Pilgrim Petroleum Corp. (PGPM)

[1manband]

No, they can't. Corporate law does apply, but it actually prohibits PGPM from both paying a dividend and buying back shares. State law (and no shortage of case law) is very clear on the matter.

By law, common shareholders are only entitled to the assets that are left after all the classes in front of them are paid in full. Those would be debtors, then creditors, then preferred stockholders. In order to prove they have excess capital that can be distributed to common shareholders, a corporation must have GAAP compliant financial statements of a current date.

PGPM does not have GAAP compliant financial statements. The BS they paid OTCMarkets to publish on their website were obviously not GAAP compliant. Strike one.

They also have nothing current. Strike two.

And even if they did, they would not have the excess capital required to make such a distribution. PGPM is broke and in debt.

I suggest you review Wyoming Statute 17-16-640 (subsection C in particular) and the applicable case law. Wyoming law applies because PGPM just reincorporated there, but every single state or corporate jurisdiction has the exact same law - in some cases, the exact same language. It is a basic pillar of corporate law as it protects the debtors and creditors from being ripped off to enrich common shareholders with money which is not theirs. If such a law was not in place, any corporation would have a difficult time borrowing money and doing business on credit.