How could Danny Rand be removed from the board of directors in Iron Fist when he is the majority shareholder?
Reference to episode 8. Which is as far as I have gotten so far.
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2Because companies have rules to protect all shareholders. If it came down to it Danny could fire the Board in a proxy fight, I suppose, but that's not the sign of a healthy company.– Paulie_DMay 3, 2018 at 22:41
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quora.com/…– Paulie_DMay 3, 2018 at 22:44
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1Related on Science Fiction and Fantasy: scifi.stackexchange.com/q/155117/51379– Obie 2.0May 4, 2018 at 0:56
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1 Answer
How could Danny Rand be removed from the board of directors in Iron Fist when he is the majority shareholder?
In Crosby v. Beam, 47 Ohio St. 3d 105 (Ohio 1989), the court held that “Majority shareholders have a fiduciary duty to minority shareholders. A majority shareholder has a fiduciary duty not to misuse his power by promoting his personal interests at the expense of corporate interests.” The court further observed that “Majority or controlling shareholders breach the fiduciary duty to minority shareholders when control of the close corporation is utilized to prevent the minority from having an equal opportunity in the corporation.” uslegal.com
Also from lawtrades:
If you are currently in this position and are both an employee and an owner, then the general answer is that – whether you’re a founder or not – you can be terminated from the company as an employee, but you would remain a majority shareholder. As a majority shareholder, you’re entitled to BOD representation.
The reality is often more complicated than that since a thorough evaluation of all relevant documents is required. That includes your operating agreement (if you’re an LLC), shareholder agreements, stock option agreements, employment contracts, bylaws (if you’re a C-corp) and incorporation documents.
While a founder theoretically can be removed from management – regardless of their majority shareholder status – they can replace hostile BOD members with their own candidates. However, as I just mentioned, the realities are often much more complicated, requiring legal counsel to guide you through not just the morass of legalities, but also the business and political sensitivities that these situations almost invariably demand.
So it's possible to fire majority shareholder if rest of the board agree but he will not loose his shares.
answered Oct 26, 2018 at 12:47
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1It comes down to the fact that, as a publicly traded company, the board still governs, and not just a majority shareholder. He'd have to take it private to exercise unilateral control. Now, he can basically control who is going to be on the board going forward, and stack it with his own cronies, so whether it would "stick" would be another matter, but the board runs the company. +1 for sourcing. Oct 26, 2018 at 14:59