Private corporation grossly undervaluing stocks

[footballfan]

Jurisdiction

Nebraska

I hold options at a private corporation. The stock price set by the owners represents less than half of the bank balance alone. In all likelihood, a very conservative estimate would be that the stock should be 3 to 4 times the current price the company will pay out if you depart the organization.

Is this legal? Could this stock price be successfully challenged in a court of law?

 

[army judge]

Nothing anyone tells you on the Internet rises to the force of law.

If this is important to you, consult and retain an attorney.

This is not going to be resolved by a feather dance, a command from you to the company, a magic chant, or ceremoniously shaking the bleached bones of a grizzly bear.

For real legal problems you need to consult a licensed attorney in your state.

 

[zddoodah]

In all likelihood, a very conservative estimate would be that the stock should be 3 to 4 times the current price the company will pay out if you depart the organization.

In other words, you're guessing.

How do you know how much the company would pay a shareholder if the shareholder were to "depart the organization"? Are you talking about being paid for your options or actual shares?

Is this legal?

Why wouldn't it be legal?

No law requires a corporation to buy shares of a shareholder who wants to sell. Therefore, a shareholder who wants to sell his/her shares is entitled to nothing more than the price that the corporation (or any other buyer) is willing to pay. If, as you believe, the shares are worth "3 to 4 times the current price the company will pay," then you should have no trouble finding a buyer willing to pay that inflated amount. On the other hand, if you cannot find a buyer willing to pay more, then your speculation about the inflated value is likely wrong.

Could this stock price be successfully challenged in a court of law?

Depends on the terms of the corporate by-laws and any other relevant agreements and other writings.

 

[zddoodah]

I can recommend great law firm - Zvērinātu advokātu birojs Rīgā "Rasa"& Ešenvalds"

LOL. I'm sure these lawyers in Latvia are great, but I think it's pretty unlikely that they have the competency to handle a matter involving Nebraska corporation law.