Law Commons^™

National Security Review Of Foreign Mergers And Acquisitions Of Domestic Companies In China And The United States, Kenneth Y. Hui

Cornell Law School Inter-University Graduate Student Conference Papers

China’s recently enacted Anti-Monopoly Law has received much academic attention. In particular, many articles and comments have been written about Article 31 of the Anti-Monopoly Law, a provision on national security review of foreign mergers and acquisitions of domestic companies. The provision has often been labelled as draconian and protectionist. This paper argues that Article 31 is not necessarily so. Article 31 is actually, to a large extent, in line with the national security provisions found in liberal economies. By taking a comparative approach, this paper will demonstrate the similarities between the national security laws in China and the United …

Behind Close Doors: Governance Issues In Private Equity Driven Industries – The Close Corporation Paradox And Its Impact On Private Equity In The Us And Sweden, Kristian Hermanrud

Cornell Law School Inter-University Graduate Student Conference Papers

Publicly traded companies make up only a small fraction of the vast number of corporations operating in the US today. Only about 10,000 companies are traded publicly while there are roughly 20 million corporations doing business in the US. Likewise, over 245 private corporations’ annual revenues exceed $1 billion. Among these, more than twelve employ more than 50,000 employees. Despite the influence on vast amounts of people and capital legislature has, to a large degree, focused on publicly traded companies. The reasons for this stem, in large, back to the years of the market crash in the early thirties and …

Changing The Paradigm Of Stock Ownership From Concentrated Towards Dispersed Ownership? Evidence From Brazil And Consequences For Emerging Countries, Erica Gorga

Cornell Law Faculty Working Papers

This paper analyzes micro-level dynamics of changes in ownership structures. It investigates a unique event: changes in ownership patterns currently taking place in Brazil. It builds upon empirical evidence to advance theoretical understanding of how and why concentrated ownership structures can change towards dispersed ownership.

Commentators argue that the Brazilian capital markets are finally taking off. The number of listed companies and IPOs in the Sao Paulo Stock Exchange (Bovespa) has greatly increased. Firms are migrating to Bovespa’s special listing segments, which require higher standards of corporate governance. Companies have sold control in the market, and the stock market has …

An Overview Of Brazilian Corporate Governance, Bernard S. Black, Antonio Gledson De Carvalho, Érica Gorga

Cornell Law Faculty Publications

We provide the first detailed picture of firm-level corporate governance practices in an emerging market. We report on the corporate governance practices of Brazilian public companies, based primarily on an extensive 2005 survey of 116 companies. Most firms have a controlling shareholder or group. Board independence is an area of weakness. The boards of most Brazilian private firms are comprised entirely or almost entirely of insiders or representatives of the controlling family or group. Many firms have no independent directors. Financial disclosure is a second area of weakness. Only a minority of firms provide a statement of cash flows or …

The Reform Of Corporate Taxation In The European Union, Nina Winkler

Cornell Law School Inter-University Graduate Student Conference Papers

The Commission of the European Communities is currently drafting a proposal for an EU Directive to implement the first comprehensive corporate tax strategy for the Internal Market. The adoption of a common consolidated corporate tax base for EU multinational enterprises is one of today’s most highly debated issues on Brussels’ political agenda. Since the reform would affect all international companies conducting business in the Internal Market, it should also be of great interest for non-EU corporate and tax law scholars and lawyers. The paper critically evaluates the key advantages and disadvantages of the concept of an EU consolidated tax base …

Lender Control Liability Functional Examination: The Firm And Heuristics, Sergio A. Muro

Cornell Law School J.S.D. Student Research Papers

Lender control is criticized due to problems arising out of conflict of interests among different priority claimholders. Recently, it has been defended as a way to make the reorganization process more efficient. This paper builds on previous research on the theory of the firm to show that lender control generates inefficiencies even in situations where there is only one layer of legal claimants. Specifically, the paper demonstrates that departing from the nexus of explicit contracts paradigm, used by both previous critics and supporters of lender control, allows to understand other sources of lender control inefficiencies based on its inability to …

European Law On Capital Markets – Quo Vadis?, Daniela Huemer

Cornell Law School Inter-University Graduate Student Conference Papers

The occurrence of more than a dozen accounting scandals in the United States over the past few years have deeply shaken the capital market and have led some to believe that “corporate and legal culture has lost all sense of right and wrong.” Scandals at companies such as Enron and Worldcom have cost thousands of employees their jobs and caused thousands of investors to lose their investments completely. Similar scandals have happened in Europe as well, such as at Parmalat and Lernout & Hauspie, which has caused an increasing reluctance among investors to trust companies with their dollars.

These circumstances …

Who Pays The Auditor Calls The Tune?: Auditing Regulations And Clients' Incentives, Amy Shapiro

Cornell Law Faculty Publications

As we move on from the financial scandals of the early 2000s, the question of how to prevent the next Enron continues to be a pressing one. This Article focuses on the law’s deeply conflicted treatment of auditors of public corporations. Though the audit firm is charged with serving as the public’s watchdog in insuring good financial disclosure, the auditor’s actual client is the audited corporation itself, whose interests concerning disclosure are not necessarily aligned with those of investors. Because the Sarbanes-Oxley Act of 2002 left this structure in place, further reform is needed. One promising suggestion is to give …

Taxation Of Spin-Off – U.S. And German Corporate Tax Law, Stefan W. Suchan

Cornell Law School J.D. Student Research Papers

Corporate law provides for a transaction commonly referred to as “spin-off”. The corporate enterprise is divided in (at least) two corporations. The stock of a controlled subsidiary will be distributed pro rata by a parent corporation to its shareholders which end up owning a brother/sister pair of corporate enterprises.

The Internal Revenue Code (IRC) in § 355 provides special rules for the distribution of stock and securities of a controlled corporation. The transaction is known as a “D reorganization”, if such a distribution follows the transfer by a corporation of all or a part of its assets to another corporation, …

Post-Enron: U.S. And German Corporate Governance, Stefan W. Suchan

Cornell Law School J.D. Student Research Papers

Only five years after Henry Hansmann and Reinier Kraakmann announced "the End of History of Corporate Law" – borrowing the words of Francis Fukuyama–, this observation seems at least questionable. Following two major failures of the “American Model” with the bankruptcy of Enron and WorldCom, the question of the "right" Corporate Governance regime is again under discussion.

Legislators around the globe assume that further development of Corporate Governance is necessary. There is consent for the need of improvement, but no clear answer on how to improve. A first step to solving the arising problems might be to evaluate the reasons …

Untaxing Taxes: An Attempt To Compare Philippine And Us Laws On Tax-Free Corporate Reorganizations, Salvador B. Belaro Jr.

Cornell Law School J.D. Student Research Papers

In comparing tax-free corporate reorganizations between Philippine and US law, the author wishes to learn how the US legal system would approach similar tax situations in the Philippines so he could apply it in the practice of law. Labyrinthine as they may be, US tax rules are so well-developed that they are excellent subjects for a comparative study. This paper validates the fact that Philippine and US tax laws on tax-free corporate exchanges have a lot in common. It also shows that in a lot of areas where Philippine law is silent, US tax laws have already devoted extensive treatment …