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Deceased relative stocks liquidation

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1 Deceased relative stocks liquidation on Thu Nov 24, 2016 6:16 pm

hodouk


Arresto Menor
Hello! A little background on my query.

Our father passed away years ago and he has stocks in the company he worked for that we have been trying to get liquidated (or sell, if that is a more apt term). The company would like to buyout our father's shares and we have no issues with that. The problem we have is that we are being told that they don't have enough to buyout my dad's shares. What's more, we are not receiving dividends from those stocks because they have pending cases which bar them from releasing dividends. And they refuse to let us know the value of the shares. The company is privately owned.

My questions are:
1. Is the company allowed to withhold dividends due to pending cases?
2. If the answer to the above question is yes, once the pending cases of the company are dealt with, are the withheld dividends amount to what is worth on the year it will be given or are we supposed to receive dividends owed from the time it was withheld?
3. The company tells us they don't have the money to purchase the stocks, can we sell it to someone else who does have money and does the company have the right to refuse outsiders (not employed by the company) from purchasing the stocks?
4. Are we entitled to know the value of the stocks?
5. Is there any way to liquidate the stocks and retrieve the dividends even if the company has pending cases?


Let me know if additional information (I won't really give specifics about it but will articulate as best as I can) would needed to understand the situation.


Thanks!

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2 Re: Deceased relative stocks liquidation on Fri Nov 25, 2016 4:11 am

Lunkan


Reclusion Perpetua
Are you sure it's a company and not a Partnership?

What TYPE of pending case is it, and how much money is it about, and how big risk it will be lost?
You DON'T need to tell me, but you need to think of that when you think of the valuing.

1. I suppouse they are DEMANDED to NOT pay dividend during the pending case.

2. You have right to same dividends as the other share holders get,
BUT it seem they haven't got any.

Do you mean the other share holders
or the company
don't have money to buy the shares?
If it's the company, then it's big risk it don't have money to pay any dividends.

3. Does a contract say it isn't allowed?
SOME companies have such.

4. "And they refuse to let us know the value of the shares. "
Well. It's hard to value shares, which aren't at the stock market.
IF the TREND of result is no big change during the years, then a traditional way to value the COMPANY is the SUM of:
a/ The RESULT for the last 3 years
b/ plus "junk value" = The value of assets if they are SPLITED and sold separatly. (Such as mashines, building, products in stock...)
c/ But MINUS counting for the pending case.

Then split the sum with how many shares there are and multiplicate with how many shares your father have.

"The company is privately owned."
SEC registered?
If Yes, I believe you can get a copy of result and ballanse sheets from them.
If No, demand to get them for the last years from the company.

5. I don't know, but I suppouse NOT, because the opponent want to get pay if he winn the case.

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3 Re: Deceased relative stocks liquidation on Tue Nov 29, 2016 12:52 pm

hodouk


Arresto Menor
Hi Lunkan,

Thanks for the info! Especially on #4.

We're unaware if they have been demanded not to pay, though I know when our dad was alive and the company had cases on their plate, dad was still able to get dividends.

My siblings will check the contracts if they can. I'm not sure how much paperwork they've checked but I am sure they are SEC registered and they were able to check the balance sheets of the company last year. And yes, they are a company, not a partnership.

The types of cases they have mostly deal with disability claims but I think the one that is of not is like a company takeover kind of case (not sure how to phrase that).

Oh, also for #3, I learned that it can't be sold to outside parties. That information I got from my siblings, but I haven't seen or read the contract myself.

Will try to get a hold of the contract (I am under the assumption that my siblings have atleast a copy somewhere) and then message again when I can.

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4 Re: Deceased relative stocks liquidation on Tue Nov 29, 2016 7:24 pm

Lunkan


Reclusion Perpetua
"We're unaware if they have been demanded not to pay, though I know when our dad was alive and the company had cases on their plate, dad was still able to get dividends. "
The difference can depend of how big demand it is, how big risk it is the company don't have money enough to pay the demand if they lose in court, and I suppouse the opponent can ask the court to agree to dividend block until the case is decided.

"My siblings will check the contracts if they can."
Isn't there one origin among your father's documents too?
Or you can demand a copy from the company.

"SEC registered and they were able to check the balance sheets of the company last year."
Then you can see balance sheet and result for earlier years too.

So your sibblings saw the situation last year. When you see some more years, you can value the shares as I described (if the result is rather stable).

"The types of cases they have mostly deal with disability claims but I think the one that is of not is like a company takeover kind of case (not sure how to phrase that)."
That explain why they don't allow dividends, because otherwice can the company be plundered by the owners now (=your father's bussiness partners).
But then it seem the opponent will BUY OUT your father too (?). If so, toy don't need to try to sell.

" for #3"
Perhaps it's the case opponent, who want to buy your father's shares Smile
Or what type of buyer is it?

Yes contracts can be very important.

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