Control Stockholder Held Liable in Failed ESOP

Business Valuation UpdateVol. 2 No. 8
Legal and Court Case Update
August 1996
8249 Vocational Schools, NEC
611519 Other Technical and Trade Schools
ESOP valuations

Eyler v. Commissioner
88 F.3d 445, 1996 U.S. App. LEXIS 15831
July 2, 1996
Federal Court
7th Circuit
United States Court of Appeals


Effective in December 1996, Gary Eyler, the controlling stockholder of Continental Training Services (CTS), sold 689,655 shares of CTS stock (about 14% of the outstanding shares) to a newly formed ESOP for $14.50 per share, or about $10 million, financed by a loan from American Fletcher National Bank.

See Also

Eyler v. Commissioner

At issue is whether Eyler, as the majority owner of CTS stock, engaged in a prohibited transaction with CTS's employee stock ownership plan (ESOP) when he sold $ 10 million worth of CTS stock to the ESOP.