4 ms·
How would the Delaware Chancery seize $44B worth of Elon Musk's TSLA shares?
by Victerius 4y ago
How would the Delaware Chancery seize $44B worth of Elon Musk's TSLA shares?
- smitty1110 4y agoWell, Tesla is a Delaware company[1], so I assume they have some leverage. 1: https://sec.report/CIK/0001318605 https://sec.report/CIK/0001318605
- baskethead 4y agoTesla didn't buy Twitter, Elon did.
- BbzzbB 4y agoMain chunk of his assets is Tesla stock, the Delaware incorporated company.
- deleted 4y ago[deleted]
- baskethead 4y agoWho cares, why would Tesla be beholden for the actions of its largest shareholder? Musk is acting in a capacity completely outside of Tesla. To think that Tesla is somehow connected is disinformation.
- throwaway09223 4y agoThey wouldn't. Here's how it works: 1) The court would issue a judgement for Twitter, against Musk, for $44b. 2) Musk would either voluntarily pay it by selling his own assets, or he would refuse. If he refuses, then: 3) Twitter would go about seizing and selling Musk's assets, until they have raised funds to cover the $44b judgement. Twitter could levy whatever brokerage or account Musk uses to hold his shares. Somewhere there is an account which records the shares. Twitter would serve the entity managing the account with a levy, and order the shares be liquidated.
- Victerius 4y agoThanks. Further questions: (1) Would it be legal for him to own the brokerage? (2) What if he moves all of his stock in offshore accounts?
- throwaway09223 4y ago1) Sure, but this wouldn't give him any protection. On the contrary, there would be a ton of extra liability and exposure if he were to refuse to process a levy. Shares don't need to be held in a brokerage. There's always a process to identify and seize the property in question. 2) There's no such thing. TSLA is a US public company, traded on US exchanges. It's simply not possible for shares of the company to exist outside of US jurisdiction.
- artificialLimbs 4y agoYou can obtain paper copies of your stocks. Then they could be on Mars if you'd like.
- legutierr 4y agoStock certificates can be voided and reissued. Tesla being a Delaware corporation, it would be within the power of the chancery court to order that very thing.
- kasey_junk 4y agoJust having a share certificate doesn’t make it s bearer form. The corporation would have to set up this ahead of time. I don’t know the status of Tesla shares that he owns but it would be very weird if they aren’t registered securities. It would also raise a ton of questions if they started issuing bearer shares after a court injunction.
- colechristensen 4y agoOrder the legal entities which possess the shares to transfer ownership of them. Actually keeping track of stocks is complicated but ultimately a boring bureaucracy.
- Victerius 4y agoThanks. Further questions: (1) Would it be legal for someone to own the legal entity owning their shares of publicly traded companies? (2) What if he moves all of his stock in offshore accounts?
- colechristensen 4y agoThe one used by most is DTCC, it’s basically owned by the banks who use it, not something that could be bought. The legal entity which maintains the list of teslas owners is ultimately tesla, but that duty will be likely given to dtcc. A stock is ultimately just an entry on a list maintained by the company, most offload the managing of the list to DTCC and usually the pointer isn’t to you but to your broker dealer. There is no sense of being able to hide ownership overseas, we’re talking about an American company keeping a list that points to someone, that list can’t be offshored. https://en.m.wikipedia.org/wiki/Depository_Trust_&_Clearing_Corporation https://en.m.wikipedia.org/wiki/Depository_Trust_&_Clearing_...
- Victerius 4y agoThanks. I'm always curious about the practical logistics behind things.
- deleted 4y ago[deleted]
- bradknowles 4y agoNote that the last time I checked, DTCC had over one quadrillion dollars of assets under management. They operate at a financial scale unlike any other entity on the planet. For them, $44b is the crumb left behind after you've eaten the small potatoes.