Opinion ID: 2518474
Heading Depth: 1
Heading Rank: 7

Heading: Continuity of shareholders

Text: The second factor is whether there is a continuity of shareholders. Village argues that there is a continuity of shareholders. We disagree. A review of the purchase agreement reveals that Brannen would receive 3,333 shares of U.S. Labs stock as consideration for Buena Nevada's assets, in addition to the monetary consideration of $300,000. The parties failed to complete the transaction as set forth in the agreement; instead, Brannen received $14,000 cash in lieu of stock and then proceeded to use that cash to purchase 3,333 shares of U.S. Labs stock on the open market. We conclude that this transfer of stock is not sufficient to demonstrate continuity between the shareholders of Buena Nevada and those of U.S. Labs for two reasons. First, we note that the amount of stock transferred was not substantial. Second, and most importantly, we note that Brannen did not purchase and has never owned any Buena Delaware stock. Consequently, we conclude that there is no continuity of shareholders in this case.