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Law Pro
Law Pro, Attorney
Category: Business Law
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Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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I am a shareholder (common and preferred) and a secured debtholder

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I am a shareholder (common and preferred) and a secured debtholder (debt is in default) of a PA private corporation with 100+ shareholders and organized in 1996. Under PABCL what financial information am I entitled to upon request? The bylaws defer to the PABCL code. I received an income statement and a balance sheet but would like to receive the Accounts Receivables and Accounts Payables along with a list of their biggest customers in 2009.
Submitted: 4 years ago.
Category: Business Law
Expert:  Law Pro replied 4 years ago.

No, your not entitled to that information. You simply entitled to their financial information such as balance sheet and income statement - basically a prospectus.

 

That although your an owner (common and preferred) of the company - that is privileged information.

 

Do you think you want to make a claim for mismanagement or something and that's why you want the information or what?

Customer: replied 4 years ago.
My debt is in default and is secured by a master security agreement with 3 other parties. My preferred stock is also in default and has a put feature after a certain date which has past. The company has other debt which it just tried to settle to no avail. The company continues on paying management high salaries and paying for a new PR campaign but will not negotiate with me. I have been told that I cannot seize cash in bank accounts. I am frustrated with the fact that I might have to file against them to get anywhere. If I could get their A/P, I could find inventory that I might be able to seize.
Expert:  Law Pro replied 4 years ago.

Then you have to repossess or foreclose on that collateral.

 

That is just wrong that you can't seize bank accounts - however, you have to have a judgment to do such. That they have given you a secured interest in collateral to secure payment of debt - then what you have to do is repossess for foreclose on that collateral, sell it, then pursue them for any deficiency. Then you can obtain any and all information you want about their accounts receivable, etc. because your judgment creditor and you can send them interrogatories in aid of execution.

Customer: replied 4 years ago.
What I don't understand is the foreclosure on property. The company has only some cash and inventory and no other hard assets other then a few computers and some old furniture. How do I foreclose on the inventory? If I knew where it was, what would make the warehouse turn it over to me other than a dated agreement that they wouldn't understand and would not know whether my debt was satisfied or not.
Expert:  Law Pro replied 4 years ago.

If your not the landlord and can "lock" them out of the property and use the inventory as collateral for the rent - then you have no alternative but to file suit against them for monies owed.

 

Thereafter, assuming you would win the award for the monies owed, then you can file the award as a judgment and then pursure execution against their assets for payment of the judgment.

Law Pro, Attorney
Category: Business Law
Satisfied Customers: 23990
Experience: 20 years experience in business law - sole proprietor, partnership, and corporations
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