Author Topic: A company I own got bought out, but I can't cash out.  (Read 3758 times)

Spekulatius

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Re: A company I own got bought out, but I can't cash out.
« Reply #10 on: February 11, 2020, 08:13:39 PM »
I wonder if the 60 day rollover rule could apply.
What do you mean by "60 day rollover rule"?

You can remove funds from your Roth IRA without penalty, if you put them back in after 60 day or less; at least thatís  my understanding.
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LC

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Re: A company I own got bought out, but I can't cash out.
« Reply #11 on: February 11, 2020, 09:01:17 PM »
I wonder if the 60 day rollover rule could apply.
What do you mean by "60 day rollover rule"?

You can remove funds from your Roth IRA without penalty, if you put them back in after 60 day or less; at least thatís  my understanding.

Yes that's right but I am not sure whether it is required to be the exact same security which is returned. I.e. if tendering shares worth $100 and replacing with cash of $100 is considered a distribution or not. Also note you can only do this once annually.
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writser

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Re: A company I own got bought out, but I can't cash out.
« Reply #12 on: February 11, 2020, 11:24:31 PM »
Do you have a Fidelity account? I can't open an account there but I heard they're a decent option for Americans wanting to trade foreign stocks. You've got some time left. Maybe it's a long shot but you could open an account and try to find out if they see the same regulatory problems .. Something like that would be by far the easiest solution.

Alternatively, it seems that BNP Paribas is the transfer agent, you could try to get IB to get BNP to transfer the shares to your own name and then contact Gilbert Dupont (the buying brokerage firm)  to sell your shares - or you could, after the tender offer expires, try to get IB to sell the shares to Gilbert Dupont (maybe tendering is not allowed but a direct sale is .. ) I would try to contact Gilbert Dupont in any case (from the prospectus: Gilbert Dupont, whose head office is located 50, rue d'Anjou, 75008 Paris), maybe they know what you should do. This whole route does not seem like it would be a fun experience though - how is your French?

In short, I would contact Fidelity and other brokers to see if they can faclitate something and at the same time, harass IB, SABC and Gilbert Dupont relentlessly with e-mails and phone calls. Try to get them to contact each other and try to get contact details from somebody relevant at BNP.

I'd be very careful with converting your shares to physical certificates. Once you are out of the institutional system I am afraid things will only get more difficult and you will be completely out of the loop. I'd probably rather just hold on to my shares at IB and see what happens. Situations like this "feel" extremely dangerous but we don't live in South Park (*poof* aaand it's gone). At some point down the road there will probably be an opportunity to monetize your position because in the end nobody is interested in having an American with a few shares on the registry in Cameroon; the buyers want you to sell your shares. Especially if it's a small position I'd be tempted to just hold out .. I'd say eventually somebody at some back-office will run into insurmountable problems and escalate and especially if you've been spamming everybody down the chain relentlessly they will probably get back to you with an offer to make a wire transfer or they will resume trading on Euronext or IB changes their mind when they are faced with some Cameroonian forms they have to complete or whatever.

I have been in some similar hairy situations (liquidating distributions from a delisted Dubai company, tax issues with a Kazachstan GDR delisting) and my experience is that while it feels terrible dangerous thing usually work out. The relentless harassment is important though, corporate bureaucracy is your most dangerous enemy.

Important disclaimer: this is just like, my opinion. Also, about the consequences of shares being in an IRA account I have absolutely no clue.

An interesting adventure ..
« Last Edit: February 12, 2020, 12:28:48 AM by writser »
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Hielko

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Re: A company I own got bought out, but I can't cash out.
« Reply #13 on: February 12, 2020, 02:12:20 AM »
I think switching to a different broker will not solve your problems.

Tender offers made outside the US are very often explicitly not made to residents of the US because small companies can't afford to comply with US regulations (Canada, Japan, Australia are other countries I often see explicitly excluded). I took a look at this tender offer, and while it doesn't explicitly exclude US residents it states that it is made only in France, from google translate:

Quote
This Project Information Memorandum is not intended to be broadcast in a country other than France.

