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Non-Recurring Cash Flows Complicate Hesco Valuation

August 2014 | Issue 75 NON-RECURRING CASH FLOWS COMPLICATE HESCO VALUATION Patricia Laidler  (Petitioner) was a 10% shareholder of Hesco Bastion USA, Inc. (“Hesco”).  The remaining  90% interest in Hesco was owned by Hesco Bastion Environmental, Inc. (“Environmental”).  On January 26, 2012, Hesco was merged into Environmental. Pursuant to the terms of the merger, Petitioner [...] More...

Judge Stands By His Deal Price Valuation

June 2014 | Issue 74 Introduction In a recent Delaware dissenting shareholder case, Vice Chancellor Glasscock was called upon to perform an appraisal in order to determine the fair value of the stock of a company involved in a merger.  Instead of using the methods normally employed to perform such an appraisal, such as an [...] More...

Preferred Shareholders Prevail in Trados Transaction

April 2014 | Issue 73 Trados, Inc. was sold to another company for $60 million in July of 2005.  The sale proceeds were distributed as follows; Trados management received $7.8 million, preferred shareholders received $52.2 million and common stockholders received nothing. Certain common stockholders sued.  The story is told in a Delaware Chancery matter called [...] More...

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Employee Stock Ownership Plans (ESOPS) Valuations

An ESOP is an employee retirement plan which has been specifically established to hold shares of the sponsoring company as an investment asset for the retirement of participating employees.

The Department of Labor requires that the assets in the plan be valued annually.  When the sponsoring company of the ESOPis a privately-held company, with no established trading market for its shares, it is necessary to have a business valuation performed in order to determine the fair market value of the company shares.

Hempstead & Co. has been providing ESOP valuations for many years, and is familiar with the special valuation issues that they entail.