The Dividend Window: Liquidity Options for Private Equity Investors and Business Owners Created by the New Tax Law
- Topics:
- Commercial Banking
- Tags:
- Dechert,
- Private Equity Fund,
- Private Equity,
- Liquidity,
- Investor,
- Investment,
- Financial Services,
- Finance,
- Dividend,
- Tax
- Source:
- Dechert
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Overview: This paper highlights Liquidity Options for Private Equity Investors and Business Owners Created by the New Tax Law. On May 28, 2003, President Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003 into law. If a private equity fund holds voting or convertible preferred stock and management holds vested common stock and it is intended that management participate in the distribution, a dividend on both classes of stock may be the obvious solution to take advantage of the reduced rate, since the private equity fund will probably not accept the shift in voting power required to meet the redemption test.
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Format: PDF | Size: 367KB | Date: Jun 2003 | Pages: 5
