3 ms·

The process you're describing is hardly unheard of. The problem is that a large corporation's assets include things like employees, office buildings, supplier c

The process you're describing is hardly unheard of. The problem is that a large corporation's assets include things like employees, office buildings, supplier contracts, etc, which generally aren't valuable except in the context of the business unit they operate within. So if you want to maximize recovery, you have to keep critical business units intact, which often means that large parts of the business survive in all but name. Purdue Pharma is a recent instructive case. The marketing folks did some terrible stuff, but it would be pretty rough on victims, employees, and patients who need pain meds to respond by tearing down Purdue's factories and auctioning off the contents. So the bankruptcy plan calls for keeping the factories running, transferring them to a new company called Knoa, which will be owned by a trust that's dedicated to managing the opioid crisis. Isn't Knoa just Purdue wearing a new hat? Kinda, sure, but there's no better alternative.

kelseyfrog 10mo ago
What if you don't want to maximize recovery?
- bryan_w 10mo ago
  Do you genuinely just not like businesses?
  - nrb 10mo ago
    Surely there’s some wiggle room in between “I just do not like businesses” and “businesses that are convicted of causing some amount of damage to society should not exist” At some point, recovery needs to take a back seat to deterrence.
  - saghm 10mo ago
    I'm indifferent to the idea of businesses in general. I genuinely dislike businesses that make profits from breaking laws and then don't have to suffer the consequences that individuals would suffer from the same actions.
- SpicyLemonZest 10mo ago
  Again, it's pretty rough on the victims to tell them we won't bother trying to get the money they're owed. Sometimes you have no choice; I would be shocked if the healthcare company mentioned in the source link were still operating, since it doesn't sound like it was actually doing much beyond the Medicare fraud. But when you do have a choice, what does anyone have to gain from blowing it up?
  - kelseyfrog 10mo ago
    Punitive punishment serves as a deterrent to other businesses. I really dislike the black or white thinking of, "if we're not maximizing recovery then victims will get nothing."
    - llmslave2 10mo ago
      > Punitive punishment serves as a deterrent to other businesses. You mean the owners and management and employees? Because a "business" in the way it's being suggested isn't a human with emotions or feelings, you can't "deter" a legal construct...
      - kelseyfrog 10mo ago
        If you can't deter a business, what function do fines and monetary legal judgements on businesses have?
      - saghm 10mo ago
        What about the investors into businesses that make money through fraud and other illegal acts? My theory is that if the return on investment for a business making profits through fraud is literally zero, investors would figure out a way to start avoiding investing in fraudulent businesses pretty fast.
    - SpicyLemonZest 10mo ago
      It’s not a question of black and white thinking. If a business took $20,000 from me, and prosecutors told me that they could get the full $20,000 back but instead they’re going to set some of it on fire and only get $10,000, I’d have some serious questions. Maybe answerable ones, if the deterrence theory works out! But I don’t understand who it is that’s supposed to be getting punished or deterred. The owners are losing the business anyway, what do they care if you put the assets to productive use or not?
- ssl-3 10mo ago
  Well that would be terrible! People all over would be furious! (As, perhaps, they should be.)
mschuster91 10mo ago
> So if you want to maximize recovery, you have to keep critical business units intact, which often means that large parts of the business survive in all but name. Easy solution: fire (and imprison) the executives, sell off the entire company, leave the owners/investors with nothing. That sets a proper incentive for shareholders to not send yes-men or people with a dozen or more other well-paid low-effort board memberships into corporate boards but people actually willing and capable of controlling the executive.
- SpicyLemonZest 10mo ago
  Again, you’re proposing this as a novel solution, but it’s well known and commonly deployed. The source link discusses one of the many times that it’s happened. People who think this doesn’t happen are simply mistaken, generally IME confused by large and complex cases where the story can't be so neat and clean.
  - mschuster91 10mo ago
    > Again, you’re proposing this as a novel solution, but it’s well known and commonly deployed. Imprisoning executives is rare enough (you gotta piss off the truly rich for that, e.g. Madoff or Benko), but seizing and selling off an entire company from its prior owners is something I haven't even heard of. What can happen is that a company crashes down due to fines and/or public pressure, but that's not the same.
    - SpicyLemonZest 10mo ago
      It happens all the time. It just happens through the bankruptcy process, so we generally understand it as "company crashes down" even if their core business remained healthy. Purdue, again, is a great recent example of this, although the state governments and other plaintiffs preferred to retain ownership in a trust rather than get cash by selling it to some marginally more responsible pharma company.
      - mschuster91 10mo ago

kelseyfrog 10mo ago

What if you don't want to maximize recovery?

