Question
A highly levered firm pays unusually large dividends, leaving fewer assets for creditors. What conflict is this?
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Answer
Dividend payout conflict; debtholders are harmed.
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Question
A controlling owner transfers company resources to another entity they own. What conflict is this?
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Answer
Tunneling; minority shareholders are harmed.
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Question
The company enters a deal that unfairly benefits the controlling shareholder. What conflict is present?
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Answer
Related-party transaction abuse; minority shareholders are harmed.
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Question
Founders keep voting control despite limited economic ownership through special share classes. What conflict does this suggest?
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Answer
Dual-class share entrenchment; minority shareholders are harmed.
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