I am a newbie to EB. Here is my elementary question ("I'm not worthy, I'm not worthy!")
Is it possible to structure a single-member ESOP for a manager in a management buyout/lbo? The company has other employees. I would ideally like to do a leveraged ESOP to give both seller (shareholders) and buyer (manager) the tax benefits of an ESOP. I'm assuming I cannot do this due to ERISA's general non-discrimination provisions and ESOP coverage limitations (as well as a host of other reasons: the MBO would be seller-funded, raising conflict of interest issues, and the distributions to the manager would probably exceed the maximums allowable under the ESOP qualification provisions). Another wrinkle to this problem is that the purchase envisioned by the letter of intent is a kind of vendor-funded purchase for the manager that will likely encumber the company's assets after closing.
I know there are many other laws that intersect here, but right now I'm concerned about whether an ESOP is even available in this single-member context (i.e., only the manager would be a beneficiary under the ESOP). I'm guessing the answer is a resounding "NO!" for the reasons discussed above.