Let's say there is a man who has a profitable company. Upon his death, he wishes the company to be transferred to at least some of the long term employees. He would prefer that it continue to employ people and support its customers and vendors, but secondarily it could be sold and the proceeds divided among the employees based on seniority.
1) Depending on the law at the time, the tax burden of a transfer of ownership could be enormous and enough to make the new owners insolvent, and thereby prevent it from continuing.
2) It will be impossible to sell it for what it’s worth, because the proceeds passed to the employees would be sufficient for most of them to quit their jobs, and the value of the company is closely tied to the employees. The real value of the company is their ability to produce a profit. If they are leaving, nobody will be buying.
It’s a catch 22. Maybe I'm alone on this, but this post forced me to finally know the origin of that term after pretending to my whole life.
“The term catch-22 was coined by Joseph Heller in his novel Catch-22. Initially this is based on the explanation of the character Doc Daneeka as to why any pilot requesting a psych evaluation hoping to be found not sane enough to fly, and thereby escape dangerous missions, would thereby demonstrate his sanity:” ~ Wikipedia
1) Is there a way to avoid the pitfalls above?
2) If you were a key employee, middle aged, and likely to inherit this, what would you want to happen?