Employee Stock Ownership Plans (ESOPs)

Areas of Focus

When used appropriately, ESOPs can provide significant business succession planning and tax benefits.

Holland & Hart helps to optimize ESOPs in alignment with clients’ business goals. We counsel ESOP-owned corporations as well as ESOP fiduciaries, and we work in tandem with the company's and the ESOP's legal and other advisors in a coordinated and cohesive manner.

Our team provides advice regarding existing ESOPs or, under the right circumstances, can create an ESOP and structure a transaction that transfers ownership from existing stakeholders to the plan. When a client is considering partial or total ownership through an ESOP, we can help determine whether it’s the right solution for their business. If it is, we provide counsel on how to best structure the transaction.

Guiding clients at every stage of a transaction, our team includes legal practitioners with specialized experience in mergers and acquisitions, employee benefits, tax, corporate law, banking, and financing matters. These transactions include leveraged buyouts, redemptions, corporate stock repurchases, and private equity transactions. Post-transaction, we advise the ESOP-owned corporation or ESOP fiduciaries on their ongoing operational issues, compliance, and fiduciary responsibilities.

Employee Stock Ownership Plans (ESOPs) Client Results

Company Counsel

Counsel for a 12,000-person grocery retailer S corporation in connection with the implementation of an ESOP, the restructuring of the company, and ongoing counsel, including complex executive compensation arrangements
Counsel for a 15,000-person aerospace company maintaining mature KSOP (401(k) plan with ESOP feature for employer stock fund), where the primary advantage of ESOP feature is to allow C corporation employer to deduct dividends paid on employer stock
Counsel for a 1,300-person, partial ESOP-owned financial services company with respect to corporate governance issues
Counsel for a 500-person electrical engineering company in connection with the implementation of a leveraged minority ESOP and related Section 1042 rollover transaction
Counsel to a 250-person construction company in connection with the implementation of an ESOP, Section 1042 rollover transaction, and delayed S corporation election
Counsel for a 190-person S corporation 100% ESOP owned grocery retailer, including advice relating to corporate governance and correction issues
Counsel for a 186-person architecture and design firm in connection with the implementation of partial C corporation ESOP, and ongoing advice to the company including possible S election
Counsel for a 170-person technology company, partially-owned by an ESOP, including advice regarding a potential sale transaction
Counsel for a 70-person lumber company regarding recycling/refreshing ESOP stock and general ESOP guidance
Counsel to a 35-person S corporation in the construction business relating to its ongoing ESOP issues
Counsel for a 26-person engineering company in connection with the redemption of individual shareholders to create a 100% ESOP-owned S corporation
Counsel for a 21-person oil and gas S corporation in connection with the consideration of an ESOP and implementation of a minority stock bonus plan
Counsel for a 21-person S corporation in the environmental testing business in connection with the implementation of a partial ESOP
Counsel for a 19-person S corporation in the engineering industry in connection with the implementation of a partial ESOP
Counsel for a 12-person funeral home in connection with the implementation of a second stage 100% C corporation ESOP transaction and stock sale which terminated the ESOP
Counsel for a manufacturing company in connection with the termination of an ESOP

Trustee Counsel

Trustee counsel in connection with the implementation of an ESOP by a 400-person manufacturing company
Trustee counsel in connection with the implementation of an ESOP by a 150-person agricultural equipment company
Trustee counsel in connection with the implementation of a leveraged ESOP by a 108-person advertising agency
Trustee counsel in connection with the implementation of an ESOP by a 49-person S corporation in the engineering business
Trustee counsel in connection with a bankrupt retail technology and appliance company in Department of Labor investigation and fiduciary litigation

Other Roles

Buyer counsel for a communications company in an asset purchase transaction from a 450-person S corporation that was 100% owned by an ESOP
Buyer counsel for a gun manufacturer in connection with an asset purchase from a 150-person company that was wholly-owned by an ESOP
Shareholder counsel in connection with a 108-person construction company’s implementation of an ESOP
Lender counsel in connection with the implementation of an ESOP