EP10 - ESOP Trustee Interview - Bill Kropkof

This episode we dive into the very essential role of the transaction/ongoing ESOP trustee with Bill Kropkof out of Dallas TX.  Bill’s background includes time with the Department of Labor - so he brings a perspective that is very helpful to think about how that affects a transaction as well as ongoing work related to best practices related to trustees.

Transcript

 [0:10] 

Hey everybody this is the ESOP guy we are so happy you could join us today we are on this journey to an ESOP.

And wonderful that you could join us today we are producing this podcast as a resource really to help people understand the Employee Stock ownership,

plan and the process it takes to actually get your company into that type of uh transition or transaction.

And 1 of the things that we find in the process itself is we go through,

um certain roles and 1 of the most important roles in the process is what we call the trustee.

And they really serve as the transaction part of the of the buyer and the.

ESOP process and then eventually become the ongoing trustee so that's going to be an important element for us to to think about.

Um so for those that are joining for the first time I just wanted to let you know we have a website at journey to aesop.com so you can find,

all of our episodes there to tune in so with all that I wanted to um welcome Bill crop to the podcast and Bill runs a trustee firm called odisha Advisory Group out of Dallas Texas and he has,

uh agreed to be on our podcast so we really appreciate you being with us today bill.

 [1:21] 

Thank you so much for having me great so as we start bill I wanted to kind of throw out to you hey what is your favorite movie and why.

 [1:31] 

So for me that's a that's a really easy 1 it is Pulp Fiction and the reason it's Pulp Fiction is I love all of the plots the subplots all the various,

individual stories that really weave into 1 and um it's 1 of those movies that no matter when it's on or what time I can watch it.

All the time because I always see something new in it so awesome for me that's 1 of my favorites,

it's a it's a complex movie with lots of different things happening at the same time so.

Absolutely not what that means is you're a complex person who likes complex things which is an ESOP right in this in a lot of ways so.

As we grasp towards the the connection point so but thanks thanks so much for being on the podcast I'm excited to get to interview you um,

you know because I do believe like the trustee role is sometimes so,

um like there's so much misconception about the role itself and there's a lot of things that happen where,

people think about you know giving up their business and how they have to deal with the trustee and all that so um so there's a lot of elements to that that I'm I'm excited to get to uh to talk to you about.

Um so before we okay great before we do that like let's just start with um your background like how did you get an esops and tell us a little bit about your Advisory Group that you guys have.

 [2:52] 

So um started The orisa Advisory Group in 1995 and it was founded for the purpose of working with um employers,

that had odisha covered plans both Health and Welfare retirement that had fiduciary issues uh under Title 1 of odisha.

And then in 1997 we were engaged for our first ESOP transaction,

um it was out of out in the Pacific Northwest and uh from there it's really,

uh been something that we've done for many many years uh we do quite a few ESOP transactions either initial setup second stage sales or uh sales to a third party.

 [3:40] 

And.

Prior to starting this firm I spent 7 years as an investigator for the US Department of Labor doing audits of odisha cover plans uh Department of Labor ebsa the employee benefits Security Administration,

and uh that's really where I got my kind of,

enjoyment or love of it's hard to say love of odisha Love of odisha yeah that actually never heard that 1 before but um which is good honestly you need you need to have a sense for at least loving it,

um because it's such a dominant part of the whole process and what people are going to need that's what people really need to understand better really need to get down to the backdrop of it all.

 [4:21] 

Absolutely so so when you when you went from like what as an investigator do investigator.

You know which is a completely different I mean it's it's in the same Realm of the ESOP world right but,

you're on like this part of the table that honestly we don't really talk about a lot we do talk about the do but we don't really get those that that part of the um the world involved in the ESOP um experience as we talked about in the podcast.

What would you say like the investigator I mean how do you think that people perceive the Department of Labor I guess when it comes to esops First well it's a.

It's pretty much they're hated so whenever you get a call from you know a Department of Labor investigator um most people's first perception is.

