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You're right. Something is off here. That seems like moving all the cash from one company to another and letting the first go bankrupt without the latter assumi
by netsp 17y ago
You're right. Something is off here. That seems like moving all the cash from one company to another and letting the first go bankrupt without the latter assuming liability.
What stops this happening more often?
- hristov 17y agoCorporate law.
- netsp 17y agoCare to be more specific? What happens normally that failed to happen here & why.
- hristov 17y agoThe law is different from country to country, and I am not sure about the law or the facts of the case here. But the person that controls a corporation usually has a fiduciary duty to the corporation and usually cannot merely give away the assets of the corporation. Here the corporation had an asset (voting rights) that got sold, but the proceeds of the sale did not come back to the original corporation selling the asset but went to a completely different corporation. Depending on how this was done this may be improper. What usually happens in this case is that someone that is a creditor of the corporation sues to get the money back. However, here the creditor did not sue because it seems like they were able to get their money from another source as explained in the other posts in this discussion. BTW none of this is legal advice :).