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forced buy out s corp shares
Seattle, WA
Viewed 1293 times.
Posted about 1 year ago in Business
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I own 40% of a small corporation and my partner who holds the other 60% is trying to buy me out. The company just became profitable last year, which was it's 4th year, after a 225% revenue increase. The curent years growth is 157% and the profit projection is expected to triple last years figures. I'm currently listed as the president of the company and I don't want to sell my shares but my partner seems to believe they can force a buy out. I was recently fired from the company for a dispute I had with another employee (it turned out he was stealing and he was fired a week later) and my partner used their majority share as leverage to get me out of the office and force me to be a silent shareholder. I have recieved partial dividend payments from the profits of the company last year, but not all that I believe was due. I would prefer to hold my share of the company till the end of the fiscal year, but the other shareholder seems to believe that they can force a buy out now. They have not threatened to disolve the company or liquidate anything, and as far as I know, their plan it to hold onto the business and keep growing it.
Can they force me to sell out? Do I have a right to demand profit payment from the following year? If they decide to take some of the profits and decide to reinvest in capital, do I have a say so in what it is, and if it costs more than value it adds to the company (therefore lowering company value from wasted cash) is there anything that I can do about it? Is it possible for me to demand quarterly divident payouts? Answers (2)Patrick James Smith
This attorney is licensed in Illinois.
Posted about 1 year ago.
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You are asking several questions here, most of which would be difficult to answer without more detailed information. Generally speaking, there are going to be some minority shareholder protections which you can employ, although even these may be modified under the terms of your incorporation documentation.
There are several very good lawyers in Seattle who are qualified to handle this type of matter (call it aggressive negotiations or threat of litigation or litigation - you decide). Gather up ALL of your available documentation and make an appointment for a consultation. Unfortunately, this will not be cheap to battle, but rest assured if you do not you will likely find your stake devalued by the majority in any one of a number of ways, so you should act now. I have had this happen to a client who was a shareholder in a medical services corporation, and the only way to put a stop to the "I am the majority owner and can do what I want" thought process is to be aggressive in your defense. Samuel Joseph Mamola
This attorney is licensed in California.
Posted 11 months ago.
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You have quite a situation there. Often times, the majority will manipulate the books just prior to a buyout to "fleece" the other partners.
Our offices are located in California, and have practiced in the area of minority shareholder rights for some time now. These issues are far to complex to be answered here. If you would like a consultation, please call my office at (800) 440-5294.
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