Uh oh there's going to be a problem and they're out to get me and it's really sad because when all the many years ago when I was um an investigator our main job was to help.

 [5:22] 

Plan sponsors with compliance and if you went out there and you found an issue you know your job was to help them fix that issue in the best way.

Um unfortunately it seems what's happened in the last.

10 years is that investigators go out there with the sole purpose of finding violations because.

Finding violations yield monetary results and that's what everybody's graded on so um it it's unfortunate on what's happened you know they're they're still out there and.

There are still some really great investigators but unfortunately there are ones who just don't want to work with you and um you know or just.

Think that everything you do or say is wrong right so it's it's a shame it is a shame I mean I would imagine that.

 [6:15] 

Well I mean part of it part of it I think is just the reality of having an ESOP is is going to be under the regulations of the Department of Labor but,

you know from your perspective why I guess it is it because there are government employee versus not in a government employee why do you feel like there's.

It's just almost sounds like they're a little bit um over the top sometimes when they don't need to be.

Yeah it's very they've become I don't know what the main cause has been but it's become from helper to very skeptical and accusatory so,

you know everything that they see is automatically thought of as being wrong and you know the the goal of the agency itself is to really is to help,

participants and make sure that participants are not getting screwed or not getting hurt in transactions and you know if if,

if they were to do that and just keep that goal in mind um I think it would be a much different,

agency at least today sure sure so part of that when we think about it from the reality of you know I'm sure it's it's,

there are cases where there are extreme cases where there they are more like that and there's other cases that they're just kind of normal normally just doing their job.

 [7:32] 

Absolutely for somebody that's thinking about doing a podcast or an ESOP um what would you say should it be something that they should be overly concerned about as far as a reason not to do an ESOP versus something else.

 [7:45] 

No especially you know it it's a reality whenever you have any type of plan,

you know ESOP or other it is unfortunately a reality in today's world,

but the whole goal of of using good partners and providers when you're putting together this plan is to make sure that you know if you get that letter or if you get that phone call,

you're very comfortable in knowing that we've done things right and we're doing things right on a going forward basis and that's really what counts.

And I think that's that's what I would would tell people too I mean if you do it the right way then there shouldn't be a lot of anxiety when it comes to this and I think.

It's just understanding the landscape when you think about esops like this is part of the landscape you need to understand it as you create and do your deal but what to me what it means is that you just need to pick good partners you need to pick people that know what they're doing.

 [8:43] 

Absolutely you know and and most entrepreneurs are you know,

they don't think about the the government side of of doing things it's not it's not kind of top of mind they they had that that entrepreneurial Spirit which says you know what I'd like to do this and if I

choose the right team to go forward,

I know that I'm going to be in you know good shape and I think that that's the most important thing as you say for people to think about absolutely.

Um so so going into like some of the things that you look at and this is going to be helpful for people to understand.

Well you know generally a higher level speaking like what's the difference between the the work that a trustee does on the transaction.

 [9:26] 

Then the deal goes to close and then now the trustee moves into more of like an ongoing role so how would you describe that that the the differences between transaction and ongoing.

 [9:38] 

Yeah so during the transaction we are very singular singularly focused on you know what the deal is going to be

we look at all the components of the deal to make sure that,

this is going to be a good deal at fair market value for the ESOP and participants and that is really what we think about we are

you know a lot of people say um you know when you are the trustee in a deal you are AC the table and you are negotiating,

but you know at the end of the day we all want the transaction to work.

The but from the trustees perspective we just need to make sure that it's a good deal for the participants and that it's a fair market uh transaction and that the participants are not paying over what they should for the stock.

Exactly you know so that's that's what we really focus on during the transaction for the role of ongoing trustee I kind of look at that at,

very different ways is that 1 you know we represent the ESOP so we listen in on you know board meetings so we can get a good sense of what's going on in the company,

but we're also there as as counselor uh almost because we answer questions from participants when they have questions about the ESOP how it runs you know sometimes um.

