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Full-Text Articles in Law

Private Equity & Private Suits: Using 10b-5 Antifraud Suits To Discipline A Transforming Industry, Kenneth J. Black Jan 2013

Private Equity & Private Suits: Using 10b-5 Antifraud Suits To Discipline A Transforming Industry, Kenneth J. Black

Michigan Business & Entrepreneurial Law Review

This note demonstrates why private equity will no longer be able to avoid private investor suits as it has (mostly) done in the past and explores the industry’s response to a growing number of investor suits. Notably, the industry has already begun to shift its strategy from regulatory avoidance to regulatory capture, at least in part to avoid investor suits. Given these changes, this note proposes that the best way to maintain discipline in the transforming private equity market is to protect the ability of investors to bring private suits.


Should Angel-Backed Start-Ups Reject Venture Capital?, Darian M. Ibrahim Jan 2013

Should Angel-Backed Start-Ups Reject Venture Capital?, Darian M. Ibrahim

Michigan Business & Entrepreneurial Law Review

The conventional wisdom is that entrepreneurs seek financing for their high-growth, high-risk start-up companies in a particular order. They begin with friends, family, and “bootstrapping” (e.g., credit card debt). Next they turn to angel investors, or accredited investors (and usually ex-entrepreneurs) who invest their own money in multiple, early-stage start-ups. Finally, after angel funds run dry, entrepreneurs seek funding from venture capitalists (VCs), whose deep pockets and connections lead the startup to an initial public offering (IPO) or sale to a larger company in the same industry (trade sale). That conventional wisdom may have been the model for start-up success …


Incubator Cities: Tomorrow's Economy, Yesterday's Start-Ups, Abraham J.B. Cable Jan 2013

Incubator Cities: Tomorrow's Economy, Yesterday's Start-Ups, Abraham J.B. Cable

Michigan Business & Entrepreneurial Law Review

Venture development funds (“VDFs”) are products of state and local government law that use public funds to invest in local start-ups, in the hope that these companies will then attract venture capital investment. Existing analysis by legal scholars largely assumes that establishing a private venture capital market is essential to encouraging entrepreneurship. This article challenges that assumption. It argues that VDFs and other policies focused on encouraging venture capital are outmoded and inconsistent with the ultimate economic development goals of state and local governments. In many industries, entrepreneurs can now get by with less capital because the cost of developing …


A Complete View Of The Cathedral: Claims Of Tortious Interference And The Specific Performance Remedy In Mergers And Acquisitions Litigation, Luke Nikas, Paul B. Maslo Jan 2013

A Complete View Of The Cathedral: Claims Of Tortious Interference And The Specific Performance Remedy In Mergers And Acquisitions Litigation, Luke Nikas, Paul B. Maslo

Michigan Business & Entrepreneurial Law Review

A bank promises to lend several billion dollars to fund a buyer’s purchase of a target company. The buyer enters into a merger agreement with the target. Thereafter, the economy plummets, and the bank decides that breaching its contract with the buyer will cost less than performing. The buyer seeks specific performance. The target also sues the bank, alleging tortious interference with the merger agreement. Billions of dollars are on the line. This is the reality lived by many investment banks that committed to fund leveraged buyouts during the recent economic downturn. Most of these matters were resolved in private …


Front Matter Sep 2012

Front Matter

Michigan Business & Entrepreneurial Law Review

No abstract provided.


Front Matter May 2012

Front Matter

Michigan Business & Entrepreneurial Law Review

No abstract provided.


Private Equity In Brazil: Industry Overview And Regulatory Environment, Shannon Guy Jan 2012

Private Equity In Brazil: Industry Overview And Regulatory Environment, Shannon Guy

Michigan Business & Entrepreneurial Law Review

The overall goal of this note is to paint a picture of the current state of the private equity industry in Brazil and the existing regulations which must be obeyed to participate as a private equity investor. Part II of this note provides a brief history of the private equity industry in Brazil, discusses recent investor interest in the growing area, and introduces the main regulatory bodies in Brazil. Part III explains several specific rules that govern a private equity investment by breaking down the “life” of a private equity investment into four stages: (1) setting up the private equity …


Mezzanine Finance And Preferred Equity Investment In Commercial Real Estate: Security, Collateral & Control, Jon S. Robins, David E. Wallace, Mark Franke Jan 2012

Mezzanine Finance And Preferred Equity Investment In Commercial Real Estate: Security, Collateral & Control, Jon S. Robins, David E. Wallace, Mark Franke

Michigan Business & Entrepreneurial Law Review

This article will review both the genesis and the rise in popularity of preferred equity and mezzanine debt, examine their legal and structural differences, and provide some exposition as to how these financing techniques work from security, collateral and control standpoints. We do not undertake in this article to address the differences in tax and accounting treatment between mezzanine loans and preferred equity investments both for either the mezzanine lender or preferred equity investor on the one hand, or for the mezzanine borrower or the common equity investor, on the other hand. In deciding upon which structure to use, transaction …


Venture Capital Investments In China: The Use Of Offshore Financing Structures And Corporate Relocations, Jing Li Jan 2012

Venture Capital Investments In China: The Use Of Offshore Financing Structures And Corporate Relocations, Jing Li

Michigan Business & Entrepreneurial Law Review

Based on an analysis of the relevant Chinese laws and regulations governing the corporate governance structure of venture capital (“VC”)-invested firms, as well as a discussion on the feasibility of employing different alternatives to make direct and indirect VC investments in Chinese portfolio firms, this article studies a hand-collected sample consisting of the twenty-nine VCbacked Chinese portfolio firms that have been financed and listed from 1990 to 2005 in order to empirically show how these investments were actually made in practice. The findings show that twenty-three out of the twentynine firms received their VC investments in various offshore holding entities, …


The Meaning Of The Market Myth, Benjamin Means Jan 2012

The Meaning Of The Market Myth, Benjamin Means

Michigan Business & Entrepreneurial Law Review

This Book Review contends that the perfectly rational market may be a myth, not just in the sense of a false or over-simplified account of reality, but also in the deeper, anthropological sense of cultural explanation. Part I describes how rational-market theories were developed by financial economists and applied to Wall Street, sometimes without adequate appreciation for the difference between simplified economic models and real-world behavior. Part II contends that if the rational-market theory has met with acceptance that outstrips its empirical support, the favorable reception may be explained in part by the theory’s congruence with broader normative views about …


A Very Quiet Revolution: A Primer On Securities Crowdfunding And Title Iii Of The Jobs Act, Thaya Brook Knight, Huiwen Leo, Adrian A. Ohmer Jan 2012

A Very Quiet Revolution: A Primer On Securities Crowdfunding And Title Iii Of The Jobs Act, Thaya Brook Knight, Huiwen Leo, Adrian A. Ohmer

Michigan Business & Entrepreneurial Law Review

This essay introduces the complex regulatory regime that governs the public sale of all securities, no matter how small the offeror. It is intended as a rudimentary roadmap for the start-up or its counsel and will, hopefully, help to illuminate the traps for the unwary while providing an overview of the regulatory universe in which securities crowdfunding will operate.