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by mschuster91 175 days 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.
1 comments
SpicyLemonZest 175 days 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.
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mschuster91 175 days 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.

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SpicyLemonZest 175 days 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.
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mschuster91 174 days ago
> It just happens through the bankruptcy process

And that is fundamentally different in messaging to owners and boards than a court order explicitly stating "the government has seized this company because too many laws were violated too egregiously, the entire board is banned for 5-10 years from holding any other board position, the owners/shareholders will not be compensated".

Bankruptcies and dissolutions happen all the time, they are a part of normal healthy capitalism. But explicit, no-nonsense, no-excuse seizures not.

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