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Ask HN: What disclosures am I owed when a startup I have equity in is sold?

2 points by freewilly1040 ↗ HN
A startup I worked at and own equity in was recently sold. All we received was a short email outlining the sale in general terms, and a 280G form to sign. I understand the 280G form relates to a parachute payment to the CEO.

Relevant seeming bits of the email:

"The transaction with {the buyer} was approved unanimously by {my former company}'s board of directors and by more than a majority of each class and series of {my former company}'s stock."

"The available proceeds from the sale of {my former company}’s assets are insufficient to cover the amounts of the liquidation preferences payable to the preferred stockholders. As such, no distributions will be made to the holders of common stock at this time."

What does the company owe me and other common share holders as part of being sold (both in terms of information and assets)? I understand that the sale was more or less a fire sale, so I'm not expecting to get anything. The money I put into it is not enough to warrant seeking counsel or anything, but I'm pretty irritated at the vague communication I've received.

1 comment

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icedchai
They don't owe you anything. I received a similar letter from a startup I was involved in many years ago. Preferred shareholders are first in line. Sounds like there wasn't enough to even pay them off. Common shareholders get the left over scraps, and there aren't any... You're SOL.