Taking cues from Colorado, Missouri, Pennsylvania, Iowa, New Jersey, and Virginia, all of which have recently enacted legislation supporting and encouraging the establishment of ESOPs, the states of Texas, Indiana, and Nebraska are now moving forward with their own pro-ESOP initiatives.
The US House of Representatives passed the Main Street Employee Ownership Act (H.R. 5236) on May 8. The bill would be instrumental in facilitating the establishment of employee stock ownership plans (ESOPs) by revamping the rules by which the Small Business Administration (SBA) must abide when assisting small employers interested in transitioning to an employee-owned model.
Following in the footsteps of states that already have passed pro-ESOP legislation—including Pennsylvania, Iowa, New Jersey, Virginia, and Nebraska—the states of Colorado, Texas, and Missouri are now moving forward with pro-ESOP initiatives.
Join us in November for our upcoming programs on a variety of employee benefits and executive compensation topics.
On September 26, the US Court of Appeals for the Fifth Circuit ruled that a stock-drop complaint against BP and fiduciaries of its 401(k) plan failed to state a plausible claim of imprudence based on insider information under the pleading standards established in Fifth Third Bancorp v. Dudenhoeffer.
A New York federal appeals court once again rejected a breach of fiduciary duty claim against the now bankrupt Lehman Brothers brought by its employee stock ownership plan (ESOP) participants.
Aspatore Books just released its 2016 edition of Recent Changes in Employee Benefits and Executive Compensation: Leading Lawyers on Understanding ERISA Changes, Navigating Disclosure Guidelines, and Designing Compliance Strategies (Inside the Minds) . Employee Benefits partner Brian D. Hector authored the chapter “ESOPs for Owners of Privately Held Corporations,” which discusses how an employee stock ownership plan (ESOP) is a useful succession planning tool for the owners of closely held businesses.
In IRS Revenue Procedure 2015-36 (Revenue Procedure), the IRS announced that it will allow prototype and volume submitter employee stock ownership plan (ESOP) documents.