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what we do / ESOP

an intricate structure can be a powerful business solution
overview

Employee stock ownership plans – ESOPs – can be complicated, often involving multiple areas of law. Our ESOP Group uses an efficient team approach, working closely across disciplines to ensure a seamless delivery of services to our clients. Our practice includes significant depth in every aspect of a full-service ESOP practice – ERISA, tax, corporate finance, lending, securities regulation, corporate and fiduciary governance, estate planning, and mergers and acquisitions – making our practice the one-stop shop our ESOP clients need.

Because we understand the complexities of ESOPs, we can help business owners determine whether an ESOP is the right fit. We can help establish a simple ESOP – where stock will be redeemed from owners and allocated to employees over an extended period of time, or a more typical ESOP, formed as part of a significant financial transaction – where all or a substantial portion of an owner’s interest is acquired by the ESOP. We address the complexities associated with this type of transaction from every angle – for owners and their companies, for ESOP trustees in buying or selling stock or assets, and for ESOP lenders. Our involvement extends over the life of an ESOP, handling the administrative questions and other issues that arise in the early stages of an ESOP, as well as later-stage issues, including repurchase liability and plan termination.

Finally, we know that an ESOP company needs more than legal counsel. It needs a key team of ESOP professionals, such as accountants, financial and tax advisors, lenders, investment bankers, administrators, valuation firms, and professional trustees or other independent fiduciaries. At Tucker Ellis, our relationships with these service providers are integral to helping our ESOP clients assemble the most effective team for their unique needs.

Read the latest insights about ESOP on our ERISA Blog.

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areas of emphasis

  • ESOP formation
  • Structuring complex leveraged purchase
  • Acquisitions
  • Compliance
  • Fiduciary education
  • Estate planning for owners
  • Unwinding strategies
  • Sales to third parties
  • Business succession planning
  • IRS audits
  • DOL investigations
  • Repurchase liability strategies
  • Plan termination
  • Employee Benefits & Executive Compensation
  • ERISA litigation, including "stock drop" cases

