“Graceful Exit” published July 2004 in Big Builder Magazine
(Article no longer available; partial text provided)
This article discusses North Carolina builder Ashley Turner's plans to sell his company to his employees. Michael Kahn was interviewed and had numerous comments, including the following:
But homebuilding merger and acquisitions expert Michael Kahn of Michael P. Kahn & Associates, which is based in Ponte Vedra Beach, Fla., disdains ESOPs. Pension rules govern the plans, and reporting requirements are strict. Kahn says that "ESOPs are a wonderful way for starting out when everyone's goals are aligned. But after 15 or 20 years, goals change. " If an owner wants to cash out of the ESOP before retirement to spend more time with family or pursue a lifelong dream, he or she will pay hefty tax penalties. Strict ESOP rules also make it tough to sell the company. Still, Kahn acknowledges that in those rare cases where employees do buy out an owner, most use an ESOP.
Regarding Ashley Turner's valuation approach:
Kahn says he's never seen a valuation done this way. "The common way is to value the company on the open market and then figure out a mechanism for the employees to buy" he says. "My hat's off to Ashley Turner, and I hope it works for him. Most people aren't that nice to their employees. They're a little more selfish, and that's not necessarily a bad thing."