NEGOTIATING & DOCUMENTING BUSINESS TRANSACTIONS

A Type F reorganization (“F Reorg”), governed by Section 368(a)(1)(F) of the Internal Revenue Code, provides a strategically significant mechanism for corporate restructuring. Defined as a “mere change in identity, form, or place of organization of one corporation,” an F Reorg permits a corporation to alter its legal existence while being treated for federal tax purposes as the same entity. This recharacterization allows for the uninterrupted preservation of tax attributes while maintaining shareholder continuity.

FTC’s Revised Hart-Scott-Rodino Filing Thresholds, Filing Fee Schedule, and an Increased Civil Penalty for M&A Transactions

In the August article, I discussed the proposed merger guidelines issued by the U.S. Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC” and collectively with DOJ, “Agencies”). They were finalized and released by the Agencies on December 18, 2023. They continue the Biden Administration’s theme of increased scrutiny of mergers and stricter enforcement of antitrust laws.

On July 19, 2023, the U.S. Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC” and collectively with DOJ, “Agencies”) issued their proposed joint merger guidelines (“Proposed Guidelines”) to be used in analyzing whether a merger is illegal, reflecting the Biden Administration’s competition policy and existing enforcement priorities. After a 60-day comment period that closes on September 18, 2023, the DOJ and FTC will finalize them. The Proposed Guidelines will replace the Agencies’ 2010 Horizontal Merger Guidelines and their 2020 Vertical Merger Guidelines, which the FTC (but not the DOJ) has already repealed.

In the current interest rate environment, sellers and buyers of businesses are increasingly faced with financing shortfalls from traditional commercial lenders as roadblocks to getting deals closed. When this occurs, sellers and buyers often turn to seller financing, also known as owner-financing, as an efficient means to bridge the gap.

Are you planning on expanding your business? On the other hand, are you planning on exiting or retiring from your business? Lavelle Law’s Mergers and Acquisitions Team can help you navigate through all of the complex and unexpected hurdles that may arise during a corporate transaction.

In this video podcast, Lavelle Law attorneys Steven Migala and David O'Leary review the advantages and strategies of using an Employee Stock Ownership Plan as a business succession option. ESOPs are a mechanism by which owners can sell their business to employees allowing their legacy to be protected. Learn about the advantages of the approach and some of the mechanisms involved in an ESOP transaction from two very experienced attorneys.

Lavelle Law is hosting a free seminar about ESOPs and their role in transitioning a business.

An Employee Stock Ownership Plan (“ESOP”) is a type of qualified employee benefit plan that is designed to invest primarily in the stock of the sponsoring company. It provides employees with an ownership interest in the company, giving them an incentive to be more productive. It is also a retirement plan and shareholder transition vehicle which may provide selling shareholders and the company with significant tax benefits.