Corporate Law: Corporate & Takeover Law最新文献

{"title":"Before Competition: Origins of the Internal Affairs Doctrine","authors":"Frederick Tung","doi":"10.2139/SSRN.686592","DOIUrl":"https://doi.org/10.2139/SSRN.686592","url":null,"abstract":"To the modern corporate scholar and lawyer, the internal affairs doctrine seems in the natural order of things. Corporate law is state law. Each corporation is formed under the law of its chosen state of incorporation. To ensure consistency and predictability, that law must govern the corporation's internal affairs. Yet the origin of such a doctrine is puzzling. Respecting the firm's choice of corporate law, the doctrine forces state legislatures into competition to attract incorporations. But how did legislatures come to concede their traditional territorial regulatory authority, and instead agree to compete? This Article solves this puzzle, offering the first account of the doctrine's surprising origins. In so doing, it also raises an important challenge to regulatory competition proposals generally, which are all the rage today, and which rely on U.S. corporate law as their prototype. Widespread acceptance of the internal affairs doctrine among U.S. states assures that a firm's choice of corporate law will be respected outside the incorporating state. According to the dominant paradigm, this respect for firm choice creates a common market for corporate law, enabling regulatory competition. Both proponents and critics of competition agree that state legislatures compete - or at least have competed - to sell corporate charters to raise state revenues. In the debate over state competition, all sides take the internal affairs doctrine as a given. But if legislators compete to maximize private benefits in the form of state revenues, why do states recognize foreign corporation law at all? How did state legislatures ever come to surrender their traditional territorial jurisdiction, and instead agree to a choice of law convention forcing them into direct competition? To date, the puzzle of the internal affairs doctrine has been overlooked. The doctrine's existence has been taken for granted, requiring little in the way of comment, criticism, or explanation. I explain the unexpected origins of the doctrine and its persistence through the early years of modern charter competition in the early part of the twentieth century. This historical analysis shows that the doctrine's origin had nothing to do with regulatory competition. Instead, it emerged before state charter competition, at a time when firms had little choice about where to incorporate. Competition came later, under circumstances radically different from those under which the doctrine was first articulated. That the earlier-crafted doctrine later facilitated regulatory competition was hardly by design. Instead, its path to facilitating modern charter competition depended on a fortuitous sequence of events, driven by ideology, interest group influences, and institutional inertia. This story of historical contingency debunks common assumptions about the emergence of the doctrine, which modern corporate scholars implicitly view to have been inevitable. Solving the puzzle of the internal affairs doc","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"64 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131727458","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Returns to Developed-Market Acquirers in Emerging Markets","authors":"Anusha Chari, P. Ouimet, L. Tesar","doi":"10.2139/ssrn.891250","DOIUrl":"https://doi.org/10.2139/ssrn.891250","url":null,"abstract":"In stark contrast to the findings based on domestic M&A transactions, we find that the developed-market acquirers experience positive and significant announcement returns in transactions that involve an emerging-market target. On average, over the 1988-2003 period, developed-market acquirer returns show a statistically significant increase of 1.18% over a three-week event window when M&A transactions in emerging markets are announced. Abnormal returns for target firms are also positive and on average equal 6.8%. The acquisition of majority control is a key feature of transactions that deliver positive acquirer returns - acquirer return increases range from 3.3% to 4.9% when majority control of an emerging-market target is acquired. The results are robust to the inclusion of controls for country, time, industrial diversification, method of payment effects, as well as acquirer- and target-firm characteristics such as size and liquidity. We find positive support for two hypotheses which can explain these unique findings. First, we find that developed-market acquirer returns increase as emerging-market bond spreads widen. This suggests the ability of developed-market acquirers to provide access to finance may be particularly valuable for targets located in capital-scarce emerging markets. Second, we find that developed-market acquirer returns increase significantly when they gain majority control of targets in countries with high risks of expropriation and contract repudiation and a weak rule of law. We find minority control acquisitions in these same countries do not produce the same results. We argue that in majority control acquisitions the boundaries of the firm are extended, thus bonding an emerging-market target firm to a developed-market acquirer from a country with better institutions.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126544391","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"What Independent Directors Should Expect from Inside Directors: Smith V. Van Gorkom as a Guide to Intra-Firm Governance","authors":"Cheryl L. Wade","doi":"10.2139/ssrn.888812","DOIUrl":"https://doi.org/10.2139/ssrn.888812","url":null,"abstract":"In this article, I appraise the ability of individual directors to motivate those who serve with them on the board to exercise care. I focus on the relationship between independent and inside directors. I discuss horizontal monitoring - the process by which members of a corporate board monitor each other. I suggest that outside directors make clear their expectation that inside directors satisfy care obligations. The goal in this article is to encourage the accountability of inside directors - not to shareholders through derivative litigation - but to independent members of the board through horizontal monitoring. The duty of care, as articulated in Smith v. Van Gorkom and other case law, is a normative guide for internal governance of the corporation. The focus in this article is on the relevance of the duty of care to internal governance processes rather than judicial review of board decisions and processes. The duty of care can provide a way for independent directors to evaluate the inside directors who serve with them. The duty becomes relevant as a way to define the expectations that outsiders should have from inside board members. Once this happens, the duty of care would become