Skip to content

Nevada bearer shares

Puedo ponerlo exactamente igual:

There’s no question that Asset Protection is a good idea – just as you’d be irresponsible to drive your car without insurance, you’d be crazy not to shield yourself and your money from a lawsuit. But are Nevada corporations the one-size-fits-all answer? As a lawyer who has practiced in Nevada since 1983, I have to tell you that the answer is a resounding “no.”

Thus, when a creditor hauls the person who has been running the corporation up until the morning of his testimony into court, that person can look the judge in the eye and state truthfully, “Gee, I don’t know who owns the corporation, sir, since I just don’t know where the ‘bearer’ shares are right now, or who’s got ‘em today. And whoever’s got ‘em is the owner – at least right now.”

Accordingly, the judge will shrug his shoulders, throw his hands in the air and confess, “Well, I guess that’s the end of that. We just can’t figure it out, so … CASE DISMISSED! Next?”

The debtor then scurries home, where his grandma, or whoever happens to be holding the stock certificates, says, “Welcome home, Sonny … here are those pesky papers you gave me this morning,” after which life goes on unabated, since the debtor now has the stock (and thus ownership of the corporation) back in his hands, with the frustrated creditor stamping his feet in the background, muttering, “Curses! Foiled again by that darned Nevada ‘bearer shares’ law!”

That’s the theory, at least. Unfortunately, this structure appears to be built on a pretty shaky foundation.

Finally, does anyone seriously believe that any judge would fall for this sham? I’ve been practicing law in Nevada since 1983, and I know or have practiced before an awful lot of the judges on the Nevada bench, including the Nevada Supreme Court. Now, even granting that not everyone who’s ever been appointed or elected to the bench (that’s right, in Nevada, judges are elected) is the brightest lamp on the casino marquee, I don’t believe that even the dimmest of Nevada’s legal luminaries would fall for the idea that a corporate ledger book that makes out the owner of stock shares to “Bearer,” coupled with a befuddled-looking debtor defendant smugly saying, “Yup, I think I might’ve had some of them stock certificates, but I don’t have any now,” would somehow leave the judge without any ability to fashion a legal remedy other than dismissal of a case against a debtor.

I think that the most tame thing that a judge would do under such circumstances would be to declare the debtor to be in constructive, if not actual, ownership of the shares and order the corporation to be liquidated to satisfy a creditor’s claim. Most of the judges I know wouldn’t sit still for just that, though; somehow, the phrase “contempt of court” keeps springing to mind.

No comments yet

Leave a Reply

Note: XHTML is allowed. Your email address will never be published.

Subscribe to this comment feed via RSS