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Comment by dragonwriter | Hacker News Reader

> I spent around $100k to purchase this stock and paid tax on the gain.

Yes, that’s how options exercises work.

> They are now worth millions of dollars on the open market, but the company will not allow me to sell them...

But you were prrsumably aware of that limitation when you entered into the agreement under which you purchased them (if you dispute that that is the agreement you agreed to, thebmn, definitely, you need a lawyer.) So, even insofar as you describe the “open market” accurately, that market isn’t open to you.

> I understand it's risky, but at this point they just aren't letting me get a payday...

Perhaps not. Are they obligated to let you get a payday? Is it in their interests to do so? If neither of those is the case, why do you expect they would?

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Yes, you're totally right.

Trying to take this in a more constructive direction though: what happens if I go bankrupt? I have no idea how all of that works, but I can imagine a judge saying this limited transferability clause isn't legal or something. How can I go bankrupt when I kinda-sorta own millions of dollars worth of company stock?

> Trying to take this in a more constructive direction though: what happens if I go bankrupt?

If that is an important real consideration, you should consult an attorney; my general understanding, whixh yoi should not rely on, is that non-transferrability clauses mostly are not enforceable in bankruptcy, with some particular exceptions.

It's a theoretical question, and I'm not trying to be annoying here, just genuinely curious.

If this stock is non-transferable, does that mean it has an inherent value of zero? Does that mean I can file for bankruptcy and still keep the stock? I just feel like the nature of property rights in this country doesn't square with transferability restrictions. :shrug:

I used ChatGPT so who knows if this is true but:

> For example, in a U.S. case, Associated Grocers of Maine, Inc., the Bankruptcy Court for the District of Maine ruled that federal bankruptcy law preempted a restriction on the transfer of the debtor's stock, thereby permitting a sale of the stock free and clear of the restriction.

Makes sense though, honestly

If it is permissible to sell in bankruptcy, then I don't see why it wouldn't be permissible to sell to buy a new car.

Its not “permissible”; asset sales in bankruptcy aren’t permissive, they are compulsory.

The governments power to compel sale to resolve bankruptcy trumps your counterparty’s right to limit the sale.

> If this stock is non-transferable, does that mean it has an inherent value of zero?

The value of stock comes from the claim against the assets in the case of dissolution, the ability ot sell in the market just enables one to realize that value without the company dissolving in whole or (as by issuing dividends) in part.

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