Law Commons^™

Oversight Liability For Risk Management Failures At Financial Firms, Robert T. Miller

Robert T Miller

Many people believe that excessive risk-taking at large financial firms was an important cause of the financial crisis in 2007-2008 and thus that preventing another crisis requires improving risk-management systems at such institutions. One way to do this would be to use board oversight liability to hold directors personally liable for failing properly to monitor the risks that their firms are running. The purpose of this Article is to determine what role director oversight liability can efficiently play in improving risk-management practices at large financial firms.

A key contention of the Article is that previous treatments of this problem have …

The Economics Of Deal Risk: Allocating Risk Through Mac Clauses In Business Combination Agreements, Robert T. Miller

Robert T Miller

In any large corporate acquisition, there is a delay between the time the parties enter into a merger agreement (the signing) and the time the merger is effected and the purchase price paid (the closing). During this period, the business of one of the parties may deteriorate. When this happens to a target company in a cash deal, or to either party in a stock-for-stock deal, the counterparty may no longer want to consummate the transaction. The primary contractual protection parties have in such situations is the merger agreement’s “material adverse change” (MAC) clause. Such clauses are heavily negotiated and …

Canceling The Deal: Two Models Of Material Adverse Change Clauses In Business Combination Agreements, Robert T. Miller

Robert T Miller

In any large corporate acquisition, there is a delay between the time the parties enter into a merger agreement (the signing) and the time the merger is effected and the purchase price paid (the closing). During this period, the business of one of the parties may deteriorate. When this happens to a target company in a cash deal or to either party in a stock deal, the counterparty may no longer want to consummate the transaction. Merger agreements typically protect counterparties against this risk through “material adverse change” (MAC) clauses, which permit the counterparty to cancel the deal if the …