friesfreeze

I think that the most important aspect of corporations is limited liability and that is barely mentioned in the article - but maybe that’s a narrow way of thinking about it.

This is double plus good!

> People should be able to monetize lies.

What? No.

> And people should be able to say things about people or companies that might cause a crazy person to do something crazy.

Yeah sure, but that's not the issue here.

> If the parents of Sandy Hook were harassed then the issue here is surely the harassers?

False dilemma.

> The reason I worry about this is because if I believe someone is doing something evil does that mean I now have to stay silent in case some crazy person agrees with what I'm saying and does something crazy?

AJ was accused of defamation. There is free speech protection for alleged defamatory statements. If statement regards a public figure, must be knowing or reckless with regard to truth. If not a public figure, must be at least negligent.

> I suppose I don't really understand what was illegal here.

He defamed the parents by claiming they were crisis actors in the Sandy hook shooting. While perhaps not criminal, it is damaging to their reputation and the victims are entitled to compensation.

> I also think $50m is simply an insane amount of money.

(1) Sure, the defense bar would love you and (2) that what the jury found and (3) those are punitive damages - i.e. damages set to punish the defamer. $50m in damages need not be done and can be multiples of actual without any constitutional issues.

> What damages were actually done here?

Alex Jones harmed the reputation of the parents and families related to the Sandy Hook shooting.

> $50m for "emotional distress" is ridiculous in any context.

This is more of punishment than compensation. Personally, I can get on board for especially bad actors, but to each their own.

> To those who agree with this, could you help me understand what Alex Jones did here that's any difference to what someone like Joe Rogan does when he accuses individuals like Klaus Schwab of being involved in some global conspiracy?

I mean to start, Klaus Schwab is a public figure so the bar for fault is higher. Also, Schwab might figure that it is not worth suing.

> Is it simply that Joe Rogan tends to accuse people with some meaningful about of fame evil conspiracies?

Idk I don't listen to Joe Rogan lol.

> And if so, what level of fame does someone have to have before it's legal to say what you think about them in public?

I mean if you are flat out lying and know you are lying - basically never. But if you are acting in good faith you have some protection. Just look up defamation on wikipedia - it's not rocket science.

Legal writing has something like this.

If you look at the - sometimes dreaded - Bluebook, "signals" play a large role in indicating the relevance of the cited source to the argument.

See generally Peter W. Martin, Introduction to Basic Legal Citation: § 6-300 Signals, Legal Information Institute (last visited July 10, 2022), https://www.law.cornell.edu/citation/6-300.

You're welcome. Corporate governance is a surprisingly controversial area for how boring it seems at first glance.

Here's a more in depth apologetic for the interested: https://theliptonarchive.org/1980s/

Also - since I'm on a bit of a roll - there are definitely other stories for what is going on here.

One is that poison pills kind of soften the edges of capitalism a bit by allowing directors to decide if they want to the company to be sold or not. Call it crocodile tears by entrenched management, but there is something to be said for keeping a company off the market if the hostile bidder is going to just fire workers and scrap the company for parts. Fairly, this view is not consistent with "shareholder primacy" but it has to be said that not everyone sees the world that way.

Wrt 2:

It's a bit complicated. The "market price" isn't really the target here, if you are talking about the price of the stock on stock exchanges. It's accepted that there is a thing called a "control premium" - basically it is more valuable to own >50% of a company because in addition to having an economic stake, you can now control the company. So when you are buying a company, you generally have to pay more (20%+) than the "market price" because you are also purchasing the "control premium".

So, there is a zero sum game going on here. That control premium is going to be divided up between the buyer and the seller based on the strength of their bargaining positions. For various reasons (poison pill included) board has a stronger negotiating position in extracting the "control premium" than do individual investors. If you weaken the current shareholder's bargaining position (by for example not allowing the board to negotiate price) you increase the share of the control premium going to the purchaser and decrease the share going to the current shareholders.

FWIW the poison pill is controversial. But from a "Law and Econ" perspective - this is the main justification.

