Employee Stock Ownership Plans

Request Proposal
Want to get our alerts?

Click “Subscribe Now” to get attorney insights on the latest developments in a range of services and industries.

An Employee Stock Ownership Plan (ESOP) is an important business, tax, financial, and succession planning tool. It is also a means by which employees can acquire ownership interest through the acquisition of company stock by a retirement plan. Due to their complexity, assuring the successful creation, implementation, operation, and use of ESOPs requires a combination of legal, finance, and tax knowledge along with business acumen.


With decades of experience navigating the rules that apply to ESOPs, we offer the full range of ESOP and ESOP-related services, including the structuring of corporate transactions involving ESOPs, preparation of IRS filings for ESOP tax qualification and plan termination; resolving fiduciary issues, and advising on the various tax opportunities and incentives associated with ESOP transactions.


Our Clients


We serve as counsel to a broad range of clients in ESOP transactional, litigation, and regulatory compliance matters. Representing such diverse interests enables us to view transactions from all sides and enhances our ability to devise creative solutions when disputes arise. Our clients include:


  • Private & public companies       

  • Fiduciaries

  • Corporate boards & officers

  • Business owners

  • Institutional ESOP trustees  

  • Management groups

  •  Shareholders
  • Private equity groups

  •  Lenders


Our Team


Working collaboratively with attorneys from our Employee Benefits & Executive Compensation, Banking and Financing, Corporate, Securities, Mergers and Acquisitions, and Taxation groups, we assure comprehensive and efficient service. Members of our ESOP team advise and present on a wide variety of ESOP topics ranging from best practices in corporate governance with ESOP-owned companies to ESOP benefits for employees. Additionally, our lawyers participate in professional organizations that keep them current on legal and regulatory developments, and the latest ESOP trends and strategies, including The American Bar Association, Section of Taxation, the ESOP Association, and various state and regional ESOP Associations. 


Our Services


  • Designing and structuring ESOPs and ESOP transactions, including corporate reorganizations

  • Representation of founding shareholders, company ESOP sponsors, and lenders in acquisition transactions between the company, selling shareholders and ESOP

  • Financing and loan documentation

  • Day-to-day operational, administration, and corporate governance issues

  • Corporate transactions and ongoing ESOP administration and operations

  • ERISA and Internal Revenue Code regulation matters including prohibited transactions and fiduciary responsibilities

  • IRS tax qualification and compliance issues

  • Stock appreciation rights planning for key executives

  • Warrants for selling shareholders and private equity investors

  • ESOP restructurings and leveraging  to accommodate our clients’ changing needs and goals

  • Purchases and sales of ESOP-owned companies

  • Representation of lending institutions in connection with loans to ESOP-owned companies

  • Merger, acquisition, termination, and downsizing of established ESOPs

  • Recapitalizations and redemptions

  • Succession and exit planning

Representative Matters


–Represented commercial, residential electric, and HVAC contractor company and majority owner in the sale of 100% of stock to ESOP, including pre-transaction restructuring and Section 1042 rollover as well as post-transaction matters including on-going ESOP compliance, roll-out to employee-participants, refinancing of Company loan and shareholder note and amendment to Management Incentive Plan (Stock Appreciation Rights).


–Represented company in the energy sector in the partial sale of stock to ESOP.


–Represented ESOP-owned company in its sale to a foreign-owned company.


–Represented lender to ESOP plan sponsor in connection with equity-structured ESOP transaction with private equity investors.


–Represented lender in connection with ESOP-owned borrower default due to ESOP compliance failure.


–Represented manufacturer of custom and industrial hardware including presentation to  Board of Directors regarding ESOP fiduciary duties,  preparation of ESOP governance documents,  and preparation of ESOP amendments, credit and loan agreements  in connection with the extension of the term of ESOP loan. 


–Represented chemical manufacturer in structuring Stock Appreciation Rights Plan for executives, CEO, and independent members of Board of Directors as well as counsel in connection with the re-leveraging of company stock in ESOP to fund diversification and other distributions.


–Represented company regarding fiduciary duties in connection with mergers and acquisitions.

–Represented ESOP-owned bank in its merger with a publicly-traded bank and coordinated ESOP termination and  distribution of plan assets.


Have a question or want to connect?