Lindsay Isaac
In case you missed it, The Download is a monthly resource designed for members to use to increase education and engagement at their companies. This month’s resource is something that many companies have already adopted (and something that we have heard is a need for many others): ownership rights and responsibilities.
NCEO
The Department of Labor (DOL) has posted the latest Form 5500 filing data, which covers plan year 2021 (the most recent available year). The data includes 6,533 ESOPs filing for 2021, covering 14.7 million participants holding over $2.1 trillion in total assets.
Corey Rosen
A new bill in Colorado, HB24-1157, would provide statutory authority for the Colorado Employee Ownership Office, which Governor Jared Polis created in 2020 through an executive order. The bill would make the office permanent. The office provides technical assistance, coordinates with other agencies, and conducts outreach.
Loren Rodgers
At the NCEO, we talk with a lot of people from a lot of creative companies. Here are two of the thought-provoking ideas we’ve heard in the last few weeks. Please borrow and adapt these ideas – and let us know what you do with them!
Corey Rosen
For those of a certain age (like me), Sears was the Amazon of its day. You could get almost anything but food in a Sears catalogue, and its stores were ubiquitous. My first house in the San Francisco Bay area was built in 1906 with plans from Sears. Early in his life my dad sold shoes for Sears. Back then, Sears put in 10% of pay into a profit-sharing plan that owned Sears stock. Contributions were based on years of service. If a salesman worked for Sears for decades, they could walk away with what would be worth over $1 million today. My dad didn’t stay long, but he sometimes mused about what might have happened. Sears ended the plan in the 1970’s, although it briefly had an ESOP in the 1980s as it was trying to find its way back in a changing retail landscape.
Corey Rosen
Oxfam, a nonprofit focusing on hunger and other poverty-rated issues, issued a report that includes a number of recommendations, one of which is “providing financial support to employee-owned businesses, including worker cooperatives. This includes the implementation of ILO [International Labour Organization] Recommendation no.193 on promoting cooperatives and relevant regional instruments.” That recommendation, which is specific to cooperatives, "provides non-binding guidelines in drafting and/or revising national policy and legislation."
Loren Rodgers
The election for the NCEO’s board of directors opens on January 3 for three-year terms that begin on April 1, 2024. NCEO members in good standing will receive an email on January 3 with the subject line "Invitation to the ballot for the NCEO board elections," which will include a link to a confidential electronic ballot. Directors will be selected through this election and by appointment by the existing board. Balloting will end on January 19.
Corey Rosen
In a potentially important ruling, a district court has dismissed a case against the defendants at Inland Fresh Seafood Company because the plaintiffs did not first exhaust the administrative remedies for complaints provided by the plan. In Bolton v. Inland Fresh Seafood Employee Stock Ownership Plan, No. 1:22-cv-04602-AT (N.D. Ga. Dec. 5, 2023), the plaintiffs contended that a 2016 $92 million sale to the ESOP was overpriced. The plaintiffs alleged that the defendants (including the independent trustee) and sellers to the ESOP (all of whom were executives of the company) and the executives each were acting as fiduciaries. The suit alleged the executives had already received multiple bids for the company at lower prices. The plaintiffs alleged that management provided the appraiser with highly unrealistic projections about significant increases in revenues and profits, which they alleged were accepted to provide a higher than fair value. The plaintiffs said the defendants sought multiple valuations for the stock and accepted the highest one.
Evelyn Castro
We're thrilled to announce our highly anticipated 1.5-day seminar Is an ESOP Right for You? in Dallas, TX, from February 5-6, 2024. This event will provide entrepreneurs, business owners, and HR professionals with comprehensive insights into ESOP transaction structures, plan design, financing, and more in response to the expanding ESOP landscape.