 [11:05] 

You you'll get into situations where a couple years down the road for whatever it could be economic reasons,

the the value of the stock gets lowered a little bit,

so you know sometimes uh participants in the plan will Panic so we're there to kind of talk to them explain to them you know that this is normal,

and is this is due to economic factors or industry factors and this is not long term that the the fundamentals of the business have not changed,

and so the ESOP going forward is still going to be truly beneficial to them so you know we kind of look at it in that aspect of ongoing counselor almost.

 [11:48] 

Yeah cool no I think that's important and I think part of it is getting your head around that your 1 side of the table first like which is the buyer independent.

You know and and asking questions you know to evaluate.

Um to evaluate certain factors in order for your independent valuation firm to help you,

decide on what is fair market value for adequate consideration so you can make you know your proper offer so that's within the guidelines of the DOL process agreement really.

 [12:18] 

Absolutely yeah so during that due diligence we want to know everything about the company.

Everything from financials legal status you know are there any pending lawsuits uh,

any major contracts that are coming on or going away so we want to make sure at the end of the day that we're as comfortable with knowing everything about that business as the owners are,

exactly yep and and then as you go forward um it helps you and this is why I think too like thinking about the education of all of it.

It helps you to become to do the transaction part and then become the ongoing because you already have all this the Salient details to the transaction which is really coming out of the gate for the very first year of course that's,

it's really that the stat the transaction that establishes you know the beginning parts of what the ESOP is over time with that company.

You know of course they're going to start paying off loans and they're going to mature through the ESOP process but I think it really does.

You know instead of hiring a transaction trustee here and then somebody completely different as the ongoing there's a lot of um value and building that up through the transaction and then that person getting to know the company and then just really stepping into that role you know as an ongoing.

 [13:35] 

Totally agree with that because you know going through that transaction you know you're going to know.

Everything that led up to it so you're going to know going you'll have a much better sense going forward about the company so it's a it's a much more secure feeling on on how the company is operating exactly yeah.

Um going into like if we go into the transaction trustee process you know for you for you guys.

Um you know 1 of the elements of that is you know once you get engaged to do the transaction trustee work.

You're going to have to represent your team right and your team is going to include an independent valuation firm or a financial adviser and then most likely an attorney,

um how do you qualify the valuation firm like who who are they how do you qualify them and and how do you establish for like the Department of Labor process agreement itself how do you establish the independence between,

what you're looking for to be represented correctly.

 [14:34] 

Yeah so what 1 of the things that we do is we are constantly talking to new valuation firms ones that we have not met before or done any work with to try and get um you know some insight,

on how they operate if they have um you know any.

Uh industries that they specialize in so kind of what we look at is when we are interviewing for a transaction um you know after our initial conversation um with the seller,

what we try and do is put together the most appropriate team and you know if if I know that.

The company is in a a specific area I will look for a valuation firm that does a lot of work in that area um is very familiar with that area so it's not a learning curve for them.

And they know the you know they will end up being able to know the company as well yep so that's that's really the big thing yeah.

 [15:40] 

Yeah I mean I think 1 thing too I would comment on is this that.

You can't use in a sense you got to have somebody some firm like that understands ESOP valuation as well it can't you can't just use any old,

valuation firm maybe their practices and gift and estate and it's really not geared towards ESOP because it's a,

very particular skill set and it's pretty you know when you think about what they're going to do it's a pretty heavy duty responsibility to you because they're going to have to issue,

fairness opinion and really you know document everything accordingly to your what your needs and um requirements are so that you're you're feeling like you've got the right representation so.

Um you know so with that I'm sure that takes you some time to think through or or have a have a short list of of companies like that.

 [16:26] 

Yeah absolutely and and Phil what you just said is so important because from our perspective we want to make sure that evaluation firm,

not only has experience in the industry but as you said they are they deal with esops and that is their main focus of their practice

because an ESOP really is a little bit of a different animal and you want to make sure that they know and can understand all the aspects that go into the ESOP valuation.

