DOL plans increased oversight of ESOP transactions

BVWireIssue #56-2
May 9, 2007

At a meeting of the Michigan Bar Tax Section last week, Theresa Gee, Deputy Associate Solicitor with the Department of Labor (Benefit Plan Security) spoke on fiduciary liability in ERISA litigation.  Almost as an aside, Ms. Gee mentioned that the DOL is in the process of creating new disclosure regulations for plans with respect to consultants, including investment banks, financial advisors, and appraisers.

Apparently, the Department plans to issue new regulations to “ramp up” its oversight of ESOP-related transactions (perhaps in the wake of the $8.2 million buy-out of the Chicago Tribune?  See BVWire # 55-3).  There was no word when the regulations would appear or if enforcement of prohibited transactions has already begun—but we’ll keep readers posted on any news from the applicable authorities.

In the mean time, check out the latest (2nd Edition) of The Guide to ESOP Valuation and Financial Advisory Services, by Robert Reilly and Robert Schweihs, which updates current thinking on ESOP employer stock valuation, transaction structure, acquisition financing, independent financial adviser issues, and more.  To pre-order a copy, click here.

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