At least four lawsuits have recently been filed against employee stock ownership plan (ESOP) fiduciaries alleging a failure to prudently invest cash held in the ESOP trust. While scrutiny of investments in company stock has...more
3/27/2025
/ Corporate Governance ,
Employee Benefits ,
Employee Stock Purchase Plans ,
Employer Liability Issues ,
Employment Litigation ,
ESOP ,
Fiduciary Duty ,
Investment Adviser ,
Investment Management ,
Litigation Strategies ,
Retirement Plan ,
Risk Management
A distribution policy is a helpful tool for ESOP companies to comply with distribution requirements while retaining maximum flexibility. In a prior article, we reviewed the rules governing ESOP distributions. In this article,...more
Following up on our prior blog posts (here and here) regarding employee stock ownership plans (ESOPs) generally for constructions companies, as well specific issues for consideration, this blog post evaluates the pros and...more
Following up on our first blog post about employee stock ownership plans (ESOPs) for construction companies, this post addresses surety bond requirements as well as the way in which ESOPs can incentivize employees and...more
In recent years, a growing number of construction companies have established employee stock ownership plans (ESOPs). The interest in an ESOP is often generated by the need for an exit strategy for one or more of the owners of...more
The budding cannabis industry, despite its rapid growth and gradual acceptance in recent years, still faces a major sustainability challenge: Cannabis businesses cannot deduct most ordinary business expenses. Under Internal...more
1/9/2024
/ Business Expenses ,
Business Operations ,
Business Ownership ,
Cannabis Products ,
Cannabis-Related Businesses (CRBs) ,
Employee Benefits ,
Employer Liability Issues ,
ESOP ,
Internal Revenue Code (IRC) ,
Marijuana ,
Marijuana Related Businesses ,
Tax Credits ,
Tax Deductions ,
Tax Liability ,
Taxation
On November 8, 2022, the Department of Defense (DOD) issued a memorandum that provides details on a pilot program that allows government contractors owned 100% by an S-corporation employee stock ownership plan (ESOP) to...more
A federal trial court has dismissed a lawsuit brought by a participant in an employee stock ownership plan (ESOP) claiming that fiduciaries of the ESOP caused it to overpay for stock of the company in a leveraged transaction....more
One of the most difficult challenges for owners of family-owned businesses is finding a way to turn their equity in the business into cash. Also, after putting years of hard work into a business, owners often have a desire...more
The Department of Labor (DOL) recently settled a case involving an employee stock ownership plan (ESOP) that provides guidance but also a warning for trustees and employers contemplating ESOP transactions that later go awry....more
In Fifth Third Bancorp v. Dudenhoeffer, the U.S. Supreme Court unanimously held that there is no presumption of prudence for fiduciaries of an employee stock ownership plan (ESOP) who invest in employer securities. The case...more