Can I sell worthless share certificates to collectors...?
August 14, 2009 9:34 AM Subscribe
Can I safely / legally sell the old share certificates of companies who changed their name and issued new certificates in a new name?
CunningLinguist's comment here got me thinking...
Going through my grandfather's estate I keep finding old share certificates mixed in with current ones. They're all from situations where:
* AlphaPlc merged with BetaPlc to make GammaPlc. or
* AlphaPlc demerged into GammaPlc and DeltaPlc. or
* AlphaPlc changed its name to EpsilonPlc
( In one case AlphaCo, renamed to BetaCo, demerged to form GammaCo and DeltaCo, renamed DeltaCo to EpsilonCo and then merged with someone else to make ZetaCo - for all of which he kept his old certificates... )
In other words, in each case new share certificates were issued in the new company/companies and the old ones were declared worthless.
It's these worthless ones that I'm now referring to...
My questions are:
* If a relevant collector existed on eBay (or similar) could I legally sell these bits of paper?
* Is there any risk that the purchaser could try and use the old certificates to stake a claim on the valid shares in the new company?
If it makes any difference, all the companies are UK based, but a couple of them were listed on US markets not UK ones.
CunningLinguist's comment here got me thinking...
Going through my grandfather's estate I keep finding old share certificates mixed in with current ones. They're all from situations where:
* AlphaPlc merged with BetaPlc to make GammaPlc. or
* AlphaPlc demerged into GammaPlc and DeltaPlc. or
* AlphaPlc changed its name to EpsilonPlc
( In one case AlphaCo, renamed to BetaCo, demerged to form GammaCo and DeltaCo, renamed DeltaCo to EpsilonCo and then merged with someone else to make ZetaCo - for all of which he kept his old certificates... )
In other words, in each case new share certificates were issued in the new company/companies and the old ones were declared worthless.
It's these worthless ones that I'm now referring to...
My questions are:
* If a relevant collector existed on eBay (or similar) could I legally sell these bits of paper?
* Is there any risk that the purchaser could try and use the old certificates to stake a claim on the valid shares in the new company?
If it makes any difference, all the companies are UK based, but a couple of them were listed on US markets not UK ones.
Response by poster: Thanks BrooksCooper, but I think you've misunderstood me...
* I'm in charge of sorting out his estate (with his solicitors). I spent yesterday with the solicitor organising the transfer of shares in Epsilon, Zeta, and all the other Greek letters to my Grandmother (for whom I'm seeking Deputyship so I can manage the shares).
* The certificates are just those of the original companies - ones that no longer legally exist due to renamings, mergers or demergers. In every case the new share certificate has come with a letter saying that the old one is now worthless and they recommend destroying it.
* My question isn't "I've found an old share certificate for Alpha - can I hijack the certificates for Epsilon and steal them out from under the estate"... it's "I've dealt with the shares in Epsilon and legally transfered them to my grandmother - is there any risk that if I sold the certificates in Alpha as a memento/souvenir/historical-record, is there any chance they could try and hijack the shares from under my grandfather..."
posted by twine42 at 10:28 AM on August 14, 2009
* I'm in charge of sorting out his estate (with his solicitors). I spent yesterday with the solicitor organising the transfer of shares in Epsilon, Zeta, and all the other Greek letters to my Grandmother (for whom I'm seeking Deputyship so I can manage the shares).
* The certificates are just those of the original companies - ones that no longer legally exist due to renamings, mergers or demergers. In every case the new share certificate has come with a letter saying that the old one is now worthless and they recommend destroying it.
* My question isn't "I've found an old share certificate for Alpha - can I hijack the certificates for Epsilon and steal them out from under the estate"... it's "I've dealt with the shares in Epsilon and legally transfered them to my grandmother - is there any risk that if I sold the certificates in Alpha as a memento/souvenir/historical-record, is there any chance they could try and hijack the shares from under my grandfather..."
posted by twine42 at 10:28 AM on August 14, 2009
This thread is closed to new comments.
1) If the shares were registered in Grandfather's name and the company that issued them (or its successor by merger / acquisition) still exists then the shares and their value in the company is an asset of Grandpa's estate that is available to his creditors, etc. So you'd want to talk to whomever handled the probate of Grandpa's estate about those.
2) If by your question you mean "shares were issued by company X which is totally dead and gone, period." Then you are right they are just paper whose value is based on their existence as paper, not as a proxy for ownership.
3) If you think you can claim ownership of the interests represented by the paper - i.e., you have a certificate for 1,000 shares of X which was bought by and subsumed into Y which still exists today then you need to contact the registrar for Y and surrender your 1,000 X share certificates to be redeemed into book shares of Y at the correct rate. When Y bought X they may very well have done this automagically and sent Grandpa a note which you no longer have. Thus, be prepared to hear from the registrar that 'we already redeemed those shares and Grandpa is today the owner of 0.000000001 shares of Y." In which case, GOTO item 1 above to figure out how to make that value accessible today.
4) If the shares get redeemed into shares of Y AND the registrar does not demand the surrender of the original certificates then you can safely sell them as historical paper / art objects on ebay or whatever because the shares will have a serial number on the certificate and the registrar will already have noted "serial number 123 was redeemed by Joe Dude and is now represented by 0.00000001 shares of Y held in street name." In other words, no risk someone could steal your shares after you've already redeemed them.
The bigger issue I see for you is, if any of the shares have any value today, that value belongs to Grandpa's creditors or his heirs or devisees according to his estate plan and you need to figure out who those people are.
I am a lawyer. A probate lawyer at that!
posted by BrooksCooper at 9:58 AM on August 14, 2009 [1 favorite]