5 ms·

Sounds like we need a corporate death penalty.

norswap 6y ago
Sounds like you need to s̶t̶f̶u̶ read the HN comment guidelines (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html). (And maybe I should too.)
- 93po 6y ago
  What, is it against the rules to be against the evils of capitalism?
z3t4 6y ago
Ianal. But i think you can be sentence to never run a company again.
- sokoloff 6y ago
  Also NAL. You can certainly be barred from serving as an officer of a publicly-traded company. I doubt you can be barred from running a small company (absent being incarcerated which may indirectly/practically bar that).
- treespace88 6y ago
  Ohh that’s good. No longer able to own any corp or LLC anywhere. Forced to liquidate all holding and be taxed as a normal citizen.
deleted 6y ago
[deleted]
JumpCrisscross 6y ago
> a corporate death penalty This is a silly idea if you think about it. Companies are packets of assets and obligations. Liquidations usually involve shareholders pulling the plug. If the shareholders want the company to keep going but the government doesn’t, when you liquidate the assets, the old shareholders will simply re-purchase them and re-hire the same (or a similar) team. Not a lot done except hosing creditors and enriching lawyers. Okay, so you ban former shareholders from buying. Who is most likely to be able to do the fire sale diligence? A competitor. Now you have a policy that promotes industrial concentration. Fine, ban competitors. At this point, few deeply knowledgeable about the assets can bid. In most cases, a deep discount bid will take the cake. So a wealthy person will get assets at a discount from pension plans and individual investors. Applying concepts like a “death penalty” to legal fictions is emotionally satisfying but economically dubious. I am actually surprised it hasn’t been suggested as a solution by large-company lobbyists. It creates lots of legal work. A back door for wiping out debts. And it enriches wealthy clients while sidestepping real consequences.
- jennyyang 6y ago
  It's a fantastic idea. Shareholders, who the Board of Directors claim to be beholden to, would lose everything. The company would get liquidated to the highest buyer. Shareholders would be incentivized to not support crimes or strategies that would lead to corporate execution and Board members would be legally bound and liable if that happened. It doesn't support industrial concentration. All the company needs to do to avoid executation is to not commit the most egregious crimes. Is that really such a hard ask? No, it isn't.
  - JumpCrisscross 6y ago
    > The company would get liquidated to the highest buyer Who do you think gets the liquidation proceeds? If not the shareholders, one, that’s expropriation, which rule-of-law countries try to avoid. And two, that’s easier achieved with a fine. For businesses requiring a license, suspending licenses could kill a business. Otherwise, “death penalty” is, at best, an expensive way to levy a fine and, at worst and most likely, inchoate.
    - kyboren 6y ago
      OK, shareholders might get some proceeds after secured and unsecured creditors, but as I am sure you're aware, share prices are generally a multiple of book value. With a corporate death penalty, the net present value of the expected future earnings of the company is 0. A fine can be paid and the organization simply continues. But the point of the corporate death penalty is that the organization ceases to operate; executives and board members lose their plum positions in ignominy; shareholders lose enormous value; and the rotten people and incentive structures in the organization are scattered into the wind.
- slipheen 6y ago
  I'm not sure why liquidating the assets is taken as given. I would be much more amenable with the idea of destroying them. Any trademarks are revoked, any copyrighted works are now PD, etc. Physical assets are destroyed and put in landfills. If they own a building, tear it down, make it a park.

Sounds like you need to s̶t̶f̶u̶ read the HN comment guidelines (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html). (And maybe I should too.)

93po 6y ago
What, is it against the rules to be against the evils of capitalism?

z3t4 6y ago

Ianal. But i think you can be sentence to never run a company again.

sokoloff 6y ago
Also NAL. You can certainly be barred from serving as an officer of a publicly-traded company. I doubt you can be barred from running a small company (absent being incarcerated which may indirectly/practically bar that).
treespace88 6y ago
Ohh that’s good. No longer able to own any corp or LLC anywhere. Forced to liquidate all holding and be taxed as a normal citizen.

deleted 6y ago

[deleted]

JumpCrisscross 6y ago

> a corporate death penalty This is a silly idea if you think about it. Companies are packets of assets and obligations. Liquidations usually involve shareholders pulling the plug. If the shareholders want the company to keep going but the government doesn’t, when you liquidate the assets, the old shareholders will simply re-purchase them and re-hire the same (or a similar) team. Not a lot done except hosing creditors and enriching lawyers. Okay, so you ban former shareholders from buying. Who is most likely to be able to do the fire sale diligence? A competitor. Now you have a policy that promotes industrial concentration. Fine, ban competitors. At this point, few deeply knowledgeable about the assets can bid. In most cases, a deep discount bid will take the cake. So a wealthy person will get assets at a discount from pension plans and individual investors. Applying concepts like a “death penalty” to legal fictions is emotionally satisfying but economically dubious. I am actually surprised it hasn’t been suggested as a solution by large-company lobbyists. It creates lots of legal work. A back door for wiping out debts. And it enriches wealthy clients while sidestepping real consequences.

jennyyang 6y ago
It's a fantastic idea. Shareholders, who the Board of Directors claim to be beholden to, would lose everything. The company would get liquidated to the highest buyer. Shareholders would be incentivized to not support crimes or strategies that would lead to corporate execution and Board members would be legally bound and liable if that happened. It doesn't support industrial concentration. All the company needs to do to avoid executation is to not commit the most egregious crimes. Is that really such a hard ask? No, it isn't.
- JumpCrisscross 6y ago
  > The company would get liquidated to the highest buyer Who do you think gets the liquidation proceeds? If not the shareholders, one, that’s expropriation, which rule-of-law countries try to avoid. And two, that’s easier achieved with a fine. For businesses requiring a license, suspending licenses could kill a business. Otherwise, “death penalty” is, at best, an expensive way to levy a fine and, at worst and most likely, inchoate.
  - kyboren 6y ago
    OK, shareholders might get some proceeds after secured and unsecured creditors, but as I am sure you're aware, share prices are generally a multiple of book value. With a corporate death penalty, the net present value of the expected future earnings of the company is 0. A fine can be paid and the organization simply continues. But the point of the corporate death penalty is that the organization ceases to operate; executives and board members lose their plum positions in ignominy; shareholders lose enormous value; and the rotten people and incentive structures in the organization are scattered into the wind.
slipheen 6y ago
I'm not sure why liquidating the assets is taken as given. I would be much more amenable with the idea of destroying them. Any trademarks are revoked, any copyrighted works are now PD, etc. Physical assets are destroyed and put in landfills. If they own a building, tear it down, make it a park.