| Everyone's hating on this, but I do think we have to rethink limited liability because of some of these contexts. 3M paid out dividends for years while producing these chemicals. Their liabilities exceed their _current market cap_, but their market cap could have been higher had they not decided to consistently make those payouts. Consider J&J's (failed) attempt to spin out a new company to hold their liability over the talcum powder case. It was attacked and shot down because it was so clearly a post-hoc maneuver. If they had merely spun out that child company earlier, would it have been ok? What if the new playbook is: - spin out a new company for every potentially risky product line. A parent company may hold a large stake, but other investors can hold shares too. - sell, grow revenue, but keep few assets in the company; pay out dividends aggressively - drag out or quash or deny any research or evidence suggesting your product is dangerous, or being sold in an irresponsible way - when you're finally sued and lose, the company has very little money left in it; plaintiffs get relatively little compensation for their harm, but you don't care because you're busy growing your next dangerous company If that works, it sounds like a broken system. If you're doing something you should expect will cause large liabilities to crop up later, it seems abusive to pay out dividends to shareholders today and become insolvent tomorrow. |