Home » Restructuring a business

Restructuring a business

The Defiant’s Exclusive Report: Solving the Riddle of the DAO with Colorado’s Cooperative Laws by Jacqueline Radebaugh and Yev Muchnik

Our Partner and Shareholder, Jacqueline Radebaugh and Senior of Counsel, Yev Muchnik recently wrote this Exclusive Report: Solving the Riddle of the DAO with Colorado’s Cooperative Laws for The Defiant in which they reflect their legal analysis and anecdotal experience with DAOs adopting the LCA cooperative legal framework in the United States; as with other …

Read more

Patagonia “Exits to Climate”: A Win for Capitalism, But a Mixed Bag for Stakeholder Governance

I, like most, was delighted to read the news that Patagonia’s shareholders decided to give away ownership of the company to benefit the climate and not private equity, a strategic buyer, or public capital markets. We’ve written extensively on mechanisms for mission protection in corporate entities.   It appears that the Chouinard family, which owned …

Read more

Updated Section 1042 Tax Benefits

There is a section of the Internal Revenue Code (IRC) that provides some tax benefits for people who sell their companies to either an ESOP or to a worker cooperative. This blog will explain how 1042 provides tax advantages when selling to a cooperative.  If you are thinking of becoming employee-owned or selling your business to …

Read more

Selling to a Worker Coop Over Time

Many businesses are looking at the possibility of selling their companies to their employees through a worker cooperative.  They have crunched the numbers, gotten the employees interested, have figured out the financing, but now want to explore the timing of a potential sale.  Often there is a misconception that the owners have to sell 100% of the business in one lump sum, in …

Read more

Thoughts from a new economies’ attorney: distinguishing cooperative governing structure

In my previous posts, I discuss how traditional businesses and cooperatives diverge from a capital (and return on capital) point-of-view. Another common misconception is that cooperatives function like nonprofits, typically from the perspective of governance structure. They don’t. Cooperatives are businesses, and, as such, business principles and governance, and business governing structure apply to them. …

Read more

Use of the term “Cooperative”

Edited June 26th, 2020: An earlier version of this blog post implied that only organizations incorporated as cooperatives under Massachusetts law may use the word “cooperative.” This post has been edited to accurately reflect that other businesses may use the term if they distribute earnings consistent with cooperative law. Entity formation is often the first …

Read more