 [16:55] 

So um so then then let's talk a little bit about the the attorney you know in terms of the you know we understand the role of valuation firm that represents you on the buy side,

um what is the what's the need in the requirement for having Council on your side what what do they do and and again how do they how do you go about sorting out them in terms of who they are.

 [17:15] 

Yeah so the attorney from from the trustee perspective is is also an important part of the team for you know really multiple reasons and the first being,

um you have an extra set of eyes overlooking the documents to make sure that we're not missing something,

and then also really looking at they can look at the company from a legal perspective search to see if there's any.

 [17:42] 

Ongoing lawsuits against the company.

Anything um that they may own that may have problems with it that may affect actually the deal and the value of the deal so they are um a really important member of of the trustee team as well,

yep absolutely um in in kind of getting into um the the actual.

Process that you guys go through just just to kind of help people think about um on the buy side your um,

you're as you go through each of your steps to get to the negotiations what so could you kind of Define like that approach and and what steps you guys take in terms of that from 1 1 thing to the next until we get to.

I'd say just take it through the negotiations and then we'll talk about the closing process.

 [18:32] 

So you know that that whole we spend a lot of time on the due diligence aspect you know,

reviewing all company financials projections um you know looking and understanding everything about the company and then.

Um the trustee team so the valuation firm myself and our legal counsel will get together and have initial discussions to kind of come up with where we believe.

The the you know the value should fall.

And then once we get the the first term sheet from uh the seller that's where the negotiations really start to make sure that you know.

 [19:17] 

What we settle on a a a price that we settle on is going to be fair to the ESOP participants.

And that really is the most you know if you say combative hopefully it's not we try and make it as as easy as possible.

Uh for all parties involved,

and then you know getting that once we can come to that conclusion of what the the the value is and the seller is is okay with that number and we're good,

um from there on it's it's really you know everything it's it's a big switch in attitudes because now all of a sudden.

We're on the same team and we're working for that closing to get done and then the discussion and uh letting the participants know that they're now going to be a proud owners of the company.

 [20:09] 

Exactly yeah now I mean that's that's the exciting part right when you get to to to that level or whatever um yeah.

So you know as you go through all the different things you've done and as a as a transaction trustee or also as just an ongoing trustee what,

what sort of things would you say um I guess in the transaction side that you find companies fall into is pitfalls or problems or things that they should be thinking about now and look out for as far as not

you know as far as avoiding those types of pitfalls so there there are 2 big things where we see transactions if they have issues,

um they typically center around um too big areas first is.

Um you know an openness from the owner seller um to the transaction and the employees you know.

If if we hear at the beginning of a transaction that this is really being done for the employees because their long-term employees and they truly deserve this um we know it's going to be.

 [21:17] 

A nice smooth transaction because it's being done for the right reasons,

um and then the other big thing is is education before the transaction actually starts you know the.

 [21:31] 

The the sell side advisors we we hope that they are,

open and honest with the sellers and and truly give them a realistic perception of what the company is worth,

and what they should expect by doing an ESOP versus going you know m&a and and finding a third-party buyer.

Exactly yeah so I'm sure that varies based on sales side advisor in terms of what your experiences.

 [22:01] 

Um very much so unfortunately yeah.

You know I I mean I think my question and I think the you know I would never say hey what look at this 1 or versus another but I mean I think in general.

And I would I make a comment and then I'll ask a question about it like the comment is is I and I'm a sales site adviser but I see I have seen so many different.

Variations of what they want to try to provide right in terms of the marketplace and where I where I see it as mostly where.

Somebody is listening to the podcast and they're already in the middle of a deal with a sell-side advisor and they are like okay,

this feels a little weird or they're interviewing some and they're like hey this feels a little weird um and some some of the weirdness is in that like.

How they're um going to how the sales side advisor is structuring the transaction when it comes to,

um maybe liquidity on the deal or what the numbers are going to be um.

And and I find that there's there's just a lot of first off a lot of variation to that so it's not like there's 1 theme to them but the second part is too I I find that.

 [23:09] 

Um I think unfortunately there's a lot of financial motivation to get some something done that doesn't necessarily align well.

