Tag Archives: ESOP

ESOP Trends in the Marketplace

Over the years, employee stock ownership plans (ESOP) have evolved in many ways. Currently, ESOP transactions began to resemble traditional M&A transactions including financial structures, warrants and market rate sub-debt. In a recent presentation at the NCEO Employee Ownership Conference, Allison Wilkerson discusses current marketplace trends in structuring ESOP transactions, including the importance of pre-transaction … Continue Reading

View From McDermott: Fifth Circuit Focuses on Process in ESOP Valuations

Though the Supreme Court’s 2014 unanimous ruling in Fifth Third Bank v. Dudenhoeffer announced the Employee Retirement Income Security Act (ERISA) standards for stock valuation in the context of a large public employee stock ownership plan (ESOP), the vast majority of ESOPs are still grappling with valuation issues. ESOPs that hold stock of closely-held corporations—approximately … Continue Reading

Supreme Court Emphasizes Heightened Pleading Standard for Stock Drop Cases

On January 25, 2016, the Supreme Court of the United States issued a per curiam opinion in Amgen Inc. v. Harris, holding that the Amgen, Inc. employees who filed suit after the value of the employer stock in which they had invested dramatically decreased, failed to sufficiently plead a breach of fiduciary duty claim under … Continue Reading

Transaction Structures for Acquisitions by ESOP Companies

ESOPs have long provided an exit strategy for owners of privately held businesses and a platform for management buyouts.  Mergers and acquisition (M&A) advisors increasingly look to leveraged ESOPs to accomplish both conventional stock and asset acquisitions. Once an ESOP company decides to pursue an acquisition opportunity, it will generally structure in one of three … Continue Reading
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