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Initial Public Offerings In The Cmu: A U.S. Perspective, Merritt B. Fox
Initial Public Offerings In The Cmu: A U.S. Perspective, Merritt B. Fox
Faculty Scholarship
This chapter begins by considering the especially severe information-asymmetry problem that plagues primary offerings of truly new securities. It then examines market-based solutions for these problems, the shortcomings of exclusive reliance on such solutions, and the rationale for having a government-designed affirmative-disclosure regime, whereby an issuer making an offering is required to answer certain questions. It also addresses the question of whether this regime should be imposed on all issuers making such offerings or only those that volunteer to be subjected to it. The remainder of the chapter considers the rationale for mandating the imposition of liability on issuers, issuer …
Constraints On Private Benefits Of Control: Ex Ante Control Mechanisms Versus Ex Post Transaction Review, Ronald J. Gilson, Alan Schwartz
Constraints On Private Benefits Of Control: Ex Ante Control Mechanisms Versus Ex Post Transaction Review, Ronald J. Gilson, Alan Schwartz
Faculty Scholarship
We ask how to regulate pecuniary private benefit consumption. These benefits can compensate controlling shareholders for monitoring managers and investing effort in implementing projects. Controlling shareholders may consume excessive benefits, however. We argue (a) ex post judicial review of controlled transactions dominates ex ante restrictions on the controlled structures: the latter eliminate efficiencies along with abuses of the controlled company form; (b) controlling shareholders should be permitted to contract with investors over private benefit levels. Both work with better courts. Hence, we recommend creating a European-level corporate court, whose jurisdiction parties can invoke by contract.
Globalizing Corporate Governance: Convergence Of Form Or Function, Ronald J. Gilson
Globalizing Corporate Governance: Convergence Of Form Or Function, Ronald J. Gilson
Faculty Scholarship
Globalization has led to a remarkable resurgence in the study of comparative corporate governance. This area of scholarship had been largely the domain of taxonomists, intent on cataloguing the central characteristics of national corporate governance systems, and then classifying different systems based on the specified attributes. The result was an interesting, if perhaps somewhat dry, enterprise. We learned that national corporate governance systems differed dramatically along a number of seemingly important dimensions. Some corporate governance systems, notably those of the United States and other Anglo-Saxon countries, are built on the foundation of a stock market-centered capital market. Other systems, like …
Governance Failures Of The Enron Board And The New Information Order Of Sarbanes-Oxley, Jeffrey N. Gordon
Governance Failures Of The Enron Board And The New Information Order Of Sarbanes-Oxley, Jeffrey N. Gordon
Faculty Scholarship
Analysis of the corporate governance crisis that manifested itself in the United States at the turn of the millennium requires separating its various strands. The Enron Corporation ("Enron") debacle and the dot corn bubble and collapse, for example, share some common elements but in other ways they are quite different. In both cases investors became aggressively enamored of an unsustainable business model. In the dot com case it was the belief that an innovator in a rapidly growing market could attain powerful first mover advantages that would produce an eventual cascade of profits, so that a current and increasing stream …
The Shaping Force Of Corporate Law In The New Economic Order, Jeffrey N. Gordon
The Shaping Force Of Corporate Law In The New Economic Order, Jeffrey N. Gordon
Faculty Scholarship
My topic for this Allen Chair lecture is the shaping force of corporate governance in the new economic order. It is easy to think of corporate law as an arcane field with mysterious terms and peculiar rules, ultimately of interest only to those who are prepared to bill at least 2000 hours a year to unravel its complexities. This is the view that there is a pointless mystery about shareholders, directors, common stocks, debentures, and the bizarre creature my class encountered recently, a convertible exchangeable cumulative preferred stock; and that ultimately corporate law and practice consists of the expert manipulation …