Thursday, September 15, 2022

Billionaire No More: Patagonia Founder Gives Away the Company

Yvon ChouinardYvon Chouinard, founder of Patagonia, has given away the company. Rather than selling or taking it public, Chouinard and his family have transferred their ownership to a specially designed trust and nonprofit organization.

Valued around $3 billion, company’s voting stock was transferred into the Patagonia Purpose Trust, equivalent to two percent of the overall shares. It will be overseen by members of the family and their closest advisors with the intention of running a socially responsible business dedicated to giving away its profits.

The remaining 98 percent of Patagonia was donated to the nonprofit, Holdfast Collective, which will be the recipient of all profits to be put towards battling climate change. The family chose to do so with no charitable deduction, receiving no tax benefit from this move. They did so with the hope of influencing a new form of capitalism.

The company has given away 1 percent of sales to grass roots environmental activists for decades, but as sales have soared, the Chouinard family wanted to make a change. A small group of Patagonia lawyers and board members explored a range of options, which included selling the company, turning it into a cooperative with employees as owners, or becoming a nonprofit. However, none of these options could accomplish all of the Chouinard’s goals until they reached the current solution.

For Mr. Chouinard, it provides a peace of mind about what will happen to the company once he is gone. “I feel a big relief that I’ve put my life in order… For us, this was the ideal solution.”

For more information see David Gelles “Billionaire No More: Patagonia Founder Gives Away the Company” The New York Times, September 14, 2022.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

https://lawprofessors.typepad.com/trusts_estates_prof/2022/09/billionaire-no-more-patagonia-founder-gives-away-the-company.html

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