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ESOP/COOP partnerships, income equality and capital expansion for worker owners

December 19, 2014
  • Coop/ESOP owns a farm worker labor service.

Individual farmers form a farm labor LLC and sell the LLC to the COOP/ESOP, the LLC is the farmers hired farm workers or employees service performed and this is an asset.

The LLC sell to the farmer’s coop is the incentive to the farmer to place her farm workers in to the employment of the Coop/ESOP so that those employees may share in the progits of the coop/ESOP

Farmers receive capital from the sale of the farm worker LLC

Farmers pay the co-op/ESOP for the farm labor, the farm labor are now employees of the ESOP/Coop entity and are thus employee owners

Farm labor participates in the ESOP and looks to income equality and home ownership opportunities.

Co Op food processing labor also participates in the farmers coops ESOP along side farm labor; both groups recover the surplus value of labor through the ESOP and greater employee participation and innovation.

Coop acquisition strategy through the leveraged ESOP; expanding farm and food processing labor income equality

  • Let us use Land O lakes farmers co op as an example, it has 3000 employees in its food processing plants and the coop has a value of $ 6,758,210,000
  • So a leveraged ESOP purchases 49% for $3,379,105,000 and cash flows over time pay down this debt and this becomes employee owned equity.
  • Land O Lakes a co op/ESOP partnership and flush with $ 3 Billion now goes and acquires another coop and that coop now becomes 49% employee owned.
  • An example of an acquisition target might be Ocean Spray Cranberry farmers cooperative.
  • Most Farmers coops-are non-profit
  • so the ESOP would have to own a corporation in a GP with the non-profit
  • In the case of for profit coops, the ESOP percentage of ownership is tax-free cash flows.
  • each individual farmer places his farm workers into a farm worker leasing company(LLC) and sells the LLC to the CO-OP.

The Land O lakes and Ocean Spray both are farm labor intensive and its these farm workers most in need of income equality.The Proposed ESOP would leverage loaned equity through the ESOP to purchase 49% of the other CO-OP.Both co-ops are labor intensive in the processing of the products and these workers in the plants would own 49% after the leveraged ESOP loans were paid off

http://www.hoards.com/sites/default/files/12_Oct10-top50-coops.pdf

http://www.ncfc.org/map

http://www.landolakesinc.com/stellent/groups/public/@lolinc/documents/web_content/ecmp2-0183311.pdf

http://blogunitedcranberry.files.wordpress.com/2013/05/statementofundistutedmaterialfactsmay2013.pdf

http://www.uwcc.wisc.edu/pdf/case%20studies/19cranberryjan06.pdf

http://www.uwcc.wisc.edu/pdf/case%20studies/19cranberryjan06.pdf

http://www.rurdev.usda.gov/SupportDocuments/rdTop100AgCoop2011-Oct2012.pdf

http://www.rurdev.usda.gov/SupportDocuments/rdRuralCoop_Sept_Oct13Vr_Web.pdf

Cooperative Development Institute

(CDI)

seeking Mentor Protege

Veteran small business set aside

Steven Torry Rappolee
Terrestrial & Cislunar Exploration technologies
A Post 9/11 Veteran owned concern
810 334 4374
Fax 810 449 5484
UM Flint Student Business Incubator, #207
423 North Saginaw Street,Flint, Michigan, 48502

 

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