In our video, learn more about repurchase liability arising from an ESOP and how repurchase liability is handled to protect the corporation.
Transcript
Repurchase liability, the obligation of the corporation to buy back the stock from departing participants, is a corporate finance exercise which is driven by the plan design, the transaction design, and the demographics of the workforce. In its simplest form, repurchase liability requires you to project the participants that are coming up for distribution based upon the plan’s distribution rules.
More complex modeling of repurchase liability can be done with ESOP software specifically designed for that purpose and which may be made available either by the third-party administrator or by firms that specialize in repurchase liability analysis.
