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Tackling Investor And Managerial Myopia, Emeka Duruigbo
Tackling Investor And Managerial Myopia, Emeka Duruigbo
Emeka Duruigbo
Market observers and legal commentators link the collapse, a few years ago, of giant energy company Enron and some fabled financial firms to the short-termism phenomenon – investors acting like traders and influencing corporate managers to make policy decisions based on quarterly earnings statements. Opponents of short-termism note that the future well-being of many investors, corporations, overall economy and society at large is in jeopardy if investors with a near-term horizon, especially hedge funds, enjoy a dominant role in corporate governance. Skeptics dismiss the concerns, insisting that the notion of pervasive short-term investing is a figment of opponents’ imagination. Moreover, …
Stimulating Long-Term Shareholding, Emeka Duruigbo
Stimulating Long-Term Shareholding, Emeka Duruigbo
Emeka Duruigbo
This article answers, in the affirmative, two core research questions: do we need long-term shareholders and can we find them? The economy needs long-term shareholders to provide prudent and profitable patient capital, generate an antidote to corporate short-termism and spearhead managerial accountability. Finding these shareholders requires a structure that provides the right environment and incentives for such investment. The article presents a novel application of the trust fund theory – the dominant philosophical paradigm of American corporate finance in the 19th century - as a vehicle for stimulating long-term shareholding. The central features of the reformulated trust fund theory include …
The De Facto And Estoppel Concepts In The Llc Context: Still Birth Or Stunted Growth?, Emeka Duruigbo
The De Facto And Estoppel Concepts In The Llc Context: Still Birth Or Stunted Growth?, Emeka Duruigbo
Emeka Duruigbo
Abstract The limited liability company (“LLC”), within a short period since its entrance into the American legal landscape in 1976, has seen a meteoric rise as the business form of choice for many investors. The lack of complete compliance with the statutory requirements for organizing a business, which has posed problems in older business forms, has also found its way into the LLC arena and is only likely to escalate as the popularity of the LLC continues to grow. The consequence has been exposure of business organizers and subsequent investors to ruinous personal liability for business obligations. In response, some …