7 ms·

The government can't just dissolve a corporation on a whim. We have due process and the rule of law.

dragonwriter 9y ago
> The government can't just dissolve a corporation on a whim. Not on a whim, but for (e.g., in Delaware) “abuse, misuse or nonuse of its corporate powers, privileges or franchises.” (Delaware Code Title 8, § 284.) > We have due process and the rule of law. While rarely used in practice currently (it was more used in the past, and there is a movement to revive the practice), the law provides for charter revocation for corporate misconduct.
- joe_the_user 9y ago
  The point is that charter revocation requires both the executive and judicial branch to agree. Moreover, I think I can guarantee that any vague sounding statement like "abuse, misuse or nonuse of its corporate powers, privileges or franchises." has been translated into a series of relatively specific conditions by the courts. You can't just sue someone for being vaguely terrible. Basically, however appalling the unaccountable power of credit bureaus is, it was legal yesterday and it's not the job of either the executive branch or the judicial to decide today that such power isn't legal today. The judicial system especially is oriented towards prevent that kind of thing. Rather, deciding that is the job of (even more dysfunctional) legislative branch. This, of course, doesn't guarantee that executive or judicial branch couldn't "get religion" and try to get end this situation but it would have it own messiness. And there you have it - an American legal/government system very much resembling a well built car driven far too long without an overhaul.
  - subroutine 9y ago
    It doesn't seem like the executive and judicial branches will need to get involved whatsoever if there is a multibillion dollar lawsuit; if successful this will basically 'dissolve' Equifax.
    - joe_the_user 9y ago
      Well, I wouldn't shed any tears over the dissolution of Equifax and other credit agencies - though a lawsuit would of course involve the judicial branch (the courts). But the problem is: A. If Equifax gets a judgment for close to or for more than the company is worth, the simplest way one could assure the suit is paid to sell the company, keeping the operation going rather than ending it. B. Many businesses integrate credit checks into their operations - it's ridiculous and despicable as mentioned by other but most of these companies and individuals (landlord for example) at least imagine they couldn't survive without the credit agencies so this large group would push for another solution then just getting rid of the credit agencies. C. Getting rid of one credit agencies leaves the other two even stronger.
      - jgowdy 9y ago
        "Well, I wouldn't shed any tears over the dissolution of Equifax and other credit agencies" In Project Mayhem we have no names.
      - 90s-socal-kid 9y ago
        If there were a $17 billion judgement against a $17 billion company, it would not sell for $17 billion. It is also unlikely a $17 billion market cap = $17 billion in assets during an emergency sale. Especially with the shadow of a $17 billion judgement that could encumber the acquired assets. It's bad business to acquire assets from someone with a judgement against them, unless you're getting a great deal.
        joe_the_user 9y ago
        If there were a $17 billion judgement against a $17 billion company, it would not sell for $17 billion. If there is a judgment against a company which that company cannot pay, that company enters bankruptcy. What happens when a corporation enter bankruptcy is the assets of the corporation are assigned to a receiver. The receiver then disposes of those assets with the aim of raising as much money as possible to pay the creditors involved. In the case of a credit bureau, keeping the bureau functioning would arguably be the best way to earn money to pay the individuals who the corporation owes money to - both the people who the got the judgment (first priority), other creditors(second priority) and then the share-holder (third priority). This situation means that corporation that produces toxic waste, dumps it in a river and goes bankrupt from a private suit against it could continue to produce toxic in order keep producing and making money, in order to pay that judgment (it would probably be argued that the toxic-waste leak was a one-time thing). Part of the problem is a private lawsuit isn't a substitute for state regulation even if it's often presented as such. Part of the problem is the very worst that happen to the owners, the shareholder, is their shares become worthless so their incentive for stopping truly bad behavior by organizations is limited. You might say this is fucked-up and I would agree with you. Don't confuse my comments with statements of support for how things. I simply want to thorough, accurate and complete summary of just what a messy we're in.
  - 90s-socal-kid 9y ago
    This assumes the highest good is to maintain the previously defined delineation of governmental branches. Some of the legislative branch dysfunction is due to interference from the same corporate interests they should govern. Corporations are able to DoS their oversight. You are correct there will be unexpected messiness. The question becomes whether our current trend is sustainable over the long term; many believe the second order effects cannot be worse than the path we are currently on.
panic 9y ago
Since Congress defines what the law is, couldn't they do it? The only law binding Congress's lawmaking powers is the Constitution, and I don't think it restricts their ability to dissolve corporations.
- throwaway613834 9y ago
  The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. So this would only work if you can find a clause permitting them to do this. I assume this would be the commerce clause?
- yuliyp 9y ago
  It does actually have such a restriction (Article 1 Section 9): "No bill of attainder or ex post facto Law shall be passed." Further, it prohibits the states from passing such laws as well (Article 1 Section 10).
  - yahna 9y ago
    If Equifax gets sued into bankruptcy and the government passes a law for next time this happens I'd be okay with that outcome.
- marcoperaza 9y ago
  In addition to what others have said, you cannot be deprived of life, liberty, or property without due process in the US.
  - mtanski 9y ago
    In principle that's true... In reality 1. You can be shot by a cop even if you do not pose a real threat (they just need to claim they though you might have a gun, simple) 2. People are routinely kept in jail for unreasonably long time because their families cannot afford bail often on things charges are dropped for later 3. Ever hear of civil forfeiture? The whole thing is a nice story that we love to repeat to each other. Maybe it was easier to accept that during the cold war when the other guys were worse and news traveled slowly (or didn't). It's pretty apparently that isn't true given the quick news cycle... and opening any US history book. Sometimes I wish I could myself become a corporation. Seams it's much easier to exercise your rights as a corporation.
mgleason_3 9y ago
What I can't believe is why there's not a criminal case against these idiots? When you are controlling something dangerous and you allow that thing to harm someone else, it's a criminal offense. It's not a matter of whether it's hard. It's simply your responsibility to ensure no one gets hurt. This company has already caused harm to literally everyone in the US. Minimally, we all now have to take action to attempt to avoid identity theft. And it only gets worse from here. And these bastards have the chutzpah to wait until hurricane Irma is upon us to make the announcement.
- throwaway613834 9y ago
  > This company has already caused harm to literally everyone in the US. Not yet. People might be annoyed but not many of them have been harmed yet. They're harmed when their identity is actually stolen (i.e. used by someone else), not merely when someone gets access to their data. (Not saying I like this system. Just saying this it how the system works.)
- wonderwonder 9y ago
  If people did not go to jail for the wells fargo fiasco where willful fraud was committed, I very much doubt anyone will go to jail for this. Although you are absolutely right, someone should be severely punished for this.
- horusthecat 9y ago
  Bourgeois law in its wisdom protects individual property owners from their mistakes, unless they affect owners of larger property... that said, Equifax may have just fucked over the entire retail/consumer credit industry in the US, so the hammer may very well fall on them. We might get some of those banker perp-walks everyone loves. But with the current administration as well as Congress (we're likely to see a Federal gov't shutdown over the budget even though the Republicans control the legislature and White House), I wouldn't anticipate seeing any regulation down the pike because of this. They mention the Struts vuln, but not which one... did an attacker access the info directly via a naive attack, or was this a campaign? Having worked on Enterprise-Ready(tm) systems I wouldn't be surprised if Equifax had an unsegmented network...

