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To breakthrough or not - A study in economic efficiency

Belin, Johan LU (2017) JURM02 20172
Department of Law
Faculty of Law
Abstract
This thesis evaluates under which circumstances it is advantageous to implement the breakthrough rules of the takeover directive. Methodology from normative law and economics is used to construct a three-step test which allows the breakthrough rules to be tested against varying methods of separating control rights from cash-flow rights.
Little evidence is found to support the implementation of the breakthrough rules on the level of a member state. This conclusion is based on the fact that in some instances the breakthrough rules do not affect the methods used to separate cash-flow rights from control rights and that the rules are often possible to evade in those cases where the rules do effect the control mechanisms.
The same conclusion... (More)
This thesis evaluates under which circumstances it is advantageous to implement the breakthrough rules of the takeover directive. Methodology from normative law and economics is used to construct a three-step test which allows the breakthrough rules to be tested against varying methods of separating control rights from cash-flow rights.
Little evidence is found to support the implementation of the breakthrough rules on the level of a member state. This conclusion is based on the fact that in some instances the breakthrough rules do not affect the methods used to separate cash-flow rights from control rights and that the rules are often possible to evade in those cases where the rules do effect the control mechanisms.
The same conclusion is reached when the case for implementing the rules is studied for an individual company. The possible exception to this negative view is the case of initial public offers. The special situation in this case, where investors have an increased leverage over the founders of the company may produce situations where it could be advantageous to implement the breakthrough rules through the corporate charter. The requirement to pay compensation to a controlling shareholder whose rights are removed by the breakthrough rules is found to affect the utility of the rules adversely in these cases. (Less)
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author
Belin, Johan LU
supervisor
organization
course
JURM02 20172
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EU law, law and economics, corporate law
language
English
id
8929833
date added to LUP
2018-01-31 16:22:44
date last changed
2018-01-31 16:22:44
@misc{8929833,
  abstract     = {This thesis evaluates under which circumstances it is advantageous to implement the breakthrough rules of the takeover directive. Methodology from normative law and economics is used to construct a three-step test which allows the breakthrough rules to be tested against varying methods of separating control rights from cash-flow rights.
Little evidence is found to support the implementation of the breakthrough rules on the level of a member state. This conclusion is based on the fact that in some instances the breakthrough rules do not affect the methods used to separate cash-flow rights from control rights and that the rules are often possible to evade in those cases where the rules do effect the control mechanisms.
The same conclusion is reached when the case for implementing the rules is studied for an individual company. The possible exception to this negative view is the case of initial public offers. The special situation in this case, where investors have an increased leverage over the founders of the company may produce situations where it could be advantageous to implement the breakthrough rules through the corporate charter. The requirement to pay compensation to a controlling shareholder whose rights are removed by the breakthrough rules is found to affect the utility of the rules adversely in these cases.},
  author       = {Belin, Johan},
  keyword      = {EU law,law and economics,corporate law},
  language     = {eng},
  note         = {Student Paper},
  title        = {To breakthrough or not - A study in economic efficiency},
  year         = {2017},
}