That penalty exists, and e.g. Purdue Pharma was subject to it. But of course, Purdue also shows why it's complicated:
* When you dismantle a company, you have to figure out what to do with its assets. You could just burn them all down I guess, but if the company did something wrong that we want compensation for, it usually makes more sense to try and maximize the value you can get.
* A large manufacturing company is going to have factories, distributor contracts, etc. with no liquid secondary market. The value-maximizing play is most likely going to be selling the package to an existing company or setting up a new one, rather than holding a piecemeal fire sale.
* But if you have a new company/division with all of the old company's assets, doesn't that mean you've just renamed the old company? Kinda, yeah. You could disrupt the sameness by firing all the employees and hiring new ones - but that's going to hurt the value of the assets too, and it's not clear what the point would be of punishing the employees for executive misconduct.
Fire sale everything. And without exemptions for the C-suite/owners.
In the Purdue case, the family should have lost everything, not retained billions. And they damn sure shouldn't get protection from civil liability, as a few courts of tried to do.
It'll be interesting to see what SCOTUS ends up deciding (I think the bankruptcy landed there, with arguments in December 2023).
* When you dismantle a company, you have to figure out what to do with its assets. You could just burn them all down I guess, but if the company did something wrong that we want compensation for, it usually makes more sense to try and maximize the value you can get.
* A large manufacturing company is going to have factories, distributor contracts, etc. with no liquid secondary market. The value-maximizing play is most likely going to be selling the package to an existing company or setting up a new one, rather than holding a piecemeal fire sale.
* But if you have a new company/division with all of the old company's assets, doesn't that mean you've just renamed the old company? Kinda, yeah. You could disrupt the sameness by firing all the employees and hiring new ones - but that's going to hurt the value of the assets too, and it's not clear what the point would be of punishing the employees for executive misconduct.