Legal Question in Civil Litigation in Massachusetts

Re: Stock pledge to secure payment of debt

I concur with another reply in that, for the kind of money that is at stake here, you need to consult with an attorney. Call me (413) 584-8067, call him, call somebody else, but get advice from someone who knows his way around corporate and commercial law issues.

You should not rely upon any advice that is not based upon a full review of the facts and circumstances of your particular case.

Re: Stock pledge to secure payment of debt

Ms. Johnson, Mr. Williams and Mr. Graves are right that you should have a lawyer involved in this, and that you should have had one long before now. Your message indicates that your question is about both MAssachusetts and California law; please feel free to call me at (310) 575-3540 if you need to speak with a California lawyer. As the others have already pointed out, the amount involved suggests that there are many details I would need to know before I could offer a helpful opinion.

Re: Stock pledge to secure payment of debt

For this kind of money, you can afford to call an attorney by telephone! In fact, you must already have an attorney -- you'd better! -- and these are questions that attorney ought to have settled for you, in my opinion.

Are you in CA? Is this agreement under MA law? Was the case being settled under MA law? Is/are the company/companies both in MA? Is your atty in MA? Who is it?

I invite you to call me at (617) 527-0050.

I'll give overly brief answers to some of your questions meanwhile.

If the person who has given you the shares should default on a payment, you should have recourse(s) as defined in your settlement agreement, I hope, but the most obvious is that you can sell the stock you hold as security, either all of it if the agreement allows "acceleration" upon missing a single payment or else just enough to make the payment for the month. Who you can sell to (which affects price) may depend upon whether the shares are restricted, Sub-S (subchapter S Corporation), whether they are blue-skied where you would like to market them (which is not likely for a private company) and whether you can even find a buyer for shares in a private company as well as the value at that time of the company. If the company is liquid enough, it could buy some shares back itself.

If all the shares are already pledged, then a bank foreclosure would mean you probably have nothing of value in your hands. It also reduces the value of the shares you hold, of course.

If the person dies, and your agreement ought to have addressed this very clearly, you should have a claim against the estate for the entire amount of the judgment, secured by the shares you hold.

Now I'm quite curious. Did you not have an attorney do all this work for you? Do you find that attorney too difficult to talk with? I promise to keep your response (to me, directly, at [email protected]) 100% private, aside from the theoretical risk of electronic eavesdropping beyond my control.

Congratulations on your settlement. It seems like a lot of money and I'm certainly curious about the details, and I hope it wasn't because of a personal injury to you.

Re: Stock pledge to secure payment of debt

I would have to see the papers. I am particularly interested in yur position vis a vis the bank or the pledge to the bank.

Just had a similar case. Won the trial years ago, they appealed and lost, pre-judgment and

pre-rescript-judgment attachment had been

unsuccessful on the grounds that the debtor had set up a reserve in a lockbox set up by the debtor and the bank.

After a year and a half, we got them and the

money!! The law is complicated and little known

in this area, varies from state to state, but I

notice you're in Massachusetts, which is where I

am and my case was. So do call. I may be of assistance.

I must warn you, though. I would not take the case as a freebie.

I believe, however, that you'd be pleased.

Barbara C. Johnson

Attorney at Law

Andover, Massachusetts

978-474-0833

[email protected]