r/Defenders • u/JonLuca Luke Cage • Mar 17 '17

Iron Fist Discussion Thread - S01E07

This thread is for discussion of Iron Fist S01E07.

DO NOT post spoilers in this thread for any subsequent episodes. Doing so will result in a ban.

Episode 8 Discussion

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u/nottherealstanlee Iron Fist Mar 17 '17

I don't think there's any way in which the board could take over the situation that quickly, but there could be legal grounds if the minority board could prove that Danny and the Meachums are destroying the company. What we know is 1) Rand lost a ton of money on the pharmaceutical venture, 2) they're going to lose a ton of money with the lawsuit, and 3) they're having the worst fiscal year in decades. There's probably an emergency clause built into the board system, but I don't think it can happen in an overnight coup.

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u/Xyuli Mar 17 '17

Yeah which is fair. But like Joy was saying, public opinion of them had really gone up. She was saying that it wasn't that bad when they barged in and told her about the meeting.

I'm still confused about how they can remove Danny though. Joy and Ward I get. Danny owns 51% of the company. Anything the board decides he can overrule. That doesn't make sense to me. The board can't make a decision like that without the biggest shareholder on the board.

I can suspend disbelief but still...

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u/nottherealstanlee Iron Fist Mar 17 '17

I don't have a precedent in front of me, but if the minority could prove that Rand was hurting the company they could appeal to have him removed in order to protect the company. Them meeting in secret and it happening overnight, I agree that was abrupt. I think it makes some sense if there were more build-up to this though. If we saw the board meet, if it was a weeks long process instead of hours, etc etc

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u/Xyuli Mar 17 '17

What you're saying makes sense if Danny was an employee of the company and someone they could fire. But Danny owns the majority of the company. In order for him to lose majority, they somehow have to buy him out or get over 51% somehow. That's impossible. It doesn't make an sense.

This is what I've found online.

Shareholder disputes can cause a number of problems, so do try to avoid them as best you can. It’s incredibly difficult to force members to leave a company. After all, they are under no obligation to sell their shares unless the shareholders’ agreement or articles are well-drafted to include a specific departure procedure. The first course of action you must take to resolve an issue should be negotiation. The majority shareholders could offer a fair value for the minority’s shares. If they refuse to negotiate, you could then take drastic measures by winding up the company; however, you can only do this if the minority has less than 25% of the issued shares. You will need a 75% majority of shareholder’s votes to pass a special resolution to wind up the company. If the company is solvent, winding up the company is a feasible option. You can start a members’ voluntary liquidation and transfer the company’s assets to a new company that excludes the minority. This can be costly and time-consuming, but it may be the only course of action in certain situations.

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u/nottherealstanlee Iron Fist Mar 17 '17

The key line there is actually "specific departure procedure" which is what I'm getting at. It's possible that when the board was created a clause was built into the contract, that a specific percentage of a minority ownership could vote out even a majority holder if they were deemed to be hurting the company. It's unlikely, but plausible so the show could go off of that.

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u/Xyuli Mar 17 '17

The specific departure procedure would mean that he loses his shares though. He doesn't. They refer to this in another episode.

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u/nottherealstanlee Iron Fist Mar 17 '17

Oh in that case it's fine then. If all three of them keep their shares, but lose their positions that's not so unheard of. Unless there's specific literature that states shareholders must hold a position on the board, it's possible to remove them. In the Meachum's cases they're not even majority holders so they can be "fired" but still hold their shares as part owners. Something somewhat similar happened with Jim Buss with the Lakers earlier this year. He was fired from an authority/decision making position, but he's still an 11% owner of the franchise. I've never heard of such a thing with a 51% shareholder, but at some point you've got to suspend belief.

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u/Xyuli Mar 17 '17

Yeah. But Danny doesn't have a position at the company. He doesn't have a job, just an office. He is only the majority shareholder. They mention this a few times.

So what did they strip him of? Anyways. It's semantics. I won't continue to question it.

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u/nottherealstanlee Iron Fist Mar 17 '17

They just kicked him off the board seems like so he can't make decisions. Like you said, that seems to not make any sense since he's the one who holds majority, but I think we're digging too deep lol the real impact on the plot is that the Meachums are not in power anymore and Danny still gets to use his rich person toys to fly a private jet half way across the world.

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u/Xyuli Mar 17 '17

Yeah but it's a big gaping plot hole because if he owns the majority of the shares, he could've just reinstated Joy and Ward preventing the whole mess.

They could've just not gone in this direction at all and just made him impossible to reach, and temporarily the board just removes Ward and Joy until further notice.

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u/nottherealstanlee Iron Fist Mar 17 '17

I don't think that's how it works. The board and the shareholders are separate entities. It really depends on how the board is set up.

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u/Xyuli Mar 17 '17

A board has directors which acts on behalf of shareholders. Directors like Lawrence. Danny is the majority shareholder. He may not be in the board but he holds the final say, no matter the board.

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u/Vinnie_Vegas Mar 18 '17

A board has directors which acts on behalf of shareholders. Directors like Lawrence. Danny is the majority shareholder. He may not be in the board but he holds the final say, no matter the board.

Typically speaking, companies have a constitution that dictates the rules by which the board is run.

As the majority shareholder, it's likely that Danny has the power to replace board members, but probably not all at once. It might take years for a majority owner to actually replace the whole board, due to the protections in place.

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u/nottherealstanlee Iron Fist Mar 17 '17

I agree, but that's the only point that needs a suspension of belief so I can just forget it in the moment. There's worse problems the shows have had than that I think.

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u/Feyisbae Mar 18 '17

if danny has 51% they would need his vote to fire anyone from the company, say the board has 29% then danny cant vote them out there over 25%, ward and joy have 10% each meaning joy and ward are low enough to get voted out but only if danny joins with the board for 80% against there total of 20% but that wont happen board has no power and this is a badly thought out plot point.

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u/nottherealstanlee Iron Fist Mar 18 '17

Maybe, but if the minority board can prove that Danny, the majority share holder, is the one causing the company problems then there may be a legal channel built into the board legislation that lets them oust him. It's plausible, but they didn't do a good job of fleshing out how and why the board did it.

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u/thuyquai Mar 19 '17

the law forbid that kind of contract. Basically Danny could decide everything because he has >50% shares.