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PCola77
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A few weeks ago I bought a stock that was trading at like $7 and was cashing out people holding under 111 shares. I bought 100 shares and a few days later e-mailed the broker CS and asked when I would get the money. The response was this:

"I have confirmed the split activity and the cash payment of $10.00 per share. However, I regret to inform you that you would had to have been a shareholder of record on 03/26/2008 to receive the $10/share buyout. Therefore, as you purchased shares on 04/29/2008, your shares will not be bought out at $10."

I replied by saying:

"I have copied a couple of relevent passages here, which I believe shows that I am entitled to the $10 per share cash out.

http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5756481

'The net effect of the transaction is our repurchase of shares from all shareholders of record who own fewer than 111 shares at the time of the transaction, which is proposed to take place on March 27, 2008. The price per share will be $10.00.'

I can understand why your reorg department took that to mean that you had to have been holding on the 26th, but when you read the sentence, it is clear that it says 'at the time of the transaction', and the transaction was the overnight period between April 29th and April 30th. The issue was that they proposed a date of March 27th, but the NASD assigned the transaction to occur on April 29th/30th. It seems that their intent was to effect the transaction on March 27th, but that obviously did not happen, or I would not have been subject to the reverse/forward split since I bought long after that date."

Their response:
"I have contacted our reorganization department and the terms we received from the company did not include a $10 payout for clients with less than 111 shares."

[Eek!]

So the chain of e-mails went:

Me: When do I get my $10

Them: We've confirmed the $10 payment, but you are not eligible because of the date you bought

Me: Yes I am, because the date of the transaction was after I bought, regardless of their intent.

Them: $10? What is this $10 of which you speak? Ignore our e-mail just previous to this one where we confirmed the $10 payment, we've never heard of such a thing. Pay no attention to the man behind the curtain...

[Wall Bang]

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T e x
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crazy...pure lunacy

Have you replied again, yet?

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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*Mag*
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What gets me the most upset is when I take the time to write a well contructed E-mail coupled with all relevant filings etc.; and I get a reply that looks like they did'nt even read what I wrote... I guess you could say I feel like a woman talking to her husband while he is watching the game.

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^..^

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T e x
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What gets me is when they know you're right--but choose to stonewall, forcing you to escalate...then when you're proven right, they're all smiles and roses.

We need to support the following:

quote:
Detailed Summary, S. 1782, The Arbitration Fairness Act of 2007
(from http://www.washingtonwatch.com/bills/show/110_SN_1782.html#toc1 )
Arbitration Fairness Act of 2007 - Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of: (1) an employment, consumer, or franchise dispute, or (2) a dispute arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.

Declares, further, that the validity or enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.

Exempts arbitration provisions in collective bargaining agreements from this Act.



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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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metal1
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this is from the Q&A from the company. It looks like your broker got it right. you said you bought a couple of weeks ago which is way too late according the companies filing.


Q: What will I receive in the Recapitalization?

A: If you own fewer than 111 shares of our common stock on March 27, 2008, you will receive $10.00 in cash , without interest, from us for each share you own. If you own 111 or more shares of our common stock on March 27, 2008, you will not receive any cash payment for your shares in connection with the Recapitalization and will continue to hold the same number of shares of our common stock as you did before the Recapitalization

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PCola77
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Actually metal, as I wrote above, the company INTENDED for the transaction to occur on the 27th, but it did not. It's not up to them to pick the date, it's up to the NASD. Would you mind sending me a link to where you found that, regardless, so at leas I can prepare an educated response if they do quote that?

Thanks.

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T e x
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quote:
Originally posted by metal1:
this is from the Q&A from the company. It looks like your broker got it right. you said you bought a couple of weeks ago which is way too late according the companies filing.


Q: What will I receive in the Recapitalization?

A: If you own fewer than 111 shares of our common stock on March 27, 2008, you will receive $10.00 in cash , without interest, from us for each share you own. If you own 111 or more shares of our common stock on March 27, 2008, you will not receive any cash payment for your shares in connection with the Recapitalization and will continue to hold the same number of shares of our common stock as you did before the Recapitalization

Metal,

companies and brokers screw this up alla time... the ex-date is what counts re: eligibility, and clearly "any less than 111 shares" qualifies:

http://www.otcbb.com/asp/dividend.asp?sym_id=CKSB&dDate=4/30/2008&sDateType=ex_d ate

--------------------
Nashoba Holba Chepulechi
Adventures in microcapitalism...

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PCola77
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Metal, to follow up, think of it this way:

I had 100 shares on March 24th. On April 1st I sold them for $7 a share. According to that answer, I still would get $10 per share from the company, because I held on March 27th. Doesn't make sense, right? You can't "interpret" filings to try to figure out what they wanted to do, you have to go by what the filing says, or you'd be opening a rather large can of worms, don't ya think?

