Employee Stock Ownership Plans (ESOPs)
ESOPs provide a means for company owners to diversify the equity ownership of a company, to exit their own ownership position, and to reward employees, by allowing company owners to sell their stock to an employee stock ownership plan in a tax-advantaged way.
Robinson Brog's ESOP group is highly experienced in the complexities of ESOPs, both leveraged and non-leveraged, and is able to apply the intricate ESOP rules to our clients' maximum benefit. We use our extensive knowledge of ESOPs to provide effective solutions to business owners interested in selling all or part of their businesses, and who are dealing with issues of business succession.
Members of Robinson Brog's ESOP group are experienced in ERISA, corporate finance, lending, tax, and trusts & estates, all of which must be considered in ESOP transactions.
Serving as Special ESOP Counsel
For clients who wish to establish an ESOP, we:
- Guide the client on the structure of the transaction with a major goal to maximize tax benefits
- Assemble and oversee the client's ESOP team
- Advise on plan feasibility and design
- Prepare the plan, trust agreement, and all ESOP transaction documents
- Review and negotiate bank and related financing documents
- Draft legal opinions for the ESOP trustee, the company, and other parties to the transaction
- Prepare and file ruling and determination letter requests with the IRS and the Department of Labor
Serving as Trustee's Counsel
Robinson Brog frequently represents ESOP trustees and provides advice as to their fiduciary responsibilities. As such we:
- Perform due-diligence reviews of the corporation whose stock the trustees are negotiating to acquire
- Review and negotiate stock acquisition agreements
- Review valuation reports and "adequate consideration" and fairness opinions prepared by financial advisors to the trustees
- Review the plan and other documents to assure that they are prepared and implemented as legally require
- Review the corporate governance of ESOP companies
- Advise on legal compliance
Serving as ESOP Litigation Counsel
Robinson Brog frequently advises owners of ESOP-owned companies and ESOP Trustees that are served with subpoenas in connection with Department of Labor investigations or named as defendants in enforcement proceedings or in litigation commenced by plan participants alleging breach of fiduciary duty and/or involving prohibited transactions.
- Trustee Representation
- ESOP Transaction Structuring
- Plan Feasibility and Design
- Negotiation of Bank and Financing Documents
- Corporate Governance for ESOP Companies
- ESOP Legal Compliance
- ESOP/ERISA Litigation