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Off Topics > California Grocery Strike
 
 
Dragon2115
Key Veteran
Location: New England

gpyros,

Ok so what you're saying is that if the company doesn't have enough assets to post as collateral on the loan the owner has to. Ok, got it. Problem is you're talking small privately owned businesses and I'm talking publicly traded corporations.
10-15-2003 Over year old.
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Rawlie
Senior Heliman
Location: JHB

Dragon

You guys are both right, depending on the exact scenario.

You were 100% correct in saying that in principle the company provides a legal blanket of cover for directors, employees and officers. But banks and/or other vendors may require additional security before they extend credit where the company's equity is insufficient to cover the loan/credit extended.
10-15-2003 Over year old.
 
 
Obsessive
Key Veteran
Location: 41.73N 71.41W

Note: Regardless of a corporations' internal ownership percentages, each Owner is jointly and severally responsible for outstanding obligations (debt); in the eye of the creditor.
10-15-2003 Over year old.
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rkelder
Senior Heliman
Location: Portland, Oregon

Quote 
The people who made up your Union.... to pass a vote like that, they are out of their mind.


This was Albertsons here in the NorthWest about 12 years ago.

Ray

If I throw a stick, will you leave?
10-15-2003 Over year old.
 
 
Dragon2115
Key Veteran
Location: New England

Obsessive,

I think that's where the difference lies. In a publicly traded corporation the CEO, COO, CFO, etc don't actually own the company, the stock holders do. The officers in that situation are technically employees of the company and therefore their personal assets can not be seized to cover debts of the corporation.
10-15-2003 Over year old.
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gpyros
Key Veteran
Location: On a beach in Mexico

Dragon:

Actually, in any corporation, public or private, the owners and officers are all employees.

In either case, nobody's assets can be seized - UNLESS they have guaranteed the company's loans by co-signing the note.

Most public corporations do not need a guarantor, while most privately-owned corporations do.

Greg

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10-15-2003 Over year old.
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Off Topics > California Grocery Strike
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