[markstos]

And how you would craft a law to prevent a company from forming sub-companies for specific games to isolate risk? Or make it illegal for a company to go bankrupt?

Creating sub-companies is common business practice that even small businesses use. Like if a small company wants to buy a building, they may form an LLC to hold the property to isolate that risk from the rest of their business.

[Ukv]

Bankruptcy process already involves identifying and administering the company's assets, so releasing the server software (as-is) to owners of the game could be part of that.

[jandrewrogers]

Bankruptcy sells the assets on behalf of creditors that have specific priority in law. Just releasing code to users would be a pretty serious abrogation of creditor rights.

The most likely outcome is that some PE firm would buy the software rights out of bankruptcy and figure out how to bleed money out of people that want to continue using that software.

[kbenson]

> Just releasing code to users would be a pretty serious abrogation of creditor rights.

Would it, if legally required at the point of sale of the good the source code is based on and utilizes? I doubt creditors claiming ignorance of state law works well as a defense.

[markstos]

Besides bankruptcy there is also shutting a business down, in which case are no new owners. Lavabit and Silent Circle being examples of businesses that shutdown rather than comply with laws they didn't like.

[Ukv]

Shutting down operations as Lavabit/Silent Circle did doesn't negate existing contractual obligations. Voluntarily dissolving the company would also involve completing performance of outstanding contracts.

[jandrewrogers]

How would this solve anything?

Performance under existing contracts is still required to shutdown. The mechanisms for getting around contract performance without bankruptcy essentially require handing control of the company to the contractual counter-parties.

[eclipticplane]

Sub-companies are owned by companies. Don't cap liabilities to the limited assets of a sub-company that actively violates the law.

Or cap them to a reasonable standard: 100% of revenues derived from the game.

[ryandrake]

I don't know how you'd craft that law--I'm just saying they should. How to encode the spirit of the law into the letter of the law is the job for legislators.

Whenever the topic of regulating companies comes up, there's way too much fatalistic "Oh dear, we can't possibly incentivize good corporate behavior because companies are oh-so-clever and there's just no way to handle all the edge cases they will exploit!"

We'll never get anywhere at all if we simply give up the moment someone forms a shell LLC.