Indemnity for Lost Share Certificates – Key tips for shareholders and companies
Although many shares are held in electronic format these days, that doesn’t mean a company shouldn’t keep a close eye on the status of physical share certificates. At Surety Bonds, we are always ready to assist both companies and shareholders in the process of acquiring indemnity for lost, damaged, or destroyed share certificates – and have extensive experience in doing so.
In this blog, we want to explain a bit more about indemnity for lost share certs, and give some practical examples of how we’ve helped clients in the past. NOTE: This process is often referred to as “Lost Securities” – especially by U.S. based firms – so keep that in mind!
First – let’s go over the simplest explanation for what indemnity for lost share certificates means. Basically, indemnity is a ‘mini insurance policy’ which protects the company against potentially fraudulent actions that arise from the misuse of share certificates.
For example; Shareholder X claims that their share certificate was destroyed in a flood, and is issued a “new” one by the company. Shareholder X then sells the “old” certificate to an oblivious Purchaser Y – who subsequently finds out that his certificate is worthless. Indemnity protects the company against any potential lawsuit that Purchaser Y might bring in this situation.
How our team at Surety Bonds have helped Clients in the past...
Surety Bonds has extensive experience in providing assistance and indemnity for lost share certificates. Here’s a couple of instances:
- Fire Damage: This instance was a little more interesting. A client who was looking into estate planning had inadvertently destroyed their share certificates by throwing them into a fire. The combined value of the share certificates was approximately €250k. This meant that they had an asset (the shares) but had no way of proving it as the share certificates had been destroyed in the fire. So, Surety Bonds assisted in replacing the share certificates in order to reinstate the asset. While it was costly to do this, it was necessary to regain the asset.
- Deceased Estate: The deceased individual had lost the share certificates, and we assisted in replacing the certificates in order for the deceased’s estate to be appropriately reflected with regards to probate. The executors had to sign the documents in order for the share certificates to be reissued. This was done quickly and respectfully.
On a human level with lost share certificates, we try to ensure that the person/ estate gets back what is rightfully theirs rather than it sitting out there in the ether.
Countersignatures - the Over/ Under 50,000 Rule
One thing to keep in mind when looking for indemnities – large share management entities (including Computershare) will ask for a countersignature from a bank or insurance company for ALL lost share certificate indemnity forms for certificates over €50,000
Surety Bonds has You Covered
Whether you are a company looking for indemnity advice, or a shareholder whose certificate has become misplaced, damaged, illegible, or destroyed, Surety Bonds has you covered. Our indemnity forms for lost share certificates have been prepared, checked, and then double-checked by our experienced team! We provide you with easy-to-follow instructions on how to complete this process quickly and with the least amount of hassle.
Get in touch with us today for more information about lost share certificate indemnity.