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DOL Claims Board Failed to Monitor Independent ESOP Trustee

A company’s founders (and sole directors) contest DOL allegations that they failed to prudently monitor the independent ESOP trustee’s duty to not overpay for the stock. M&A Stories June 17, 2021 Introduction An exit strategy for an owner of a

Posted in director liability, independent trustee, prudence, sale of business to ESOP Tagged with: ,

DOL sues Target Directors for Breach of Fiduciary Duties in ESOP Transaction

DOL claims that independent ESOP trustee overpaid for the majority owner’s stock and sued the company’s directors for breach of fiduciary duty.  The purchase price was 2.5 times higher than the prior 5 years ESOP valuations. M&A Stories March 29,

Posted in director liability, independent trustee, sale of business to ESOP

ESOP Bank Trustee & Owner Must Pay $6.5 Million Purchase Price Overpayment to ESOP

Introduction One exit strategy for a business owner is to sell your company to an ESOP; especially if there are no serious buyers. However, those transactions are highly regulated by the federal government and must be done right. The deal

Posted in capitalization of cash flow, discounted cash flow or DCF, independent trustee, projections, prudence, sale of business to ESOP, valuation Tagged with: , ,

Court may unwind owner sale of company to ESOP because price too high

Company is a Hawaii architectural firm. On April 27, 2018, the U.S. Department of Labor filed a lawsuit in a Hawaii federal district court alleging that ESOP Trustee and Owners caused the Company’s ESOP to purchase the Company’s shares from

Posted in sale of business to ESOP Tagged with: , , ,

Utah case is a lesson for selling your stock to an ESOP

This is the story of Dale and Julie, husband and wife, who owned a Utah company that was started in 1952 and sold and implemented computer products. As an exit strategy Dale and Julie established a company ESOP. From 2007

Posted in sale of business to ESOP

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