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Full-Text Articles in Law

Corporate Policy And The Coherence Of Delaware Takeover Law, Richard E. Kihlstrom, Michael L. Wachter Jan 2003

Corporate Policy And The Coherence Of Delaware Takeover Law, Richard E. Kihlstrom, Michael L. Wachter

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This Article presents a model that can be used to explain key elements of Delaware takeover law. By incorporating corporate policy as a key variable in the model, Delaware law’s management discretion rule can be shown to be best suited for maximizing the value of the corporation and the shareholders’ interest under a set of reasonable assumptions. By allowing for occasional market mispricing and the agency costs associated with managing to the market, we demonstrate that a shareholder choice regime would likely lead to suboptimal investment decisions. In our model, managers are assumed to have better information regarding alternative corporate …


Takeover Defense When Financial Markets Are (Only) Relatively Efficient, Michael L. Wachter Jan 2003

Takeover Defense When Financial Markets Are (Only) Relatively Efficient, Michael L. Wachter

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This paper evaluates the impact of developments in the understanding of asset value pricing for alternative legal standards for takeover defenses: the management discretion and the shareholder rights positions. Both sides place considerable, albeit implicit, reliance on alternative views of the efficiency of financial markets. Developments in finance theory show that when financial markets are only "relatively efficient," stock prices can incorrectly value the corporation at any point in time, at the same time as investors cannot outperform the market on an ongoing basis. I focus on financial market anomalies arising from the failure of the capital asset pricing model …


Corporate Control Transactions: Introduction, Edward B. Rock, Michael L. Wachter Jan 2003

Corporate Control Transactions: Introduction, Edward B. Rock, Michael L. Wachter

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No abstract provided.


Shareholder Value And Auditor Independence, William W. Bratton Jan 2003

Shareholder Value And Auditor Independence, William W. Bratton

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This Article questions the practice of framing problems concerning auditors’ professional responsibility inside a principal-agent paradigm. If professional independence is to be achieved, auditors cannot be enmeshed in agency relationships with the shareholders of their audit clients. As agents, the auditors by definition become subject to the principal’s control and cannot act independently. For the same reason, auditors’ duties should be neither articulated in the framework of corporate law fiduciary duty, nor conceived relationally at all. These assertions follow from an inquiry into the operative notion of the shareholder-beneficiary. The Article unpacks the notion of the shareholder and tells a …


The Case For Repealing The Corporate Alternative Minimum Tax, Terrence R. Chorvat, Michael S. Knoll Jan 2003

The Case For Repealing The Corporate Alternative Minimum Tax, Terrence R. Chorvat, Michael S. Knoll

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No abstract provided.


Enron, Sarbanes-Oxley And Accounting: Rules Versus Principles Versus Rents, William W. Bratton Jan 2003

Enron, Sarbanes-Oxley And Accounting: Rules Versus Principles Versus Rents, William W. Bratton

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No abstract provided.