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benreesman 4 days ago

There are orhanized ways to wind down a business unit or even a whole business and convert the salvagable assets into shareholder value, these range from corp dev / M&A activity all the way through bankrupcy and bondholder seniority.

And in the days when fraud or "fraud-adjacent" behavior carried serious costs? When violating the social contract around pensions and severance and stuff had real reputational costs that followed the principles around? People used them when necessary. You sold off the assets sometimes.

But beginning with the LBO "innovation" in the 80s and running a line through Milken and shit all the way to the Vanguard/State Street/Blackrock "quasi-sovereign" level of PE asset capture?

People started arbing it, not by seeing value where others had missed it! By betting that Gordon Gecko had enough fans to make the arb work. "Gutting" a company slowely and painfully is in a bucket I'll call "fraud adjacent": usually not outright illegal (lotta "gray" work, gray edge), clearly not what society wants or intended, and you know it's a scam when you look in the mirror every night. i used to get wasted with these guys at Catch when I lived in NYC: they'll tell you everytging I am and more on five gin and tonics

There's no place for the word "duty" in any version of that argument unless you also use the word "derelict".

Don't excuse weakness at the top.

joe_the_user 4 days ago | parent [-]

Don't think I'm using duty in any sense other than the sense than that the corporate raiders have set-up a situation where management feels forced to engage in the program of gutting they outline. All of this is part of the gutting of the US of course.

By betting that Gordon Gecko had enough fans to make the arb work. "Gutting" a company slowely and painfully is in a bucket I'll call "fraud adjacent": usually not outright illegal (lotta "gray" work, gray edge), clearly not what society wants or intended

Sure, but if society doesn't intend this, society has to f---ing do something. Clearly it's not.

IE: if the only legal obligation of management is promoting maximum legally possible valuation over time, "squeezing" still makes sense if there's enough money to be had. The only way to change this is forcing the issue in some fashion or other.