Limited liability does not protect you from the negative consequences of willfully misleading investors. It just protects you from liability if market forces cause your business to go under.
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Chipotle Is Being Sued by Its Shareholders
- Thread starter jwk94
- Start date
PlayALLtheGames
Banned
This suit will be about as successful as Chipotle's attempts to eradicate contamination.
Tal Shiar Agent
Member
Chipotle is a poison brand. It'll be dead by this time next year. One time was bad enough, twice is the end.
Desipte what those on GAF with tissue paper colons would have you believe, Taco Bell doesn't have anywhere near these kind of food safety issues.
Desipte what those on GAF with tissue paper colons would have you believe, Taco Bell doesn't have anywhere near these kind of food safety issues.
Just_myles
Member
That's what it looks like to me. Maybe they need to fire people or something. Is that not what happens with these things? Geez.
#sorrynotsorry
Member
This business judgment rule is a shield for directors which protects them when they make bad decisions in good faith.
As I noted above in my edit, this is probably a securities class action
RedAssedApe
Banned
Damn I remember when they were all the rage
#sorrynotsorry
Member
No. Limited liability expressly limits the liability of the owners of the corporation for its acts. It applies in bankruptcy, but that's not really the point (and certainly not why someone would go out of their way to get it generally - it's a bonus).
This business judgment rule is a shield for directors which protects them when they make bad decisions in good faith.
As I noted above in my edit, this is probably a securities class action
Ah I just read it....I didn't think the directors were considered 3rd parties.
SlimySnake
Flashless at the Golden Globes
The fact that norovirus only spreads due to shit particles makes me think employees are doing this on purpose. it cant be coordinated because thats easy to catch. we are probably seeing some copycats in other cities.
there is really nothing chipotle can do.
there is really nothing chipotle can do.
Gordon Shumway
Banned
Holy guacamole..
Yeah TB won. I do love me a burrito bowl though.
Is that a thing? Suing because the stock falls?
For those who don't understand, there is great strategic value in doing this, even if it is effectively suing yourselves. If you win at trial, you will have a claim that is likely to rank higher in priority than those of secured and unsecured creditors as the claim will likely materialize before the bankruptcy of the company. Even if they sue and win they don't need to be in a rush to collect. Of course, this kind of law suit will stretch on for a few years so there is a kind of implicit bet that the company is going under in a few years. There are a number of classes of shareholders that might not get any revenue from the winding up of a company so this can also effectively give them a right (to collect on a judgment if successful) in lieu of a right they may not have.
TLDR: suing now is a back up to lock in more money in the event of bankruptcy.
ZombiePlatypus
Member
Wait, so they didn't fix their food safety problem? What have they been doing then?
For what it's worth, I don't recall any more food safety scandals from them after that incident.
For what it's worth, I don't recall any more food safety scandals from them after that incident.
Jack in the Box identified a problem that was new to the industry and measures were put in place to combat E. coli 0157. They deserve credit for making strides after how terrible their mistake was. Chipotle can't even get one of the most well known food born illnesses in the food industry under control.
TangoAlphaLima
Member
But here the lawsuit is against the corporation as well, not just the directors/officers. So it clearly can't be a derivative suit, which is when shareholders sue on behalf of the corporation, because the corporation cannot sue itself. Another tipoff is that it is a class action for all shareholders against the corporation and directors/officers, not a shareholder bringing suit on behalf of the corporation, which would not be designated as a class action.
Admittedly, I don't know much about this type of law either, other than the Business Associations class I took in law school. But it appears to not be a derivative suit to me.
DOWN
Banned
More like if you stick with Samsung through that negligent battery explosion thing and you believe when they say they eliminated the safety gaps they had that their competitors dont, but then a year later they do it again. At some point, management is fucking up with your money and tried to keep you calm with all their claims of fixing it. You might have a case depending on how poorly they handled eliminating their problems or what they told you to keep you invested during the crisis resolution
Seems a bit of an over reaction. It was one location that had the Norovirus, not nationwide like last time. Still not good, but a world of difference all the same. The stock will likely recover most of its losses in the next few weeks and months as long as nothing bad happens.
This conspiracy stuff is weird. You can transmit Norovirus from person to person incredibly easily. It can make its way onto the food on clothes, hands, gloves, etc. if the proper procedures aren't in place.
It can also be present for days after the person no longer feels severe symptoms. So an employee could have it, take a day off, feel slightly better, come in and not wash his hands, and then you have it.
Also, it's transmitted through feces and vomit, not just feces. No real need for this elaborate plan. Just better training.
NintendoGal
Member
Well I can tell you about a deal when they were still quite small.
Imperfected
Member
Housebound by crippling abdominal pain?
xDUMPWEEDx
Banned
That's what I said the last time this happened. At some point the negative image sticks, and it's all over but the crying.
Sho_Nuff82
Member
I thought the E.coli outbreaks were multi-state, and the last norovirus outbreak was Boston only?
WordAssassin
Member
Only if it's copies of the original one in Isla Vista and not the disgusting shit I tried at the chain version down by Venice Beach.
Wasn't aware of the Boston one from further back. Was referring to the E.coli outbreak which yeah multi-state may be more accurate as it was 11 states, but it was both east and west coasts and some central states, which to me is basically Nationwide.
Your revenge plan took a while but it was carried out brilliantly.
Wag
Member
Rat burritos (that fall from the ceiling).
Why have I never heard of this??
TheSkullPrince
Member
Just go away already Shitpotle
Qdoba has been wearing the crown for a long time. Chipotle sucks even when the food isn't trying to kill you.
Muppet of a Man
Member
Haha at people saying Chipotle is dead. Far from it. They are having their issues, but they are nowhere near dead.
Hyperbolic overload.
Hyperbolic overload.
Is that a thing? Suing because the stock falls?
Funny, this is also the gif you can use when someone says, "So why isn't anyone eating at this Chipotle?"
Zelenogorsk
Banned
Ignorance is bliss (I too have never been to a Chipotle)
also Chiptole is far from dead. Don't forget that people actually died from eating Jack in the Box and they're still around.
Yeah, I don't really see the lawsuit. If they fixed the problem and it came back, then how are the being deceptive? If it came back, then how are franchises still open? Did they fix it or not? Is this a new breakout of EColi instead of noro? Again, how is the restaurant being deceptive about a different breakout?
I see investors pissed off that the food chain screwed up and the stock price dropped. Now they screwed up again. Shit happens, pun intended, but proving that they were intentionally deceptive is going to take some fancy lawyering. I don't see the case.
Kremzeek
Member
Yeah, poor investors not getting their 20% yearly growth.
It's a bump in the road. Investors have gotten too used to gangbusters returns.
Unlikely. They'll be dead in no more than 5 years tops.
Nah. Free salmonella.
It's a $10 billion market cap company. It's going to be around for a while.
edit: and the stock is headed back up. Beat expected EPS and +8% same store sales. I'm sure this'll hurt them again but they aren't closing up shop yet
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