Posting by: Joel Susco
Date: March 13, 2009

It has been a very busy few years.  Our firm has had the opportunity to participate in a number of interesting transactions involving the transfer of an ownership interest in a variety of entities.  The need and desire to maintain the viability of an entity and continual existence is on the forefront of every owner’s mind.  It is critical that a well-structured and properly-executed agreement be drafted.  In some instances, the need for adequate financing was critical to the sustainability of the transaction.  A few that I personally was involved with included transfer of stock from both “S” and “C” corporations that used compensation as the vehicle for financing.  We found in both cases that the entering shareholder was much more comfortable and better able to manage the tax effect of the stock transaction through this means.  Other deals included seller financing as a means for transferring ownership and, of course, the traditional third party financing.  It seems as though many deals have been accelerated to take advantage of favorable capital gains rates that are currently in effect.  We are just not sure how tax law will change over the next few years.  What have you seen?

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