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lwpat, Attorney
Category: Business Law
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Experience:  Attorney with over 35 years of business experience.
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Background 100 shares stock/closely held corp. 50 shares

Resolved Question:

Background: 100 shares stock/closely held corp. 50 shares to 1 individual and 50 shares held jointly by 3 people. By-laws state a quorum is a majority of the voting shares.

Individual with 50 shares calls a shareholder meeting not in accordance with by-laws. Corporate Secretary responds with reasons why his "notice" is not legally sufficient and re-schedules a proper shareholder meeting according to by-laws. Individual goes ahead and "holds" a shareholder meeting anyway without the voting quorum and "elects" new Board Members/Officers, then files this information with the NC Secretary of State.

Question is - would this be a legal meeting and election and how would the remaining 50 shareholder votes overturn his actions?
Submitted: 3 years ago.
Category: Business Law
Expert:  Richard replied 3 years ago.

Good evening. It would not be a legal meeting and it would not be a valid election of the Board. If the 50% shareholder will not voluntarily agree to rescind this action, you will need to file a petition seeking a court order compelling a rescission and an injunction preventing such action in the future.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 3 years ago.

Why then, would an attorney (his) allow this to happen? Would we have any recourse against the individual other than filing a lawsuit (expensive) and could the new "directors/officers" have any claims against the corporation? Do we have a complaint against the so-called new officers/directors as they went to the illegal meeting and agreed with everything.

 

FYI the stock this individual obtained was not properly transferred to him according to the by-laws (not signed by corporate secretary; not in numerical sequence; books were not closed 30 days prior to meeting/elections; obtained from elderly woman who was recovering from a recent heart attack. This individual also signed on a corporate lease agreement however he has breached the lease. This was a family company and he coerced the shares out of our mother without any of the children knowing until after she died. He immediately filed a lawsuit trying to take the entire company. His lawsuit was dismissed as he had no claim but the Judge failed to rule on the ownership of the stock.

Expert:  Richard replied 3 years ago.
I will opt out and let another expert help you from here. You take care.
Richard, Attorney
Category: Business Law
Satisfied Customers: 47093
Experience: 32 years of experience practicing law and a businessman.
Richard and 2 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.
How do I get someone else to review questions?
Expert:  Richard replied 3 years ago.
Let me try to refer you to some specifically.
Customer: replied 3 years ago.

Super - thanks.

Expert:  Richard replied 3 years ago.
Let me know if someone doesn't follow up.
Richard, Attorney
Category: Business Law
Satisfied Customers: 47093
Experience: 32 years of experience practicing law and a businessman.
Richard and 2 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.
How long should I wait so I won't bug you?? :-)
Expert:  Richard replied 3 years ago.
You're not bugging me....Let me see if I can find someone else, since the person I originally pegged has not picked up. No worries.
Customer: replied 3 years ago.
Great. I've left two positive feedbacks for you. I'm drowning in this corporate stuff for a small closely held company and sure hate to go the lawsuit route if I can find the ammunition to fight without it.
Expert:  Richard replied 3 years ago.

Thank you so much for the feedback. I understand your frustration. The 50% shareholder does not control a majority, so if the rest of you stand together, the 50% shareholder cannot out vote you guys on anything. You have just as much right to do what he is doing as he does.

Customer: replied 3 years ago.
We know that but he's back dooring us every time we turn around. I'm trying to find a statute of some sort that will make him back off. This latest gimmick just blew me away and to find out that his attorney allowed him to do it and even attended the meeting just makes me wonder what he has up his sleeve. I am worried that the board members/officers he "elected" will now get their paws in our company. It would be great if I could find a NC attorney on line to help me.
Expert:  Richard replied 3 years ago.
I'll do my best to find one for you.
Richard, Attorney
Category: Business Law
Satisfied Customers: 47093
Experience: 32 years of experience practicing law and a businessman.
Richard and 2 other Business Law Specialists are ready to help you
Expert:  lwpat replied 3 years ago.
I don't know of a NC attorney on the board but I am a business law attorney and have handled such situations before. I also hate to be the bearer of bad news but your only legal recourse is to file in the local circuit court for a Temporary Restraining Order preventing the "new" board members from taking office and making any corporate decisions. I am also surprised that an attorney would assist. Take that back, actually I am not. You are correct that it will be expensive and it could take several years. The last one similar to this that I was involved in took three years with $$$$$ in legal fees. One problem is that the other party will try to use the corporate bank account to fund his legal fees so you need to ask the judge to block his use of the corporate treasury and appoint an independent receiver. You will need a business law attorney in your area and one that has handled a corporate freeze out situation. Here is the site

http://www.avvo.com

Here is a SC case

http://www.judicial.state.sc.us/opinions/displayOpinion.cfm?caseNo=25244


Here is also an excellent article on NC law

http://www.nexsenpruet.com/assets/attachments/581.PDF


Good luck to you, you are going to need it.
lwpat, Attorney
Category: Business Law
Satisfied Customers: 25384
Experience: Attorney with over 35 years of business experience.
lwpat and 2 other Business Law Specialists are ready to help you

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