Legal Question in Business Law in California

Re: issuance of shares to employees

If the stock-purchase agreement was in writing, read it carefully! These agreements usually have many restrictions on the obligation of the company. While its reports to the SEC or whatever weren't up to snuff, it was probably forbidden by law to issue or sell stock to employees, and the contract probably covers the situation. Nevertheless, your right to acquire stock may survive this period and may become binding upon a purchaser, so with luck and the proper legal guidance you might still be rewarded if the failing company is bought (for whatever reason) for a big price.

Re: issuance of shares to employees

There are no 'lucrative buy outs' of insolvent or bankrupt companies, nor is their stock worth anything.

Re: issuance of shares to employees

If the original offer was in writing, and your inquiry was in writing, see an attorney. Otherwise, remember to document everything in writing next time.

Re: issuance of shares to employees

Would you want to buy shares in a company that's on the brink of bankruptcy? I'd say you're probably lucky that you -didn't- do so. You'd probably gain no jury sympathy if you were to bring a lawsuit and that were the issue. What damages would you have suffered by not buying worthless stock?