Privately held company stock

[Macanudo 13017]

I was going through some of my dad's documents this weekend to see what I could get rid of.   He passed away in February of 2020 so I figured it was time to toss some of it.   I found common stock certificates for ownership in two separate Keller Williams offices in the Houston area.    Both of the issuing persons (owners of those offices) are deceased as well.   I am not certain that my Dad ever cashed out/sold his shares but with both offices under different ownership, 1.) How do I determine whether he did and 2.)   Is it even worth it?  One is for 5,000 shares and the other is for 100,000 shares.   

Any ideas?

[immamac 43175]

Are the offices still around? if yes, then yes. 

[NeverMarryAStripper 21943]

I would start with the Texas Secretary of State website.  If it’s a Texas entity you can look it up and get the name of the registered agent and current officers to get some contact information

[Macanudo 13017]

36 minutes ago, immamac said:

Are the offices still around? if yes, then yes. 

Both exist but have changed ownership since the original certificate was issued.   I'm not will to trust them whether or not he ever cashed out.

 

[Hefeweizen 5334]

I’d sue the shit out of them.

 

Or you could do what the other posters suggested but that sounds like work.

[NeverMarryAStripper 21943]

1 hour ago, Macanudo said:

Both exist but have changed ownership since the original certificate was issued.   I'm not will to trust them whether or not he ever cashed out.

 

Well if you have the certificates and they haven’t been cancelled then I would think  the burden would be on them to prove a cash out

[Skipper 6207]

20 hours ago, Macanudo said:

Both exist but have changed ownership since the original certificate was issued.   I'm not will to trust them whether or not he ever cashed out.

 

Do you possess certs representing stock in the entity that is the current asset owner or do you have shares in the stock of the entity that was the seller to the current asset owner?

[Macanudo 13017]

1 hour ago, Skipper said:

Do you possess certs representing stock in the entity that is the current asset owner or do you have shares in the stock of the entity that was the seller to the current asset owner?

I have the certs sold to my Dad from the original owner.

 

[Skipper 6207]

24 minutes ago, Macanudo said:

I have the certs sold to my Dad from the original owner.

 

I may not be following but my question goes to whether you think you have a possible claim against the current owner (i.e., does the same entity named on the shares currently own the business) or the original owner that sold the business to the current owner. 

[TwiceHorn 31554]

30 minutes ago, Skipper said:

I may not be following but my question goes to whether you think you have a possible claim against the current owner (i.e., does the same entity named on the shares currently own the business) or the original owner that sold the business to the current owner. 

Yep, what he means is just because there are still K-W offices at those locations or whatever doesn't mean that the same corporation still owns those offices or any of their assets.

A lot of these "smaller" businesses form a new corporation like people take shits.  So, new "managing broker" at K-W Sharpstown = new corporation.  And, in theory at least all of the assets of the old corp are transferred to the new corp in return for whatever compensation was due to the shareholders of old corp.  For example, old managing broker gets "bought out" and any agents or other shareholder just get shares in new corp.

So it winds up being an "asset purchase or transfer" instead of a "share sale," and the shares of old corp are worthless.

[Macanudo 13017]

I'm trying to figure out if I have a claim at all.   

[Skipper 6207]

1 minute ago, Macanudo said:

I'm trying to figure out if I have a claim at all.   

I would start with the secretary of state website to see if the name on the shares still exists as a legal entity.  

[Sbbruin 21898]

If the prior entity sold to a separate entity, the prior entity (who your dad holds stock in), should have paid out at the time of the sale.  So that's who would owe.  The new entity, assuming it is different than the original, wouldn't owe you shit.

[HouTex 1894]

54 minutes ago, Macanudo said:

I'm trying to figure out if I have a claim at all.   

Do what Stripper and Skipper suggest.  Check with the Secretary of State’s office.  SSBruin is also correct.  But you first need to find out what happened to the corporation that you/the estate own shares of.

[HouTex 1894]

Oh, and if the corporation that you/the estate own shares in didn’t pay its creditors then the shareholders (you/the estate) should not get anything upon dissolution.  

[Js1 85602]

8 minutes ago, HouTex said:

Stripper and Skipper

I’d watch this show. Buddy cop comedy

[TwiceHorn 31554]

Actually a cheap, quick and dirty way to check a corporation is the Comptroller website. Cheap meaning free.  SoS requires you to sign up and pay some fees to get documents.

You can check to see if any corp or llc is is in good standing and the officers shown in the most recent public information report.\https://mycpa.cpa.state.tx.us/coa/search.do

Edited May 10, 2023 by TwiceHorn

[troph 24912]

18 hours ago, Sbbruin said:

If the prior entity sold to a separate entity, the prior entity (who your dad holds stock in), should have paid out at the time of the sale.  So that's who would owe.  The new entity, assuming it is different than the original, wouldn't owe you shit.

this is correct, but with more corporate legal nuance if the shares were worth anything of consequence and there were a sizable number of shareholders then the buyer and seller likely would have agreed to use a paying agent. the buyer deposits the purchase price with that agent, effectively acting like a title company when you sell a house.  paper work would have been required, stock certificates would likely be returned true, but in many cases the stock certificate is lost so he could have signed an affidavit of lost certificate in lieu of surrendering the stock certificate, and that's actually quite common, it's why and how electronic repositories like carta found their niche.  In any event, that money would be with the paying agent for probably a year or two, then it likely escheats to the state.

If the deal was small with relatively few shareholders then the buyer may have paid directly or paid to an account of the seller with a designated selling shareholders representative who would have effectively acted as a paying agent.

The right way to go about this is to contact the company, but they aren't cutting a check, at best they are pointing you to who was responsible for sending your dad payment - selling shareholders representative or the the paying agent who is likely pointing you to the fact that he did get paid or that it went to the state (comptroller), at which point those rules apply and that is where my knowledge would be exhausted I don't know those rules.  So find out if he was paid if you can, and if not you're likely talking to the comptroller or to some yacker who was supposed to send your dad the money.  If there was no paying agent, you may have a situation where someone kept the money instead of following the escheat laws, I've seen that too.

even odds he was paid though, having the certificate still isn't outcome determinative.

could be a waste of time, could be $20 in an old coat pocket, or it could be gold jerry, a pot of pirate booty. goonies never die! go for it @Macanudo

Edited May 11, 2023 by troph