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Full-Text Articles in Law
Gatekeeper Failures: Why Important, What To Do, Merritt B. Fox
Gatekeeper Failures: Why Important, What To Do, Merritt B. Fox
Faculty Scholarship
The United States was hit by a wave of corporate scandals that crested between late 2001 and the end of 2002. Some were traditional scandals involving insiders looting company assets – the most prominent being Tyco, HealthSouth, and Adelphia. But most were what might be called "financial scandals": attempts by an issuer to maximize the market price of its securities by creating misimpressions as to what its future cash flows were likely to be. Enron and WorldCom were the most spectacular examples of these financial scandals. In scores of additional cases, the companies involved and their executives were sued by …
Sovereign Wealth Funds And Corporate Governance: A Minimalist Response To The New Mercantilism, Ronald J. Gilson, Curtis J. Milhaupt
Sovereign Wealth Funds And Corporate Governance: A Minimalist Response To The New Mercantilism, Ronald J. Gilson, Curtis J. Milhaupt
Faculty Scholarship
Keynes taught years ago that international cash flows are always political. Western response to the enormous increase in the number and the assets of sovereign wealth funds (SWFs), and other government-directed investment vehicles that often get lumped together under the SWF label, proves Keynes right. To their most severe critics, SWFs are a threat to the sovereignty of the nations in whose corporations they invest. The heat of the metaphors matches the volume of the complaints. The nations whose corporations are targets of investments are said to be threatened with becoming "sharecropper" states if ownership of industry moves to foreign-government …
Deconstructing Equity: Public Ownership, Agency Costs, And Complete Capital Markets, Ronald J. Gilson, Charles K. Whitehead
Deconstructing Equity: Public Ownership, Agency Costs, And Complete Capital Markets, Ronald J. Gilson, Charles K. Whitehead
Faculty Scholarship
The traditional law and finance focus on agency costs presumes that the premise that diversified public shareholders are the cheapest risk bearers is immutable. In this Essay, we raise the possibility that changes in the capital markets have called this premise into question, drawn into sharp relief by the recent private equity wave in which the size and range of public companies being taken private expanded signficantly. In brief, we argue that private owners, in increasingly complete markets, can transfer risk in discrete slices to counterparties who, in turn, can manage or otherwise diversify away those risks they choose to …