transferring stock 12 years after death

[rwillia2]

Hi All,
My Mother has a stock certificate that her deceased husband bought in 1979. It is for a private corporation that is still in business.The company is located in Missouri and my mother and I live in Ohio. The president/owner is giving us a hard time about it. He says the company has never made much money, the stock is nontransferrable because it is in my stepdads name only. I have been trying to get him to send me financial reports for two weeks and finally received one on Fri. the 17th, for the "12 month period ending June 30, 1999". He said this is the latest one, but according to the Sec. of State web page (Missouri) the latest annual report was filed 10/11/00. After all of his moaning, complaining, and crying broke, he said he would talk to his CPA and see what he could offer, if anything, at this time for the stock. According to the report he sent(after stalling for 2 weeks) the company had sales of almost a million dollars and a net loss of $3,000+ for the year. I really don't believe anything this guy says, I've done some searching on the net and found that the company has some government contracts.(with the state of NJ, IND, Malstrom AFB in Montana, they're registered with the GSA, etc.)If anyone knows how I could verify his information I would really appreciate it!
My main question for this board is; how do I transfer this stock to my mother? My stepdad passed in 1989.
thanks in advance for your help!!
Ray

 

[ALawyer]

If your father had a Will the executor could transfer it to the beneficiary; if he did not and you had an administrator (typically your mother would be appointed) the administrator could effect the transfer.

There probably is some type of shareholder's agreement that talks about transfers and restricts certain distributuons, such as anything needing SEC registration like a public offering", or gives the company or others rights to repurchase, etc.

But the fact remains that once transferred the shares will remain illiquid and as a minority shareholder of a privately held business there will be very few rights that the shareholder has. As a privately held company, the principal owners typically try to operate it to show little if any profits. For example, they can pay themselves salary and bonuses to wipe out profits. They can havce the company pick up what might otherwise be personal expenses (such as that 2 week trip to France to look at acquiring or doing a deal with a French company with offices on the Riveria) and act to wipe out what might otherwise be profits. They do not want to pay Uncle Sam any more taxes on the corporate level then they have to and do not want to pay taxes on a personal level either.

I think I answered a question on this topic from you or another with a similar story before. But let me repeat what I said: if you want to get the real value out of the shares (and recognize the value may be small) you'll need professional help who knows business law and knows what buttons to push and how to get results for you. Doing it yourself will get you 25% of what the shares are worth, at best. An expert can get you alt least half of the value without litigation.

I repeat, The company

 

[rwillia2]

ALawyer,
Thank you for your reply, I really appreciate it.
The owner has said that he would make us an offer (if he could)after he talks to his CPA. My mother is losing her house on Dec. 4th, so time is very important right now. If he offers enough to help my mom save her house, we will take it, if not, we will get a lawyer and fight for more. Until then I would like to have a little more knowledge to negotiate with. If you don't mind, I'd like to ask a couple more questions?



You mentioned there should be a shareholder's agreement. Would the "Agent" for the corporation have this?

The President/Owner is also listed as the agent, as shareholders can we "Demand" to see the annual report he filed with the sec. of state on 10-11-00? (instead of one that is a year and a half old?)

I am interested in how many shares there are for the company, how can I find that out? Is he required to give that information?

As shareholders do we have an ownership interest in any equipment the company owns?

Is there any way to verify the information he sends me?

The stock is listed as class B, common stock. With this type of stock, would we be due anything from the last 22 years? like dividends? would that info be in the agreement?

I really appreciate your help ALawyer, thank you very much.