A corporation is owned 65% by a private individual and 35% by an ESOP. The individual wants to sell another 35% of the corporation's stock to the ESOP. The Seller wants to make the sale transaction effective as of January 1, 2003. Closing of the sale will actually occur on June 1, 2003. Individual wants to sell his stock at the price that the stock was appraised on January 1, 2003 Now, realizing that the ESOP cannot buy the stock at a price greater than its fair market value on the date of closing, isn't this transaction okay so long as an update of the January 1, 2003 appraisal is done and the update shows that the appraised value on the date of the closing equals or exceeds the January 1, 2003 price??
Since a valuation study takes time, in a sale to an ESOP, mechanically how do you coordinate the timinng of the appraisal and the closing? How can you get an exact appraisal value as of the date of a closing??