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A 100% ESOP-owned company has received a letter of intent to be acquired by a private equity company. The transaction is expected to be a stock sale about 40% above the 12/31/2023 FMV. Should the expected sale price be disclosed on the diversification notice? At least 2 of the diversification eligible participants have or will have knowledge of the sale discussion at the time the notices are scheduled to be distributed, but the rest of the eligible group may not know all the details. Please assume the diversification is timely based upon the availability of the final FMV, I'm only concerned about the fiduciary responsibility of providing the information necessary to make an appropriate election. -
TRA 1986 and Diversification Rules / Stock Split
Guest posted a topic in Employee Stock Ownership Plans (ESOPs)
There is an ESOP that contains pre-1986 stock so the rules in effect prior to 1986 Tax Reform Act regarding diversificaiton still apply to that stock. If the employer does a stock split with respect to the pre-1986 stock, are the pre-1986 rules applicable after the stock split or would the sotck issued as a result of the stock split be subject now to the post-1986 rules?