Fieldfisher has advised on the first move to employee ownership in the biomolecular industry in the United States.
Founded in 2007 by Drs. Russell Hart, Nancy Schmidt and Barbara Scheuer, Arbor Assays, a small Ann Arbor company with a global reach, designs, develops, and manufactures detection and immunoassay products for important research biomolecules.
On 1 January 2017, Arbor Assays (A2) became an employee-owned company through the use of a “perpetual trust.” The owners sold their interests to the employee trust and provided seller financing. Arbor Assays now has 11 employee owners. While a relatively new technique in the United States this arrangement is more common in Great Britain where “perpetual trusts” are widely recognized.
Until the end of 2016 Russ Hart and Barb Scheuer each owned 45% of Arbor Assays while Nancy Schmidt owned the other 10%. Bobbi O’Hara, R&D Project Manager at Arbor Assays, led the employee group through the transaction, having been elected as the Employee Representative. Russ, Barb and Bobbi are Directors of the Perpetual Trust that now owns all the stock of Arbor Assays, Inc.
This is the second transaction of its kind in America. The first company to adopt the UK employee ownership model was Wimberly Allison Tong & Goo (WATG), the leading international design consultant to the hospitality, leisure and entertainment industries. Graeme also advised on that transaction.
The transaction involved a team of professional advisers. A2 used Bruce Elliott at Conlin, McKenney & Philbrick, and Christopher Moceri at Jaffe, Raitt, Heuer & Weiss to handle US legal work. Atty. Deborah Groban Olson, Executive Director of the Center for Community Based Enterprise (C2BE), was hired to represent the employees during this period and to work with Arbor Assays to ensure that the company is run for the benefit of the employees.
This method of employee ownership maintains the company perpetually for the benefit of its employees, while eliminating the need for the company to repurchase shares from terminating employees. Financially, the employees will benefit because, in addition to their basic compensation, the trust will annually allocate revenue not needed for company operations or future investment, to participating employees.
Fieldfisher has advised with a team led by Graeme Nuttall (Picture).
Involved fees earner: Graeme Nuttall – Fieldfisher;
Law Firms: Fieldfisher;
Clients: Arbor Assays;