Reforming Company And Takeover Law In Europe

by Ferrarini, Guido; Hopt, Klaus J.; Winter, Japp; Wymeersch, Eddy

• ISBN13: 9780199273805
• ISBN10: 0199273804
• Format: Hardcover
• Copyright: 2004-08-12
• Publisher: Oxford University Press

Summary

This book examines reforms in company and takeover law, crucial to modern business and economics. The new European 13th directive on takeovers and its 'break-through' rule are discussed, as is the controversial level playing field for takeover activities all over Europe and from the United States. The volume provides comprehensive commentary and full text of the European Commission's new company law action plan. Issues including corporate disclosure, remuneration of directors, personal liability of board members, auditors, and conflicts of interest are also examined.

Author Biography

Guido A. Ferrarini is Professor of Law at the University of Genoa and Director of the Centre for Law and Finance. Klaus J. Hopt is Professor of Law and Director of the Max Planck Institute for Foreign Private and Private International Law, Hamburg. Jaap Winter is partner at the Dutch law firm De Brauw Blackstone Westbroek and Professor of International Company Law at the Erasmus University, Rotterdam. Eddy Wymeersch is Chairman of the Banking Finance and Insurance Commission, Belgium; cochair of the CESR-ECB, working on clearing and settlement; member of the Committees of European Securities Regulators (CESR), and Part time Professor of Commercial Law, University of Ghent.

