I am a shareholder in a New Zealand registered company. In fact I am a former Director of this company. I got "given" a
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Customer: Hi Pearl
JA: Hello. How can I help?
Customer: I am a shareholder in a New Zealand registered company. In fact I am a former Director of this company. I got "given" a block of shares which I have been told are "sweat equity". Ie: remuneration by way of sweat equity shareholding. Now, I believe, in short due course, like now during April, I am told that there will be a "company shareholder offer" made. The one current director is telling me they have to establish what my share is worth. I feel that I should be made the same price offer as all other shareholders within this company. I realise that the Board can make me an offer. But surely you cant offer all shareholders one price and myself (a sweat equity guy), another. I dont know the Law. Please could you advise. Thank you so much, regards ***** ***** mail address is***@******.***
JA: Have you talked to a New Zealand lawyer about this?
Customer: No not as yet.
JA: What steps have you taken so far?
Customer: None at all. I was hoping Ellen could advise me.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No, that's it. I just need to know whether the Board "has to by Law", offer me the same price in the Offer, as all the other shareholders.
JA: Hello. How can I help?
Customer: I am a shareholder in a New Zealand registered company. In fact I am a former Director of this company. I got "given" a block of shares which I have been told are "sweat equity". Ie: remuneration by way of sweat equity shareholding. Now, I believe, in short due course, like now during April, I am told that there will be a "company shareholder offer" made. The one current director is telling me they have to establish what my share is worth. I feel that I should be made the same price offer as all other shareholders within this company. I realise that the Board can make me an offer. But surely you cant offer all shareholders one price and myself (a sweat equity guy), another. I dont know the Law. Please could you advise. Thank you so much, regards ***** ***** mail address is***@******.***
JA: Have you talked to a New Zealand lawyer about this?
Customer: No not as yet.
JA: What steps have you taken so far?
Customer: None at all. I was hoping Ellen could advise me.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No, that's it. I just need to know whether the Board "has to by Law", offer me the same price in the Offer, as all the other shareholders.
Answered by Chris The Lawyer in 8 hours 1 year ago
Chris The Lawyer
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Chris The Lawyer, Expert
Hi
I am a New Zealand lawyer based in Wellington and will help you with your question today. Please give me a minute to read the question
Chris The Lawyer, Expert
Sometimes shares are created in different classes, but if all these shares were the same when created then they have the same value. So they should offer to buy you out based on what the shares are worth overall, rather than for your sweat equity shares
Customer
Good morning ChrisThanks so much for getting back to me.Chris the short story is this -
It's quite a substantial amount of stock that got given to me.
I resigned from the company in late 2017. There was absolutely a big amount of jealousy involved regarding my stock (it's a long story), which led to some animosity.Now, I'm told that the Board needs to put a value on "my stock".What's causing me anxiety is I've heard from a reliable source that the offer will be between USD0,50 and 0,60 ps.
I know for fact that the Board are going to try and skin me by offering me eg: USD0,05 ps.
Can they do this ?
Or do they also have to offer me 0,50 / 0,60 ps ?
It's quite a substantial amount of stock that got given to me.
I resigned from the company in late 2017. There was absolutely a big amount of jealousy involved regarding my stock (it's a long story), which led to some animosity.Now, I'm told that the Board needs to put a value on "my stock".What's causing me anxiety is I've heard from a reliable source that the offer will be between USD0,50 and 0,60 ps.
I know for fact that the Board are going to try and skin me by offering me eg: USD0,05 ps.
Can they do this ?
Or do they also have to offer me 0,50 / 0,60 ps ?
Chris The Lawyer, Expert
They need to offer the actual value
Customer
Hi ChrisI apologise if it seems I'm being rude and I really appreciate and value the advice you're giving me.Your sentence "if all the shares were created the same" ...
I dont know whether or how this may affect me.The company share is the company share.
But ... during a 3-4 year period of time, this share got sold at different prices.
Ie: some shareholders paid 1,50. Some paid 1,00. Some paid 0,50. Some paid 0,20 ... and so on.
I got mine for free.So with this in mind how would this affect me ?I think I might be "caught out", and have to accept what the Board determine is "my value".
I dont know whether or how this may affect me.The company share is the company share.
But ... during a 3-4 year period of time, this share got sold at different prices.
Ie: some shareholders paid 1,50. Some paid 1,00. Some paid 0,50. Some paid 0,20 ... and so on.
I got mine for free.So with this in mind how would this affect me ?I think I might be "caught out", and have to accept what the Board determine is "my value".
Chris The Lawyer, Expert
I assume you don’t have a shareholder agreement with a formula for calculating the value of the shares nor does your company constitution. Usually there should be process for valuing shares. It doesn’t matter what you paid , if anything. It’s the value as at the present
Chris The Lawyer, Expert
But in a small closely held company they likely have the power to set a price and while you don’t need to accept, it would be possibly difficult to sell the shares to others
Customer
Chris that's correct. There was never a shareholder agreement with any formula to detemine the value of the shares.
So I then take it that the Board should make me the same offer as everyone else ?
So I then take it that the Board should make me the same offer as everyone else ?
Chris The Lawyer, Expert
They should offer what the shares are worth
Customer
Chris, thank you very much indeed.
This has been an ongoing stressful saga for a LONG time.
I appreciate and value your advice very much.
In case I pick up hassles with these guys, could i call on you please to perhaps write a representative letter, if need be ?If so please send me your company name and / or mobile number.My mobile number is ***** 61(###) ###-####Thank you again Chris
Have a great day
Cheers Steve
This has been an ongoing stressful saga for a LONG time.
I appreciate and value your advice very much.
In case I pick up hassles with these guys, could i call on you please to perhaps write a representative letter, if need be ?If so please send me your company name and / or mobile number.My mobile number is ***** 61(###) ###-####Thank you again Chris
Have a great day
Cheers Steve
Chris The Lawyer, Expert
You can contact me at***@******.***
Customer
Wonderful, thank you, cheers ***** *****
Chris The Lawyer, Expert
Thanks
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