BlkKnight

Morning guys.

A friend of mine works for a small independent garage as a manager of the servicing / repairs section.

He has worked for the company many years and has accrued a large number of shares in the organisation. (to the tune of 10-15%).

The business has been going a little slow of late and the major share holders are getting concerned.

They have approached my friend and are to all intents blackmailing him. They have given him this ultimatum:

- give back your shares, and you will get paid this month and will have a job to go back to.

- if you don't there will be no money and no job for anyone else at the company.

If anyone can recommend a source of information on this, or recommend a good solicitor, then please do.

Ta

BK

Scoobydid

How does giving back the shares raise any money? unless they are then selling them to someone else, in which case, they should buy them from him.

Any Solicitor or Accountant should be able to help him.

Persumably he has accrued the shares in leiu of pay or as some sort of bonus either way he must have earnt them, so they have no right to ask for them back.

Good luck to him, they can't make him do it. I'd be interested to hear their reasoning.

Cheers
Andy

BlkKnight

the only reason I can see the directors want his shares back is so that they don't have to give any money should the company wind up (and there some assets left). The garage is sitting on land worth about 1 mil! They don't have any outstanding debts AFAIK as it was funded by shareholders / private invertors.

Bit of a ****ty situation.

I'd be inclined to call their bluff. . . . but that's me.

Wish

iTrader: (2)

I would hang on to them, personaly. It would seem by what the others have told him that its a loose loose situation.........

He must keep the shares if the company is sitting on a plot of land !
I feel they are trying to pull a fast one over him.

GC8

The shares are worth up to £150,000 then; I wouldnt part with them under any circumstances. I doubt that the companys fate (and others jobs) hangs on these shares, but as theyre about to wind it all up the majority shareholdersd like to get 'their' £150,000 back..... He should fight for this like he would £150k in £10 notes!

Simon

PCatWork

I would guess that 10-15% of £1M is going to be more than a month's wages!

Looks like a bit of an easy decision to me.

Jonathan Davies

If the land's worth £1m, the net assets of the firm are probably a fair bit less. They'll have debts and borrowings, particularly if business is slow.

But it does sound like someone's trying to shaft this geezer. 10-15% is substantial - worth getting some legal advice I'd say, cos the terms on which he holds the shares will be relevant... which means someone looking at his contract and the company's articles of association.

GC8

Perhaps Jonathan; but Im assuming that its a small business benefiting from the increase in the value of building plots... If it transpires that they have borrowed against their assets there mightnt be a deal of equity remaining, but the fellow will still own 15% of it.

Simon

BlkKnight

we will have to wait and see. . . . .

I think he's going to see a solicitor today.

Cheers chaps

Diablo

Bill, whats the company called and I'll do a search.

BlkKnight

eh?

Diablo

lol

if you give me the company name, I'll run a company search. That should give some info as to whether or not there are significant liabilities.

My guess is that the other shareholder/directors want to regain 100% for the purposes of an ultimate distribution to the shareholders following the sale of the land.

Jonathan Davies

For sure - didn't mean to say it wouldn't be worth having! Dreams of £150k might be a bit premature though... but, yeah, I'd be surprised if there wasn't some remaining value in a business which has non-trading assets worth that much.

Best of luck to him - smells a bit fishy, so hope it works out.

BlkKnight

D YHPM

Yex

Go with Diablo's advice on this. If he comes up with something worth looking deeper into then legal advise is going to be needed, given we appear to be talking about a substantial sum here the sooner the better.

If the guy is a major shareholder he should be in receipt of a copy of the latest set of books for the company concerned. These should detail all assets, borrowings, cash flows, other financial commitments etc. This data will allow an accountant to give him a fairly accurate idea of how much his shares are worth based on the current financial health of the company. If he has not received this information he should demand it.

The only reason I can see that they would ask him to "give" his shares back was if they were about to pay a dividend and didn't want to pay him his due share, were under a take-over offer and didn't want him to get his payout, or wanted to sell the company and land to a developer and didn't want him to get his payout again. Overall, sounds fishy and he does need legal advise.

I would seek out a specialist in this type of legal matter if it was me. Even if the £150k mentioned is off the mark holding 15% of a company's shares is a substantial amount of money if that company is a going concern, and/or is going to be bought out or has sizeable assets in the shape of land which could be developed etc, etc.

Yex

Gordo

Get a lawyer involved and fast.

Either he owns the shares or he doesn't.

I.e.

A) He might only have options on the shares. His employment contract would probably state that he forfeits any un-exercised options if he is fired. They may be able to fire him to get the options released, in which case he's fecked and may as well cede to the blackmail.

B) If he has shares, then the articles will give him certain minority protection rights. A lawyer needs to check these to see if he can exercise any e.g. is he owed dividends which he could demand? Giving up the shares if he owns them would be pointless - they could fire him afterwards in any case.

Wouldn't do any harm to record conversations / get things in writing. An unfair dismissal claim could be building....

Good luck

Gordo