An ESOP company needs to understand what it should do if an offer to purchase is made. Watch our video to learn more about having the proper procedures in place.
Transcript
This is a very dynamic and evolving area of the law involving ESOPs. Suffice to say that a board of directors of a corporation should have procedures in place by which they will evaluate whether or not an overture to purchase a company or to merge with another company is analyzed as being a serious credible offer that the board needs to present to the shareholders for approval. On the other hand, a trustee might also be the recipient of an overture because the trustee holds stock in the corporation.
There are no black and white answers to this question, unfortunately, but the key is to have procedures in place and be able to deal with the type of offer that comes in with the right parties responding and the proper parties analyzing to determine what’s best for all the shareholders of the corporation and what’s the most prudent investment for the ESOP.
