preferential shares == owned by CPA
That.
I'm assuming that is what you are referring to since it's bolded.
As I said you're mistaken.
Here, I'll walk you through it. It begins with the odd shareholder problem. In the odd shareholder problem, case one assumes an even number of shares (say, 2,000 shares) and an odd number of investors. No matter how you divide the shares some investors will get more shares than others.
Normally it's not a problem however because there are many different assets in a portfolio and you can use smaller per-share-value assets to "make change" if you will.
Now there's 2 basic ways to do this:
1. Give each of the investors an even share of each company, more or less, or
2. Give each shareholder the bulk (or entirety of) one or more companies and then fill in with what's left over (use the smallest value company to make change).
It might not matter to you much when there are only seven investors but when there are seventy or seven hundred things begin to look different. In the case we are discussing the ownership looks like this:
(of BMF): Me and/or CPA: 70%
50-100 other people: 30%
The assets in question look like this:
A single worth ~60 bitcoins
300 shares of X worth 1 bitcoin each,
2000 shares of Y worth 0.05 bitcoins each
5000 shares of whatever else worth maybe 0.1 bitcoins each (for example).
Now, do I want to make your life difficult and transfer your 2,000 shares 50 different ways? No. That would be stupid, and a nightmare for both parties. Why would I do that? No, I will do something like:
a) Give the single and the 5000 shares to CPA/me
b) Give 1000 of the Y to a big investor
c) give chunks of shares to other big investors
d) liquidate smaller positions and give value in bitcoins to the dozen or more remaining small investors
Doing something along these lines makes sense, and is easy.
The second issue you seem to have is that I am paying off CPA's debts before I pay off someone else's. Well thank you Dr. Obvious, what do you expect me to do, wait 6 months before I start paying out claims? I can easily prove my claim on CPA and BMF assets, but random joe on the street cannot do that until I receive the lists from nefario. Handling 2 or 3% of what CPA is owed is no big deal.
Otherwise another issue you will have is YARR, which was created by CPA. Any assets that CPA owned, INCLUDING SHARES OF BMF, will pass to YARR holders as well. This is normal and natural. What do you expect, I put off paying out 5 or 6 bitcoins to YARR shareholders just because I didn't get the CPA shareholders list? That's insane.
What you are witnessing is this:
1. CPA owned shares of BMF.
2. Rather than sell the single and split up the 60 bitcoins in 60 different ways, I just gave it to someone who we owe the almost exact amount of a single +shipping (~65 bitcoins).
3. You will see me do the same in the future. I am trying to find a shareholder I can just give all 2,000 shares of BITCOINRS to, for example. I am not interested in splitting up BITCOINRS 50 different ways and I doubt you would enjoy wading through 50 different GPG signed documents either.
I can't imagine you've thought this though and realize you are asking me to split up BITCOINRS 50 different ways. It just doesn't make sense.
WTF? Why do you insist on making everything up as you go along? There is actually a correct way to do this.
Step 1, decide to shut down.
Step 2, freeze everything. And I do mean
everything.
Step 3a, begin liquidation
Step 3b, have everyone that could possibly consider themselves a creditor to the company submit documentation of debt.
Step 3c, verify that your shareholder information is correct
Step 4b, verify debts, dispute and resolve if applicable
Step 4c, resolve any shareholder ownership issues
Step 5, Once enough assets have been liquidated from step 3a to cover all debts from step 4b, pay them
all. If you run out of assets and still don't have enough, switch to seniority. Starting from the most senior debts, pay all or in proportion until you run out of money, advancing down the seniority levels.
Example: If you owe $10 to 1 senior creditor and $10 each to 9 juniors, and you have $50, you pay the senior guy $10 and the juniors each get $4.44.Step 6, Divide whatever remains among shareholders by shares. There may be seniority issues here too, if so, handle them just like debt seniority in step 5. Under rare circumstances, seniority rules may be spelled out by contract, in which case, follow the contracts. Note that a contract between the company and shareholder A cannot deprive shareholder B of his equity rights unless shareholder B is also a signatory on the contract. People
do end up in prison for this.
This is a parallel plan. Step 3 breaks into 3 parts that can run concurrently. 4b comes after 3b, and 4c comes after 3c. Step 5 requires that step 4b be completed, and step 3a either finish, or run far enough to cover
all debts before paying any of them. Step 6 requires that step 3a be completed entirely.
It is permissible to use a contract for sale with a creditor or a shareholder to transfer assets to them,
if and only if the sale price is at or above market value. Such a contract can offset/replace a payout. Note that I said "can offset/replace a
payout", which is not the same thing as offsetting debt or equity. This is a very important point, and one that you are specifically planning to get wrong.
This plan works for liquidating a corporation, personal bankruptcy, closing an estate, etc. Pretty much every time you find yourself distributing assets of a former entity (or soon to be former entity), you'll follow essentially this plan. If you don't follow this plan in the real world, you end up in court, usually jail.
Oh, if the assets are encumbered in some way, for example, a shareholder agreement, and that agreement interferes in this process, usually a judge will just strike the whole agreement down. Plenty of closely-held companies have unintentionally ended up as public companies because of poorly written shareholder agreements.
Let me say this part very clearly so that you understand it.
Your plan to preferentially offset one shareholder, at assumed face value, is active outright fraud. You need to stop what you are doing right now and start taking this seriously, go back to step 1 and work through the process the right way.
