Client Spotlight: Cheever Construction

Written by Ronald L. Ecklund, CPA, CFP, Director

At HBE Becker Meyer Love LLP, one of the characteristics we are most proud of is our firm’s ability to recognize the need for change and to successfully adapt to it. In fact, our firm’s own name changes over the years have somewhat indicated to the world our thoughts on change. Our firm was founded in 1974 by Mr. Dale Gruntorad and was originally known as Gruntorad & Company, CPAs. Upon Mr. Gruntorad’s retirement, the name was changed to Hanigan Bjorkman Ecklund, which represented the second generation of partners. As the firm transitioned to the third generation of partners, our name once again changed to reflect our evolution, and today we are HBE Becker Meyer Love LLP. Clearly, succession planning and transition have been important parts of our culture throughout our firm’s history.

We also strive to help our clients navigate the succession and transition process. One of the clients we would like to highlight in this regard is Cheever Construction. Cheever Construction was founded in the late 1950’s by Clifford C. Cheever. When Cliff began his retirement in April 1997, he also began a long-term plan for his succession. Initially that involved selling minority shares of the company to key employees to ensure continuation of business operations and surety bonding responsibilities.

One of Cliff’s chief objectives was to create a way for his sole ownership to be bought out by his loyal employees who had made his success possible. An Employee Stock Ownership Plan (ESOP) was put in place to begin the systematic transfer of company ownership to the valued employees that helped make Cheever Construction successful.

When the company began planning for this change in ownership, the key employees who were managing the company contacted our firm for assistance. At the time we became involved, the negotiations between Clifford Cheever and the ESOP had been going on for some time, with little progress made toward that final ‘leverage step’ in Cliff’s exit strategy.

Through a series of meetings with our firm, we were able to help Cheever’s new managers establish funding for the buyout, as well as a strategy for funding their own eventual buyout by the next generation of owners. This took several steps, including a change in the type of tax entity the business operated under, to take full advantage of the Minority Shareholders and ESOP Shareholder ownership structure.   In 2005, the ESOP accomplished a full leveraged purchase of all stock from Clifford and became 100% employed owned.

The next step involved strategies for profitability and funding to enable the ESOP to purchase all outstanding Minority Shares and become 100% ESOP Owned. That goal was accomplished in 2012 and today, we continue to serve Cheever as their company grows. Recently, we assisted the new owners in the company move to a larger facility in north Lincoln, which they now own.

We had many times attempted to reach an agreement on the transition of ownership, but it didn’t happen until HBE became involved. We very much appreciate their involvement with our management team since we have accomplished the change in ownership and acquired our new location.  HBE continues to assist us as we proactively prepare for future transitions of our leadership team.

~ Wes Oestreich, President, Cheever Construction

Cheever Construction prides itself in its construction methods and techniques, but also in the way the company internally strives to be actively involved in and continuously expanding their community involvement and participation. To learn more, please visit the Cheever Construction website

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