 [23:18] 

With the goals and objectives of the selling shareholder and.

In conjunction with that the company right I mean it's like they're all 1 in a sense it has to be done holistically so that's that's kind of my comment but.

You know from from your perspective um you know how do you vet through that I mean as trustee you kind of have to choose too like whether or not you even want to be.

Um part of a deal I mean you you obviously don't have to take every deal that passes over your desk and I'm sure you don't write.

 [23:46] 

No absolutely not yeah yeah I mean part of you know the whole process is.

You know it's an interview process on on all aspects so you know when we have the our initial conversation um you know with the company and typically their sell side advisor you know we we get a good feeling on you know,

how they approach things essentially from that that initial conversation.

Um unfortunately there are sometimes where you know you hear all of the right things during that initial conversation,

and then as soon as the deal starts things change very dramatically or and are very different from how you first um heard them,

and you know we've we've learned over the years that there are some advisors that we just would rather not work with on a going forward basis just because.

We don't believe that the conversations that they've had with their clients are doing them Justice you know and our real benefit.

 [24:52] 

I mean because because too like when you I think about it this way too like who's left holding the bag when you get down to it and the bag is.

Who's the Department of Labor going to point the finger at and this is what I find is interesting about the whole industry it's like.

They're going to point the finger at you you know you're the fiduciary buyer right you're the trustee they're also going to point the finger at the selling shareholder.

Ultimately right coming through the transaction absolutely yeah absolutely it's they're going to be the 2 main parties who are going to be looked at.

And you know unfortunately the advisors on the on the sell side don't typically get involved.

You know in that uh in that part if if if something occurs so there's not a a whole lot of liability on that aspect yeah so you know it's it's it's really important and you know.

Over the years we've really learned that there are some great salsa advisors who are just.

Not only phenomenal with their clients but are just open and honest about how the whole thing will work and how the process will will will work out.

And then some that are not yeah,

and the kind of there's 2 types right I guess a few categories and somebody told me this and I and I I guess it's true it's like there's no jurisdiction departmentally like Department Labor has no jurisdiction to go after a sell-side advisor.

 [26:18] 

Correct so it's interesting about the whole the whole discussion is like.

They are the ones that Mastermind honestly the whole plan when you get down to it I mean you're going to review everything you're going to have all the data that you can find as they present it to you but ultimately they're the ones that really architect the deal,

with the um representation that the company is full in full knowledge and disclosure of everything which like for instance the company prepared forecast.

You know of course that's always going to be presented as the company prepared that you know which is kind of the industry standard.

 [26:52] 

But in a lot of ways they are going to have a lot of influence over all those parts and pieces so um yeah yeah it it's it's really interesting because you know we've been involved in transactions where.

Everything you know you start off.

 [27:08] 

On on a great note and then as you go down the road you start hearing from the seller expectations about what the value will be,

um and you know when you're nowhere near that it's it's not a it's not a fun conversation when you've when you have your valuation team.

And go through everything and they they look at everything that the company has all the financials their prospects their clients you know everything about the company,

and you are multi-millions of dollars off and then you have to have that conversation.

Um I can tell you from the trustee perspective nobody is happy yeah so that's that's where that you know that education really is is is just key and it makes I think.

At the end of the day everyone's life,

better and and less stressful and uh it's just easier to get a transaction done yep yeah and that's why the podcast exists honestly is to make sure there's there's good honest information out there that hopefully,

you know people are getting this from the conferences the same way but it's not always that way because it's just kind of depends on on the last person you talked to so having.

 [28:23] 

Um and that's why like I would interview all kinds of different trustees in these podcasts because you do I do want to get a good sense for how everybody sees these things um,

yeah absolutely and you know,

being able to for someone to be able to just listen to some of the episodes that you have of the podcast is it's it's really beneficial so they can get.

That third-party perspective on hey this is what I should expect not what not what a single individual is telling me so which is really nice yep for sure.

1 thing that pops up every once in a while with with a a new client that I get with that I get into is.

