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That only applies immediately before insolvency or immediately after acquistion. Primary motive does not mean no action of a corporation is allowed to lower its
by anticensor 8y ago
That only applies immediately before insolvency or immediately after acquistion. Primary motive does not mean no action of a corporation is allowed to lower its short term profit.
- baybal2 8y agoNot to say that the legal logic of that case was defeated numerous times
- anticensor 8y agoEuropean JSCs (inc. equivalent) have a codified requirement of returning shareholder dividend at least once in 5 years. Is there a similar codified law in the US requiring public companies to return profit every quarter?
- torstenvl 8y agoNo, not in any state I've practiced in. I suspect there is no such legal requirement in any U.S. jurisdiction. However, shareholders and their boards expect growth. Additionally, note the distinction between profit and growth. For a long time, Amazon grew a lot and shareholders saw returns in terms of stock price, but the company itself made little to no profit.
- torstenvl 8y agoThat is not accurate.
- torstenvl 8y agoYou're off-topic and completely non-responsive. The question of whether officers of a corporation have a fiduciary duty to maximize shareholder value is utterly orthogonal to the question of whether there can be local peaks and valleys in the chart of that value's growth. Stopping operations, liquidating all the assets, and putting the whole mess in a savings account... that would eliminate local troughs, but is so obviously not in the shareholders' best interests that it might even violate the duty of good faith.