Friday, January 22, 2010
“If the First Amendment has any force it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” Citizens United v FEC.
Interesting. For a bunch of “strict constructionists” they appear to construe the Constitution quite broadly. I dare say the imputation of First Amendment rights to corporations on par with speech rights enjoyed by natural persons would be a concept alien to the founding fathers. Indeed, equating corporations with “associations of citizens” is quite a leap itself. If corporations are anything they are associations of capital and not citizens. The corporate law imposes no citizenship, or even residence, requirement on stockholders.
The globalization of capital markets ensures that stockholders in any of America’s largest corporations will not be made of up US citizens. So, while we correctly restrict the ability of non-citizens to participate in US elections, we leave open a large loophole for non-citizens to be very active participants. Does anyone think Carlos Slim can’t incorporate a Delaware entity named “Elections Are U.S., Inc.” with its stated nature of business reading something like: “The purpose of this corporation is to undertake legal activities to influence the US political process”?
My objections to this decision are almost entirely rooted in the corporate law. For example, the biggest mistake of the decision released last night, I think, was an extension of the argument that corporations are and share the same rights as natural people. Well, they're not. They're state created and regulated entities granted charters by the stated to serve a public purpose. States still, near as I can tell, maintain the right to grant and/or revoke charters on such conditions as they see fit. General incorporation statutes are only a little over a century old. Oh, I could go on, but I'll get off my soap-box.
Update: You know, I've been thinking about it. I think these rules that dictate how and under what circumstances a corporation can communicate with their shareholders are violations of a corporations free speech rights. I think maybe we should also abolish the Federal Securities Laws while we're at it as an impermissible restraint on speech.
Wednesday, January 20, 2010
Tuesday, January 19, 2010
I previously posted on Emory’s Transactional Teaching Conference. I’m now informed that: [T]here was a problem with the Call for Proposals online submission process. As a result, any proposal that was previously submitted has not been received. The technical team has corrected the problem and the new call for proposals form [is here.] If you previously submitted a proposal, please resubmit it using the link above. We sincerely apologize for the inconvenience and look forward to your participation in the conference. MAW
I previously posted on Emory’s Transactional Teaching Conference. I’m now informed that:
[T]here was a problem with the Call for Proposals online submission process. As a result, any proposal that was previously submitted has not been received. The technical team has corrected the problem and the new call for proposals form [is here.]
If you previously submitted a proposal, please resubmit it using the link above. We sincerely apologize for the inconvenience and look forward to your participation in the conference.
Keep Cadbury Birtish! ... or not. I suppose everything has its price, even national icons. In this case, the price is about $19 billion. Cadbury's board just unanimously recommended Kraft's offer to its shareholders. Summary of the terms from the Kraft "micro-site" is below:
- Under the terms of the Final Offer, Cadbury Securityholders will be entitled to receive:
representing, in aggregate, 840 pence per Cadbury Share and GBP 33.60 per Cadbury ADS.
for each Cadbury Share 500 pence in cash
0.1874 New Kraft Foods Shares
for each Cadbury ADS 2,000 pence in cash
0.7496 New Kraft Foods Shares
- In addition, Cadbury Shareholders will be entitled to receive 10 pence per Cadbury share by way of a Special Dividend following the date on which the Final Offer becomes or is declared unconditional.
Monday, January 18, 2010
Abstract: This paper argues that in revising the Takeover Bid Directive, EU policymakers should adopt a neutral approach toward takeovers, i.e. enact rules that neither hamper nor promote them. The rationale behind this approach is that takeovers can be both value-creating and value-decreasing and there is no way to tell ex ante whether they are of the former or the latter kind. Unfortunately, takeover rules cannot be crafted so as to hinder all the bad takeovers while at the same time promoting the good ones. Further, contestability of control is not cost-free, because it has a negative impact on managers’ and block-holders’ incentives to make firm-specific investments of human capital, which in turn affects firm value. It is thus argued that individual companies should be able to decide how contestable their control should be. After showing that the current EC legal framework for takeovers overall hinders takeover activity in the EU, the paper identifies three rationales for a takeover-neutral intervention of the EC in the area of takeover regulation (preemption of “takeover-hostile,” protectionist national regulations, opt-out rules protecting shareholders vis-à-vis managers’ and dominant shareholders’ opportunism in takeover contexts, and menu rules helping individual companies define their degree of control contestability) and provides examples of rules that may respond to such rationales.