In January, the New England Patriots’ (the “Patriots”) easy victory over the Indianapolis Colts in the AFC Championship was muddled by reports that eleven of the twelve footballs used by the Patriots were underinflated.1 This controversy quickly gained fame as “Deflategate” and the NFL, following an investigation; (1) suspended quarterback Tom Brady for four games;…
Tag: Governance
Stock Markets Move Towards Sidelining Shareholders
As the dust settles on Alibaba’s IPO, the single largest initial public offering to date, experts have turned their attention to a less-celebrated aspect: the relative lack of shareholder control in firm operations. Alibaba listed on the NYSE, an unexpected choice over the Hong Kong Stock Exchange1 Although every Alibaba share technically has equal rights,…
In Takeover Battle, Allergan Agrees to Special Meeting Amidst Critique of Restrictive Bylaw
On September 15, 2014, Allergan made a concession in its contentious battle to thwart Valeant Pharmaceuticals and hedge fund Pershing Square Capital Management in their joint attempt at a $53 billion takeover of Allergan. 1 The concession was to agree to the special meeting called by Pershing Square with the hope of voting out a…
Despite Outstanding Growth Prospects, Alibaba’s IPO Fraught with Risk
Although few retail investors in the United States have even heard of Chinese e-commerce behemoth Alibaba, anticipation on Wall Street this week for the company’s forthcoming I.P.O. is palpable.1 Touted by many as a uniquely positioned hybrid of eBay, Amazon, and Google, the company announced its plans earlier this year to go public in New…
Online Gambling in the United States
Gambling, and especially online gaming, in the United States has a long and complicated past. Recently, three states, Nevada, Delaware, and New Jersey, have passed legislation allowing for online gambling within their state borders. This blog post reviews a history of online gaming in the United States, examines recent areas of legalization for online…
It May Be Time to Revisit Institutional Shareholder Activism
Institutional shareholder activism has often been viewed as a positive corporate governance tool to ameliorate shareholder collective action problems and keep management teams and boards of directors in check, particularly for large public companies with a widely dispersed group of shareholders. Typically, an activist shareholder (ranging from large individual stockholders to institutional investors) will use…
Corporate Law in Asia Symposium This Week
We welcome you to join the Michigan Journal of Private Equity and Venture Capital and the Asia Law Society for the Corporate Law in Asia: Trends and Opportunities symposium. It is being held this Friday, February 21, 2014 in South Hall Room 1020 at the University of Michigan Law School. Registration begins at 8:30 AM, and the program…
Hedge Funds: A Solution to the Collective Action Problem
There is a collective action problem in any system where an informed vote is costly to a shareholder.1 Such a collective action problem is present among shareholders of publicly traded companies in the United States.2 Small shareholders are rationally apathetic in their voting decisions because they assume (usually correctly) that their vote will not change…
Buy or Sell: Geithner’s New Gig
Timothy Geithner served as the United States Secretary of the Treasury until January of this year. During his past four years in office Mr. Geithner has been an extremely polarizing figure in the financial world. His tenure was defined mostly by his dealings with the fallout of the recession. He is the name, perhaps unfairly,…
The Volcker Rule: Implementation Imminent or Unlikely?
Paul Volcker, former United States Federal Reserve Chairman and originator of the Volcker Rule, was appointed to the President’s Economic Recovery Advisory Board in early 20091 The board was created with the intent to advise the Obama Administration on economic recovery matters. The creation of the board also gave Volcker the platform to lay the…