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Employee Stock Ownership Plans “ESOPs”
OVERVIEW
REPRESENTATIVE CASES

One of the many benefits of Maynard Cooper’s full-service platform is our Employee Stock Ownership Plan (“ESOP”) practice. Our multi-disciplinary team regularly represents ESOP companies, shareholders, trustees, and lenders, and we provide ongoing ESOP legal counseling needs. We have counseled both public and private corporations, trust companies, and financial institutions on the use of ESOPs in many transactions over the years, including mergers, acquisitions, leveraged buyouts, stock repurchases, and ownership-succession transactions.

With years of experience working with public and privately-held companies of all sizes from a wide range of industries, we have a deep understanding of the complexities and advantages of having a successful ESOP for accomplishing key business and tax goals. Whether our clients are using an ESOP as a part of their employee benefits offering, as a financial and business succession planning tool, or in a strategic corporation transaction, we help them navigate all aspects of the intricacies involved to deliver effective results. We then partner with our clients as needed to provide ongoing support on day-to-day ESOP operational issues.

From the company perspective, developing and implementing an ESOP can be time-consuming and daunting. Maynard Cooper’s team is highly skilled in all aspects of the process, from due diligence, feasibility, to design and drafting, enforcement, and regulatory compliance. We also have expertise unwinding and helping to turn around unsuccessful ESOPs.

Members of our Employee Benefits, Mergers & Acquisitions, Tax, Securities Regulation, and Commercial Finance teams frequently work seamlessly to make sure all ESOP-related avenues are thoroughly addressed. Maynard Cooper has long-standing relationships with valuation experts, CPAs, and lending institutions to help facilitate transactions. And when needed, we can provide defense litigation in lawsuits or regulatory enforcement actions.

Fiduciary and Trustee Experience

Maynard Cooper’s team regularly counsels fiduciaries in ESOP compliance matters, as well as on strategies aimed at reducing exposure to liability. We counsel clients on ESOP fiduciary governance structures, including formation and operation of plan fiduciary committees, and the need for an independent fiduciary. We advise on best practices to help fiduciaries comply with ERISA and effectively manage risk. We also have extensive experience representing both individual and institutional ESOP trustees in connection with their fiduciary role in an ESOP’s sale or purchase of company stock and with ongoing decisions. In a time when there is more focused attention by the regulatory agencies that oversee ESOPs, it’s important for ESOP trustees to have access to experienced ESOP legal counsel.

Lender Experience

Members of Maynard Cooper’s Commercial Finance practice assist companies, banks, financial institutions and selling shareholders in ESOP transactions to ensure that loans are properly documented and secured – and that the ESOP complies with Internal Revenue Code and ERISA requirements. The lending team regularly provides counsel regarding the structuring of loan instruments, guidance on legal requirements, and the drafting of loan documents and security agreements, as well as implementation from start to successful closing.

Representative ESOP Experience

  • Served as company counsel in various roles, including financing and governance, in two ESOP transactions (including the transaction taking the company to 100% ESOP-owned) for an American applied science and information technology company providing engineering, scientific, and IT solutions to the United States Department of Defense, the United States Intelligence Community, and National Aeronautics and Space Administration
  • Served as company counsel to a provider of systems engineering, technology and prototype development, production, and fielding for the Department of Defense, armed services, and other governmental organizations in an ESOP transaction taking the company from 50% ESOP-owned to 100% ESOP-owned
  • Serve as legal counsel, including ESOP counsel, to a company specialized in engineering, logistics, and technical support for military grade products, Unmanned Aircraft Systems, and energy solutions
  • Served as company counsel to a professional services and technology solutions provider for the defense and intelligence communities in a transaction establishing an ESOP for the company
  • Represented the selling shareholders of a front-end engineering design, inspection, GIS, GeoCurrent, and technology provider in the company’s initial ESOP partial cash out
  • Served as lending counsel in an ESOP transaction involving one of the top 100 defense companies with employees located in 11 states and Kwajalein and Egypt
  • Represented a partially ESOP-owned developer of high-quality modeling and simulation products and serious games in a transaction involving a private equity fund
  • Serve as legal counsel, including ESOP counsel, to a partially-owned ESOP company specializing in engineering simulations and designs for Aerospace, Biomedical, Defense, Materials, and Energy industries
  • Represented an IT resource management company serving customers in the Banking, Automotive, Higher Education, Airline, Insurance, Medical, and Telecom industries in its 20% ESOP transaction
  • Represent an ESOP-owned provider of advanced weapons systems engineering, inventory management solutions, training, and operational support to the Department of Defense (DoD) and other federal agencies, serving the company in various legal roles
  • Served as ESOP counsel to a leader in missile defense, joint interoperability, program management, quality assurance engineering, cost analysis, outsourcing, and business process reengineering in the sale of the company
  • Represented a former ESOP-owned state-chartered community bank headquartered in Fresno, CA
  • Serve as legal counsel, including ESOP counsel, to a company providing infrastructure planning, engineering, and construction services to both public and private clients
  • Serve as ESOP counsel to a heavy industrial contractor offering engineering, design-build, and construction management support in national and international markets
  • Served as lending counsel in an ESOP transaction for a premier services provider to government and industry customers including engineering, simulation, technology, software, logistics, and training
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