| ▲ | chii 11 hours ago | |
> fiduciary duty to the common holders? as long as the transaction is reasonable, they've held up this fiduciary duty. And the minority holders will need to sue for damages in any case, it's not an "automatic" crime. The cost of that suit will be more than the value of the gains and damages awarded. Therefore, minority shareholders in a startup are highly likely to get screwed - not to mention they don't get a say in decisions being made at the top. The only thing preventing this is social pressure (ala, reputational damage, if the founder did it). And if the payday is high enough, the reputational damage is irrelevant (you'd be out of the game with a big enough payday!) | ||
| ▲ | theptip 10 hours ago | parent [-] | |
> The cost of that suit will be more than the value of the gains and damages awarded. In many cases this is so, but here we are talking about tens of billions in value. Even a few percent of value won is worth lawyering up to the hilt for. > as long as the transaction is reasonable What does “reasonable” mean? If the OP is correct and selling the IP guts the company then it seems hard to justify. I also don’t think you can reduce the concept of fiduciary duty in this way. It’s a well-defined term of art with specific precedent. | ||