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Again, these aren't poor downtrodden factory workers toiling away in the mines... these are unbelievably well compensated non-founders who have made far more th

Again, these aren't poor downtrodden factory workers toiling away in the mines... these are unbelievably well compensated non-founders who have made far more than even the founders of most successful startups, all without taking true entrepreneurial risks. They are already rich beyond measure, and yet their greed is so extreme that they think they are entitled to extort the founder's shares at some knock-down price because of "reasons"-- to the point where they cry about it to the NYT in violation of their NDAs. Also, you are quite mistaken about the legal duty owed to employees in any capitalist society. You absolutely can wind down a firm, especially if you give sufficient notice in advance to employees (i.e., "we will shut down in 1.5 years from today").

lmm 4y ago
> Also, you are quite mistaken about the legal duty owed to employees in any capitalist society. You absolutely can wind down a firm, especially if you give sufficient notice in advance to employees (i.e., "we will shut down in 1.5 years from today"). Not necessarily. In Germany for example the employees are entitled to set up a works council (under certain conditions), and that council has a right to negotiate for the worker's interests if a restructuring is proposed, including on the point of whether it happens at all, and if they can't reach agreement with management then they're entitled to independent arbitration.
- refurb 4y ago
  So you're saying in Germany the government can force a company to keep operating? That's doesn't sound like a good thing.
  - lmm 4y ago
    The US government also can and does "force a company to keep operating" in the case where e.g. there's a dispute between two groups of shareholders and/or creditors, one of whom wants to shut it down and the other doesn't. Bankruptcy courts do that all the time; for the court of chancery to do it is rarer but it happens. The difference is that Germany recognises that the workers are also legitimate stakeholders with an interest in the business' continued operation.
    - refurb 4y ago
      That's a different situation that the grandparent mentioned. If I'm running a business in the US and I decide that our goose is cooked and it's eventually going to fail, I can just decide to wind it down and close it (if I have control of the company). You're saying that Germany can actually tell the company "no, you're not shutting down"? That's just odd.
      - lmm 4y ago
        > if I have control of the company And there's the rub. If it's not clear who has control and two competing groups think they have control, the court will mediate, at least until things are sorted out (and might force e.g. a Texas Shootout). In Germany, subject to certain conditions (the company being large enough, having enough employees with long enough tenure, etc.), you can't have 100% control of the company even if you've bought 100% of the shares. The employees are a recognised stakeholder and you have to reach consensus with them to make changes, the same as any other situation where you share control of a company with some other party.
        refurb 4y ago
        So what you're saying is if I as an investor fund a company 100%, I can't shut it down unless employees agree? That sounds terrible.
        lmm 4y ago
        It seems natural to me. You may have poured a lot into the company but so have the employees; you shouldn't be able to unilaterally tear up everything you've built together.
        refurb 4y ago
        I’ll throw out an edge case. You invest $10M in a new company, most of it in equipment. Hire 10 people who then form a work council (work councils are possible over 5 employees). 3 months in you realize the business will flop, it was a bad idea, so you want to shut it down and sell all the assets and recoup what you can of your investment. So the work council can say “no”? You're basically forced to run the business until it goes bankrupt? Thats nuts.

lmm 4y ago

> Also, you are quite mistaken about the legal duty owed to employees in any capitalist society. You absolutely can wind down a firm, especially if you give sufficient notice in advance to employees (i.e., "we will shut down in 1.5 years from today"). Not necessarily. In Germany for example the employees are entitled to set up a works council (under certain conditions), and that council has a right to negotiate for the worker's interests if a restructuring is proposed, including on the point of whether it happens at all, and if they can't reach agreement with management then they're entitled to independent arbitration.

refurb 4y ago
So you're saying in Germany the government can force a company to keep operating? That's doesn't sound like a good thing.
- lmm 4y ago
  The US government also can and does "force a company to keep operating" in the case where e.g. there's a dispute between two groups of shareholders and/or creditors, one of whom wants to shut it down and the other doesn't. Bankruptcy courts do that all the time; for the court of chancery to do it is rarer but it happens. The difference is that Germany recognises that the workers are also legitimate stakeholders with an interest in the business' continued operation.
  - refurb 4y ago
    That's a different situation that the grandparent mentioned. If I'm running a business in the US and I decide that our goose is cooked and it's eventually going to fail, I can just decide to wind it down and close it (if I have control of the company). You're saying that Germany can actually tell the company "no, you're not shutting down"? That's just odd.
    - lmm 4y ago
      > if I have control of the company And there's the rub. If it's not clear who has control and two competing groups think they have control, the court will mediate, at least until things are sorted out (and might force e.g. a Texas Shootout). In Germany, subject to certain conditions (the company being large enough, having enough employees with long enough tenure, etc.), you can't have 100% control of the company even if you've bought 100% of the shares. The employees are a recognised stakeholder and you have to reach consensus with them to make changes, the same as any other situation where you share control of a company with some other party.
      - refurb 4y ago
        So what you're saying is if I as an investor fund a company 100%, I can't shut it down unless employees agree? That sounds terrible.
        lmm 4y ago
        It seems natural to me. You may have poured a lot into the company but so have the employees; you shouldn't be able to unilaterally tear up everything you've built together.
        refurb 4y ago
        I’ll throw out an edge case. You invest $10M in a new company, most of it in equipment. Hire 10 people who then form a work council (work councils are possible over 5 employees). 3 months in you realize the business will flop, it was a bad idea, so you want to shut it down and sell all the assets and recoup what you can of your investment. So the work council can say “no”? You're basically forced to run the business until it goes bankrupt? Thats nuts.