership Plan
Owner of a well established manufacturing company wanted to sell his company and eventually retire.
- Sale of company to an outside buyer would have resulted in large tax liability due to low tax basis of assets and C-Corp status. The result would have been an unsatisfactory financial outcome after years of building a successful company.
- Evaluated Employee Stock Ownership Plan (ESOP) structure for benefits as well as risks. The financial benefits to the owner were substantial with the sale of the company to the ESOP.
- Coordinated all aspects of structuring the transaction with legal, accounting, investment and independent valuation professionals. This allowed the Owner/President to continue to focus on the strategic and operational aspects of the business.
- Obtained bank financing for the ESOP buyout during a very difficult credit environment ("2008 Credit Crunch").
- Negotiated purchase and financing documents.
