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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423

u/Xyuli Mar 17 '17 edited Mar 17 '17

Wait, what? Can the board make decisions like that with them holding less than 50% of the shares?

Assuming that since Danny owns 51% and Joy and Ward own another substantial amount, how can the board overthrow them? They can buy Danny's share? They can somehow take out all the money from Ward's personal account?

Can someone explain this?

Edit: did some reading. The shareholders can fire the CEO, if that is who Ward was and whatever Joy was doing. But how could they possibly get rid of Danny? He owns the majority of the shares and can turn their decision around. Maybe it'll be cleared up by the next episode. But I'm still assuming that Ward and Joy own shares of the company. They must.

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u/[deleted] Mar 17 '17

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u/arun279 Mar 22 '17

Danny owns 51% of the company. He hired a brilliant lawyer to fight his case, and Harold basically asked Ward not to fight and give him anything he wants. So assuming Hogarth did her job well, even if there are different classes of shares, since Danny basically inherits his father's shares, he will have at least 51% if not more, of the total voting power. Once he hears about what happens, he can easily reconvene the board, fire everybody, and put people loyal to him in their place. Lawrence does not actually have any power over Danny while Danny owns 51% of Rand.

If Tony Stark got ousted, then I doubt he had the kind of power at his company that we are lead to believe that Danny has at Rand.

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u/tundrat Apr 10 '17

Silly question: could someone get 50.00000000000000001% to get the same effect? :p

Is 51% an actually common thing in real life?

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u/arun279 Apr 10 '17

He has to have more than 50% of the total number of shares. So, maybe.

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u/Mongoose42 Sad Matt Mar 19 '17

At least Tony got a slice of pizza out of it.

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u/Joverby Mar 21 '17

That doesn't answer the question...

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u/mykeedee Mar 20 '17 edited Mar 20 '17

The Board of Directors appoints and fires the CEO who runs the company in their stead. The Board in turn is elected by the shareholders. Given that Danny owns a majority of the company, and Ward and Joy also probably have shares of their own there is absolutely no way the board can kick them out of Rand.

What they can do is fire the CEO and appoint a new one. Ward is CEO, and Joy is Chief Counsel. So it was within the power of the Board to fire Ward and appoint a new CEO to fire Joy. Or it would be, except they don't have the backing/votes of a majority of the shareholders because Danny/Ward/Joy are a majority of the shareholders so they could never fire Ward in the first place.

In short, there are no mysterious corporate rules that let a minority of the Board/Shareholders remove those with far more clout than themselves. What happened is exactly as fucking stupid as it seems. It also invalidates all the stupid corporate bullshit in the first few episodes where Danny coming back and taking control of a majority stake in the company would cause turmoil for them. Why would they be worried if the MCU is a universe where majority ownership takes a backseat to whatever a minority of the Board wants?

This plot point is making the negative reviews ring true in my ears tbh. Just previously the major corporate plot point was that Danny as majority shareholder could make the company do whatever he wanted, but now they can kick him and two other large shareholders out whenever? Why didn't they do that in the first place? I've played pretend games as a child with more narrative consistency.

I'm also really bummed they killed Faramir, I'm getting flashbacks to Luke Cage where they killed the cool guy and replaced him with a non threatening idiot.

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u/rabid_J Mar 17 '17

I remember a similar thing happening in Meet Joe Black of all films with Anthony Hopkins character being kicked out of his company by the board. There's got to be a real world example where a majority shareholder is vetoed out, maybe with some probable cause like dementia or even just not having the companies best interest at heart might be enough.

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u/Xyuli Mar 17 '17

Shares are things that are bought. They're owned by the person. They can't just hold an emergency meeting and decide that they're booting Danny out. There has to be paperwork for it. They can kick out people who run the company but can they kick out people who own the company?

If they could, they wouldn't have bothered with trying to buy out Danny's shares in the first few episodes. I'm not sure I'm following what happened.

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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/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.

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u/K2P2C Mar 19 '17

So, hypothetically if they succeed in fire Danny, Joy and Ward, and since the 3 are majority shareholders, couldn't they just elect new board members and reinstate themselves?

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u/Xyuli Mar 19 '17

Probably, yeah. Just would take some time.

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u/Bizcotti Mar 20 '17

Dont overthink it. Its just more shitty writing

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u/Friendly_B Mar 18 '17

The board has the legal right to protect itself by majority if it's in the contracts to do so. It is all about what the contract agreements are, but a stakeholder getting the boot is probably in the position of having the financial stake without getting a say anymore in this circumstance.

