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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 116818
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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The owner of the company I previously worked at has decided

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The owner of the company I previously worked at has decided to close and dissolve the business. However, I own stock in the company that I acquired from the Buy-Sell Agreement in place between the owner and employees. These were common stock, but not publicly traded and did not come with voting rights. He claims he does not HAVE to consolidate all the stock to dissolve the business, but said it makes it easier. My research leads me to believe he must buy back the stock before closing the company. He has made me a low ball offer for my stock and I want to know if I have grounds to request more money for him.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

Yes, the board of directors may set the value of stock reasonably based on the value of the company. If you believe he is setting the stock value too low, then you have a right to fight him over improperly devaluing the stock to dissolve the business. However, to dissolve the business without bankruptcy, he has to pay out share prices to shareholders to buy out their shares on dissolution.

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Customer: replied 3 years ago.

Thank you. As part of the Agreement, there was a firm formula specified to calculate share price and had to do with current and two past years sales. When I left three years ago share price was calculated at about $220. His offer to me was $20, so I am sure it is under the value that should be calculated. So, he has to buy back my shares or would have to go bankrupt to close it? Personal bankruptcy?

Thank you for your response.

You have a right to insist the share price be calculated in accordance to the formula and if they refuse you can sue them and he will legally have to buy back your shares or file bankruptcy and if he files bankruptcy then you would file to be a creditor in the bankruptcy so you can get something from the bankruptcy for your shares.

He certainly is way undervaluing those shares based on what you are stating and he is bound to follow the formula.
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