dentalcorp Holdings Ltd T.DNTL

dc forgives loans to execs, not good for shareholders

[DrCincinnatus]

Based on a piece in the Globe & Mail, it seems that Graham Rosenberg, Nate Tchaplia, and Guy Amini might be engaging in behavior that could be considered questionable or potentially unfair to Dentalcorp shareholders. Here's why:

1. Loan Structure and Forgiveness: The company made significant loans to its executives to purchase company shares, which in itself is not necessarily problematic. However, the fact that these loans were structured in a way that allowed for partial or full forgiveness based on time rather than performance raises concerns. This could be seen as a way for the executives to benefit financially without necessarily improving the company's performance or delivering value to shareholders.

2. Restructuring of Loans: The restructuring of these loans into preferred shares that can be redeemed for nominal consideration (essentially forgiving the debt) further exacerbates the issue. This shift from a performance-based to a time-based forgiveness structure appears to prioritize the financial interests of the executives over those of the shareholders.

3. Impact on Shareholders: The restructuring and forgiveness of these loans could dilute the value of the shares held by other shareholders and may undermine confidence in the company's governance. The fact that Mr. Rosenberg retains significant voting power despite owning a relatively small percentage of the company's shares also limits the ability of other shareholders to influence decisions that affect their investments.

While these actions may not necessarily constitute legal wrongdoing, they could be perceived as a governance failure and a breach of fiduciary duty to shareholders. This could lead to a loss of trust among investors and negatively impact the company's reputation and stock value.