Join James F. Joyner and attorney Richard Pearl for unique insight into ESOPs and valuation principles. The general trend in ESOP transactions and valuation has been to acquiesce to fundamental changes because of the threat of litigation, even though ERISA or valuation principles do not require changes. Many defendants have been unable to adequately educate courts on some key issues. Get both the valuation and attorney perspective on how to address these issues.
Program Agenda
What are differences among various standards of value?
How is the FMV standard relevant to ESOPs? [e.g., FMV is the standard for ESOP transactions, and accounting, distribution, reporting purposes, and damages estimates]
The basic logic of an ESOP lawsuit
ERISA context for ESOPs (legislative history and Congressional publications pertaining to the ESOP structure, goals of an ESOP, and the FMV standard)
Does FMV matter if the fiduciary “good faith” requirement has been violated?
What is fair? What is a market? What is value?
Are rulings in ESOP trials based on FMV? When Treasury Dept sues? When DOL sues?
Are courts correctly understanding FMV as the standard of value for employer stock in ESOP transactions?
Are courts correctly understanding FMV as the standard of value for seller notes in ESOP transactions? For damages?
Control for ESOPs: DOL vs IRS (Vinoskey and the 6th fiduciary process agreements (Farmer’s National)
Control for ESOPs: DOL vs Delaware appraisal litigation
What is the case for applying large marketability discounts to ESOP (non-controlling) transactions?
Learning Objectives
Describe the differences among various standards of value used ins ESOP litigation
How is the FMV standard relevant to ESOPs? [e.g., FMV is the standard for ESOP transactions, and accounting, distribution, reporting purposes, and damages estimates]
Restate the basic logic of an ESOP lawsuit.
List recent cases involving control for ESOP litigation
Explain the case for applying large marketability discounts to ESOP (non-controlling) transactions?
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