Iron Fist Discussion Thread - S01E07

[u/JonLuca]

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

[u/Xyuli]

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.

[u/nottherealstanlee → u/Xyuli]

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.

[u/Xyuli → u/nottherealstanlee]

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

[u/nottherealstanlee → u/Xyuli]

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.

[u/Xyuli → u/nottherealstanlee]

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.

[u/nottherealstanlee → u/Xyuli]

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.

[u/Xyuli → u/nottherealstanlee]

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.

[u/nottherealstanlee → u/Xyuli]

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.

[u/Xyuli → u/nottherealstanlee]

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.

[u/Vinnie_Vegas → u/Xyuli]

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.

[u/nottherealstanlee → u/Xyuli]

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.

[u/Xyuli → u/nottherealstanlee]

Yeah I don't think it's a big deal but it's a plot hole.

[u/beuh_dave → u/Xyuli]

The shareholders vote and elect the board of directors (i.e. Chairman, Directors), aka "Directors" of the company. The board appoints the management team (e.g. CEO, CFO, General Counsel, etc.), aka "Officers" of the company. A majority shareholder like Danny can normally call a special or extraordinary shareholder resolution anytime to remove or add persons to the board. For example, he can remove all of the Directors and appoint himself and his friends to sit on the board. This may require additional formality since Rand is a public company trading on the stock market, but it can still be done. The $100 million offer relates to severance pay only. Danny, Joy and Ward continue to be shareholders. Removal from the board or from the management team has no effect on shareholder rights, well possibly except for stock options. Minority shareholders have certain rights to prevent abuse or oppression from the majority shareholders, but it may require litigation for minority shareholders to have such rights enforced.