an explicit part of what outsiders ask of insiders. Inside directors are likely to fulfill this expectation because of the dynamic of horizontal monitoring that encourages individual board members to perform their duties in a way that will meet the approval of other board members. I also consider the ability of independent directors to monitor and assess the conduct of inside directors when those insiders act as corporate officers. The unitary approach that courts take when reviewing a board's decision-making process ignores the conduct of individual board members who participate in the decision-making process not only as directors but also as officers. The traditional focus on a board's collective decision-making obscures the notion of individual accountability and responsibility. Even if courts should consider board conduct as a collective, this should not obscure the need for clarification of the relationship between inside and outside directors, and the need for independent board members to let inside directors know what is expected of them. The approach to internal governance I advocate in this article requires independent directors to determine when insiders act in their capacity as directors and when they act as officers. I use the term role differentiation to describe the practice of distinguishing among the various roles undertaken by a single individual.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114993584","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Horizontal Merger Antitrust Enforcement: Some Historical Perspectives, Some Current Observations","authors":"Lawrence J. White","doi":"10.2139/ssrn.878452","DOIUrl":"https://doi.org/10.2139/ssrn.878452","url":null,"abstract":"The DOJ-FTC Merger Guidelines were developed for and best deal with horizontal mergers where the theory of harm is coordinated effects. The Guidelines deal awkwardly, at best, with mergers where the theory of harm is unilateral effects. The broad body of evidence - from profitability studies, from pricing studies, and from auction studies - indicates that seller concentration matters. But these studies do not provide adequate guidance as to whether current antitrust enforcement is too strict or too lenient with respect to mergers. Research on the consequences of the close call mergers that were not challenged might well provide such guidance, as might a meta analysis of the extant price-concentration studies. New procedures are needed for inquiry and enforcement where the theory of harm is unilateral effects, as is a market definition paradigm for monopolization cases.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121821954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Thirteenth Directive and the Contrasts between European and U.S. Takeover Regulation: Different (Regulatory) Means, Not so Different (Political and Economic) Ends?","authors":"Marco Ventoruzzo","doi":"10.2139/ssrn.819764","DOIUrl":"https://doi.org/10.2139/ssrn.819764","url":null,"abstract":"Cross-border acquisitions, especially through hostile takeovers, represent one of the most dramatic consequences of the growing integration, both within Europe, and when considering the economic balance of power between the U.S. and the European industries. This Article focuses on the single most important piece of legislation on European takeover law, the Thirteenth Directive of the European Union on Takeover Regulation, which was approved on April, 21 2004 and must be implemented by Member States before the end of 2006. Passage of the Thirteenth Directive is no minor event. Earlier versions were embroiled in arresting political controversies that generated significant Member State antipathy toward European regulation of the area. As a result, several earlier versions were rejected, causing many experts and observers to question whether any takeover directive would be adopted at the EU level. Also as a result of the political controversies, the final version of the Directive represents a significant compromise, most strikingly for the flexibility it affords Member States in adopting its various provisions. For all these reasons, final passage of the Directive represents a significant legislative accomplishment, worthy of attention not only for its substantive effect, but also for its contribution to the on-going debate over the desirability of harmonization versus regulatory competition. Consistent with prevailing European perspectives, but differently from the U.S. approach, the core premises of the Thirteenth Directive involve significant restrictions on the freedom of both the raider and of the target corporation. Under the Directive, corporate raiders are generally obliged to obtain control only through the launching of a public tender offer on all the outstanding shares, at a fixed minimum price. Meanwhile, the directors (and/or the controlling shareholders) of target companies are limited under the Directive regarding the defensive measures that they can employ to repel a hostile bid. Meanwhile, in the United States, these restrictions are almost completely absent, as would seem in keeping with its more market-oriented approach to regulation of various categories of economic activity. Taking as its starting point U.S. rules and assumptions regarding takeovers, this Article identifies the fundamental features of the European approach to takeovers in a comparative and critical perspective. I examine extent of and rationales for the discrepancies between the two systems, discrepancies that, in the next few years, will play an important role in shaping the international takeover scenario, and therefore the cross-Atlantic economic landscape. Two common risks of comparative analysis are a tendency to over-emphasize superficial differences and a temptation to evaluate one system as inherently superior to another. Through my analysis, I show that, even if manifested through different rules, the distance between U.S. and European takeover regulatio","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-10-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125101425","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Clearing the Fog Surrounding Internet File Sharing?","authors":"M. Beurskens","doi":"10.2139/ssrn.828447","DOIUrl":"https://doi.org/10.2139/ssrn.828447","url":null,"abstract":"In its (in)famous decision against Grokster and Streamcast the Supreme Court managed to sidestep the fundamental issues of copyright in the information age and focused on a generic bad faith standard and obscure business models instead. This short article provides an introduction to fundamental questions of indirect liability for copyright infringement under US law and follows the trail of decisions leading up to the confusing Supreme Court opinion (including Aimster and Napster). It analyzes the arguments made and briefly discusses possible implications for the interest groups involved. The paper concludes that file sharing is still a dubious, but not illegal business and that all important questions remain open even after the ruling. All parties involved can feel both worried and assured by the decision, but no one can claim a decisive victory (yet). The clear line between the Consumer Electronics (and Software) industry and the Entertainment business divides not only the state of California, but the Supreme Court bench as well.