When a CEO fails his investors (fails to file/refuses to file), the company becomes at risk if going dark or becoming defunct; when a CEO fails his investors and dilutes too much, giving a trader opportunity to own more of the company than s/he...and does not increase market cap or shareholder value in any other way, an investor (who owns more shares than the CEO) petitions the court to demonstrate they have a plan to increase shareholder value.
When the petition is successful, that shareholder/petitioner is awarded custodianship.
During a prescribed period, a custodian will return to court to prove they have increased shareholder value, or has increaaed liquidity potential.
* In most cases, a custodianship is petitioned for in preparation of a RM. The petitioner does not want to control the company, but will take steps to make it attractive for a private company WANTING to become public, and not wanting the hassle and expense of an IPO.
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