Citation. Torres v. Speiser, 268 A.D.2d 253, 701 N.Y.S.2d 360, 2000)
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Brief Fact Summary.
Torres (P) claims that because his sale of stock was sold at less than par value, the sale is invalid.
Synopsis of Rule of Law.
The statute that prohibits the initial dispersal of stock in a new corporation for less than par value is inapplicable on the resale of dispersed shares among stockholders.
Facts.
Torres (P) and allegedly Speiser (D) agreed to establish a check cashing business in Puerto Rico, in which Torres (P) agreed to retransfer his stock. Torres (P) claims that because his sale of stock was sold at less than par value, the sale is invalid and an unenforceable agreement. He moved for summary judgment. It was denied and Torres (P) appealed.
Issue.
Is the statute that prohibits the initial dispersal of stock in a new corporation for less than par value applicable on the resale of dispersed shares among stockholders?
Held.
(Memorandum decision) No. The statute that prohibits the initial dispersal of stock in a new corporation for less than par value is inapplicable on the resale of dispersed shares among stockholders. There were issues of fact regarding only partial performance of the agreement that precludes summary judgment. Motion is denied.
Discussion.
Shares today no longer have a par value equal to the proposed issuance price, nominal par value shares are used instead. Par value does not indicate the price at which shares are to be dispersed.
