Control Stockholder Held Liable in Failed ESOP
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.
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.