Fairness Opinions: How Fair Are They and Why We Should Do Nothing About It

I believe that fairness opinions exist for two reasons: a judicial belief in the determinacy of value, and legal rules that shelter the business judgment of a board when based on reliance on the opinion of experts. Except in rare instances, investment bankers do not deliver fairness opinions for the benefit of public shareholders. Further, the nature of the fairness opinion is such that neither courts nor investors should attach too much weight to it nor impose liability because of it, except in instances of fraud

Section 40.1 of the American Law Institute\u27s Corporate Governance Project: Restatement or Misstatement?

The American Law Institute\u27s (ALI\u27s) corporate governance project has generated the most heated debate in the history of that distinguished institution. Critics claim that the document is a radical proposal for reforming corporate law in a way that increases legal intrusions into the management of business, while supporters claim that the document is fairly reflective of much of the existing law, and that it clarifies and simplifies that law. This article focuses on what thus far has been the most heated part of the debate-the ALI\u27s treatment of the duties and liabilities of corporate directors, set out in section 4.01 of the Principles of Corporate Governance. My thesis is that events of the 1960\u27s and \u2770\u27s led to attempts by both corporate officials and their attorneys to fend off what they saw as radical law reform, focused on federal chartering, with a series of aspirational documents intended to reassure critics that corporate managers and their attorneys were good and responsible citizens who were aware of their responsibilities. Accepting Berle & Mean\u27s view of their own power, corporate managers claimed the mantle of good citizenship that Berle had ultimately bestowed upon them

Public Health Considerations of the Kenduskeag Stream, Bangor, November 1960

Introduction More than 350 years ago the first white man excreted his wastes into the Kenduskeag Stream. Today, the City of Bangor offers its citizens the same sewage treatment facilities as that given to the crewmen of Samuel de Champlain\u27s ship in 1604. This report attempts to describe the extent of pollution in the Kenduskeag Stream and point out the potential health hazard of this foul smelling watercourse that divides our city with the sewage of our citizens. William J. Carney / Director of Public Healthhttps://digicom.bpl.lib.me.us/books_pubs/1206/thumbnail.jp

The Theory of the Firm: Investor Coordination Costs, Control Premiums and Capital Structure

In this Article, I will argue that the entire exercise of worrying about distributions among investors is more than a rent-dissipation activity. One the contrary, it has real efficiency implications that lawyers have not yet expressed to economists, although many clients may well be aware of the value of these services. I develop a taxonomy of the general conflicts that can arise among investors within a firm. I describe them as coordination costs, because in part they involve issues of whether the preferences of multiple investors are so coordinated that the corporate actions selected are likely to be Pareto superior rather than Kaldor-Hicks efficient. Following the example of Smith and Warner, I construct two competing hypotheses, which I call the Irrelevance Hypothesis and the Costly Contracting Hypothesis

The Death of Appraisal Arbitrage: Ending Windfalls for Deal Dissenters

In this article, we take note of a new and positive development in Delaware\u27s law of appraisal: more robust enforcement of Section 262(h), which expressly excludes from fair value in appraisal litigation the value that is uniquely associated with the deal from which the shareholders seeking appraisal are dissenting. For public firms, this implies that deal dissenters are entitled to no more than the price that prevailed prior to the deal\u27s announcement. In a salutary development, the Delaware Chancery Court took this approach in its recent appraisal decision in Verition Master Fund Partners, Ltd. v. Aruba Networks, Inc., awarding to the deal dissenters the pre-announcement price and striking a blow against appraisal arbitrage —a trading and litigation strategy that is predicated on deal dissenters receiving appraisal remedies in excess of the deal prices from which they dissent. We explore here the historical and economic rationales for limiting the appraisal remedy in this fashion. And we conclude with some recommendations for ending or limiting appraisal windfalls in the context of private firms as well via contractual and corporate bylaw valuation mechanisms that would replace judicial with market valuation in appraisal litigation as well as select litigation fora that would be amenable to enforcement of such mechanisms