tag:blogger.com,1999:blog-36117428290479617792024-03-13T13:10:38.949-07:00The Math GuyThe Math Guyhttp://www.blogger.com/profile/06194608964375763933noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3611742829047961779.post-33706120347686463712012-05-15T09:58:00.000-07:002012-05-15T09:58:09.772-07:00<br />
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<span style="mso-no-proof: yes;"><span style="font-family: Calibri;">On avvo.com, a guest asked the following question: <b style="mso-bidi-font-weight: normal;">Is it legal to sell a company without
telling the shareholders?</b><o:p></o:p></span></span></div>
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<span style="font-family: Calibri;">I thought
the answer by Mr. Linscott Roberts Hanson (http://www.avvo.com/attorneys/60068-il-linscott-hanson-1133366.html)
was good enough to share:</span></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Unless there is some sort of agreement
restricting the 50% shareholder's right to sell, requiring notice, first
refusal options, etc., there is nothing illegal about a 50% shareholder selling
his stock to a third party.<span style="mso-spacerun: yes;"> </span>In so doing,
he has not interfered with the rights of the other stockholders - they are
legally unaffected by his sale.<span style="mso-spacerun: yes;"> </span>If they
had pre-emptive rights to acquire shares before his sale they still will have
those rights after his sale.<span style="mso-spacerun: yes;"> </span>Most
corporations are subject to statutory restrictions on so-called "organic
acts" such as merger, sale of the corporation's assets in bulk, amendment
of the corporation charter and so forth.<span style="mso-spacerun: yes;">
</span>Usually (not always) these kinds of major changes require a larger than
majority vote - something like a 2/3 vote.<span style="mso-spacerun: yes;">
</span>Thus someone acquiring "only" 50% of the stock would lack the
votes to make major changes in the corporation.<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Shareholder agreements can be written which
include what are called "tag along" or "drag along"
rights.<span style="mso-spacerun: yes;"> </span>The former would give the other
shareholders the right to take advantage of the deal the 50% shareholder
negotiated, and have their stock purchased at the same price, while the latter
would give the 50% shareholder the right to force the other shareholders to
sell their shares along with his.<span style="mso-spacerun: yes;">
</span>Evidently neither arrangement was in place here.<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">The most surprising thing about your
question is that someone would be willing to buy a 50% interest without
acquiring the remainder of the stock.<span style="mso-spacerun: yes;">
</span>50% is not control, in fact there are court opinions that refer to it as
a minority position.<span style="mso-spacerun: yes;"> </span>If is unusual that
someone would purchase a minority position.</span></i></div>
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<span style="font-family: Calibri;">To learn
more about me, please visit www.avanesianlaw.com</span></div>The Math Guyhttp://www.blogger.com/profile/06194608964375763933noreply@blogger.com0tag:blogger.com,1999:blog-3611742829047961779.post-58290225883673560582010-10-11T11:16:00.000-07:002011-01-31T12:03:53.834-08:00Something is wrong with the way our politics are evolvingI think I am like most Americans. I have some extreme liberal views, I have some extreme conservative views, but I have mostly centric views. I tend to lean "right" because it feels safer to do so. One of my extreme conservative views is that the Constitution is very important document and that it should be treated with the utmost care because it is <em>the</em> check on our government. The Consitution <em>is</em> what gives the people their power. This comment by Robert on abajournal.com is one of the best explanations of why I feel the way I do:<br />
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<em>I can’t believe how everyone overlooks the obvious. </em><br />
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<em>Either the Constitution means something specific, or it means nothing at all. If “what it means” is completely up to a vote of nine political appointees, then it has no specific meaning. </em><br />
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<em>If it has no specific meaning, then government limitations are non-existent. The only limitation is what the USSC will allow, which is only limited to what they can find emanating from penumbras. Since they are appointed for life, we citizens have no control over the government at all, since that puts all power in the SC. </em><br />
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<em>And that is the definition of “tyranny.” It isn’t a question of whether the majority of Americans LIKE what they are doing, it’s a matter of whether or not there are limits. </em><br />
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<em>But the Constitution IS the limit? Really? The USSC is 9 people sworn to uphold and defend that document, charged with the responsibility to settle cases and controversies which may arise under it, but there’s a singular problem with that. </em><br />
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<em>We so regularly see decisions that are 5-4, and no one ever stops to consider that this means that AT LEAST 4 (maybe 5) either haven’t the love for the Constitution the job and oath demand, or they haven’t the wit to understand it correctly. </em><br />
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<em>Ever stop to think about who ratified the Constitution? It was the average man of 1787, who probably didn’t go to college since there were only 20 in the U.S. at the time, and couldn’t possibly have gotten information about the document from any of the usual modern sources; there were no USSC cases, DeTocqueville was a half-century from being born, and the Federalist Papers weren’t started until six States had already ratified. Think people who just fought a war to get rid of a government they couldn’t control would replace it with one they couldn’t understand? </em><br />
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<em>The bottom line is that it is a VERY simple and VERY clear document, and if four (or five) of the nine brightest lawyers in America can’t get it, we have a serious problem.</em><br />
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You can view the full article that spawned this comment at <a href="http://www.abajournal.com/weekly/article/stevens_says_court_will_eventually_straighten_itself_out">http://www.abajournal.com/weekly/article/stevens_says_court_will_eventually_straighten_itself_out</a>The Math Guyhttp://www.blogger.com/profile/06194608964375763933noreply@blogger.com0