Re:Twitter takeover battle: Elon Musk and Jack Dorsey turn u...
by HWR_14 on Monday April 18, 2022 @02:48PM
(#31074837)
I would imagine there is definitely a course of civil action. I honestly don't know (but assume) that criminal action would probably depend on exactly how it was done. After all, Holmes's Theranos trial turned on federal wire fraud charges.
Re:Twitter takeover battle: Elon Musk and Jack Dorsey turn u...
by GauntletWizard on Monday April 18, 2022 @05:50PM
(#31077067)
Absolutely - Everything is legal until you're caught. How easy it is to catch you and how easy it is to prove in a court of law are what matters.
As today's Money Stuff[1] opines - This kind of transaction can be really easily made legal, while still giving investors the middle finger. If the company is worth X, you takeover the board and carry out a merger that cashes out minority stakeholders for $1, you're liable for X. If the company is worth X, you takeover the board, and carry out a merger that cashes out minority shareholders for X * .8, you've got a good chance of getting away with it - The standards is "business judgment" vs "fiduciary duty". Companies have fiduciary duty to all shareholders. Sometimes that means that the board gets to dissolve the company for a lot less than it's worth.
[1] https://www.bloomberg.com/opinion/articles/2022-04-18/twitte...
IANAL, but this is actually theft - Minority shareholders have rights if a company is liquidated, and the courts are smart enough to recognize "Reorganize all assets under a new company owned only by the majority shareholder" as being that liquidation. As far as I'm aware, States Attorney General are the ones to prosecute this crime, so file a complaint there.