speaking engagements

  • "Legal and Regulatory Update" and "ESOP Litigation Trends," 4th Annual Great Lakes Regional ESOP Conference, Sandusky, Ohio (October 2018)
  • "Leveraging a Legacy: Introduction to ESOPs," Boy Scouts of America, Lake Erie Council, Cleveland, Ohio (September 2018)
  • "ESOP Legal Update – Hot Topics," Ohio/Kentucky Chapter of The ESOP Association’s 2nd Annual Thoroughbred ESOP Conference, Lexington, Kentucky (August 2018)
  • "ESOP Administrative, Reporting, and Disclosure Responsibilities," 32nd Annual Ohio Employee Ownership Conference, Akron, Ohio (April 2018) – Ann Caresani
  • "Administrative, Reporting, and Disclosure Responsibilities," NCEO Employee Ownership Conference, Atlanta, Georgia (April 2018) – Ann Caresani
  • "Analyzing the Valuation Issues in Recent ESOP Lawsuits," NCEO Employee Ownership Conference, Atlanta, Georgia (April 2018) – Scott Stitt
  • "Hot New Legal & Regulatory Issues for ESOPs," Ohio/Kentucky Chapter of the ESOP Association’s Annual Spring Conference, Powell, Ohio (March 2018) – Ann Caresani
  • "On Representing ESOPs," The ESOP Podcast, Episode 13, Capital Trustees LLC (November 2017) – Scott Stitt
  • "ESOP Legal & Regulatory Update," Ohio Employee Ownership Center’s 31st Annual Conference, Fairlawn, Ohio (April 2017) – Scott Stitt
  • "Hot New Legal & Regulatory Issues for ESOPs," The ESOP Association’s Ohio/Kentucky Chapter’s Spring Conference, Columbus, Ohio (March 2017) – Scott Stitt
  • "ESOPs as an Estate Planning Tool: An Introduction to Employee Stock Ownership Plans," 43rd Annual Estate Planning Institute, Cleveland Metropolitan Bar Association, Cleveland, Ohio (October 2016) – Ann Caresani
  • "Understanding Where and How Your ESOP Benefit Fits in Your Retirement Plan," 30th Annual Ohio Employee Ownership Conference, Fairlawn, Ohio (April 2016) – Ann Caresani
  • "ESOP Litigation: New and Emerging Claims and Guidelines for ESOP Valuations," American Conference Institute’s 10th National Forum on ERISA Litigation, New York, New York (October 2015) – Scott Stitt
  • "ESOP Is a 4-Letter Word," Great Lakes Regional ESOP Conference, Sandusky, Ohio (October 2015) – Scott Stitt
  • "Don’t Do That: Avoiding ESOP Problems," The National Center for Employee Ownership (NCEO) 2015 Conference, Denver, Colorado (April 2015) – Scott Stitt
  • "Legal Update," Ohio/Kentucky Chapter Annual Spring ESOP Conference, Powell, Ohio (March 2015) – Scott Stitt
  • "ESOPs: New and Emerging Trends in Private Company ESOP Litigation, Lessons Learned from Recent Decisions in ESOP Cases, and the Latest on DOL Investigations and Enforcement Policies," ACI ERISA Litigation Conference, New York, New York (October 2014) – Scott Stitt
  • "Managing ESOP Repurchase Obligations Before They Become Unmanageable," 28th Annual Ohio Employee Ownership Conference, Fairlawn, Ohio (April 2014) – Ann Caresani
  • "ESOP Litigation: New and Emerging Claims and Recent Developments," ACI ERISA Litigation Conference, Chicago, Illinois (April 2014) – Scott Stitt
  • "Helpful Hints for Fiduciaries: Avoiding and Surviving Litigation," The National Center for Employee Ownership, Annual Conference, Atlanta, Georgia (April 2014) – Scott Stitt
  • "An ESOP Fable: Lessons from the Tribune Transaction," The ESOP Association, Ohio/Kentucky Chapter, Fall Conference (October 2013) – Scott Stitt

Key Contacts

Ann M. Caresani
Partner
Scott J. Stitt
Partner
experience

experience

  • Counseled trustees of an ESOP in connection with real estate law and fiduciary issues in restructuring the company and related entities and increasing the ESOP ownership percentage to 100%
  • Advised a consumer products manufacturer in the sale of a 30% ESOP-owned company and termination of the ESOP in connection with the sale of the business to a foreign buyer
  • Represented the independent fiduciary of an ESOP which was partial owner of a company in connection with the sale of company assets and termination of the ESOP
  • Advised a tech business in establishing 100% ESOP ownership by company contribution of shares to ESOP followed by redemption of other shareholders
  • Counseled a high-growth business in establishing 30% ESOP structure taking advantage of IRC Section 1042 tax deferral and investment of proceeds in qualifying replacement securities
  • Counseled an ESOP-owned military equipment supplier in ESOP termination due to adverse business conditions and excessive leveraging
  • Structured and implemented a 100% ESOP transaction involving bank financing and subordinated seller financing
  • Developed and implemented a strategy to unwind an ESOP where ownership strategy of the company’s individual owners changed after establishment
  • Defended an ESOP-owned healthcare company in connection with an extensive Department of Labor investigation
  • Advised a 100% ESOP-owned, unionized S-corporation regarding various fiduciary responsibilities, administration, and compliance issues incurred over the years, ranging from diversification rights to changing distribution policy
  • Represented a specially appointed ESOP trustee regarding sale of the business to a third party
  • Advised an ESOP trustee regarding the reorganization of the business and its management in the face of competitive and litigation threats
  • Represented ESOP trustees and companies in ERISA litigation and DOL and IRS investigations regarding all aspects of an ESOP’s life cycle – the acquisition of stock, the sale of assets, and allegations of breach of fiduciary duty among other claims
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