4 ms·

> Could we institute a corporation death penalty? That's what bankruptcy is. Existing owners (stockholders) lose the company entirely. The company gets sold t

> Could we institute a corporation death penalty? That's what bankruptcy is. Existing owners (stockholders) lose the company entirely. The company gets sold to entirely new owners. And while bankruptcy is usually due to mismanagement or bad luck, it can also certainly happen because a legal judgment or fine makes the corporation no longer viable. But if you're asking for the company to be destroyed to the extent where every single contract is cancelled and every single person gets laid off, that's not generally desirable. We don't want people to lose their jobs, or customers to stop receiving what a company produces, whenever possible. There's a lot of value in a functioning corporation that you don't want to just disappear. Better to let new owners reuse it.

Sniffnoy 1y ago
Generally the phrase "corporate death penalty" refers to revoking the charter, not bankruptcy. Which you argue is undesirable, but like, that is what the phrase normally refers to.
- crazygringo 1y ago
  Sure, the technical term is "judicial dissolution". But the main counterpoint is that there's literally no point to that. If you want to punish the owners, there's no difference between taking the value of their investment to zero, or going beyond that and destroying every contract and job. The owners don't care if a receptionist loses their job too, but the receptionist sure does. It becomes more than just a "death penalty" -- it becomes a "nuclear bomb" that takes out everyone. So bankruptcy already accomplishes everything you'd want from a "corporate death penalty". The company is gone as far as the previous owners are concerned.
  - M95D 1y ago
    There is a point. If everyone in the company fear of losing their jobs, there would be a lot more internal resistance to illegal activities, a lot more whistle blowers.
    - jmalicki 1y ago
      That's effectively the same as chapter 11 bankruptcy - a new corporation is formed and they buy all the assets and hire all the employees back.
    - crazygringo 1y ago
      Most people in a company won't even know about illegal activities at the top. So that wouldn't work. And if there's illegal activity that ought to be punished at the employee level, then that's what criminal statutes and charges are for. "Losing your job" is a punishment that is too much for innocent people who just work there, but far too little for anyone actually directly engaging in criminal activity.
patcon 1y ago
> > Could we institute a corporation death penalty? > That's what bankruptcy is. No bankruptcy is the invention of gentler death, or maybe euthanasia. A death penalty would be about killing an otherwise "healthy" (aka "resourced") company due to a transgression. Maybe a death penalty is more like fines and penalties that might be impossible for a company to bear.

Sniffnoy 1y ago

Generally the phrase "corporate death penalty" refers to revoking the charter, not bankruptcy. Which you argue is undesirable, but like, that is what the phrase normally refers to.

crazygringo 1y ago
Sure, the technical term is "judicial dissolution". But the main counterpoint is that there's literally no point to that. If you want to punish the owners, there's no difference between taking the value of their investment to zero, or going beyond that and destroying every contract and job. The owners don't care if a receptionist loses their job too, but the receptionist sure does. It becomes more than just a "death penalty" -- it becomes a "nuclear bomb" that takes out everyone. So bankruptcy already accomplishes everything you'd want from a "corporate death penalty". The company is gone as far as the previous owners are concerned.
- M95D 1y ago
  There is a point. If everyone in the company fear of losing their jobs, there would be a lot more internal resistance to illegal activities, a lot more whistle blowers.
  - jmalicki 1y ago
    That's effectively the same as chapter 11 bankruptcy - a new corporation is formed and they buy all the assets and hire all the employees back.
  - crazygringo 1y ago
    Most people in a company won't even know about illegal activities at the top. So that wouldn't work. And if there's illegal activity that ought to be punished at the employee level, then that's what criminal statutes and charges are for. "Losing your job" is a punishment that is too much for innocent people who just work there, but far too little for anyone actually directly engaging in criminal activity.

patcon 1y ago

> > Could we institute a corporation death penalty? > That's what bankruptcy is. No bankruptcy is the invention of gentler death, or maybe euthanasia. A death penalty would be about killing an otherwise "healthy" (aka "resourced") company due to a transgression. Maybe a death penalty is more like fines and penalties that might be impossible for a company to bear.