California  |  Business Law

Legal Question

Asked on: 3/16/07, 12:35 am

Unequal Shareholder Dividends

Five of us formed a corporation 17 years ago with $20k each. Annual sales are $10 mil. We are all equal shareholders, board members, and employees. Positions range from President to Facilities Maintenance. Hourly pay varies by $10.00 depending on job title. Three share holders have decided to pay unequal performance based bonuses (30%, 25%, 22%, 13%, 10%) instead of equal dividends. My shares were recently valued at 800k. The corporation offered me 400k for my shares in unsecured installments over ten years starting with the 100k I loaned the company (shareholders loan the company money when needed at 10% interest). I was unsuccessful selling my shares on open market for 400k in a lump sum. Our building is worth $1.5 and we owe $500k. I have to wait until the company is dissolved to get any equity in the building. I would get 200k if the business was dissolved now and even less if shareholders borrowed more money. Three shareholders now want a buy sell agreement with a shareholder buy out price of 200k. Can only three shareholders do this? If I continue to work Iíll get less money. If I sue the other shareholders Iíll be spending my retirement while theyíll be spending the companies. What are my options? Help!!!

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