Corey Rosen
A new bill introduced by Rep. Ocasio-Cortez and an amendment to the Defense Authoriziation Act would both encourage employee ownership. The two proposals come shortly after Sen. Ron Johnson (R-WI) advocated linking business support during the COVID crisis to employee ownership.
Corey Rosen
Only a handful of people in Congress have actually worked for an ESOP company, but Sen. Ron Johnson (R-WI) is one of them. In an interview with Urban Milwaukee on July 3, Johnson suggested linking government assistance to employee ownership. “PPP on average probably provided a grant of around $11,000 per employee. So if we’re going to provide these grants, you know, restore capital, what I will say in exchange for the grant, a business that wants to reopen would then establish a new ownership structure, something like an employee stock ownership plan. I actually worked at one … and it’s a great form of ownership. Every employee participates. They participate in the earnings of the company, generally set up as a retirement type of plan. It’s a really good ownership structure for a capitalist society. I think it would also help alleviate the inequality gap as well.”
Corey Rosen
Update on July 16, 2020: Pursuant to a motion by the plaintiff-appellant, the Fourth Circuit has today dismissed the plaintiff's appeal of the district court's judgment.
Corey Rosen
On May 13, 2020, the SBA, in consultation with the Department of the Treasury, updated its Frequently Asked Questions to include a new Question 46 that provides additional guidance about the certification needed to prove that the funds were necessary in order to maintain payroll and thus eligible for forgiveness.
Corey Rosen
The Paycheck Protection Program (PPP) has generated considerable controversy concerning its implementation, fairness, and rules. The Small Business Administration (SBA) is maintaining a FAQ document on the PPP program (PDF) that will be regularly updated. The SBA states, "Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the . . . PPP Interim Final Rules . . . The U.S. government will not challenge lender PPP actions that conform to this guidance, and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time."
Corey Rosen
Congress voted to add $310 billion in funding to the Payroll Protection Program (PPP). Banks have said the funds are likely to run out quickly. The bill adds one important change to the bill by adding a set aside for “(I) insured depository institutions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000;” and “(II) credit unions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000.” The bill provides that not less than $30 billion in loans will be made by these community financial institutions. The Senate passed the bill on April 21, and the House on April 23. It now goes to President Trump, who is expected to sign it.
Corey Rosen
Jack Stack, the CEO of SRC Holdings, a 100% ESOP-owned company and creator of the Great Game of Business, is holding a free Q&A on responding to the coronavirus. It will be held Friday, March 20, at 11:00 CT. Stack will be looking at issues such as:
Corey Rosen
Thirty-nine years ago, we held our first annual conference. We had 175 attendees, including my uncle Bernie. Last year we sold out at over 1,900; this year, we were on track to sell out even sooner at over 2,000. The conference is one of the most important ways we help make employee ownership grow and thrive. It is also over one-third of our annual revenue and provides most of the profit we use to support all the other work we do, such as research and outreach, that is essential to employee ownership but does not generate revenue. We devote approximately the equivalent of three full-time staff people per year to the event. I know many of you really look forward to the conference every year, just as I do. One of my favorite spring rituals is checking in each day on how many new registrations we are getting and looking forward to reconnecting with all the inspiring people I have gotten to know over the years, as well as meeting so many new ones. I come back reenergized for another year, and it is part of why I count my ongoing role as a pretty much full-time volunteer for the NCEO as an extraordinary blessing.
Corey Rosen
A new process agreement between the Department of Labor and Farmers National Bank (FNB) was made public on February 28. It lays out a much more detailed process for evaluating whether an ESOP actually has and can pay for control. It also prevents FNB from accepting indemnification and sets new hurdles for the advancement of fees in legal cases. The agreement was included in a settlement in the case of Scalia v. The Farmers National Bank of Danville and Weddle Bros. Construction Company, No. 1:20-cv-674 (S.D. Ind. Feb 28, 2020). Process agreements apply only to the parties involved, but they may indicate how the DOL would proceed in other actions. While much of the agreement reiterates prior agreements, this new one lays out some potentially troubling issues.
