ESOP Valuations Under Increased Scrutiny

By Robert Snowden • April 11, 2015 • ESOP

Now more than ever it’s important to hire a qualified valuation advisor for your employee stock ownership plan (ESOP) to avoid unforeseen consequences for both the plan’s fiduciaries and the sponsoring company. The impact on stakeholders could be considerable and potentially last for years.

 The Department of Labor (DOL) has stepped up its efforts to oversee ESOP compliance to ensure the protection of plan participants – your employees. Recently, the DOL has expressed concerns over the quality of business valuations used to facilitate ESOP purchase and sale transactions. Valuation advisors, and the trustees who engage them, must diligently work to meet professional standards. A high level of care and expertise should be applied throughout all aspects of the business valuation process.

South Park Advisors is an independent business valuation firm that caters to small to mid-sized privately held businesses and has acted as an advisor on both leveraged and non-leveraged ESOP transactions. If you have any questions or concerns about the quality of your business valuation, or are contemplating a change in your advisor, please contact us today.

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