Consulting Firm


  • Business and litigation consulting firm
  • Financial, accounting, regulatory, and engineering consulting services
  • Offices in 7 states
  • C Corporation with approximately 75 employees
  • 4 shareholders plus 13 Incentive Share Participants
  • Company value $27,300,000


  • Tax-free liquidity for shareholders
  • Sale to Incentive Share Participants
  • Employee retention & motivation
  • Corporate tax relief


  • Establish an ESOP
  • All shareholders will sell 100% of their stock to the ESOP
  • Company will borrow $12,500,000 in senior debt
  • Balance will be funded by seller notes with a low interest rate to lessen the burden on the Company
  • Shareholders elect IRC 1042 to avoid/defer capital gains tax on stock sale
  • Following year of stock sale Company will elect S Corp status
  • Accelerated release of shares to participants to reward employees
  • Employment agreements will be executed between the Company and 17 key personnel

Benefit to Client

  • Owners received $12,500,000 cash at closing for stock sale down payment
  • 15 year seller notes totaling $14,800,000 at 2.25% interest rate (life of loan interest = approx. $2.7mm)
  • At the end of the seller note period the projected value of warrants is estimated to be over $12,000,000
  • Sellers avoid $8,900,000 in capital gains tax
  • As a 100% S Corp ESOP owned company, 100% of future profit will not be taxed from that point forward
  • Over the next 15 years the corporate tax savings are estimated to be over $47,000,000