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personal ch 7, 33% ownership in c corp

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  • personal ch 7, 33% ownership in c corp

    I'm about to file personal chapter-7

    But I own 33% of a c-corp, valued at around $25k (very little assets, mostly AR value)

    I don't care if the trustee forces it to sale, but I'm just wondering how all that happens -- the company is a privately held corporation, which is allowed to approve or not approve any investors or exchanges of ownership...

  • #2
    The trustee is probably going to want for the other 67% ownership to buy your 33% share from your bk estate.
    All information contained in this post is for informational and amusement purposes only.
    Bankruptcy is a process, not an event.......

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    • #3
      Originally posted by frogger View Post
      The trustee is probably going to want for the other 67% ownership to buy your 33% share from your bk estate.
      That would be nice and tidy if the other two owners agree, but what if they say "not interested".? The TT could try to sell this stock on the open mkt which would sell for lots less. I guess it depends on the exact particulars of the company as to whether it would be saleable or not.

      The practical side of this could be a big headache for TT. Maybe the OP could buy the shares back for a negotiated settlement price of a lot less. Just an idea, of course it all depends on the TT too.

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      • #4
        Well, the other owners aren't exactly in a financial position to buy my shares...so they won't be able to that...

        The corporation bylaws also say that any transfers of stock from one entity or individual to another has to be approved by the board of directors (which I'm on), or the stock is void.

        The company also has 5k shares, but only 1k shares issued (I have 330)

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        • #5
          Originally posted by ja181 View Post
          Well, the other owners aren't exactly in a financial position to buy my shares...so they won't be able to that...

          The corporation bylaws also say that any transfers of stock from one entity or individual to another has to be approved by the board of directors (which I'm on), or the stock is void.

          The company also has 5k shares, but only 1k shares issued (I have 330)

          Are you receiving any distributions or income of any kind from the Corp at this time? If so, salary or dividends?

          How did you arrive at the valuation of the stock, or assets?

          Comment


          • #6
            Originally posted by Mensa1 View Post
            Are you receiving any distributions or income of any kind from the Corp at this time? If so, salary or dividends?

            How did you arrive at the valuation of the stock, or assets?
            Nope, no income from the company.

            Value from balance sheet.

            Company only grossed 70k in 2009, and had a 15k loss.

            Comment


            • #7
              The value on the balance sheet is meaningless.

              We are talking FMV on a distressed valuation, in other words... what will an arms length buyer pay for that stock in the next 30 days; (highest bidder)????

              Based on the recent financials the value would be very low unless there is some hidden asset that drives value.

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              • #8
                I really have no idea...it is a small managed hosting (internet stuff) company with a few big healthcare customers.

                the company has very few assets, almost everything is leased.

                how would we go about figuring the FMV?

                is the trustee likely to just leave this alone?

                Comment


                • #9
                  Originally posted by ja181 View Post
                  I really have no idea...it is a small managed hosting (internet stuff) company with a few big healthcare customers.

                  the company has very few assets, almost everything is leased.

                  how would we go about figuring the FMV?

                  is the trustee likely to just leave this alone?
                  It depends on how you list it in your Bk schedules. Surely if you list at 25K there is no way the TT leaves it alone. If you list it at a valuation of what it is worth, liquidated to an arms length buyer, (which isn't anywhere near 25K... maybe not even 5K), then the TT may well leave it alone. This depends on your state and its exemptions, as well as the luck of the draw of your TT.

                  But the point is I surely wouldn't list it for what is held on book value because there is no correlation to reality with book value, which is purely an accting number. Kind of like someone saying there house was appraised at 300K a couple of yrs ago... but today it will sell for half that number. What is the house worth...? The value of any item is based on what someone will pay for it...

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