 [29:03] 

You know they might have in terms of valuation they may have in their in their um.

 [29:09] 

Their minds right strategic value a market approach value that's maybe something here.

And then they have like the fair market value is going to be down here you know some level.

And and I try to explain to them I mean what's the difference between what they think the market first off what they think the market approach is because again that's all about selecting comparables.

But when you get down to the.

The fair market value I kind of I just drive people towards the cash flow like what what is your cash flow really telling you because if cash flow is there first off that'll dictate a value that makes sense for the company.

To borrow money to pay off the debt and and then all of it works very well so as opposed to if I'm trying to hit a market value.

 [29:56] 

That doesn't have the cash flow because some maybe or some kind of tech company that has some some crazy Market approach you know and maybe it's that's real.

But some of that at the very beginning kind of for me can rule out like.

You know whether or not you want to be an ESOP because I've told people this is the number you should get comfortable with this number you should not worry about because that's not really what we're going to structure so.

How often do you see that coming across your table from a negotiation standpoint where where an advisor is trying to get to like a market approach number versus like what we believe really is cash flow where there's a Delta where it's significant.

 [30:32] 

Yeah so for the most part again with the really good advisors we know that that's not going to be an issue,

but it it's with some of those advisors who you know are are telling their clients hey you're going to get this this is what the this is the number you're going to get.

And um,

it's just when you're so far off um you know sometimes the transactions just stop right there in the middle or sometimes through education and through conversations we've been able to talk to Sellers and say look,

this is really reality and this is what you have to think about if if an ESOP is truly what you would like this is the route to go you know if if you don't care you know if if.

To the changing of hands of the employees then you know what do a third-party sale make your money and go yeah but this is not this is not that method yeah I think that's an important Point too like you're.

 [31:34] 

Don't think it's something it's really not at the same time.

There's a there's things that you can do an ESOP and that you could possibly never do with the other type of sale where,

you're able to build Legacy have you stick around longer you know have your people benefit you know in the long term as well and you just can't do that with a third party so it's what you're what's important to you.

You know and I I had a client today I was talking to him about you know how do you define success like in in you know you he's got plenty of money.

 [32:06] 

And that becomes cloudy when people are thinking about the money part like when you start when you really drive into that question and I think a good advisor.

Drives into a bigger picture of of the Outlook as opposed to getting people really excited about like some big number you know,

yeah I I think that that all goes back to that education process and if the if the advisor spending time and and giving a a true realistic picture that's when these are fantastic and you know.

The ESOP itself you know after years we've seen people retire.

You know who who haven't made much you know their annual salary is not much.

For you know uh you know so to say so to speak and you know you look at them when they retire and they're retiring with account balances from the ESOP of

you know hundreds of thousands of dollars that they never would have had,

with another type of retirement plan so yeah it truly is an amazing vehicle that's pretty amazing yeah.

What so what so some some things to people ask me too like what can go wrong after the fact so you do a good deal you feel like we just kind of went through that like you everything's good then what can go wrong afterwards that people need to be thinking about.

 [33:26] 

So 1 of the things that that we've seen and and it kind of goes back to that that role of the ongoing trustee about Park counselor,

is that we've been involved in transactions where,

you know the company is doing amazing for 5 7 years and you do the transaction uh it's at a high value and then a couple years go by and a change in economics just,

that you know Countrywide or industry things change,

and values go down people all participants all of a sudden they get very jumpy they they they you know want to know you know what's happening with their retirement and you know,

so part of the job is is being able to talk to them and counsel them and say hey this is normal this is not something to worry about you know because I've heard stories where people go they they.

 [34:20] 

Will contact the Department of Labor they will,

uh all of a sudden get contacted by a a class action attorney and all of a sudden,

they're suing the company you know the company that they've worked for and they had their retirement and not thinking about what's really happening you know that's that's really kind of the big thing.

 [34:42] 

No I think that's that's important and I think part part of what I would say too is just you know whether you have an ESOP or not you still have a business to run and businesses go through Cycles businesses have all kinds of things that you may not have planned for,

um so you can't plan for everything you got to know you're in it for the long term and you have to walk through um a long-term perspective as opposed to.

