Employee Owned Company Sold Due to Upcoming Repurchase Obligation

Posted by Aaron Juckett, CPA, CPC, QPA, QKA on Fri, Dec 02, 2011
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The December 1, 2011 Employee Ownership Update is online and discusses the following:  

  • Berkshire Hathaway to Buy Employee-Owned Omaha World-Herald Co.
  • Updated Database of Employee Ownership Plans in Large Public Companies
  • Oxford Launches Employee Ownership Job-Creation Awards
  • NCEO Board Nominations Close December 19 

The Update discussed how Warren Buffet will be purchasing the 80% employee owned Omaha World-Herald, Buffet's hometown newspaper.  The deal was viewed as a positive in part due to the significance of the future obligation to pay upcoming retirees:

One newsroom employee, who spoke under condition of anonymity, said Wednesday's announcement was positive.

"It's obviously good news for the paper because we were facing a pretty heavy load of debt to pay to older stockholders (as they retired).

While the newspaper industry is a difficult industry to be in at this time and we don’t know the extent of the company's Long-Term Objectives, this can serve as a lesson to ESOP companies by illustrating the importance of forecasting and ESOP planning for the future ESOP repurchase obligation to ensure the ESOP remains Sustainable in the long-term.

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Topics: Employee Stock Ownership Plan (ESOP), Repurchase Obligation

Aaron Juckett, CPA, CPC, QPA, QKA
Written by Aaron Juckett, CPA, CPC, QPA, QKA

Aaron is President and Founder of ESOP Partners and provides implementation, administration, and consulting services to hundreds of companies. He is a member of The ESOP Association (TEA) and the National Center for Employee Ownership (NCEO).

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