> The government can't just dissolve a corporation on a whim. Not on a whim, but for (e.g., in Delaware) “abuse, misuse or nonuse of its corporate powers, privileges or franchises.” (Delaware Code Title 8, § 284.) > We have due process and the rule of law. While rarely used in practice currently (it was more used in the past, and there is a movement to revive the practice), the law provides for charter revocation for corporate misconduct.

joe_the_user 9y ago
The point is that charter revocation requires both the executive and judicial branch to agree. Moreover, I think I can guarantee that any vague sounding statement like "abuse, misuse or nonuse of its corporate powers, privileges or franchises." has been translated into a series of relatively specific conditions by the courts. You can't just sue someone for being vaguely terrible. Basically, however appalling the unaccountable power of credit bureaus is, it was legal yesterday and it's not the job of either the executive branch or the judicial to decide today that such power isn't legal today. The judicial system especially is oriented towards prevent that kind of thing. Rather, deciding that is the job of (even more dysfunctional) legislative branch. This, of course, doesn't guarantee that executive or judicial branch couldn't "get religion" and try to get end this situation but it would have it own messiness. And there you have it - an American legal/government system very much resembling a well built car driven far too long without an overhaul.
- subroutine 9y ago
  It doesn't seem like the executive and judicial branches will need to get involved whatsoever if there is a multibillion dollar lawsuit; if successful this will basically 'dissolve' Equifax.
  - joe_the_user 9y ago
    Well, I wouldn't shed any tears over the dissolution of Equifax and other credit agencies - though a lawsuit would of course involve the judicial branch (the courts). But the problem is: A. If Equifax gets a judgment for close to or for more than the company is worth, the simplest way one could assure the suit is paid to sell the company, keeping the operation going rather than ending it. B. Many businesses integrate credit checks into their operations - it's ridiculous and despicable as mentioned by other but most of these companies and individuals (landlord for example) at least imagine they couldn't survive without the credit agencies so this large group would push for another solution then just getting rid of the credit agencies. C. Getting rid of one credit agencies leaves the other two even stronger.
    - jgowdy 9y ago
      "Well, I wouldn't shed any tears over the dissolution of Equifax and other credit agencies" In Project Mayhem we have no names.
    - 90s-socal-kid 9y ago
      If there were a $17 billion judgement against a $17 billion company, it would not sell for $17 billion. It is also unlikely a $17 billion market cap = $17 billion in assets during an emergency sale. Especially with the shadow of a $17 billion judgement that could encumber the acquired assets. It's bad business to acquire assets from someone with a judgement against them, unless you're getting a great deal.
      - joe_the_user 9y ago
        If there were a $17 billion judgement against a $17 billion company, it would not sell for $17 billion. If there is a judgment against a company which that company cannot pay, that company enters bankruptcy. What happens when a corporation enter bankruptcy is the assets of the corporation are assigned to a receiver. The receiver then disposes of those assets with the aim of raising as much money as possible to pay the creditors involved. In the case of a credit bureau, keeping the bureau functioning would arguably be the best way to earn money to pay the individuals who the corporation owes money to - both the people who the got the judgment (first priority), other creditors(second priority) and then the share-holder (third priority). This situation means that corporation that produces toxic waste, dumps it in a river and goes bankrupt from a private suit against it could continue to produce toxic in order keep producing and making money, in order to pay that judgment (it would probably be argued that the toxic-waste leak was a one-time thing). Part of the problem is a private lawsuit isn't a substitute for state regulation even if it's often presented as such. Part of the problem is the very worst that happen to the owners, the shareholder, is their shares become worthless so their incentive for stopping truly bad behavior by organizations is limited. You might say this is fucked-up and I would agree with you. Don't confuse my comments with statements of support for how things. I simply want to thorough, accurate and complete summary of just what a messy we're in.
- 90s-socal-kid 9y ago
  This assumes the highest good is to maintain the previously defined delineation of governmental branches. Some of the legislative branch dysfunction is due to interference from the same corporate interests they should govern. Corporations are able to DoS their oversight. You are correct there will be unexpected messiness. The question becomes whether our current trend is sustainable over the long term; many believe the second order effects cannot be worse than the path we are currently on.