The Offer has been nor will be registered or approved outside of France. Holders of shares outside of France can not
participate in the Offer unless local law to which they are subject permits. Indeed, the distribution of this document, the Offer,
the acceptance of the offer and delivery of the shares may be subject to specific regulations or restrictions in certain
countries.
Odds that any broker is willing to submit your shares and that the company is willing to purchase your shares: 0.0001% (okay, that might be a bit too pessimistic)

Besides that, writser is making some good points.
« Last Edit: February 12, 2020, 02:20:39 AM by Hielko »

writser

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Re: A company I own got bought out, but I can't cash out.
« Reply #14 on: February 12, 2020, 03:37:33 AM »
Yes, you are probably correct with regards to the tender offer. I'm not a US resident so these restrictions do usually not apply to me. Forgot about that. Still it might be worth a try to see if Fido can help.

Also, reading back my previous post I think my advice could be seen as slightly conflicting with what Gregmal was saying. Just to clarify, Gregmal is an esteemed forum member and by no means should you discard his knowledge. Greg has been treated horribly on this forum in the past (me being one of the instigators of that) and going forward one should treat his posts with the care and respect they deserve. Greg, if you want me to rephrase or change my advice because I have offended you in the slightest, please let me know. Everybody should be able to give his or her or hir (if you are transgender) opinion without fear of repercussions.
« Last Edit: February 12, 2020, 04:02:30 AM by writser »
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Spekulatius

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Re: A company I own got bought out, but I can't cash out.
« Reply #15 on: February 12, 2020, 04:04:19 AM »
Do you have a Fidelity account? I can't open an account there but I heard they're a decent option for Americans wanting to trade foreign stocks. You've got some time left. Maybe it's a long shot but you could open an account and try to find out if they see the same regulatory problems .. Something like that would be by far the easiest solution.

Alternatively, it seems that BNP Paribas is the transfer agent, you could try to get IB to get BNP to transfer the shares to your own name and then contact Gilbert Dupont (the buying brokerage firm)  to sell your shares - or you could, after the tender offer expires, try to get IB to sell the shares to Gilbert Dupont (maybe tendering is not allowed but a direct sale is .. ) I would try to contact Gilbert Dupont in any case (from the prospectus: Gilbert Dupont, whose head office is located 50, rue d'Anjou, 75008 Paris), maybe they know what you should do. This whole route does not seem like it would be a fun experience though - how is your French?

In short, I would contact Fidelity and other brokers to see if they can faclitate something and at the same time, harass IB, SABC and Gilbert Dupont relentlessly with e-mails and phone calls. Try to get them to contact each other and try to get contact details from somebody relevant at BNP.

I'd be very careful with converting your shares to physical certificates. Once you are out of the institutional system I am afraid things will only get more difficult and you will be completely out of the loop. I'd probably rather just hold on to my shares at IB and see what happens. Situations like this "feel" extremely dangerous but we don't live in South Park (*poof* aaand it's gone). At some point down the road there will probably be an opportunity to monetize your position because in the end nobody is interested in having an American with a few shares on the registry in Cameroon; the buyers want you to sell your shares. Especially if it's a small position I'd be tempted to just hold out .. I'd say eventually somebody at some back-office will run into insurmountable problems and escalate and especially if you've been spamming everybody down the chain relentlessly they will probably get back to you with an offer to make a wire transfer or they will resume trading on Euronext or IB changes their mind when they are faced with some Cameroonian forms they have to complete or whatever.

I have been in some similar hairy situations (liquidating distributions from a delisted Dubai company, tax issues with a Kazachstan GDR delisting) and my experience is that while it feels terrible dangerous thing usually work out. The relentless harassment is important though, corporate bureaucracy is your most dangerous enemy.

Important disclaimer: this is just like, my opinion. Also, about the consequences of shares being in an IRA account I have absolutely no clue.

An interesting adventure ..

Thanks for your suggestions. So far, I have contacted SABC and actually received a response overnight (redacted threatens for privacy):

Quote
Dear Investor,
We acknowledge reception of your email below by which you want to tender your shares in response to the SABC takeover offer at Euronext Paris.
Mrs Eva XXXX XXXX, our head of Legal department will provide you more details.
Regards.

I have also reopened the ticket with IB and might escalate. I had some luck before elevating matters before (in one case right to a CEO who delegated it down, butt still got the job done). I have been with IB for years (15?) and don’t want to leave. They suit me well generally, but when they suck they suck bollocks,

I also appreciate the suggestion to go to Fidelity. I have already considerable accounts with them (recently moved a Wells Fargo account there too) and they have an office close to where I live.

