In two surprising recent cases, a law school professor and a circuit court
judge seek to revoke the charters of corporate lawbreakers.
By Russell Mokhiber
We know what the death penalty for individuals means: Commit an egregious
crime, die at the hands of the state. What does it mean to talk about the
"death penalty" for corporations? Simply this: Commit an egregious wrong
and have your charter revoked. In other words, lose the state's permission
to exist. It's an intriguing concept, because most of us never think about
corporations needing anyone's permission to exist. But they do.
Throughout the nation's history, the states have had - and still have - the
authority to give birth to a corporation by granting a corporate charter,
and to impose the death penalty on corporate wrongdoers by revoking its
charter. Activist-author Richard Grossman points out that in 1890, for
example, New York's highest court revoked the charter of the North River
Sugar Refining Corporation - referring to the judgment explicitly as one of
"corporate death." It was once widely understood that the states had this
power. "New York, Ohio, Michigan and Nebraska revoked the charters of oil,
match, sugar and whiskey trusts" in the 1800s, Grossman wrote in the
pamphlet, "Taking Care of Business: Citizenship and the Charter of
Incorporation," co-authored with Frank Adams.
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