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Selling a Franchise Company to an ESOP
Business owners exploring exit planning options may have been introduced to the idea of selling some or all of their stock to an Employee Stock Ownership Plan (“ESOP”). ESOP proponents tout the tax advantages to sellers and the company, as well as the benefits to employees, that can be achieved with an ESOP. Certain industries tend to attract more ESOPs than others, and owners of franchise businesses, both franchisors and franchisees, may wonder whether an ESOP is a realistic fit for their company. This article focuses on franchisee ESOPs, particularly multi-unit operators.
First, a general introduction to ESOPs is in order. An ESOP is an employee retirement plan, similar to a 401(k) plan. Generally speaking, the ESOP purchases stock from the company owner(s) at fair market value with funds contributed to employee retirement accounts, similar to 401(k) matching or profit-sharing contributions. The business owner(s) can sell stock over time, or in large chunks funded by bank debt loaned by the company to the ESOP.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
'Insurable Interest' and the Scope of First-Party Coverage
This article reviews the fundamental underpinnings of the concept of insurable interest, and certain recent cases that have grappled with the scope of insurable interest and have articulated a more meaningful application of the concept to claims under first-party property policies.