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metal1
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pc, i got the info from your link to the company press release in your original post. there is a QA section. i didn't look at it that closely, let me look again.
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metal1
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never mind, i didn't realize the transaction didn't occur on the dates they mentioned. if the ex date is 4/30 you should have received the $10.
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metal1
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eom
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PCola77
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yeah metal, and you have to go by the filing, not a PR, obviously. Thanks for the info though. Always good to get all sides to have betetr responses for them when they opint out things like that.
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PCola77
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Update:

Their reply:

I have contacted the transfer agent and asked for a copy of the terms mailed to shareholders on April 11, 2008. This information was mailed directly to DTC on our behalf since our clients shares are held in Street Name.
The terms indicate that holders of record who owned less than 111 shares of Clarkston Financial on March 27, 2008 would qualify for the $10 cash out. All clients holding their shares at brokerage firms are considered holders in street name and the terms would not apply nor would we be able to make them payable to our clients.
I have overnighted the letter to shareholders from the CEO, J. Grant Smith to your AOR, the tracking number is 1Z8700031394815067. I can also fax it to you if you'd like to provide me with a number.

Sincerely,
XXXXXXXXX

Mine:

XXXXX,

Thank you for your continued assistance, and I apologize for having to bother you yet again. I have participated in numerous transaction such as this one, and am basically 100% certain that I am correct. There are numerous flaws in the decision process that has been carried out by Schwab with regard to this matter.

First, I would think you would have to agree with me when I say that shareholder letters, press releases, and the TAs interpretation take a back seat to what was actually filed with the SEC. If you're saying that you're taking the word of a TA over an actual SEC filing, I think the SEC would find that interesting. So because of this first fact, I apologize that you went to the lengths that you did to get the letter sent to me.

Now, assuming that we both agree that only the SEC filing matters, I ask you to look at http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5756481 again, and note the following:

"The net effect of the transaction is our repurchase of shares from all shareholders of record who own fewer than 111 shares at the time of the transaction, which is proposed to take place on March 27, 2008. The price per share will be $10.00."

From that sentence alone (and the positioned is strengthened throughout the filing), it is obvious that the cash-out applies to all holders at the time of the transaction, and the date you continually reference is merely the date on which they proposed for the transaction to go through.

So I think that you would have to agree that one of two things are true here:

1) I bought before the transaction date (which was overnight on April 29th), and thus am eligible for the cash-out
2) I bought after the transaction date (which was March 27th), and thus am not eligible for the cashout, but since the transaction had already occurred, Schwab erred in allowing me to purchase shares of CKSB when no such symbol existed, since the symbol changed to CKFC upon completion of the transaction.

So either I am due the cash-out or the trade must be busted, since I could not have bought CKSB after the transaction occurred.

The next flaw contained in your replies is that the cash-out is only due to those whose shares are in their own name. I believe it is a law that no two shareholders of the same class of stock with the same ownership stake can be treated differently. If it was a condition that the TA needed the shares in the shareholder's name, it is the responsibilty of Schwab to correctly report the breakout to the TA. I don't think that's news to you though, as I know for a fact that Schwab correctly cashed out holders of OPBP, which was a similar situation that took place the same week as CKSB. Feel free to check with your reorg department about that symbol, to see how they handled the street name shares in that case.

My honest opinion of what happened here is that Schwab's reorg department made a mistake, and I am being stonewalled with excuses to try to get me to go away. Frankly, I don't appreciate it, and I am fairly surprised that a matter of merely a couple hundred dollars is even worth your efforts, given the fact that it's probably the cost of about 1 billable hour for one of your compliance lawyers.

I do appreciate your continued resonses and civilty, and I have tried to respond as politely as I could, given my extreme frustration. This is actually the reason that I have preferred to communicate via e-mail, as it affords me the ability to "undo" a sentence if I believe it sounds impolite , whereas on a phone call emotions can often lead to saying regretful things.

That being said, if the proof that I sent in the form of the filing is still not sufficient for you to agree that I am, in fact, due this round-up, I am willing to talk to a supervisor on the phone, despite my reluctance to do so. If this matter can not be resolved to my satisfaction, please have a supervisor call me at XXX-XXX-XXXX at some point Thursday or Friday, after he has had an opportunity to review this issue.

Thanks for all of you help, and I hope it ends happily.

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metal1
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well, i don't know if it's illegal or not (i would guess it's not) but this is what they are referring to. I guess a broker holding shares in street name is considered one stock holder so the net effect is still the same to the company (reducing holder count). so if a broker has more than 111 shares, they don't get cashed out either. it's in the Q&A in your link...Schwab is usually pretty good with these reorgs.http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5756481

Q: What if my shares are held in "street name" through a broker, bank or other nominee?

A: If your shares are held in “street name” through a broker, bank or other nominee (a “broker”), the effect of the Recapitalization on your shares may be different than for record holders. You should contact your broker (1) to determine whether or not your shares are eligible to be cashed out in the Recapitalization and (2) to instruct the broker as to how you would like to proceed. If a broker is the record holder of 111 or more shares on March 27, 2008, the shares held by the broker will not be cashed out in the Recapitalization.

If you hold less than 111 shares in “street name” and you want to ensure that you will be cashed out in the Recapitalization, you may transfer your shares out of “street name” and into a record account with the Company far enough in advance so that the transfer is complete by March 27, 2008.

Regardless of whether your shares are held in “street name” or in a record account, you will not be cashed out in the Recapitalization if you own 111 or more shares in at least one account on March 27, 2008.

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Ace of Spades
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I think a financial lawyer needs to handle this one......
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beechwood
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A financial lawyer will cost you more than
the bloody stock is worth.

Posts: 669 | From: Gouldsboro, Pa. | Registered: May 2006  |  IP: Logged | Report this post to a Moderator
   

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