So does good society happen when prosocial truths are high status and antisocial truths are low status?

Edit: and the same for lies I suppose.

Courts have upheld poison pills that treat 13D and 13G filers differently. I'd wager most ETFs that hold 5% of major public companies are 13G filers. Vanguard files a 13G for twitter. To be fair idk what the twitter pill will do - maybe it will be more aggressive.

Right, though it is an interesting question of whether those values either have to be (1) directly fiducial (2) couched in some theory of fiducial return or (3) can be entirely non-fiducial. Doesn't really mean much in practice because management can always just cover their ass by saying that the other aims are also good for the bottom line - even if it is nonsense.

I hear what you are saying. Hobby Lobby is an important case but to me Hobby Lobby doesn't really implicate the same policy concerns. Hobby Lobby was a closely held (read family held) private corporation. I agree that the language is dramatic, but I don't really think it the case has much to say about the duty to maximize shareholder value in widely held or public companies.

I read that quote from Hobby Lobby as saying "Sure, where you own the whole thing you can do what you want, whatever, it's not like you are hurting any other shareholders" but I would hesitate in relying on getting that type of language in other fact patterns.

Note that the plaintiff in Hobby Lobby was the secretary health - not a disgruntled shareholder.

Edit: a word

Right, though I don't think it is so vague as to be meaningless. The stakeholder / shareholder value debates in corporate governance play on the extremities of this distinction a lot, with the current koan being that what is good for stakeholders is good for shareholders.

Under DE law, my understanding is that you are slightly off on this.

Boards do have a duty to maximize shareholder value. THAT SAID, the business judgement rule provides that judges will not second guess the board absent evidence of gross negligence or total disregard of duty. This is because the Delaware court has decided that judges are not better than boards at evaluating business decisions.

BUT! Overcoming the BJR is very difficult unless management stupidly says the quiet part out loud.

Dodge v. Ford is a celebrated case in this regard because Ford basically said at trial "Yeah my main consideration in taking [specific action] is not maximizing shareholder value" and the judge was like "Haha no, that's not how any of this works - you can't do [specific thing] now." But if Ford was like "Yeah [specific thing] would be GREAT for shareholders" under the BJR the judge would have been like "Okay, great, keep doing what you are doing. How could I possibly know better than you?"

Also there is no "need to do right by the company" - squeezing value out of the company and all of its stakeholders is completely consistent with the duties of the board members. How else would the private equity industry exist? (jk!)

Technically he could - it would just be ludicrously expensive.

Tender offers can be hostile - a "hostile tender offer" is an offer directly to shareholders to buy shares at a certain price, without getting the blessing of the board.

Well (1) you can be sure Musk is paying lawyers $$$ to make sure he doesn't deeply fuck up on any securities rules given his contentious relationship with the SEC [though fairly that might be de minimus to him] (2) there is an opportunity cost to putting money so much money in twitter just for laughs [he could be doing other things] and (3) there is risk that the twitter stock could fall out from under him. (3) is really only a cost relative to having the money in a diversified portfolio - but it is a real cost nonetheless.

Likely wouldn't even get around modern poison pills since they often contain "wolf pack provisions" covering multiple persons acting in unison.

(1) yes, though would be an expensive troll and (2) no - offer was non-binding and very conditional (due diligence, financing, etc.)

Poison pills often have exemptions for passive investors such as ETFs.

I, for one, pay taxes so I don’t wind up in jail.

Limited liability entities (e.g. corporations, LLCs, etc) are one of the legal cornerstones our economy. Anyone can form one, but it takes expert (thus expensive) advice from a lawyer to make sure you are in compliance and thus really protected - either as a shareholder or an agent of the company. This makes sense when a lot of money is at stake.

To be clear: the entity is liable for the debts it incurs but not necessarily its shareholders or agents. If it cannot pay its debts it goes into bankruptcy and is either reorganized with its creditors as its new owners or liquidated and sold.