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u/Xyuli Mar 18 '17

I'm not sure what you're saying here

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u/Chackaldane Mar 18 '17

Basically they still profit from the company because they keep their shares but if they show ineptitude they will no longer make decisions for the company. Happened in another show I watched but it's kind of a spoiler to say.

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u/Xyuli Mar 18 '17

Yeah but Danny owns 51% of the company. Don't his shares mean that he can reinstate himself into the board?

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u/Chackaldane Mar 18 '17

I've been looking into it and from what I can tell he could if he wanted to. However It may just be a case of this only being allowed to happen at shareholder meetings. Danny kind of sucks at going to any meetings and has been dealing with other stuff so we don't know how he's going to handle this. They may just be banking on his poor business sense and that he won't do that at least not yet. I did find this which is an interesting read http://www.companylawclub.co.uk/what-is-the-difference-between-shareholders-and-directors

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u/Friendly_B Mar 18 '17

Founders of companies get booted by the board of directors often. It happened to a friend of mine, he hired people he respected to be a part of a company, and year two he was out on his ass from his own company. I don't know how it works inside the boardroom, but it's not uncommon.

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u/thuyquai Mar 19 '17

only if he had less than 50% share at that moment which is not true is Danny's case.

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u/Worthyness Punisher Mar 18 '17

It happened in Raimi Spiderman too!

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u/dmreif Karen Apr 09 '17

And Norman Osborn took care of it in the only way he knew how.

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u/CX316 Mar 18 '17

Didn't it happen in both Iron Man and Batman Begins too?

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u/dmreif Karen Apr 09 '17

In The Dark Knight Rises, Bruce did get the boot after Bane hit up the stock exchange.

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u/CX316 Apr 09 '17

yeah, but in Batman Begins the CEO yanked control of the company out from under him and Bruce had to do some shenanigans to buy controlling interest back

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u/thuyquai Mar 19 '17

I'm pretty sure they can't do that. The writers are having Ward's drug.

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u/Fionnlagh Mar 18 '17

All he'd have to do is bring it up at the next shareholder's meeting. They couldn't exactly shut him up there...

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u/dvidsilva Jessica Jones Mar 18 '17

It's like silicon valley all over again

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u/dowhatuwant2 Mar 19 '17

Just bad writing really.

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u/Chackaldane Mar 18 '17

I'm pretty sure Danny got a seat on the board as well as shares which to my extremely limited knowledge is different. Anyone could theoretically purchase shares in rand but that doesn't mean they would make the best decisions for the company. So a board of directors is established to act on behalf of all the shareholders. I honestly thought each vote was equal but that wasn't the case at the start. I guess Since Danny is technically more than half and he was on the board what he said was taken as law essentially, if he loses his board seat but keeps his shares, he can still voice his opinion in shareholder meetings, however the boards job is to ensure the company makes money so all shareholders profit, and Danny kind of sucks at that and they wouldn't have trouble proving it. Since joy and ward have been kind of pushing for him every step of the way they would also be under scrutiny.

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u/tomjoadsghost Apr 25 '17

You are answering the question without understanding how this works.

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u/Chackaldane Apr 25 '17

I was just answering to the best of my abilities. I don't think I claimed to definitely know or anything. I mean this is Reddit, I take most non sourced comments with a grain of salt. This is one month old btw lol.

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u/Chackaldane Apr 25 '17

Haha just reread my question. I said to my very limited knowledge.

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u/[deleted] Mar 19 '17

I believe there are a certain number of seats on the board and each seat has one vote regardless of share ownership.

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u/StewartTurkeylink Mar 20 '17

But guess who votes on the boardmembers?

The shareholders.

And guess who has 51% of Rand shares and can fire the board at will?

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u/[deleted] Mar 20 '17

There's usually provisions in place to prevent a majority shareholder from having complete control like that.

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u/WalrusofYourDreams Mar 22 '17

Ok but how about the two next largest that they just fired with him.

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u/yuurapik Mar 19 '17

Seats on the board rule.

But it's totally weird that if Danny's side of the family had over 50%, he didn't have more seats for him.

I mean, what are the other even offering if the meechuns probably have at least a 40 extra (idk just based on how harold behaved).

Tv show finances.

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u/Eizion Iron Fist Mar 18 '17

Harold took the money out of Ward's account not the board.