ESOP Appraisers Will Not be Named as Fiduciaries…At Least for the Time Being

It was reported in January 2015 that the Department of Labor (DOL) will abandon the “appraiser-as-fiduciary” rule from its planned re-proposal of a broad set of rules affecting fiduciaries and prohibited transactions. This story goes back to 2010 when the DOL issued a proposed regulation that would impose a fiduciary obligation on business appraisers in …

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The DOL Comes Down Hard on ESOP Trustee

On June 2, 2014 the U.S. Department of Labor (DOL) reached a $5.25 million settlement with GreatBanc Trust Company (GreatBanc). It was alleged that GreatBanc, as trustee to the Sierra Aluminum Company Employee Stock Ownership Plan (ESOP), allowed the plan to purchase stock from Sierra Aluminum’s co-founders and top executives for more than fair market …

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DOL Renews Focus on ESOPs

In October 2010 the Department of Labor (DOL) proposed a regulation that would classify business appraisers who perform appraisals for Employee Stock Ownership Plans (ESOPs) as ‘fiduciaries’ under ERISA. In September 2011, the DOL withdrew its proposed regulation. The DOL has indicated it intends to re-propose the rule after this year’s mid-term elections. The issue …

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Succession Planning With an ESOP

There are many ways for a business owner to successfully plan for his/her exit.  A survey conducted by the Business Enterprise Institute, Inc. shows the break down by successor type as follows:                 The largest allocation of 41% is to key employee(s), a co-owner, or an employee stock …

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ESOP and the DOL

Our blog posted on September 28, 2011 addressed the latest development on the Department of Labor (DOL) reconsidering its proposed fiduciary regulations for business appraisers in Employee Stock Ownership Plan (ESOP) valuations.  This blog provides the background of the original DOL proposal to change the status of appraisers from advisers to fiduciaries announced in October …

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Thinking About A Leveraged ESOP Transaction? Part II

With proper planning and execution, a leveraged ESOP can provide benefits to all parties of the transaction, including the company, the owners, the employees and lenders. The Company The most significant benefit for the company is the tax deduction for the contributions to the ESOP, which are essentially returned to the company and available to …

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