Table of Contents

The Contributors	xix
Part I: A Framework for a Modern Company and Takeover Law in Europe: Common Regulatory Issues	1	(182)
The Need for a Regulatory Framework	3	(92)
EU Company Law at the Cross-Roads	3	(18)
Jaap Winter
Introduction	3	(1)
The European Company Statute	4	(3)
The European Court of Justice	7	(3)
Capital Market Law and Company Law	10	(3)
Parenthesis: Competition and Harmonization	13	(1)
A Modern Regulatory Framework for Company Law in Europe	14	(3)
The Takeover Bids Directive	17	(2)
Outlook	19	(2)
An Agenda for Reform: Company and Takeover Law in Europe	21	(30)
Gerard Hertig
Joseph A. McCahery
Introduction	21	(2)
Reflections on Regulatory Arbitrage and Competition	23	(6)
The Proposed EU Company and Takeover Law Reforms	29	(9)
An Alternative Approach to Corporate Law Reform	38	(7)
Conclusion	45	(1)
References	46	(5)
Trusteeship and Conflicts of Interest in Corporate, Banking and Agency Law: Toward Common Legal Principles for Intermediaries in the Modern Service-Oriented Society	51	(38)
Klaus J. Hopt
Introduction	52	(1)
Duties of Loyalty of Corporate Organs Under Special Contracts and of Professional Intermediaries: A Survey	53	(9)
Sources, Differences, and Common Features of the Duties of Loyalty of Intermediaries	62	(5)
Common Legal Principles for Treating Conflicts of Interest	67	(13)
Prevention of Conflicts of Interest, Sanctions, and Enforcement	80	(6)
Summary	86	(3)
A Modern Regulatory Framework for Company and Takeover Law in Europe	89	(6)
Michel Prada
Regulation of Corporate Governance, in Particular Disclosure	95	(50)
Disclosure and Corporate Governance: An Overview Essay	95	(20)
Reinier Kraakman
Introduction	95	(2)
The Governance Functions of Disclosure	97	(2)
Why Make Disclosure Mandatory?	99	(2)
What Companies Are Subject to Mandatory Disclosure?	101	(5)
The Enforcement of Disclosure Rules	106	(4)
The Limits of Mandatory Disclosure	110	(5)
Disclosing Disclosure: Europe's Winding Road to Competitive Standards of Publication of Company-Related Information	115	(30)
Hanno Merkt
Introduction	115	(2)
Fundamentals of Disclosure	117	(22)
General Principles of Disclosure	139	(4)
Sanctioning of Disclosure Duties	143	(1)
Conclusion	144	(1)
Modern Company Law-Making	145	(38)
About Techniques of Regulating Companies in the European Union	145	(38)
Eddy Wymeersch
Regulation of Companies and Their Conduct	145	(15)
The Regulation of Companies at the EU Level	160	(9)
Which Way Forward?	169	(13)
Conclusion	182	(1)
Part II: Corporate Governance: Inside the Corporation	183	(356)
Board Structure, in Particular the Role of Non-Executive and Supervisory Directors	185	(82)
Post-Enron Developments in the United Kingdom	185	(40)
Paul Davies
The Enron Issues and the British Response	185	(3)
General Points	188	(5)
Board Structure	193	(13)
Auditor Independence	206	(5)
Executive Remuneration	211	(7)
Analysts' Conflicts of Interest	218	(2)
By Way of Conclusion: The Non-Barking Dog	220	(5)
Corporate Scandals Across the Globe: Regulating the Role of the Director	225	(42)
Jennifer Hill
Introduction	225	(2)
A Tale of Two Australian Corporate Collapses	227	(5)
Board Structure and Composition as a Contemporary Corporate Governance Tool	232	(21)
Director and Officer Liability as an Accountability Mechanism	253	(6)
Executive Remuneration	259	(7)
Conclusion	266	(1)
The Remuneration of Executive and Non-Executive Directors	267	(106)
Executive Remuneration and Corporate Governance in the EU: Convergence, Divergence, and Reform Perspectives	267	(80)
Guido Ferrarini
Niamh Moloney
Theoretical Foundations	268	(52)
Comparative Overview	320	(20)
Reform Perspectives	340	(7)
Accounting for Share-Based Remuneration	347	(26)
Kimberley Crook
Introduction	347	(1)
Overview of the Accounting Issues	348	(4)
U.S. Accounting Requirements	352	(2)
IASB Project	354	(4)
Concluding Comments	358	(1)
Appendix: IASB -- Share-Based Payment	358	(15)
The Responsibility of the Management and of the Board and Its Enforcement	373	(44)
The Responsibility of the Management and Its Enforcement	373	(44)
Holger Fleischer
Introduction	373	(1)
Fiduciary Duties in Different Legal Systems	374	(19)
Duties to Creditors and the Responsibility for Wrongful Trading	393	(10)
Management Responsibility for Financial Statements	403	(5)
Directors' Disqualification	408	(9)
The Role of the Shareholder	417	(38)
The Role of the Shareholder in Internal Corporate Governance: Shareholder Information, Communication and Decision-Making	417	(38)
Eilis Ferran
Introduction	418	(2)
The Development of European Company Law	420	(2)
