Here is a concept that does not frequently come into play, but you should know about it because, when it does, it can facilitate the realization of goals that might not otherwise be attainable. The law permits participants to transfer funds from their account in another qualified plan (including a rollover Individual Retirement Account (IRA)) into their account in an ESOP. For instance, where a company has both a 401(k) plan and an ESOP, participants can be permitted to move money from their account in that 401(k) plan into their account in the ESOP, and then direct that those funds be used to buy company stock just for their account. I have served as counsel in transactions that have used this approach. In one, most of the assets of a tax-exempt, but quite profitable, foundation controlled by a university were to be sold and the proceeds donated to the University. The foundation’s management interceded and requested the opportunity to buy the business themselves. Although they did not have the financial wherewithal to accomplish such a purchase, they did, however, have ample money in their accounts in the foundation’s qualified plans. The University agreed to work with those employees towards that end. A program was then instituted pursuant to which all of the foundation’s employees, which, of course, included management, were given the choice of moving their entitlements in the foundation’s qualified plans laterally into their account in an ESOP adopted by a newly-formed company (Newco). Then, after full compliance with Security and Exchange Commission (SEC) and state “Blue Sky” rules notifying these employees in writing (e.g. a “prospectus”) and in meetings, as to all that was involved, a number of those employees agreed to transfer $27,000,000 of the $110,000,000 of aggregate employee entitlements in foundation plans into their account in the Newco ESOP. Then, using that money as their equity and borrowing the rest, the ESOP bought the company on their behalf. That company is now a very successful government contractor. I have also designed analogous arrangements, including one for a much smaller transaction involving only around $2,000,000. While this procedure is complicated and costly, where it fits it has the potential to be quite rewarding.