Articles by John D. Menke

Why Is It Necessary to Restructure America?

Socialism and communism developed as a reaction to the concentration of ownership and the abusive labor practices that developed in the early stages of capitalism. However, after nearly a century of conflict between these two competing economic systems, a century that witnessed two world wars and a protracted cold war, we have seen in the…

The Employee Stock Ownership Trust – A New Trend In Employee Benefits and Corporate Finance

An increasing number of companies are turning to Employee Stock Ownership Trust financing as a means to simultaneously raise low cost capital and provide increased employee incentives and retirement benefits while reducing the cost of qualified plan benefits. The Employee Stock Ownership Plan is a qualified plan under Section 401(a) of the Internal Revenue Code.…

The Use of ESOPs to Finance Mergers and Acquisitions

Advantages to C Corporations Many companies that have ESOPs fail to realize that their ESOP can be used to the finance acquisitions with pre-tax dollars. Normally, when debt is incurred to finance an acquisition, only the interest payments are deductible.  Principal payments are not deductible.  However, if the acquisition is financed through an ESOP, both…

The Perfect Solution to the Perfect Storm: How an SR ESOP Can Be Used to Save Your Business from Bankruptcy

A “perfect storm” has hit the U.S. economy and its privately-held businesses. Consumer purchasing power has dried up, resulting in reduced revenues for almost all privately-held businesses. At the same time most banks have stopped or curtailed lending, and bank credit is no longer available to many businesses. During the past two quarters many businesses…

Four Ways That a Cash Flow ESOP Can Be Used To Help Your Company Survive the Credit Crunch

A “perfect storm” has hit the U. S. economy and its privately-held businesses. Consumer purchasing power has dried up, resulting in reduced revenues for almost all privately-held businesses. At the same time most banks have stopped or curtailed lending, and bank credit is no longer available to many businesses.

Why Selling to an ESOP May Be Better Than an Internal Ownership Transition or Sale to a Third Party

By: John D. Menke There are good reasons to consider selling your firm to your own employees through an Employee Stock Ownership Plan (ESOP).  No other alternative combines maximum financial advantage with the flexibility that enables you to customize the sale to fit your own particular circumstances.  An ESOP enables you to sell your business…

An Open Letter to Business Owners

Dear Business Owner, Would you be interested in selling part or all of your stock in your company if you could sell it for more than twice what it is currently worth? Case Study I: The Benefits of a Gradual Sale to an ESOP We recently helped one of our clients do just that. Company X…

Why Should You Consider an ESOP?

Dear Reader: As president of Menke & Associates, Inc., I believe there is significant untapped growth potential in most privately held companies. Whether you want to sell some or all of your stock in the company in the next five years or whether you plan to remain active for the long term, Menke & Associates,…

Tax Alert for Business Owners

Dear Business Owner, This may be the opportune time to take action to avoid the increase in capital gains tax rates that will take effect after 2010. As you may know, the Bush tax rate cuts, including the current 15% capital gains tax rate, are slated to expire at the end of 2010. In addition,…

A Modest Proposal for a New, New Deal

Capitalism collapsed in the fall of 2008. It’s collapse was also the direct result of a flaw in the system. Capitalism promised universal opportunity and a rising tide for everyone. To achieve this result, capitalism privatized and/or deregulated every possible industry. It glorified greed, extravagant executive compensation, and financial manipulation. Just as in the case…

Restoring The American Dream

Economic Stimulation and Solutions for Creating New American Jobs and for Protecting Existing American Jobs By John D. Menke, Esq. Historical Background of the American Dream Since the very founding of the original thirteen colonies, America has always been known as the land of economic opportunity and as the most capitalistic country on the face…

ESOPs and PHILANTHROPY: What Non-Profit and Tax-Exempt Organizations Should Know about ESOPs

Approximately 97 percent of our nation’s businesses are privately-held. In spite of this, charitable and tax-exempt organizations have not achieved particularly significant results in securing major gift income from owners of closely-held companies. The reasons for this apparent oversight may be understandable. Although small business owners may head enterprises worth substantial amounts of money, frequently,…

Why Giving To The Esop Foundation Is Now Critically Important

By John D. Menke Although the Employee Stock Ownership Plan (“ESOP”) concept continues to enjoy bipartisan support in Congress, this support is still not deep. Current support for the tax incentives that are essential to the adoption of new ESOPs comes from only a handful of key members of the House and the Senate.Meanwhile, during…