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My mother died in 2001 and I inherited 6% in stock of a family

business upon her death. The...
My mother died in 2001 and I inherited 6% in stock of a family business upon her death. The company received had purchased her a life insurance policy for the amount of $450,000.00. So upon her death, the 6% of the stock was mine. My brother at the time was the president of the company and bought my stock for $4,000.00. Should I have received a 6% portion of the companies total assets plus 6% of the life insurance money that was distributed from the insurance company because there was no proof shown to me as to the value of the companies assets plus would the insurance money be considered as part of the companies assets? I do know that he gave his wife 25% of the stock when my brother died (25% was my brothers percent in the company) and an EFT transfer of 25% of the 450,00.00 and 51% of this money went into they're bank accounts. Is there a statue of limitation in which I may or may not act upon and possibly retain your services to rightfully get money that should have come to me and my sister who owned 6% also, but did not get any of the monies.
Thank You
Edward
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Answered in 21 minutes by:
7/17/2013
Dwayne B.
Dwayne B., Attorney
Category: Legal
Satisfied Customers: 34,316
Experience: Began practicing law in 1992
Verified

JD 1992 :

Hello and thank you for contacting Just Answer. I am an expert here and I look forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification.

JD 1992 :

In this case, there would almost certainly be a 5 year statute of limitations on the case.

JD 1992 :

Although if you can allege and prove fraud that would extend it to 10 years.

JD 1992 :

There is nothing in your facts to indicate fraud though.

JD 1992 :

A sale of stock doesn't require an affirmative act on the part of the buyer or the corporation to reveal all assets, value, etc.

JD 1992 :

Also, as the click throughs indicate, no one on this website can actually represent you. All of the experts here are expressly forbidden from taking on any work outside of the website which originates on the website. This is actually to protect the customer since that way you can be sure that the information you are getting is true, complete and correct and not just someone trying to get you to hire them and giving you less than complete info.

Customer:

The question is not so much as to fraud being committed, but if I was supposed to be shown proof of the companies total assets and if I was to receive any percentage of the 450,000.00 life insurance money which would have been around 24,000.00 dollars.

JD 1992 :

The company would have had to authorize distribution of the assets at a time before you sold your stock for you to have been entitled to it. No, there is no requirement that you be shown proof of the company's total assets before selling your stock to another shareholder.

JD 1992 :

If you had asked to see it and they had shown you proof then they would have been required to show you correct information but there is no requirement that anything automatically be shown.

JD 1992 :

The rules are substantially different for a privately held company than they are for publicly traded companies which have extensive reporting duties.

JD 1992 :

Plus, the time to file a lawsuit for that would have been 5 years so if the sale of the stock too place before July 17, 2008, the statute of limitations would have passed and you wouldn't be able to pursue it anyway.

Customer:

I understand. I guess what I'm trying to figure out is if my brother screwed me and my sister out of the money from the insurance company (her still being a stock holder of the company)

JD 1992 :

It is quite possible that he did. Since he was the President of the corporation he could have waited until he acquired all of the stock to have the corporation issue a disbursement.

JD 1992 :

You might be able to argue that was a type of fraud which would extend the statute of limitation to ten years so if your sale was after July 17, 2003, then you could still pursue him under a fraud type of action.

JD 1992 :

Unless you knew the insurance money had been or would be paid to the company.

Customer:

I knew that the insurance money of $450,000.00 was going to be paid before I sold my stock plus my brother replaced me and my position in the company as an accountant around the same time that the insurance check came in.

JD 1992 :

If you knew the insurance money was floating out there somewhere then you won't be able to allege fraud and so it would be the 5 year statute of limitations.

Customer:

As dishonest as it is, I understand now and know that my sister and I have been cheated. I appreciate your assistance. Last question. I will be charged 36.00 on my credit card? And do I have 30 days membership for this money, or does it end here?

JD 1992 :

I can tell that it is a $36 charge but I don't know anything about your membership, the experts don't have access to any information like that. Once you issue your Positive Rating the question will change into a regular Q and A format. At that point I can ask a moderator to get in touch with you about what type of membership you have, etc.

Customer:

Thank you for your time and wish you a good day. Sincerely, Ed

JD 1992 :

You're very welcome!

JD 1992 :

Best wishes to you on this and please don't forget to leave a Positive Rating (of course I’d suggest Excellent!) so I get credit for my work.

Customer:

Are you to connect me to a moderator?

Dwayne B.
Dwayne B., Attorney
Category: Legal
Satisfied Customers: 34,316
Experience: Began practicing law in 1992
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Thank you very much for the Positive Rating. Please come back and visit us if you have any new questions and feel free to ask for me by placing “FOR JD 1992” in the subject line or as the first words of your question and I will pick up as soon as I see it.
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