Guest Toni Jo Posted April 17, 2001 Posted April 17, 2001 We have an Esop plan that recently sold all of its stock. The only asset that is left in the plan is cash. Is the plan still an esop? Is there some correction or problems that this may have caused that we are not aware of?
RLL Posted April 17, 2001 Posted April 17, 2001 Hi Toni Jo --- An ESOP must be "designed to invest primarily in employer stock." The transaction whereby the ESOP sold all of its stock should have contemplated one of the following courses of action: (1) termination of the ESOP; (2) conversion (or merger) of the ESOP into another type of retirement plan, such as a profit-sharing plan; or (3) future purchases of employer stock, if available. If employer stock will not be available to the ESOP, #3 would not be an alternative. I wonder why the ESOP would sell all its stock ... unless it were in connection with the sale of the company and/or the termination of the ESOP. I recommend that you discuss this with your legal counsel, who presumably is experienced in ESOP matters.
Recommended Posts
Archived
This topic is now archived and is closed to further replies.