I am a 5% non-family member owner of a family owned S Corp and am preparing to retire and sell my stock.

Over the years, periodic distributions have been made to individual Shareholder Loan accounts, proportionate to each owners' percent of ownership.

From these accounts, taxes are paid and other uses are managed, such as purchasing other family members stock as they retire by younger family members.

As I had no need for the money, beyond tax payments, my account increased over the years as distributions were in excess of tax needs.

It was explained to me by our company's CPA and Tax guy, who is also a Board member, that when I sell my stock, per the stock purchase agreement (which is mute on the loan issue), the balance of my account would be paid.

Now the CEO is telling me that those funds will not be paid to me, but will be kept by the company, and was unable to express a coherent reason for that.

The net affect of that appears to me to be in violation of the equitable distribution requirement of an S Corporation and a major personal hit as I've held the stock for 15 years or so and have a pile of money in there.

I don't want to lawyer up, as I have 6-9 months to go, but I do need to have a better understanding of what is generally done with something like this as I believe sane, rational discussion is still possible. I just need to be better informed.

Any thoughts would be greatly appreciated.

In my opinion, needless to say, you need to get accurate advice on the issue from your company's CPA and Tax guy saying that when you sell your stock, per the stock purchase agreement , the balance of your account would be paid. Or you need to check in S corp rules, i.e, the S corp bylaws. Typically, the bylaws are adopted by the corporation's directors at their first board meeting. A shareholders' agreement helps owners of a small corp decide and plan for what will happen when one owner retires, dies, becomes disabled, or leaves the corp to pursue other interests. Only they know the rules of the their S corp.If the issue is still not solved then, in common sense, you need to consult an experienced business attorney for assistance