Judicial dissolution

{{Short description|Legal procedure that forcibly dissolves a corporation}}

File:Deepwater Horizon offshore drilling unit on fire 2010 (cropped 3 to 2).jpg, is one justification often cited by proponents of a corporate death penalty.[https://www.pbs.org/wgbh/frontline/article/do-we-need-a-death-penalty-for-negligent-oil-companies/ "Do We Need a 'Death Penalty' for Negligent Oil Companies?"] Frontline.]]

Judicial dissolution, informally called the corporate death penalty, is a legal procedure in which a corporation is forced to dissolve or cease to exist.

Dissolution is the revocation of a corporation's charter for significant harm to society.{{Cite journal|last=Grossman|first=Drew Isler|date=2015–2016|title=Would a Corporate Death Penalty Be Cruel and Unusual Punishment|url=https://heinonline.org/HOL/Page?handle=hein.journals/cjlpp25&id=715&div=&collection=|journal=Cornell Journal of Law and Public Policy|volume=25|pages=697}} In some countries, there are corporate manslaughter laws; however, almost all countries enable the revocation of a corporate charter. There have been numerous calls in the literature for a "corporate death penalty".{{Cite journal|last=Markoff|first=Gabriel|date=2012–2013|title=Arthur Andersen and the Myth of the Corporate Death Penalty: Corporate Criminal Convictions in the Twenty-First Century|url=https://heinonline.org/HOL/Page?handle=hein.journals/upjlel15&id=809&div=&collection=|journal=University of Pennsylvania Journal of Business Law|volume=15|pages=797}}{{Cite journal|last=Ramirez|first=Mary Kreiner|date=2005|title=The Science Fiction of Corporate Criminal Liability: Containing the Machine through the Corporate Death Penalty|url=https://heinonline.org/HOL/Page?handle=hein.journals/arz47&id=945&div=&collection=|journal=Arizona Law Review|volume=47|pages=933}}{{Cite book|url=https://books.google.com/books?id=VpysDQAAQBAJ&q=%22corporate+death+penalty%22&pg=PR11|title=The Case for the Corporate Death Penalty: Restoring Law and Order on Wall Street|last1=Ramirez|first1=Mary Kreiner|last2=Ramirez|first2=Steven A.|date=2017-01-31|publisher=NYU Press|isbn=9781479881574}}{{Cite journal|last=Amann|first=Diane Marie|date=2000–2001|title=Capital Punishment: Corporate Criminal Liability for Gross Violations of Human Rights|url=https://heinonline.org/HOL/Page?handle=hein.journals/hasint24&id=341&div=&collection=|journal=Hastings International and Comparative Law Review|volume=24|pages=327}} In 2019, a study argued that industries that kill more people each year than they employ should have an industry-wide corporate death penalty.{{Cite web|url=https://bigthink.com/politics-current-affairs/corporate-death-penalty|title=Do industries that kill more people than they employ have a right to exist?|date=2019-02-24|website=Big Think|access-date=2019-03-09}}{{Cite journal|last=Pearce|first=Joshua M.|date=February 2019|title=Towards Quantifiable Metrics Warranting Industry-Wide Corporate Death Penalties|journal=Social Sciences|volume=8|issue=2|pages=62|doi=10.3390/socsci8020062|doi-access=free}} Some legal analysis has been done on the idea to revoke corporate charters for environmental violations{{Cite journal|last=Linzey|first=Thomas|date=1997|title=Killing Goliath: Defending Our Sovereignty and Environmental Sustainability through Corporate Charter Revocation in Pennsylvania and Delaware|url=https://heinonline.org/HOL/Page?handle=hein.journals/pensaenlar6&id=33&div=&collection=|journal=Dickinson Journal of Environmental Law & Policy|volume=6|pages=31}}{{Cite journal|last=Linzey|first=Thomas|date=1995–1996|title=Awakening a Sleeping Giant: Creating a Quasi-Private Cause of Action for Revoking Corporate Charters in Response to Environmental Violations|url=https://heinonline.org/HOL/Page?handle=hein.journals/penv13&id=235&div=&collection=|journal=Pace Environmental Law Review|volume=13|pages=219|doi=10.58948/0738-6206.1398 }}{{Cite journal|last=Crusto|first=Mitchell F.|date=2002–2003|title=Green Business: Should We Revoke Corporate Charters for Environmental Violations|url=https://heinonline.org/HOL/Page?handle=hein.journals/louilr63&id=189&div=&collection=|journal=Louisiana Law Review|volume=63|pages=175}} such as for severe environmental pollution. Actual judicial dissolutions in the United States are rare.{{Cite web|url=https://corpwatch.org/article/death-penalty-corporations-comes-age|title=The Death Penalty for Corporations Comes of Age |work=Corpwatch}} For example, Markoff has shown that no publicly traded company failed because of a criminal conviction that occurred between 2001 and 2010.{{Cite journal|last=Markoff|first=Gabriel|date=2012–2013|title=Arthur Andersen and the Myth of the Corporate Death Penalty: Corporate Criminal Convictions in the Twenty-First Century|url=https://heinonline.org/HOL/Page?handle=hein.journals/upjlel15&id=809&div=&collection=|journal=University of Pennsylvania Journal of Business Law|volume=15|pages=797}}

Companies suggested as deserving the corporate death penalty include Eli Lilly & Company, Equifax, Unocal Corporation, and Wells Fargo.{{Cite magazine | url=https://www.wired.com/story/equifax-deserves-the-corporate-death-penalty/ | title=Equifax Deserves the Corporate Death Penalty| magazine=Wired| date=2017-10-20}}{{Cite magazine | url=https://newrepublic.com/article/144144/give-wells-fargo-corporate-death-penalty | title=Give Wells Fargo the Corporate Death Penalty| magazine=The New Republic| date=August 2017}} "If other examples in this volume were forced out of existence, this would send a message", John Hulpke wrote in the Journal of Management Inquiry in 2017.{{Cite journal | doi=10.1177/1056492617706545|title = If All else Fails, A Corporate Death Penalty?| journal=Journal of Management Inquiry| volume=26| issue=4| pages=433–439|year = 2017|last1 = Hulpke|first1 = John F.|s2cid = 149136851}}

One argument against its use is that otherwise innocent employees and shareholders will lose money or their jobs. But author David Dayen argues in The New Republic that "the risk of a corporate death penalty should inspire active governance practices to protect their investments".{{Cite magazine | url=https://newrepublic.com/article/144144/give-wells-fargo-corporate-death-penalty | title=Give Wells Fargo the Corporate Death Penalty| magazine=The New Republic| date=August 2017}}