Legal Question in Securities Law in Georgia
company won't buy back shares
I own stock in a closely-held company. I want to redeem my shares but the company says no because business has slowed and they are being cautious. They have cash on hand that would more then cover the cost of share redemption. Can they legally refuse to redeem my shares? I have redeemed shares before without problems.
Also, if they really don't want to buy back my stock could they lower the share price dramatically to discourage me from selling?
Thanks!
1 Answer from Attorneys
Re: company won't buy back shares
No one here knows anything about the company, documents, financials, or many other facts necessary to answer your questions. In a small corporation, these issues are often understood and documented when the company is started. Generally, for obvious reasons, it makes sense for companies to maintain cash to pay the bills. Further, officers and directors can face personal liability for preferring owners over creditors. This is the risk one takes in such a situation - shareholders generally come last.
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