A short-term you know trying to get to this big number or you know you just have to you have to kind of Nobody Does that when they're running their own business anyways they just take 1 year fiscal year at a time they do their best,

they make their plans and so I think having a nice steady Pace um is important.

 [35:23] 

Um yeah yeah and funny what you just said is that what you know 1 of the things when we do um an ESOP meeting.

After a transaction is closed that's 1 of the things that we always tell people you know hey new participants new owners,

this is not you're not going to get rich overnight this is this is still a retirement plan so think about it,

years down the road not tomorrow not not 6 months from now this is years down the road so you know if if people can.

Remember that then uh they typically do pretty well exactly yeah and I think that's why having more of,

advisors that can kind of help you a lot of different levels is important um the the other thing I get involved in talking a lot about is is the idea of.

 [36:13] 

The succession plan and who's going to do what and sometimes,

you know it's it's really a spectrum of a lot of different possibilities but sometimes the owners like look I'm really ready to get out as soon as I can other times they're like I could stay do this for the next 10 years I just want to move my ownership.

 [36:31] 

What sort of things do you think are in terms of moving the succession plan forward what sort of things do you would you advise people on you know I've had some clients say I I got to get all this figured out before I do the ESOP.

 [36:45] 

And then or I have other people not really worried about it and they'll just deal with it later what what would you say about like your advice on those things.

Yeah so absolutely giving it some thought before the transaction is always good um you don't have to get everything in place prior to because that ends up,

who knows delaying the transaction for could be how long.

But you know just giving it some thought and what you want to see and you know your timeline as the seller

you know am I going to get out in 6 months or

do I want to stay involved for a period of time you know do I want to stay involved if I especially if I have seller notes that are going to get paid off what is my involvement going to be so I would just say you know from that aspect,

just give it some thought there's no need to have everything figured out all at once or before a transaction,

because even during the transaction things are going to evolve you're going to get different thoughts and ideas about how things should should happen,

looks good now I think that's true and the problem that the 1 thing is that you can't tell people.

That this is exactly the same for every every company's different every single 1 is is going to be completely different and it's a it's a matter of really assessing the talent.

 [38:01] 

Trying to get out of the way when it's time but I think what I would always tell people too is the ESOP at least gives you a tool to use to push forward on the plan where sometimes nothing happens because there's no motivation to move,

out of that spot when you do sell your stock then I think you're motivated by hey I'm I'm already done I'm done really increasing my per share value.

 [38:25] 

Assuming I don't have the warrant but even if I do now it's time for me to kind of move out of the way so I think it uses it helps incentivize incentivize somebody to get out of the way,

but I think it helps people to um,

have some tools so we can connect the key people into the organization like with SARS and with um just having ESOP shares.

 [38:46] 

Yeah and it's it's again also motivate motivating those key employees at that next level to really,

take a new position in the firm and be responsible for you know maybe driving more growth the revenue or cutting expenses doing things,

that will lead to a long-term uh viability of the company,

yeah exactly which which ultimately all comes back to the same same thing in mind which is we want the company to be sustainable we need our good people to do that we need to

to keep moving cash flow that we created before we need we need that to stick and pay off debt and all those things need to kind of work together.

So that's a key element yeah so what we're we're pretty much almost out of time I wanted to kind of thank you again um any any last words of advice for people that are thinking about you know pulling the trigger on an ESOP.

 [39:40] 

I think that you know if it's a thought process that you have really talked to people and,

after after having some conversations if you still think it's the right thing to do you really should do it because it is a wonderful vehicle not only for you as a seller but for your employees uh to reward them,

for their service and their their uh dedication to the company Perfect it's a it's a great process and transaction.

I totally agree I agree well Bill thank you go thank you so much for your time today I know with everything you got going on I appreciate you taking a little time to do this and um no thank you.

For and for everybody else thank you for listening today and we'll we'll see you on our next step on this journey to an ESOP.