The current coronavirus pandemic has certainly presented new challenges for companies across all industries, and a company who sponsors an employee stock ownership plan (ESOP) is certainly no different. However, an ESOP company is presented with a variety of additional challenges unique to maintaining an ESOP which could threaten the ESOP company’s very existence. Many of these challenges will also require an ESOP company to delicately balance its ERISA fiduciary duties it owes to the ESOP participants while doing all it can to continue as a going concern.
This article will shed light on some of the unique issues with which an ESOP company is faced during a time of global crisis, such as the current coronavirus pandemic, and, hopefully, will serve as somewhat of a learning tool for an ESOP company to use in order to guide its way through these difficult times and also be forewarned should a “black swan” global crisis like the coronavirus pandemic ever recur.
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