Financial Assessment and
Management Transition Plans
The Financial Assessment and Management Transition Plan establishes a working plan to provide shareholder liquidity and management continuity. AQP develops the report based on the financial and management objectives expressed by the selling shareholder(s) in order to optimize the net return on the stock sale and to insure the future operational control under successor management.
AQP will develop various ESOP and management buyout alternatives and present the related schedules and illustrations in the Financial Assessment section of the report. The role of the company’s existing or proposed ESOP is explained in detail and includes the various technical and regulatory aspects of the ESOP, which affect the buyout plan. The advantage of an ESOP is that it offers a source of funds for the purchase of stock, based upon pre-tax company contributions, up to 25% of qualifying payroll, depending on the method selected to structure the buyout.
One of the most critical considerations to a management buyout is a plan for transferring all of the responsibilities and functions of the current principal owner to the future owner. AQP identifies the current and proposed future key roles, duties and responsibilities of all principals to the buyout, and completes a specific plan of action to facilitate efficient transfer of control. The plan identifies the current lines of authority and organizational structure and proposes restructuring and reallocating management authority and responsibility where appropriate.
A timetable of key events in the transition process is prepared to enable all parties to effectively track the schedule and progress. The timetable contains identifiable goals that can be monitored to assess success and to provide checkpoints for developing additional or remedial courses of action to insure continuity.