panic 9y ago

Since Congress defines what the law is, couldn't they do it? The only law binding Congress's lawmaking powers is the Constitution, and I don't think it restricts their ability to dissolve corporations.

throwaway613834 9y ago
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. So this would only work if you can find a clause permitting them to do this. I assume this would be the commerce clause?
yuliyp 9y ago
It does actually have such a restriction (Article 1 Section 9): "No bill of attainder or ex post facto Law shall be passed." Further, it prohibits the states from passing such laws as well (Article 1 Section 10).
- yahna 9y ago
  If Equifax gets sued into bankruptcy and the government passes a law for next time this happens I'd be okay with that outcome.
marcoperaza 9y ago
In addition to what others have said, you cannot be deprived of life, liberty, or property without due process in the US.
- mtanski 9y ago
  In principle that's true... In reality 1. You can be shot by a cop even if you do not pose a real threat (they just need to claim they though you might have a gun, simple) 2. People are routinely kept in jail for unreasonably long time because their families cannot afford bail often on things charges are dropped for later 3. Ever hear of civil forfeiture? The whole thing is a nice story that we love to repeat to each other. Maybe it was easier to accept that during the cold war when the other guys were worse and news traveled slowly (or didn't). It's pretty apparently that isn't true given the quick news cycle... and opening any US history book. Sometimes I wish I could myself become a corporation. Seams it's much easier to exercise your rights as a corporation.

mgleason_3 9y ago

What I can't believe is why there's not a criminal case against these idiots? When you are controlling something dangerous and you allow that thing to harm someone else, it's a criminal offense. It's not a matter of whether it's hard. It's simply your responsibility to ensure no one gets hurt. This company has already caused harm to literally everyone in the US. Minimally, we all now have to take action to attempt to avoid identity theft. And it only gets worse from here. And these bastards have the chutzpah to wait until hurricane Irma is upon us to make the announcement.

throwaway613834 9y ago
> This company has already caused harm to literally everyone in the US. Not yet. People might be annoyed but not many of them have been harmed yet. They're harmed when their identity is actually stolen (i.e. used by someone else), not merely when someone gets access to their data. (Not saying I like this system. Just saying this it how the system works.)
wonderwonder 9y ago
If people did not go to jail for the wells fargo fiasco where willful fraud was committed, I very much doubt anyone will go to jail for this. Although you are absolutely right, someone should be severely punished for this.
horusthecat 9y ago
Bourgeois law in its wisdom protects individual property owners from their mistakes, unless they affect owners of larger property... that said, Equifax may have just fucked over the entire retail/consumer credit industry in the US, so the hammer may very well fall on them. We might get some of those banker perp-walks everyone loves. But with the current administration as well as Congress (we're likely to see a Federal gov't shutdown over the budget even though the Republicans control the legislature and White House), I wouldn't anticipate seeing any regulation down the pike because of this. They mention the Struts vuln, but not which one... did an attacker access the info directly via a naive attack, or was this a campaign? Having worked on Enterprise-Ready(tm) systems I wouldn't be surprised if Equifax had an unsegmented network...