3 ms·
As far as I'm aware the board of any company is legally obliged to act in the interests of all shareholders. If an offer was big enough then each board member w
by dejb 19y ago
As far as I'm aware the board of any company is legally obliged to act in the interests of all shareholders. If an offer was big enough then each board member would probably have to defend their decision in court from angry shareholders if they refused, possibly against criminal as well as civil charges.
So in the event of say a $500 Billion offer, the whole board would have to resign if they didn't want to sell. Where it goes from there I don't know? Of course I don't see anyone offering that much in a hurry.
- ashu 19y agoDo you have a reference for this? Because if this were the case, the point of such classification of shares would be somewhat moot.
- dejb 19y agoLook up 'Board of Directors' on wiki or 'Fiduciary Duty'. I don't think it makes classifications of shares moot. It still matters as to who who has the say as to what the correct strategy (to benefit all shareholders) is.
- marcus 19y agoThe board can decide to put the decision to the general assembly of stock holders and in that, the preferred shares will get more votes and stop the decision. Shareholders will have no legal recurse to take, as they we're fully informed of this power balance before they bought the shares.
- dejb 19y agoImagine if the decision clearly disadvantaged one class of shareholders in favour of another. For example just taking all the assets of the company and distributing them to Class B shareholders, leaving the class A shares worthless. I do believe there would be legal recourse in this type of situation.