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The subsidiary will pay out the settlement and go bankrupt without affecting the parent company's stock price.
by surfingdino 3y ago
The subsidiary will pay out the settlement and go bankrupt without affecting the parent company's stock price.
- lotsofpulp 3y agoWhere does the subsidiary get $6.5B from?
- surfingdino 3y agoThe parent company.
- lotsofpulp 3y agoSurely investors value parent company less if the company has $6.5B less than they would if the same company had $6.5B more.
- carbotaniuman 3y agoYes, but compared to the alternative where the parent company is responsible for an unknown amount of liabilities, capping ones liabilities at 6.5 billion might be better for shareholders.
- surfingdino 3y agoAre film studios valued less after a blockbuster? And yet, almost every US movie, good or not has a company set up for it and that company spends cash and gets closed down after filming ends. So they cannot be sued and the studios cannot be sued. It's a good old US tradition.