What to do if officers/shareholders of a coproration can’t agree on a buy-out of of one of the otherofficers/shareholders?
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What to do if officers/shareholders of a coproration can’t agree on a buy-out of of one of the otherofficers/shareholders?
We have a “C” corp with 3 individuals with an equal share of the stocks distributed. The VP is retiring and we cannot agree on a buyout for shares. Our consignment store is 2 years old. We were each given 5,000 shares valued at $1 each. We each put in $5,000 start-up. The retiring officer has quit working with no notice, offering her shares for $125,000 saying the figure is based on future earning potential. The other 2 officers/shareholders rejected that offer as has the business. The business has a loss the past 2 years. We are so far apart on our valuation of the shares and what she should be given for her shares based on value and performance. We don’t want her to retire and not work but continue to keep her shares.
Asked on November 21, 2010 under Business Law, Georgia
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
And I am sure that you have no agreement between you as to the matter? I think that you may need to agree to go to a mediator on the matter. You will have to, though, have the business valued for the purposes of the buyout. I see no other way if you can not agree on the value of the stock and the amount to be given her in the buyout. You can not force her to stay on and work. If she wants out she wants out. I would suggest, though, that you now come to an agreement in writing with the other partner so that this never happens again. Good luck.
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