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Confidential Draft - Rich & Co.- ESOPs-Helping Clients Capture Liquidity v2

Confidential Draft - Rich & Co.- ESOPs-Helping Clients Capture Liquidity v2

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Published by: RichandCo on Nov 01, 2010
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11/01/2010

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Helping Your Business-Owner ClientsCapture Liquidity
³There is no bigger risk to my business, and futuregrowth, and critical client relationships, than a clientselling their business and our firm not being involved.´
--Multi-billion AUM Investment Advisor 
DRAFT
Comments welcome
ConfidentialCopyright Rich and Co.
 
Reducing Your Risks --Defending Your Assets
 As your client¶s age, and they must liquefy the value locked in their businesses, your relationships with them van ³go into play.´If your client¶s businesses are sold outright, you risk:Investment banks, commercial banks and other financial firms willlikely
capture your assets
Family membes assets will
move away from you
Pension plan and employee benefit assets and accounts will
moveaway from you
Relationships with employees and key executives will be
lost
C
opyright Rich and
C
o. 20102
 
An Outright Sale is Often Not the Best Option
Many business owners want and need liquidity, but can¶t odon¶t want to sell their businesses outright because: ±Control is lost ±Family member¶s involvement in the business can bediminished or lost ±Of an emotional attachment to business ±They can¶t find acceptable buyer  ±Banks are not making loans for purchases ±Inherent issues with business (eg, labor problems,environmental issues)An ESOP permits the owner to achieve liquidity without sellingoutrightThe owner can retain ownership while also capturing significantassets
C
opyright Rich and
C
o. 20103

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