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Full-Text Articles in Law
Takeover Defense Tactics: A Comment On Two Models, Jeffrey N. Gordon, Lewis A. Kornhauser
Takeover Defense Tactics: A Comment On Two Models, Jeffrey N. Gordon, Lewis A. Kornhauser
Faculty Scholarship
One of the most important debates of current corporate law practice and scholarship is about the appropriate role of target management confronted with a takeover bid. The controversy turns on the identification of a criterion for evaluating takeovers and target management defensive tactics. An influential body of opinion contends that maximization of shareholder wealth is the appropriate criterion because, first, traditional notions of fiduciary duty generally require managers to act in the shareholders' interest, and, second, shareholder wealth maximization is seen as the best available proxy for social wealth maximization. On this view, takeovers are desirable because they can increase …
Rethinking The Theory Of Legal Rights, Jules S. Coleman, Jody S. Kraus
Rethinking The Theory Of Legal Rights, Jules S. Coleman, Jody S. Kraus
Faculty Scholarship
In the economic approach to law, legal rights are designed, in part, to overcome the conditions under which markets fail. In correcting for market failure, economic analysis endorses two rules for assigning legal rights. The first specifies the allocation of rights under conditions of rational cooperation, full information and zero transaction costs. Provided that exchange is available and that obstacles to exercising it are insignificant, rational cooperators will negotiate around inefficiencies. Under these conditions, legal rights are not assigned in order to establish optimal levels of resource deployment directly; rather, they establish well-defined entitlements or negotiation points which create a …