Tag Archives: greed

Context Counts

The answer to the question, “Is this a successful outcome?” can be dependent on your perspective.  Although the result can be agreed to objectively, that is everyone accepts what happened, whether it was positive (sucessful) or negative is very much contextual.

For Example

The owners of the majority of shares in a large company develop a plan of subsidary asset sales and excess cash divestiture through stock repurchase and dividend payouts.

The result is beneficial to exisitng shareholders of the parent company.  The value of the subsidiary drops but the holders of equity in the parent company gain (dividends, parent company stock price increases).

Ultimately the subsidiary may go bankrupt having a very negative impact on its employees, suppliers and customer base ( they need to go elsewhere if they can even find an alternative)

In this case, the shareholders deem the result a success, the other shareholders not so much.  The outcome, bankruptcy of a viable enterprise, is not disputed, whether it was a good or bad outcome is.

In case you did not recognize it, this  story is one way of describing the recent Sears Canada bankrupty.  My telling of the tale is from a cynical perspective, but does have some validity nether the less.

That is the facts, allbeit interpreted liberally, are provable facts.  So clearly your place in the story, rich owner profiting from others loss or poor employyee without severance really speaks to how the outcome is viewed.

 

A litiguous Society

In North America (particularly in the US) there is a belief that if someone wrongs you they should be sued for damages.  For example, three big tabaco companies have  just launched their appeal of a $15 billion class action they lost in June 2015.

For gain or for Redress

The right to sue is basically an opportunity to use legal proceedings to address a wrong for which there appears no other course.  The intent of this process was never to create material gain.

Rather, the idea is to ensure our society has a fair and equitable way to right a wrong.  This entails first determining if a “wrong” has occurred.

If the courts determine this to be the case the corrective action is to first ensure fair and equitable compensation for losses incurred.   Secondly, and this does not always apply, a punishment or penalty can be assessed.  This remedy is intended for grevious and harmful abuses.

The System Subverted

Unfortunately this logical and reasonal approach to correcting both harmful and wrongful behaviors has been subverted by greed.  This is evidenced by two practices associated with this type of litigation.

  1. Lawyers leverage the opportunity for huge fees by engaging in class action law suits (often on a contingency basis with higher risk and reward) not to help the litigant but to earn money for themselves, often at their clients expense.
  2. The public at large will often leverage any perceived opportunity for financial gain when the chance arises, not because they feel wronged but rather for the financial windfall.

I believe the call of riches has morphed a process for fairness into one of potential enrichment.  Unfortunately, the goal now is often to “win the lotteryr” as opposed to correcting a misdeed.

The $15 billion dollar settlement won by smokers who died of cancer or suffered other ill effects of cigarettes is prime example of this.

The smokers whom freely bought and used the cigarettes, could not avoid knowing the health risks (it’s stated clearly on the package for more than 25 years) . Yet somehow the tabbaco companies are responsible for their misfortunes.

Seriously!