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Restrictions on shareholders' rights to sell shares to non-sharelholders

  • 03-09-2011 12:25am
    #1
    brophs
    Registered Users, Registered Users 2 Posts: 1,339 ✭✭✭


    Hello,

    Had a quick question that someone who's better versed on these things than me might be able to answer.

    The issue is that one company bought a franchise in another well known Irish company. That relationship has now soured and they have parted ways.

    However at the original time of sale the franchisee was advised by the franchisor company to buy shares in the franchisor company, which they did. It appears that these shares conferred no voting rights and restricted their right of sale to other members and/or the franchisor company.

    Since the relationship has broken down requests have been made that the franchisor buy out the franchisee (now ex-franchisee) as this is the only remaining link to the company, but they have refused. Essentially the now ex-franchisors have a large amount of stock which they are, in essence, not entitled to sell, despite the relationship between them clearly having broken down.

    Is there any means by which you can compel the franchisor company to buy back the shares? Otherwise it appears they will simply be rendered 'worthless' by the inability to dispose of them.

    Cheers,
    brophs


Comments

  • #2
    CIARAN_BOYLE
    Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    I'm sure there are options available but I think this is something that you need to hash out with a solicitor


  • #3
    bath handle
    Banned (with Prison Access) Posts: 370 ✭✭bath handle


    CIARAN_BOYLE wrote: »
    I'm sure there are options available but I think this is something that you need to hash out with a solicitor
    What are the options you are sure are available?


  • #4
    brophs
    Registered Users, Registered Users 2 Posts: 1,339 ✭✭✭brophs


    CIARAN_BOYLE wrote: »
    I'm sure there are options available but I think this is something that you need to hash out with a solicitor

    I'm asking the question from the professional standpoint, more as a curiosity at this stage than anything. If I have to look into it I will, but at this point I'm just wondering whether someone might have experience of it or know the answer.


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