Supreme Court Holding In Connelly Requires that Redemption Agreements be Reconsidered

On June 6, 2024, the U.S. Supreme Court issued a unanimous opinion on a closely held business valuation case that will have significant impact on many family and closely held businesses. Connelly v. United States, U.S., No. 23-146, Opinion 6/6/24. The case addressed the valuation of stock in a closely held business and held that the obligation of an entity to buy a deceased equity owner’s shares does not reduce the value of the insurance proceeds received by the entity to fund the buyout. The Supreme Court’s ruling resolves the conflict between the Connelly case and Estate of Blount v. Commissioner which had reached the opposite conclusion. What should practitioners be telling clients now? Will every redemption agreement be adversely affected? Should redemption agreements be restructured as cross-purchase agreements? Should more insurance be purchased to address potential estate taxes? How will the reduction in the exemption in 2026 exacerbate the negative repercussions of Connelly?

Speakers: Jonathan G. Blattmachr, Prof. Mitchell Gans, Robert S. Keebler,  and Martin M.  Shenkman

Sponsors: Interactive Legal Systems (ILS), Peak Trust Company

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* No CPE, CLE, etc. is offered but a certificate of attendance will be provided.