Litigation settlement, either cash or stock

If your club has received a settlement check and/or shares of stock as a result of a class-action suit, take the following steps:

For cash only

  • Select the correct transaction
    • In Club Accounting 3: Select TRANSACTIONS > DIVIDEND OR DISTRIBUTION.
    • In myICLUB.com (Club Accounting Online): Select ACCOUNTING > SECURITIES > CASH DIVIDENDS.
  • Complete the transaction
    • If you still own shares of the security, change the TYPE selection to Return of Capital.
    • If you do NOT own shares of the security, you will need to enter the transaction as a Capital Gain distribution rather than a Return of Capital.
      • If less than a year has passed between the date of purchase and the date of the settlement check, the gain will be short-term select Short-Term Capital Gain from the Type menu. Otherwise, select Long-Term Capital Gain from the Type menu.
        c. Note that if you have sold the security, Club Accounting 3 will not show it on the list of securities until you select SHOW INACTIVES.

For extra shares

In one unusual case, a Club received shares of the security as part of the settlement. In this case, the Club no longer owned any stock in the company - it was inactive.

Step 1) Calculate the total value of the shares at the market value on the date received.

Step 2) Record a long-term capital gains dividend of the total value on the date received, using Suspense as the cash account.

Step 3) Record the purchase of the shares on the date received, again using the Suspense account.

Step 4) Check the box for Show Inactives to bring up the security under the Select Security field

Step 5) The security is reinstated after the BUY transaction is complete.