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Comment by JumpCrisscross | Hacker News Reader

> There is a legal requirement for directors of public companies to act in the financial interests of all shareholders

No, there isn't.

The whole point of Revlon duties is that they trigger "in certain limited circumstances indicating that the 'sale' or 'break-up' of the company is inevitable" [1]. Outside those conditions, "the singular responsibility of the board" is not "to maximize immediate stockholder value by securing the highest price available."

> There is no such requirement for a private company

Are you thinking of minority rights? These vary based on whether a company is closely held or not [2], not whether it's public or private.

[1] https://en.wikipedia.org/wiki/Revlon%2C_Inc._v._MacAndrews_%....

[2] https://millerlawpc.com/rights-minority-shareholders-private...

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Why bring up Revlon duties when as you say, their relevance is only during company acquisition or restructuring?

It's well established over hundreds of years of case law that directors of public companies have to act in good faith to benefit the company (and therefore, the shareholders).

Weird cherry pick.

> Why bring up Revlon duties when as you say, their relevance is only during company acquisition or restructuring?

It’s an exception that proves the rule. In that specific case, what you’re saying applies. In all others, it does not.

> It's well established over hundreds of years of case law

Where are you getting this from?

> directors of public companies have to act in good faith to benefit the company (and therefore, the shareholders)

Where did you get that this only applies to public companies? What you’re describing is basic English and Delaware corporate law.

Also, there is a massive difference between “all shareholders” and “the shareholders”. And nothing about public companies says they can’t be structured in a way that sometimes undermines some shareholders. This comes up most commonly when different shares have different voting or blocking rights. But it’s also fundamental to the intent behind B Corps, publicly traded or not.

> Where are you getting this from?

I seriously doubt you're operating sincerely in this thread, given your ability to cite Revlon. But on the off chance, start here:

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

> And nothing about public companies says they can’t be structured in a way that sometimes undermines some shareholders.

See above.

> seriously doubt you're operating sincerely in this thread, given your ability to cite Revlon

I know about the topic and can correctly cite sources, herego I'm operating insincerely?

> start here [1]

You're citing a 1919 Michigan state court decision concerning the Ford Motor Company. Ford went public in 1956 [2]. The sole source you've cited is about a then-private company from over 100 years ago.

You said "there is a legal requirement for directors of public companies to act in the financial interests of all shareholders." That is wrong. It's doubly wrong in the context of public versus private companies, given it applies to all business corporations.

[1] https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

[2] https://www.fool.com/investing/2019/01/16/63-years-later-wha...

You're operating insincerely by attacking low quality interpretations of what I'm saying, among other problems. For example:

> You said "there is a legal requirement for directors of public companies to act in the financial interests of all shareholders." That is wrong. It's doubly wrong in the context of public versus private companies, given it applies to all business corporations.

Wouldn't that mean my statement is incomplete, not "doubly wrong", if it applies to all businesses, not just public ones?

Similarly, cherry picking sources that support narrow scenarios tangential to the discussion (Revlon) is not sincere.

By this point it's clear your religious grasp on the distinction between public and private companies will not be shaken. I'll continue living in reality, where in fact directors of private companies do act against the interests of the company itself (and in practice are still in accordance with the law), paying themselves off and leaving an insolvent heap. I'm honestly shocked regarding your insistence that public and private companies are the same in this matter; I can only assume that you already have, or stand to, gain from such a private endeavor, and this is causing a cognitive dissonance that is at fault for the vomit you've spewed above. Good day.

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