I happened to come into possession of some stock certificates issued in 1964 (part of an estate…they are mine now). Actual paper ones that are kinda ornate. I researched the company and it merged with another company in the 90s.
Can I redeem these certificates or are they just junk now?
I just found a decent article about the possible redemption of old stock certificates: How to Redeem Old Stock Certificates | Pocketsense
It’s very unlikely these have any value, but it depends on the specific legal terms of the merger/acquisition, and where it happened. If shareholders in the absorbed company got a cash-for-shares offer, for example, rather than stock in the new/acquiring company, there was almost certainly a deadline and these would be (at best) regarded as abandoned or unclaimed property according to the rules of the given jurisdiction, to be reported to the applicable authority. In the unlikely event these are still legitimate instruments, bear in mind there may be an accumulation of taxes over the decades, or other financial considerations (I’m assuming the person behind the estate didn’t keep up with the bookkeeping, given that the stock wasn’t previously converted). Bear in mind also that questions like this can be exceedingly complicated, requiring weeks or months of expert investigation, which is going to be quite expensive, and will eat into whatever potential hypothetical value these might have (or come out of your pocket in the more likely scenario they’re worthless). Obviously, I’m generalizing here, but it’s hard to say anything more specific without a lot more information.
The shares that it represents probably no longer exist, so there is nothing to redeem.
But, even f they do exist, mere possession of a stock certificate doesn’t give you any right to the shares (unless it’s a bearer certificate — i.e. the certificate says that the shares belong to the bearer of the certificate). The stock certificate names the person who owned the shares in 1964. You’ll need to show that the rights in the shares which that person had in 1964 have passed to you. The fact that the stock certificate has passed to you is not enough to establish this.
I think what you just wrote is almost certainly how it will work for me.
What gets me is how this is skewed. We hear of treasure hunters who find a sunk ship from 300 years ago filled with gold and companies and governments pile in claiming it is still their gold. It’s not abandoned…they were just storing it on the bottom of the ocean for some reason. And they succeed in their claims almost always.
Doesn’t work for us though. Not surprised. Different rules.
Thanks for the detailed response (and everyone else too…much appreciated).
Well, that’s because the rules for ownerless property very often say that it reverts to the state. That rule can’t apply to the state itself, obviously.
IIRC the insurance companies still make claims on that property no matter how many mergers and changes they have gone through. The governments go after it if it was government property when the ship sunk (which was often the case). If an insurance company was involved and paid off on it then they want their money back no matter how long it has been.
But I have ownership of something from 60 years ago (well, it came to me) and it is “abandoned” after some time cuz reasons.
It is difficult to see how this reasoning works. Some have perpetual rights. Some do not. Which side of the ledger are we on?
I think the point here is that the company that issues the shares can adopt rules that say that, if you don’t accept the conversion offer within x period of time, the shares are cancelled.
Companies can issue shares on any terms they like, subject to the overarching requirements of the corporations legislation and (if it’s a publicly-quoted company) the rules of the stock exchange. If that “accept conversion offer or lose” rule is valid, then it’s valid. It would affect the state, or an insurance company, that held shares in the company concerned in the same way as it would affect any other shareholder.
But there’s a distinct possiblity that whoever owned the shares at the time of the conversion offer did accept the conversion offer, did receive the replacement shares, and then bequeathed them to someone who wasn’t you, Whack-a-mole, or simply sold them at some later point. Commonly, in order to accept the offer, they would have had to return the share certificate, but not always. They might have reported the share certificate as lost (if they had mislaid it) but established their ownership of the shares by pointing to the company’s share register. Or the paper share certificate might already have been superseded by an electronic register, so returning it may not have been necessary to accept the offer. Or whatever.
Tl;dr: there is no reason to think that anyone has been dudded here.
Note that the actual paper stock certificates might be worth a few bucks to collectors of such things.
Interesting…thanks. I mean, I can’t imagine bothering to find a buyer for them for a few bucks but I think they might be worth framing (at least one or two). They do have some artistic appeal.
Like UDS says, the company that issued the stock may have that adopted rules at the time of the that said the offer was good until a certain date. Or the owner converted the shares and sold them left them to someone else and you only got the now worthless paper certificates.
But there’s a third possibility and that is that is the shares were reported to the state as unclaimed property. I don’t believe that would happen if the cash-for-shares offer wasn’t accepted by a deadline ( I think that would be treated the same as shares in any other company that no longer exists - worthless.) but if property is turned over to the state- the state doesn’t generally get to keep it and spend it . Most , if not all, states have a register of unclaimed property which would normally include stock certificates. Owners/heirs can claim the property - but the longer one waits, the harder it is. My grandmother died in 1988. I found some property listed for her around 2011 . I started to help my father claim it, but he passed away during the process. To continue, I would have needed to be appointed administrator of my grandmother’s estate and also of my father’s - which would be worth doing if it was multiple thousands of dollars. But I didn’t know how much money it was, and the Comptroller’s office couldn’t tell me until I established my claim and that was going to cost more time/money than I was willing to invest in what might be $40 split among nine grandchildren.
Find a forum on the internet that’s dedicated to stock certificate collecting. Reddit probably has one or more and likely elsewhere. Ask them about the certificates. If nothing else, you could sell them on Ebay.
Would you be comfortable sharing the name of the company?
Sure:
Interstate Power Company
Are they preferred shares?
You can find the merger proxy (S4) with consideration and “instructions” and other filings online. The merger was in c. 2000
It became interstate power and light company, still traded
I dont know how to post links to SEC.gov here. I used another tool.
Accessno. 0000897068-01-000024. Filed on 1/17/2001
I do not think they are preferred shares. I will certainly check though when I get home tonight.
The law on various things varies. For reasons sometimes ancient, sometimes new. The circumstances of insured or uninsured lost shipping cargo and the circumstances of shares in active or dead companies are pretty clearly different situations. That might well reasonably be expected to have differing legal treatment.
One thing is for sure. Your rights to the dollar value of those shares was not terminated willy nilly, assuming they were ever terminated at all. There was a process under the law that went on at various times and places over the years. if you, or whoever bequeathed you the shares slept through their role in the process, well so sad. it’s far more likely that the value was in effect mislaid, rather than confiscated.
One of the underlying features of law in general is that there must be a way to move forward even with stuff that was lost or participants who won’t (or can’t) cooperate. e.g. They can’t hold up their merger because you can’t be contacted to vote.
So your initial lament is mostly wrong. It’s not a matter that some people’s interests are perpetual and other people’s interests are not. It’s that some situations have perpetual interest and other situations do not.
I think this is a distinction without a difference.
Certainly the law varies and protects some more than others. And that’s the point here.
Let’s say you have a 20% investment in a ship carrying gold from South America to Spain in 1600 and it sinks. 400 years later someone find it and you (a descendant) claim it is yours. And it works!
And then my brother buys 20% into a company (not really that much, just an example) and it merges and if he doesn’t stake his claim in a year or two he’s out?
I am not doubting this is how it all works. I am complaining about different rules for essentially the same thing.
When my Mom passed, I cleared out the safe-deposit box and was surprised to find stock certificates for two local corporations and for a local church-affiliated private college, which both my parents had attended. The local corporations have long since disappeared, but the college is still alive and well. I wondered if the share was worth anything and/or if a shareholder had any voice in the college corporation. I looked it up online and was surprised to see that, yes, there was an annual meeting, and that anybody who had donated at least $100.00 in the past year was a member of the corporation and had a vote at the meeting!
One question I don’t see answered. Do you own the stock (actual ownership) or the stock certificate (just the piece of paper)?