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122648965","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Shareholder Activism and Institutional Investors","authors":"Stephen M. Bainbridge","doi":"10.2139/ssrn.796227","DOIUrl":"https://doi.org/10.2139/ssrn.796227","url":null,"abstract":"Recent years have seen a number of efforts to extend the shareholder franchise, principally so as to empower institutional investors. The logic of these proposals is that institutional investors will behave quite differently than dispersed individual investors. Because they own large blocks, and have an incentive to develop specialized expertise in making and monitoring investments, institutional investors could play a far more active role in corporate governance than dispersed individual investors traditionally have done. Institutional investors holding large blocks thus have more power to hold management accountable for actions that do not promote shareholder welfare. Their greater access to firm information, coupled with their concentrated voting power, might enable them to more actively monitor the firm's performance and to make changes in the board's composition when performance lagged. In fact, however, institutional investor activism is rare and limited primarily to union and state or local public employee pensions. As a result, institutional investor activism has not - and cannot - prove a panacea for the pathologies of corporate governance. Activist investors pursue agendas not shared by and often in conflict with those of passive investors. Activism by investors undermines the role of the board of directors as a central decision-making body, thereby making corporate governance less effective. Finally, relying on activist institutional investors will not solve the principal-agent problem inherent in corporate governance but rather will merely shift the locus of that problem.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"246 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124708349","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"No Freedom of Emigration for Companies?","authors":"W. Ringe","doi":"10.54648/eulr2005033","DOIUrl":"https://doi.org/10.54648/eulr2005033","url":null,"abstract":"The freedom of establishment for companies (Articles 43 and 48 EC Treaty) includes the right to choose the company's seat in any Member State of the EC. However, in recent years, the European Court of Justice (ECJ) seems to have interpreted those articles as being relevant only to the recognition of foreign companies, whereas the right to leave the company's country of incorporation has not come within the scope of this freedom. The purpose of this paper is to question this distinction between \"departure\" and \"arrival\". It is argued that the ECJ's point of view is inconsistent in itself, creates logical problems and is incoherent in light of its interpretation of other fundamental freedoms. Arguably, the Court has created a \"trap\" for itself by insisting on the differentiation between \"exit\" and \"entry\" and by putting much effort into maintaining this differentiation over the last years. The article ends with an appeal to reassess the application of the freedom of establishment to companies and to find the courage to overcome the artificial differentiation.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"69 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130390916","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Is There a Dark Side to Incentive Compensation?","authors":"David J. Denis, Paul Hanouna, Atulya Sarin","doi":"10.2139/ssrn.695583","DOIUrl":"https://doi.org/10.2139/ssrn.695583","url":null,"abstract":"We report a significant positive association between the likelihood of securities fraud allegations and a measure of executive stock option incentives. This relation is robust to the inclusion of other components of the compensation structure and to other possible determinants of fraud allegations. In addition, we find that the positive relation between the likelihood of fraud allegations and option intensity is stronger in firms with higher outside blockholder and higher institutional ownership. These findings support the view that stock options increase the incentive to engage in fraudulent activity and that this incentive is exacerbated by institutional and block ownership.","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132940544","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Us Corporate Elephant","authors":"Alan R. Palmiter","doi":"10.2139/ssrn.658522","DOIUrl":"https://doi.org/10.2139/ssrn.658522","url":null,"abstract":"Drawn from a speech at the opening convocation at two notarial schools in Italy, this is a story of modern US corporate law. Unlike the statist nature of the corporation in many other countries, the nature of the US corporation is essentially private. It is based on state corporate law, chosen by the parties. Federal law, though regulating disclosure to public investors, mostly avoids a role in the management of the corporation. The corporation rules of state law are largely enabling, not mandatory. The parties have a wide latitude in choosing their own structures. The preeminent provider of state law is Delaware, whose preeminence comes from offering a balanced package of legislative responsiveness, legal expertise, judicial expertise and efficiency, comprehensive case law, and assurances of being non-political. Corporate law in the United States provides only basic creditor protections, assuming that most protections will come through markets and contracts. Significant emphasis is placed on fiduciary duties of corporate directors - to the corporation and shareholders. Fiduciary duties are dynamic, adapting to new governance and market circumstances. Also dynamic are other aspects of corporate law, as illustrated by the legislative, administrative and judicial responses to recent corporate and accounting scandals. Some aspects of corporate law, fundamental to the legitimacy of the corporation, remain unaddressed. The role of the corporation in politics, the place of institutional investors in corporate governance, the responsibility of the corporation for social and environmental practices not mandated by law - these are the current questions for corporate law. Will the corporation be up to the task?","PeriodicalId":106641,"journal":{"name":"Corporate Law: Corporate & Takeover Law","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129096853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}