Shareholder Information	422	(14)
Beyond Disclosure: Active Exercise of Internal Control by Shareholders	436	(18)
A Concluding Observation	454	(1)
The Auditors	455	(84)
Gatekeeper Failure and Reform: The Challenge of Fashioning Relevant Reforms	455	(52)
John C. Coffee, Jr
Introduction	455	(5)
Gatekeepers: Past and Present	460	(20)
The Near Future of Gatekeepers: Sarbanes-Oxley and the Looming Litigation Crisis	480	(9)
The Future Gatekeeper: Remedies for Gatekeeper Failure	489	(16)
Conclusion	505	(2)
Corporate Governance and Auditor Independence: The Battle of the Private Versus the Public Interest	507	(32)
Werner F. Ebke
Introduction	507	(7)
The Role and Position of the Independent Auditor	514	(3)
Auditor Independence	517	(19)
Public Oversight	536	(2)
Conclusions	538	(1)
Part III: Corporate Governance: The Market for Corporate Control and the Level Playing Field	539	(258)
American Experience and EU Perspectives	541	(136)
An American Perspective on Anti-Takeover Laws in the EU: The German Example	541	(20)
Jeffrey N. Gordon
Introduction	542	(3)
Germany and the `Level Playing Field': The Problem of Economic Nationalism	545	(3)
The Different Impact of Anti-Takeover Measures, Germany vs US	548	(8)
Prospects for a Revised 13th Directive?	556	(2)
Conclusion	558	(3)
Why Continental European Takeover Law Matters	561	(14)
Allen Ferrell
Why Worry About Continental European Takeover Regulation?	561	(2)
Interaction Between Technical and Structural Barriers to Takeovers	563	(3)
Standing the Test of Time? Two Case Studies	566	(8)
Conclusion	574	(1)
The Economics of the Proposed European Takeover Directive	575	(72)
Joseph A. McCahery
Luc Renneboog
Peer Ritter
Sascha Haller
Introduction	576	(2)
Corporate Governance and the Cost of Capital	578	(6)
The Pattern of Ownership and Control in Europe	584	(5)
Explanations for Differences in Ownership and Control Concentration Across Companies and Countries	589	(10)
Takeovers in the European Union and the U.S: Evolution	599	(6)
The Determinants of Bidder and Target Returns in the Economic Literature	605	(8)
Takeover Regulation in the European Union	613	(3)
The Market for Corporate Control and Tender Offers	616	(15)
Board Neutrality	631	(4)
Squeeze-Out	635	(9)
The Level Playing Field Considered and Conclusions	644	(3)
Reciprocity in Takeovers	647	(30)
Marco Becht
Introduction	647	(4)
Models of Corporate Control	651	(2)
Achieving Reciprocity	653	(6)
Reciprocity in Takeovers as a Policy Objective	659	(3)
Conclusion	662	(3)
Figures	665	(12)
The Proposed `Break-Through' Rule	677	(60)
Ownership, Takeovers and EU Law: How Contestable Should EU Corporations Be?	677	(34)
John C. Coates IV
The DTB and the BTR	677	(3)
The High-Level Goals of the DTB	680	(2)
Doubts About the BTR	682	(8)
Why Do Takeover-Proof Firms Exist?	690	(12)
Summary	702	(1)
Implications	703	(2)
Alternatives to the BTR: Mandatory Re-Openings	705	(2)
Conclusion	707	(2)
Appendix	709	(2)
Make It or Break It: The Break-Through Rule as a Break-Through for the European Takeover Directive?	711	(26)
Peter O. Mulbert
Introduction	711	(3)
The Break-Through Concept of the High-Level Group	714	(7)
Shareholder Decision-Making	721	(5)
Proportionality	726	(8)
Concluding Remarks	734	(3)
Mandatory Bids, Squeeze-Outs and Similar Transactions	737	(60)
Mandatory Bids, Squeeze-Out, Sell-Out and the Dynamics of the Tender Offer Process	737	(30)
Mike Burkart
Fausto Panunzi
Introduction	737	(7)
Economics of the Tender Offer Process	744	(4)
Mandatory Bid Rule	748	(5)
Squeeze-Out Right	753	(3)
Sell-Out Right	756	(2)
Controlling Owners and Mandatory Bid Rule	758	(4)
Conclusions	762	(1)
References	763	(4)
The Mandatory Bid Rule in the Proposed EC Takeover Directive: Harmonization as Rent-Seeking?	767	(30)
Luca Enriques
Introduction	768	(1)
The Group's Proposals on Mandatory Bid Price, Squeeze-Out and Sell-Out Rights	769	(4)
The Proposal's Provisions on Mandatory Bids and Squeeze-Out and Sell-Out Rights: The Devil Is in the Details	773	(11)
The Uneasy Case for the Proposed EC Mandatory Bid Rule	784	(10)
Conclusions: A Lawyers' and Regulators' Plot?	794	(3)
Annex 1: Commission of the European Communities Modernising Company Law and Enhancing Corporate Governance in the European Union -- A Plan to Move Forward (21 May 2003)	797	(28)
Annex 2: Report of the High Level Group of Company Law Experts on Issues Related to Takeover Bids (10 January 2002)	825	(100)
Annex 3: Report of the High Level Group of Company Law Experts on a Modern Regulatory Framework for Company Law in Europe (4 November 2002)	925	(166)
Cases	1091	(6)
Index	1097