My French is pretty rusty and sucks, but I would probably get by with written communication and google translate.
« Last Edit: February 12, 2020, 04:13:21 AM by Spekulatius »
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writser

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Re: A company I own got bought out, but I can't cash out.
« Reply #16 on: February 12, 2020, 04:10:28 AM »
My French is pretty rusty and sucks, but I would probably get by with written communication and google translate.
Calling a French broker would be very awkward indeed and I would also desparately try e-mail first. But in my experience, if you really want to get things done, calling is simply more effective (basically in every situation).
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rb

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Re: A company I own got bought out, but I can't cash out.
« Reply #17 on: February 12, 2020, 04:37:49 AM »
I'd say that what you should do depends on how much you have invested and if it's worth the hassle.

This is not a brokerage problem, it's a custody problem. IB would not be doing the corporate action for you, IB's custodian would be doing it, which I think it's city. Moreover since this is in France it wold probably be done by Citi's office in the UK or Luxembourg.

What you need to do if figure out where do these securities clear. If they are traded on Euronext you may be in luck and it's Euroclear. Then what you need to do is get the shares into a custody account at a custodian that's active on Euroclear and they will do the CA for you. If the shares do clear on Euroclear I'd say the reason why IB doesn't want to do the CA is because you may be the only one on the platform owning this and they don't want to pay citi for the CA.

However, this is just where you problems start.

1. Custodians don't really deal with retail investors unless your talking REAL money. They certainly won't open an account to do a CA for a shitty Cameroon stock. There's no way they would open a custody account for a Roth IRA. Even if they would be willing to do it, the fees would be huge.

2. Find a broker that has a custodian that clears on where this stock clears. Even if one of these brokers would have you as a client the problem is the the stock is in Roth IRA. The broker will probably be in Europe and would have no way to do an in kind transfer between a Roth IRA and an account at their firm.

Some possible good news. I noticed that now Euroclear does open accounts for retail investors. Problem is I don't know how much it costs and you must be a resident of Europe. It's a long shot but maybe you can work the German thing in there.

Another thing, any US broker to which you can transfer the position in kind has a custodian that can do the corporate action for you. If you can find one that's probably your best bet. But my guess is that they won't want to do it.

You basically have a complicated situation that's made worse because of the IRA.

Gregmal

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Re: A company I own got bought out, but I can't cash out.
« Reply #18 on: February 12, 2020, 04:50:19 AM »
Geez, writser. You must have been really, really bothered. I am so sorry! It s funny how some react when the shoe is on the other foot. I thought for sure you were all better when Viking escaped a performance audit in the "Stocks for 15-20 year hold" thread after claiming to time the market and generate decent returns! But then a day later you're still rearranging your signature and going on long sarcastic rants. My goodness, take a deep breathe. Everything will be ok. Hang in there bud. The first 24 hours are always the toughest.

Spek,

With regard to Fidelity or another broker, that will be tough. The issue relates(probably) to reporting issues and FINRA crap. If the position is not big board traded, it would be hard to find someone that would take it. Maybe an Axos correspondent? Although if they do accept it you'll probably have to fill out a foreign/OTC securities report. Annoying and time consuming. Fidelity a few months ago would not ACAT in LAACZ or HTLZF when I had asked(although oddly you could buy/sell both in an existing Fidelity account). Which also leads me to suggest finding/asking for your initial purchase trade confirmations. Those may come in handy because these sort of issues stem almost entirely from the firms compliance department and WSPs and are designed to avoid issues with AML and OTC reporting. I'd probably do that for any OTC you own because Ive heard some firms are starting to require proof of original purchase to liquidate them. RBC even now requires it for positions you purchased with them!

I also think you've at least got a solid lead in the company's head of legal and if I had to wager, thats probably were your time will be best spent. 



SharperDingaan

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Re: A company I own got bought out, but I can't cash out.
« Reply #19 on: February 12, 2020, 05:15:47 AM »
Ultimately it is SABC that wants your shares.
Hence it is highly likely that they will work with their custodian/transfer agent to create a TRANSACTION SPECIFIC Euroclear facility.
IB in turn, simply tendering the shares into the facility, as they would for any other share on Euroclear.

However, the price will remain fixed, and the shares will be unencumbered.
No market trading, no derivatives, no loans, etc.

SD