I have talked with a family that has had the STS shares distributed to many family members. They all have a few shares and may want to sell. It seems they feel it is not worth the extra K-1 tax preparation cost.
Conceptually, we could have an auction or the trust could purchase the shares thus benefiting all unit holders.
Any thoughts?
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Perhaps we should talk to JPMorgan about buying back shares; it could do it without group consent. (Getting group consent sounds very cumbersome.) Otherwise, I think each transaction would be between individuals as in the past.
ReplyDeleteNow, if the bank wanted to canvass the beneficiaries about the trust's buying back shares, I would probably be on the fence.
This is a subject that the bank should make clear what they believe their responsibility to be and the procedure they would follow.
ReplyDeleteI think if a seller wants to offer shares through the bank, the bank should solicit bids from all beneficiaries (open sale). It could be an offering with or without a minimum which needs to be stated at the offering. The value per share of the resulting sale or failure to make the minimum should be published in a letter to all. The costs to the bank of such a transaction should be included in their fee structure. If any beneficiaries are excluded (private sale) from the offering for any reason, the costs of the transaction would lie solely with the seller and or buyer. No sale reporting would be necessary.
I think the idea of the bank buying out shareholders who want to sell is a great idea, but the problem of arriving at a share value to which all beneficiaries would agree is really difficult and maybe impossible. It seems to me consensus on value would be necessary.
Susan...If you have success talking with JPMorgan (about anything) please let us know. They are not very responsive about simple requests let alone an issue that would require thought and deliberation.
ReplyDeleteI agree. The "auctions" through the bank are not efficient. I think that is why most of the sales of the trust are one offs between a buyer and seller.
ReplyDeleteI know the two times I purchased shares I did it directly with a seller.
Let me be clear, I am not criticizing JP Morgan. It is a difficult process. I wish we could setup a private "ebay" type auction with full timely discloser of bids. But I am sure that would open a can of worms.