Any lawyers help me please?

[Confusedmummy23]

I lost my Dad suddenly last year and he owned some shares in a company. He would never sell them because he didn't agree with their offer. Now me and my sister have to sell them back as we have inherited them but they are giving us a very low valuation done by their own accountants. We had a private valuation done and their report shows that they are worth over twice as much. We could take legal advice but it would be a lengthy process. Would we have any legal standing? The shareholders agreement did say they can be valued by their accountants but we asked if we could have a neutral third party accountant also look at it and they won't agree to do this.

Are these shares in a private company?

Can you sell them to anyone else but the company?

Is there a pressing demand to sell them now?

Hi thanks for replying.

Yes it’s a private company. There are only 4 shareholders.
It is in the shareholders agreement that we have to sell them back to them. If sold to a third party it would have to be agreed by the rest of the shareholders and they wouldn’t agree to this as my Dad had looked into this in the past.

What about if you and your sister say you want to keep the shares? You might find they make a higher offer

Have at least 3 valuations done so its not bias, send them this info asking for better valuation than they offered.

One assumes your dad signed the shareholders agreement that the valuation can only be done by one person and not best of 3? So I think that would rule.

You don't have to sell but if you do, you'll have to accept what the other shareholders offer really.

What valuation was used at probate? That’s probably the best starting point.

The price is usually a matter of negotiation between the directors and the shareholder. For tax purposes I know there’s nothing to legislate how much the purchase price should be but I’m not sure about other laws.

What sort of rate of return do the shares give in terms of dividend ? Do you have to sell them ?

The problem is it sounds like these shares are pretty limited in what can be done with them, so not surprisingly that affects their value considerably. I assume your new valuation took this into account.

It is quite common to require shares to be sold back to the company. You should be able to use an independent valuer though.

Sold back to other shareholders I mean

Thanks so much for replying.

Currently £2000 a month in dividends.
They said the fact there isn’t much else you can do with them was taken into account as part of the valuation.

For probate their accountants did us a valuation and part of the argument from our accountant was that they didn’t use the same calculations in their valuation to make an offer to us. They also have given more weighting to the years when they haven’t done as well. It all just seems a bit off.

Would be useful to understand what kind of amounts you are talking about, as going down a legal process will be time consuming and expensive, so has to balanced against how much extra money you might get

Hi@Confusedmummy23 im a corporate lawyer so this is my bag. Can you post an extract of the relevant section of the shareholders agreement and articles as that’s where the answers lie. Also need to know what % shareholding your dad had, whether he signed the shareholders’ agreement (presume so, but important), that under the shareholders agreement/articles you are entitled to inherit the shares (& whether that is because he left them to you in his will or he died without a will and you are his personal representatives /beneficiaries) and when your dad left the company (I presume that’s how he got the shares).

Also, do you have any funds/appetite to fight this?

Hi! Thank you for replying. Is it ok to private message you? I don’t want to put too many details online! Thank you!