I am based in the EU, so I have very little knowledge of how the US legal system works.
I have been contacted by a "law firm" in the US about a financial issue: a company in which I own a small amount of shares went bankrupt several years ago, and apparently they are in liquidation and being bought by another company. I had completely written off this investment until this law firm contacted me out of the blue a couple of days ago, and now I am hesitating since:
- They are offering immediate payout
- They are sending me a PSA (Payment Settlement Agreement And Mutual Releases) / PSPA (Private Stock Purchase And Escrow Agreement) for me to sign. I do not know what those are.
- They are asking for a bank account for the payment.
This is the full email text (redacted for anonymity):
Please find attached the documents pertaining to the investment that you made in XXX Investment currently known as XXIT (XXX XXX Investment Trust) several years ago.
You, as all other shareholders, have the legal right to sell your position to our client, who is at this point in time the only buyer, he already has 51% control of of the common shares, however, it is his intention to acquire at least 75% of the outstanding shares to gain complete control over the assets of the company. The remaining 25% would be immediately absorbed by the new owner and have no financial value whatsoever to the existing shareholder. Under US law this is perfectly legal and a commonly used practice of acquiring full control through the purchase of a majority interest.
The company no longer trades on any stock market as it is in receivership. There is no administrative board to contact, and it doesn't even have a valid corporate ID any more, therefore research options are very limited,as you can imagine.
Upon receipt of your signed documentation, I will put you in the payout list. This is a first come first served situation ,so obviously time is of the essence.
Does this sound legitimate? The wording does, but I have been checking a bit online, and I am suspicious:
- The website could be a simple stock template.
- The whois of the website of the law firm refers to a registrar in Panama (edit: this seems due to
WhoisGuard Protected). It has been registered very recently:
Creation Date: 2017-11-13
- I can not find the law firm in any registry - but I do not know where to look, to be honest.
- The law firm is not to be found in Google Maps, nor in Google itself. It does appear in Bing though.
- They are trying to get this done quickly.
So I tend to think that this is a scam, but I would like to understand how this is supposed to work.
- In case I provide my bank account number (IBAN number in the EU), how will they be able to abuse this? I will simply cancel any suspecting charge in my account.
- What are they trying to do with me signing the PSPA / PSA documents?
What other research could I perform to verify the authenticity of this? Any other advice?
Burke Corporate Law
800 N Glebe Rd, Arlington, VA 22203 United States Phone: 1 (571) 480 6959 www.burkecorporatelaw.com