Business Planning. Closely Held Enterprises. Fifth Edition. Case problem $10$B$.$ Olson Consolidations Inc. is a successful shipping company owned by David and Kathy Olson, both age $64.$ David is the chairman of the company. David's oldest shind of the company for president and CEO and has been the diving force behind $23$ and toppany for the last five years. Jason joined the company at the age of $23$ an itok over the reins $11$ years later. The company s growth and admired position in the industry are due to Jason's efforts.

David and Kathy have four other children, two of whom work for the company. Judy, age $35,$ heads up the company's customer service operation and, in Jason's opinion, does $"$an adequate job." Luke, age $27,$ works in field operations because, according to Jason, $"$he can't find another job." The other two children, Roger, age $32,$ and Julia, age $30,$ have never worked for the company. Roger is a dentist, and Julia is a CPA.

The company has nearly $250$ employees and sales of approximately $$40$ million a year. Its pre$-$tax income is close to nine percent, nearly $$3\mathrm{.}6$ million a year. It has always been a C corporation. Its balance sheet shows total assets of $510$ million $($consisting primarily of account receivables and equipment$),$ liabilities of $$2\mathrm{.}5$ million, and equity of $$7\mathrm{.}5$ million. David believes the company is worth between $$22$ and $$28$ million, but he has no interest in selling the company.

Jason feels that he is at a crossroads in his life. He is tired of building "Mom and Dad's Company." He has made it clear to his parents that he will leave and start something on his own if they do not start the process of transitioning control and ownership of the business to him. He is not demanding that he be given more than an equal share of his parents' estate at this time, but he is through building value for his brothers and sisters, none of whom understands the business or Jason's role.

David and Linda's other assets, apart from the business and life insurance, have a value or approximately $$12$ million, putting their total estate $($exclusive of life insurance$)$ in the $$34$ million to $$40$ million range. These other assets include a $52$ million debt$-$free building that is leased to the company. David and Linda have a $$2$ million survivorship life policy on their joint lives. The children are the $4$ min debt fre torship lite poliey on thei jo colives. The children are tie have a $52$ million survivorship life policy on their joint lives. The children are the named beneficiaries on the policy.

David and Linda are concerned about Jason. His loss would seriously hurt the company. David knows that there is no way that he could step back in and pick up the slack. And if Jason decided to stay in the same industry and compete, he could destroy the company very quickly. Nearly every employee and customer would be up for grabs, with the advantage to Jason. For these reasons, David has challenged Jason to come up with a plan that will be fair to all the children, ensure that David and Linda are protected for the rest of their lives, and give Jason what he wants.

Jason has requested your advice. What ideas to you have for Jason consider? What additional facts would you like to have?