Corporate shares with no current market value may not be ordered transferred to satisfy a money judgment. In Ho v. Hseih, the California Court of Appeal reversed a trial court order directing a judgment debtor (a person who owes money on a judgment) to transfer her shares to the judgment creditor. The judgment debtor held a minority of shares in a corporation that owned a golf course. The evidence showed that, at the time of the trial, the shares had no value because: a) the corporations debt’s exceeded its assets; b) there was no public market for the shares; and c) the shares did not permit the shareholder to exercise control of the corporation. However, the evidence did show that the shares would likely have value in the future.
The Court of Appeal held that since the transfer of the shares would not reduce the amount of the judgment (because the shares were worthless), it was an error for the trial court to order the judgment debtor to transfer the shares to the judgment creditor. As a practical matter, if the judgment creditor waited until the shares did have value to seek the transfer, it would be appropriate for the court to order the transfer and reduce the judgment by the value of the shares.