Experience with ESOPS as a minority shareholder?

January 21, 2025
by a searcher from Northwestern University - Kellogg School of Management in St Paul, MN, USA
I am looking at an opportunity with a company that has an ESOP as a minority shareholder. There are members of the ESOP that I would like to roll equity into the new company post acquisition. I'm being told by the sellers that the ESOP will need to be dissolved in a sale. If that's the case, the individuals I would like to rollover equity will incur a taxable event and then would have to invest in a NewCo transaction that is tax inefficient.
Are there any experts in here that know if there is a way to liquidate an ESOP that is a minority shareholder while allowing some of those shareholders to roll their equity into a different vehicle in the NewCo without being taxed? If you have any experience in this, please feel free to dm me.
Thanks,
Derrick
from University of California, Berkeley in Oakland, CA, USA
from The University of Texas at Austin in Austin, TX, USA