How does the leveraged ESOP transaction work?
Leveraged ESOPs are distinct from other types of employee benefit plans. A leveraged ESOP borrows money from the company, the selling shareholder(s) or third-party lender (hence leveraged) using a guarantee or other extension of credit and purchases, either: (1) existing stock or (2) newly issued stock.
Related Questions
- Newly formed S Corp and newly formed ESOP. The S Corp buys assets from LLC to continue operating the business as S Corp. Does IRC section 1239 apply or is the ESOP NOT a related party? Who really owns the ESOP at the start?
- How is company stock allocated to participants in a leveraged ESOP?
- What is a leveraged ESOP?
