4 ms·

It'd be interesting to know where the lines get drawn here. Private businesses are set up with a primary purpose of being self dealing (looking at what Adam Neu

It'd be interesting to know where the lines get drawn here. Private businesses are set up with a primary purpose of being self dealing (looking at what Adam Neumann did, and it's hard to argue that from the outset at least, it doesn't look that dissimilar to how a lot of private equity companies run).

netcan 7y ago
It gets into obscure territory... private equity & various types of "corporate structure" can end creating (or be drawn specifically to create) serious conflicts of interest. They are not a single, uniform interest group and "self dealing" means screwing (fiduciary failure) someone.
- hef19898 7y ago
  In Germany you can basically go to jail for "stealing" money from a company you own to 100% (in some cases). Self-Dealing can be allowed for managing directs who are also majority owners (e.g. I'm allowed in certain limitis to sign contracts between me and my own company representing both "parties"). But still there are limits. No idea how this works in the US, but I can imagine that there are limits.
  - my123 7y ago
    Of course, you can basically go to jail for "stealing" money from a company you own to 100%. Being able to do so makes a creditor unable to recover their money in limited-liability companies (a clear majority).
    - hef19898 7y ago
      Which also makes perfectly sense, if you ask me!
godzillabrennus 7y ago
Private businesses are primarily setup to be of the benefit to shareholders. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co. If management is making decisions to enrich themselves first before the shareholders then they could run afoul if regulators. Adam was likely not a target of this so long as valuation went up. Now that it’s fallen his shareholders are arguably potentially hurt by his actions and regulators can swoop in.

netcan 7y ago

It gets into obscure territory... private equity & various types of "corporate structure" can end creating (or be drawn specifically to create) serious conflicts of interest. They are not a single, uniform interest group and "self dealing" means screwing (fiduciary failure) someone.

hef19898 7y ago
In Germany you can basically go to jail for "stealing" money from a company you own to 100% (in some cases). Self-Dealing can be allowed for managing directs who are also majority owners (e.g. I'm allowed in certain limitis to sign contracts between me and my own company representing both "parties"). But still there are limits. No idea how this works in the US, but I can imagine that there are limits.
- my123 7y ago
  Of course, you can basically go to jail for "stealing" money from a company you own to 100%. Being able to do so makes a creditor unable to recover their money in limited-liability companies (a clear majority).
  - hef19898 7y ago
    Which also makes perfectly sense, if you ask me!

godzillabrennus 7y ago

Private businesses are primarily setup to be of the benefit to shareholders. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co. If management is making decisions to enrich themselves first before the shareholders then they could run afoul if regulators. Adam was likely not a target of this so long as valuation went up. Now that it’s fallen his shareholders are arguably potentially hurt by his actions and regulators can swoop in.