QUESTION

Can the person with controlling interest in a public corporation "pay" themselves out of the companies assets or profits?

Asked on Dec 08th, 2012 on Corporate Law - Hawaii
More details to this question:
Can the person with controlling interest in a company pay themselves from the cash pile or selling assets etc? This is regarding a publicly traded company. Is there a way for someone to do this, providing there are no clauses preventing it in company articles?
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1 ANSWER

Litigation Attorney serving Greenwich, CT
Partner at Hilary B. Miller
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Yes. This happens all the time. As long as there is some legitimate corporate purpose for the payment (such as compensation for services in accumulating the cash pile or selling the assets), the board of directors of the corporation may approve such a payment. Normally, the board's judgment in such matters is respected by the courts.
Answered on Dec 09th, 2012 at 9:57 AM

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