Legal Question in Business Law in Massachusetts

Corporation sale

I helped buy a corporation but the sale remained in a different individual's name since it was a stock transfer. I was not active in day to day operations and received no compensation. I created a second corporation that purchased all new equipment and converted contracts over to new corp name as they renewed. I was the only officer listed in 2nd corporation name but no stock certificate was ever issued. The corporate book remained was kept at company and I did not have access to it. The two corporations merged within 2 years. I had to personally guarantee equipment purchases over this time period. My name remained as President and director with merger. Last year's annual filing to Sec of state had the other person's name listed in all areas. No change of directors was issued to sec of state. She has now sold company and kept all proceeds. What is my legal course and what percentage am I entitled to.


Asked on 6/26/07, 4:48 pm

3 Answers from Attorneys
Lawrence Graves Coolidge & Graves PLLC

Re: Corporation sale

You almost certainly have some right to something -- without examining all of the documents, records, etc. it is impossible to tell you exactly what rights you have. Before consulting with an attorney (which you should definitely do), gather all records, cancelled checks, bank statements, correspondance (including e-mail), so you can give full documentation to your lawyer. It is much easier to craft a demand letter with all of that information at hand -- as the saying goes, "documents don't lie and they don't die."

Best wishes,

LDWG

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Answered on 6/27/07, 10:57 am

Re: Corporation sale

More information is required to know what your rights were. Assuming you were to be issued half the stock and it was never done, you may have a lawsuit. You do not indicate what consideration you gave, what your understanding you were to get for your guarantee of the company obligations.

A verbal agreement is not going to get you where you want to be, so you need some writing not necessarily an agreement that outlines your understanding between you and the other shareholder.

If you have additional questions, please feel free to contact me without obligation.

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Answered on 6/26/07, 5:06 pm
Craig J. Tiedemann Kajko, Weisman & Colasanti, LLP

Re: Corporation sale

I'm handling a case right now very similar to your situation. Even though your description is detailed and thorough, there are still forks in the road, and the appropriate route depends on additional facts that guide properly guide the legal analysis.

Obvious questions that probably loom large here are whether (1) you were an officer or director of the first corporation, and (2) your creation of the second company, and the transferal of renewed contracts to the new company was fully disclosed to, and authorized by the first company/officer, (3) whether the sale of the merged company (assuming I understand this correctly) made without your involvement was disclosed to and authorized by you (sounds like the answer is 'no.')

I'd be happy to consult with you to at least explore where the analysis goes.

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Answered on 6/26/07, 5:39 pm


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