Q: Do the State Courts have power to compel the company to lift restrictions on its stock?
The company refuses to lift restrictions on sale from the shares I inherited from my father who was an executive. They do not provide justification, looks like it is a bad faith to force me to sell the stock through them at a much lower price.
Father passed away 10 years ago after he received these shares. I have inherited these shares recently.
The amount of shares is only a tiny fraction of their daily trading volume (less than 5%).
Hence, I am wondering whether the State Court is the right venue to litigate this issue. Do I have a good chance to win if the company fails to justify reatrictions?
Edit: the company is public US company listed in Nasdaq
A: The answer to your question is most likely no. Corporations are subject to very strict laws regarding the issuance of stock to non-insiders. Public offerings are extremely expensive. Even private offerings must be done in accordance with strict rules requiring certain minimum disclosures and offering only to insiders or persons with a certain minimum net worth or income or both. That too is expensive. A securities attorney can help you sort this out but be prepared for the answer that you didn’t want.
Unless an arbitration agreement is tied to your father's shares you can file in court.
With a proper demand on the corporation, compliance with applicable exemptions from registration, and an opinion letter, restrictive legends can be ordered to be removed by a state or federal court with jurisdiction.
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