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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.
In recent years, we have seen an unsettling trend with courts disregarding the terms of parties’ corporate asset purchase agreements and holding purchasers liable for their target’s multiemployer pension contribution and withdrawal liability under the theory of successor liability.
Most companies that consider going public evaluate their executive compensation programs and agreements prior to an initial public offering (IPO).
The Pension Benefit Guaranty Corporation (PBGC) introduced its Early Warning Program (EWP) in the early 1990s, but didn’t publish any guidelines or standards for the EWP until mid-2000, in Technical Update 00-3.
In light of robust merger and acquisition activity, companies should review their compensation and benefits programs to understand the effect that a change-in-control transaction would have.
A recent Seventh Circuit Court of Appeals case highlights a troubling trend of courts finding successor liability for multiemployer pension contributions and withdrawal liability following corporate asset sale transactions.
It is common in a private company sale transaction to have an escrow in place that holds a portion of the sale proceeds to cover the seller’s post-closing indemnification liability.