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Neufeld Legal P.C.

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SHAREHOLDER TERMINALLY ILL

Dealing with corporate shareholdings when the shareholder is terminally ill.

When a shareholder is diagnosed as terminally ill, the situation for all corporate stakeholders can be extremely sensitive and costly. For the reality is that far too many unanimous shareholders agreements, if there even is such an agreement, are inadequately drafted to effectively deal with terminal illness.

Some of the major inadequacies that arise in such agreements include an expectation of life insurance when there is none or insufficient insurance, when the payment arrangement on the share purchase is too brief, and where there is inadequate liquidity to meet the calculated share buy-out price . Each of these instant instances and others, pose serious problems for both the terminally ill shareholder and his / her estate upon their death and the surviving shareholders who acquire the shares and become responsible for the acquisition price.

As a result, it tends to be prudent to revisit the unanimous shareholders agreement when a shareholder becomes terminally ill, and potentially negotiate alternate arrangements as to the shareholder buy-out.

Other legal matters pertaining to a shareholder's personal condition, etc.: death - terminal illness - mental incapacity - retirement - spouse's position - surviving shareholder(s) - share undervaluation

For knowledgeable and experienced legal representation in dealing with legal matters impacting a shareholder's corporate shareholdings, contact the law firm of Neufeld Legal P.C. at Chris@NeufeldLegal.com or as follows:

Calgary, Alberta: 403-400-4092 (admission: Alberta Law Society)

Toronto, Ontario: 416-887-9702 (admission: Law Society of Upper Canada)

New York City: 646-681-4491 (admissions: New York State Bar, Southern and Eastern Districts of New York - United States District Court)

 

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