Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation

Delaware Court of Chancery Revisits Creditor Derivative Standing

In a significant decision, the Delaware Court of Chancery has rejected several proposed limitations on the ability of creditors to maintain derivative suits following a corporation’s insolvency. In doing so, however, the Court reaffirmed the deference owed to a board’s decisions, regardless of the company’s financial condition, and the high hurdles faced by creditors in […]

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“Exclusive Forum” Bylaws Fast Becoming an Item in M&A Deals

The Delaware Court of Chancery’s endorsement of exclusive forum bylaws—bylaw provisions establishing that certain types of lawsuits relating to internal corporate governance matters may only be pursued in a designated forum—has led to the extensive use of these bylaws as a way to manage the litigation that commonly accompanies public mergers and similar transactions. In […]

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Corporations and the 99%: Team Production Revisited

“We Are the 99%” is a political slogan used by the Occupy Wall Street movement, referring to the prevailing wealth and income inequality, and claiming a divergence of corporate America from the public. The article explores the interaction between the general public and the public corporation, and its legal manifestation. Stakeholder theory portrays the corporation […]

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Gold or Fool’s Gold?

By mid-2014 the consequences of several years of significant liquidity constraints in the traditional sources of funding for the mining sector, combined with depressed commodity prices, became increasingly evident. Official corporate announcements and market rumours appeared sporadically at first and then with disturbing regularity as major and mid-tier companies began selling “non-core” assets and juniors […]

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Financial Distress, Stock Returns, and the 1978 Bankruptcy Reform Act

In our article, Financial Distress, Stock Returns, and the 1978 Bankruptcy Reform Act, forthcoming in The Review of Financial Studies, we examine how bargaining power in distress affects the pricing of corporate securities. The nature of Chapter 11 makes bargaining an important factor in distressed reorganizations. Reorganization outcomes depend on the relative bargaining power of […]

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Shareholder Activism: Are You Prepared to Respond?

Activist investors are increasing in number and becoming more assertive in exercising their influence over companies in which they have a stake. Shareholder activism comes in different forms, ranging from say-on-pay votes, to shareholder proposals, to “vote no” campaigns (where some investors will urge other shareholders to withhold votes from one or more directors), to […]

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Increased Risk for Preferred Stockholders in Ensuring Mandatory Redemptions

The Delaware Chancery Court’s holding in TCV v. TradingScreen (Feb. 26, 2015; redacted March 27, 2015) has increased the risk for preferred stockholders in their being able to exit their investments under mandatory redemption provisions. The decision is on interlocutory appeal to the Delaware Supreme Court. The Chancery Court held that a corporation’s ability to […]

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SEC Responds to FAQs on 2014 Money Market Reform Release

On April 22, 2015, the Securities and Exchange Commission (“SEC”) staff released guidance (available here), titled “2014 Money Market Fund Reform Frequently Asked Questions,” that discusses various interpretive issues arising from the SEC’s 2014 Money Market Fund Reform release (the “2014 Reform Release”). On April 23, 2015, the SEC staff released additional guidance (available here), […]

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Latest CD&A Template Offers Best Practices, Is Win-Win for Issuers, Investors

To help companies produce a more clear and concise executive compensation report that attends to the needs of both companies and investors, CFA Institute has released an updated Compensation Discussion & Analysis (CD&A) Template. It is an update of the 2011 template of the same name and aims to help companies draft CD&As that serve […]

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Focusing on Dealer Conduct in the Derivatives Market

The financial crisis of 2008 demonstrated the devastating effects of a derivatives marketplace that, left unchecked, seriously damaged the world economy and caused significant losses to investors. As a result, Title VII of the Dodd-Frank Act tasked the SEC and the CFTC to establish a regulatory framework for the over-the-counter swaps market. In particular, the […]

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