CASE STUDY

Succession Plan for Prominent Family Owned Business

The Family Background
Family

Patriarch & Matriarch founded a successful manufacturing company with a current Enterprise Value of over $1.0B. They have seven children and over 70 grandchildren and great grandchildren. Their seven children and grandchildren are all shareholders of the company. Some of the family members work for the company, while others have a different career path.

GoalsContinue to be a privately held family owned and operated business with the ability to provide for its shareholders, stakeholders, employees and family members while still being the market leader in its industry.
Criteria
  • Create a succession plan to identify the next leader of the company
  • Develop and implement governance controls for the family and the business
  • Restructure company balance sheet to:
    • Reward shareholders
    • Foster continued organic growth
    • Target strategic acquisitions
    • Negotiate bank covenants that provide the family and leadership of the company with the freedom to operate
  • Implement asset protection strategies
  • Minimize estate tax liability to assure the family business can remain private
The Family Engages The Coury Firm
Planning

Develop a thorough workplan to identify:

  • The next leader of the company
  • Key amendments to the partnership agreement
  • Options to remove limited partnership interest out of each family members estate
  • Review existing loan documents
  • Meet with the company’s existing banking relationships
  • Meet with key management and family members
Execution

Lead a team of Advisors to develop and implement a thoughtful plan that incorporated changing tax laws, regulations and family dynamics:

  • Amended the existing partnership agreement to addresses all pertinent governance matters
  • Implemented compensation plans and employment agreements with key family members and management
  • Successfully removed the limited partnership units out each family members estate, saving the family over $500M in federal estate taxes
  • Issued a formal RFP to bankers to restructure balance sheet, remove unnecessary covenants with the capacity to do significant dividend recaps, fund organic growth and opportunistically execute on strategic acquisitions
Continued Partnership
  • A strategic advisor to the family and company
  • Successful in maintaining family continuity
  • Continuous family educational meetings and risk assessments
  • Lead in the execution of strategic acquisitions
  • Family Office to all family members

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