bryan_w 10mo ago
Do you genuinely just not like businesses?
- nrb 10mo ago
  Surely there’s some wiggle room in between “I just do not like businesses” and “businesses that are convicted of causing some amount of damage to society should not exist” At some point, recovery needs to take a back seat to deterrence.
- saghm 10mo ago
  I'm indifferent to the idea of businesses in general. I genuinely dislike businesses that make profits from breaking laws and then don't have to suffer the consequences that individuals would suffer from the same actions.
SpicyLemonZest 10mo ago
Again, it's pretty rough on the victims to tell them we won't bother trying to get the money they're owed. Sometimes you have no choice; I would be shocked if the healthcare company mentioned in the source link were still operating, since it doesn't sound like it was actually doing much beyond the Medicare fraud. But when you do have a choice, what does anyone have to gain from blowing it up?
- kelseyfrog 10mo ago
  Punitive punishment serves as a deterrent to other businesses. I really dislike the black or white thinking of, "if we're not maximizing recovery then victims will get nothing."
  - llmslave2 10mo ago
    > Punitive punishment serves as a deterrent to other businesses. You mean the owners and management and employees? Because a "business" in the way it's being suggested isn't a human with emotions or feelings, you can't "deter" a legal construct...
    - kelseyfrog 10mo ago
      If you can't deter a business, what function do fines and monetary legal judgements on businesses have?
    - saghm 10mo ago
      What about the investors into businesses that make money through fraud and other illegal acts? My theory is that if the return on investment for a business making profits through fraud is literally zero, investors would figure out a way to start avoiding investing in fraudulent businesses pretty fast.
  - SpicyLemonZest 10mo ago
    It’s not a question of black and white thinking. If a business took $20,000 from me, and prosecutors told me that they could get the full $20,000 back but instead they’re going to set some of it on fire and only get $10,000, I’d have some serious questions. Maybe answerable ones, if the deterrence theory works out! But I don’t understand who it is that’s supposed to be getting punished or deterred. The owners are losing the business anyway, what do they care if you put the assets to productive use or not?
ssl-3 10mo ago
Well that would be terrible! People all over would be furious! (As, perhaps, they should be.)

mschuster91 10mo ago

> So if you want to maximize recovery, you have to keep critical business units intact, which often means that large parts of the business survive in all but name. Easy solution: fire (and imprison) the executives, sell off the entire company, leave the owners/investors with nothing. That sets a proper incentive for shareholders to not send yes-men or people with a dozen or more other well-paid low-effort board memberships into corporate boards but people actually willing and capable of controlling the executive.

SpicyLemonZest 10mo ago
Again, you’re proposing this as a novel solution, but it’s well known and commonly deployed. The source link discusses one of the many times that it’s happened. People who think this doesn’t happen are simply mistaken, generally IME confused by large and complex cases where the story can't be so neat and clean.
- mschuster91 10mo ago
  > Again, you’re proposing this as a novel solution, but it’s well known and commonly deployed. Imprisoning executives is rare enough (you gotta piss off the truly rich for that, e.g. Madoff or Benko), but seizing and selling off an entire company from its prior owners is something I haven't even heard of. What can happen is that a company crashes down due to fines and/or public pressure, but that's not the same.
  - SpicyLemonZest 10mo ago
    It happens all the time. It just happens through the bankruptcy process, so we generally understand it as "company crashes down" even if their core business remained healthy. Purdue, again, is a great recent example of this, although the state governments and other plaintiffs preferred to retain ownership in a trust rather than get cash by selling it to some marginally more responsible pharma company.
    - mschuster91 10mo ago