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Capabilities / Employee Stock Ownership Plans

Employee Stock Ownership Plans

ESOP transitions that work for everyone.

Husch Blackwell helps clients determine whether an employee stock ownership plan (ESOP) is the best transition solution for their circumstances. Our ESOP lawyers have quarterbacked entire ESOP transactions for companies and trustees, from creation, loan repayment, allocations and repurchase liability to the sale of businesses.

Our ESOP law group includes certified public accountants, Fellows of the American Law Institute and the American College of Tax Counsel, and 10 attorneys named to U.S. News' Best Lawyers in America 2022 list. With this depth comes a thorough understanding of all angles of ESOPs, including tax, employee benefit and corporate finance considerations. We also work with lenders and trustees to ensure that ESOP transactions are structured to meet our clients’ needs and objectives within the deal.

Although an ESOP can be a useful business succession planning tool, it is not always the best option. To learn more about succession planning, including the role ESOPs can play, see Husch Blackwell's Business Succession Planning webpage.

Representative Experience

  • Designed and implemented Employee Stock Ownership Plans (ESOPs) for a food manufacturer, a manufacturer of agricultural equipment, grocery retailers, restaurant companies and agribusiness lenders.
  • Successfully defended client in a class action lawsuit that alleged Employee Retirement Income Security Act (ERISA) fiduciaries breached their duties and engaged in prohibited transactions by selling their shares in an ESOP for more than adequate consideration.
  • Assisted in engineering an ESOP for a large architectural firm, while adding a stock appreciation rights plan to provide additional incentives to the employees.
  • Assisted in the $170 million ESOP acquisition of the East St. Louis, Illinois, Casino Queen, a first in the gaming industry.
  • Assisted 100 percent ESOP-owned S corporation with selling its real estate to a REIT. The sale substantially reduced the client’s debt and rent expenses and helped avert potential default on its loans.
  • Acted as project manager and consultant in connection with first-, second- and third-stage ESOP transactions for clients, including bank holding companies.
  • Advised large regional retailer in an ESOP buyout, a 1042 tax-deferred transaction. This was viewed as a partial alternative to a buyout by an investment banker in order to secure the tax advantages.
  • Provided guidance on election of S status to companies partially or wholly owned by ESOPs, including bank holding companies.
  • Structured leveraged ESOPs for public companies to gain maximum advantage of the IRC 404(k) dividend deduction and used suspense share appreciation to offset the company's 401(k) match.
  • Established a new 100 percent ESOP-owned S corporation that acquired the assets of an operating division of a public company using rollovers from a 401(k) plan.
  • Successfully represented employers in connection with IRS and Department of Labor audits of ESOPs, including allegations related to valuation of employer stock.
  • Advised clients on establishing and maintaining ESOPs partially funded by elective employee investments.
  • Established and maintained ESOPs for public companies.
  • Represented large institutional trustees of ESOPs.
  • Represented a cooperative grocery wholesaler in selling a retail subsidiary to an ESOP created for the subsidiary and negotiating a long-term supply contract between our client and the sub. The sub became an S corporation, so the ESOP structure enabled it to avoid paying any income taxes.
  • Organized a coalition and represented technical service providers, including Nelnet Inc., TD Ameritrade, U.S. Assets, Home Instead, Nannonation, Hudl and Nebraska Global to achieve passage of a corporate apportionment formula and sourcing rules for sales of intangibles and services.
  • Assisted the Texas Assisted Living Association with almost every major policy initiative affecting assisted living providers in Texas including securing tort reform for assisted living providers in Texas, securing private accreditation of assisted living communities in Texas, negotiating the scope of practice of skilled nursing in assisted living communities, and began reforms to informal dispute resolution program for assisted living communities. This work routinely involves interaction with the Texas Legislature and lead officials of Texas’ healthcare agencies.
Alerts | November 20, 2019
Planning for 2020: Year-End Deadlines and Considerations for Employee Retirement, Health and Welfare Plans

As the end of the year approaches, employers should be aware of important year-end deadlines and considerations related to their retirement and health and welfare plans. We have compiled a list of these deadlines and provide guidance on how to comply with recent plan changes.

Testimonial Dan Quigley, Chief Operating Officer, USA800

"'I want to thank you for all the assistance and professionalism throughout... Without your work, we would not have been successful in this very important effort. Your work has gone a long way to provide for the retirement and security of our ESOP owners who have worked hard over 20 years to build and grow the company."

Read how invested partnerships make a difference
Client Result

Family-owned automotive group creates ESOP to sustain growth and incentivize employees.

See full case study

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