Opinion ID: 2231464
Heading Depth: 1
Heading Rank: 4

Heading: preparation and distribution of 1995 stock certificates and stock power

Text: On June 30, 1995, Harvey and Matthew met with two attorneys from the Erickson & Sederstrom law firm (E & S). At this time, Harvey informed one of the attorneys, Charles Sederstrom, that he was contemplating making a gift of stock to each of his sons for 1995, similar to the gift he made in 1994. After this meeting, pursuant to Harvey's instructions, Matthew contacted E & S and requested that stock certificates be filled out and forwarded to AFSCO. As a result of the June 30, 1995, meeting and Matthew's request, Connie Bitzes, a legal secretary for E & S, was asked to prepare four unsigned stock certificates and an unsigned stock power. At that time, E & S maintained at its office four maroon books that contained the blank AFSCO stock certificates and stock stubs and also contained the stock stubs or receipts for AFSCO stock certificates that had previously been issued. E & S did not have any presigned stock certificates or stock powers, nor did it have a facsimile signature stamp for any of the officers or directors of AFSCO. Accordingly, when AFSCO wanted to issue new stock certificates, an AFSCO representative would contact E & S, which would then prepare both an unsigned stock power and the unsigned stock certificates with the corresponding stock stubs. The stock certificates would be removed from the maroon books and, along with the stock power, sent to AFSCO. In addition to sending AFSCO the stock power and stock certificates, E & S would request that both the stock power and the original stock certificate, from which the gift stock originated, be returned to E & S. The stock stubs from the newly issued stock remained in the maroon books and provided the following information: the number of shares issued on that particular stock certificate, to whom the certificate was issued, and the stock number of the original stock certificate from which the shares originated. At the time E & S prepared and issued the new stock certificate, it would mark cancelled on the stock stub corresponding to the original stock certificate which was the original source of the stock gift, even though the original stock certificate had not yet been returned to E & S. Once the original stock certificate and the signed stock power were returned, E & S would attach the stock power and stock certificate to the corresponding stock stub in one of the maroon books. Consistent with the above-described procedure, and in accordance with Matthew's request, E & S sent a letter addressed to Matthew, dated July 6, 1995, attached to which was an unsigned stock power and four unsigned stock certificates. Bitzes testified that although the date on the stock certificates and the stock power was February 2, 1995, neither the stock power nor the certificates were in existence on that date, but were actually prepared by her on July 6, 1995. Bitzes further testified that although she had not yet received Harvey's original stock certificates, she marked cancelled on the stock stubs in the maroon books. The July 6, 1995, letter explained that the issuance of the four stock certificates had been noted in the stock record book (the four maroon books). The letter also directed Harvey to return his original stock certificate so that it could be canceled. It was necessary that Harvey's original stock certificate be returned and canceled because Harvey's original certificate was the source from which he was going to be giving his sons their gifts of stock. The letter further instructed Harvey to sign and return the enclosed stock power. The stock power stated: FOR VALUE RECEIVED, the undersigned hereby assigns and transfers by gift unto Matthew D. Ferer 11,764 shares, Aaron M. Ferer 11,764 shares and Whitney H. Ferer 11,764 shares of the common capital stock of Aaron Ferer & Sons Co., a Nebraska corporation, standing in the name of Harvey D. Ferer on the books of said corporation represented by certificate No. 0460. The undersigned does hereby irrevocably constitute and appoint the Secretary of the corporation as attorney to transfer the stock on the books of the corporation with full power of substitution in the premises. Dated this 2nd day of February, 1995. __________________________________ Harvey D. Ferer Matthew received the unsigned stock certificates, showed them to Harvey, and then, pursuant to Harvey's instructions, acquired the necessary signatures on the stock certificates and locked them in the company safe.