Legal Considerations for Buyers and Sellers of ESOP Companies

SES ESOP Strategies’ Edward C. Renenger authored an article for NCEO’s Responding to Acquisition Offers in ESOP Companies, 2nd Ed. An excerpt is below:

“Like other tax-qualified retirement plans, ESOPs are required to be established with an intention to be permanent. However, companies owned, in whole or in part, by an ESOP (“ESOP companies”), like non-ESOP companies, are bought and sold on a regular basis and engage in the full scope of corporate transactions. The fiduciary obligations of ESOP trustees require that the trustee be open to the possibility of engaging in corporate transactions, including the sale of the company if the appropriate situation presents itself. In many ways, selling an ESOP company is no different than selling a non-ESOP company. There are, however, unique matters that arise in the course of selling an ESOP company that buyers and sellers need to consider when negotiating the transaction. The other articles in this publication explore several of these situations. This article discusses the legal considerations that arise in the sale of an ESOP company.”

View the complete article.

Related Professional:
Edward C. Renenger