Preface to the Fourth Edition

iii

Acknowledgments

vii

Table of Cases

xxxiii

PART I: ENTERPRISE AND SECURITIES VALUATION

Introduction

(5)

Section A. Valuation of the Going Concearn

(26)

In the Matter of Atlas Pipeline Corporation

(22)

In re Atlas Pipeline Corporation

(1)

Note: The Aftermath of the Atlas Pipeline Case

(1)

Section B. Elements of Valuation

(118)

Discounting Future Returns to Present Value

(10)

Alchian and Allen, University Economics

(5)

Note: The Role of Discounting in Bond Valuation

(1)

Brealey and Myers, Principles of Corporate Finance

(2)

Note: Role of Discounting in Capital Budgeting Decisions

(2)

The Factor of Expected Returns

(15)

The Composition of ``Returns''

(8)

Blum and Katz, Depreciation and Enterprise Valuation

(4)

Note: Valuation and Accounting Earnings

(4)

Earnings Estimates and Probability Distributions

(6)

Grayson, The Use of Statistical Techniques in Capital Budgeting

(6)

The Factor of Risk

(63)

Risk as Degree of Dispersion

(11)

Lewellen, the Cost of Capital

(8)

Brealey and Myers, Principles of Corporate Finance

(3)

Risk Aversion and Investment Decisionmaking

(3)

Measures of Risk---Comparable Enterprises and Market Capitalization Rates

(9)

Francis I. DuPont & Co, v. Universal City Studios, Inc

(5)

Brigham & Gapenski, Financial Management: Theory and Practice

(3)

Note: Valuation in Legal Contexts---The Problem of Normative Goals

(1)

Measures of Risk---The Capital Asset Pricing Model and BETA

(40)

Sharpe, Portfolio Theory and Capital Markets

(7)

Note: Diversification as a Means of Reducing Risk

(4)

Note: Choosing a ``Best'' Portfolio

(1)

Lintner, A Model of a Perfectly Functioning Securities Market

(2)

Lorie, Dodd and Kimpton, The Stockmarket; Theories and Evidence

(4)

Modigliani and Pogue, An Introduction to Risk and Return; Concepts and Evidence

(8)

Van Horne, Financial Management and Policy

106

(4)

Note: Empirical Testing---The CAPM in Crisis

110

(2)

Note: Arbitrage Pricing Theory

112

(3)

The Usefulness of Beta in Valuation

115

(1)

In re Pullman Construction Industries Inc

115

(4)

Brealey and Myers, Principles of Corporate Finance

119

(1)

Notes

119

(1)

Efficient Markets

120

(30)

The Efficient Market Hypothesis

120

(16)

Brealey and Myers, Principles of Corporate Finance

120

(8)

Note: Questions About the Efficient Market Hypothesis

128

(4)

Note: Empirical Testing of the Hypothesis

132

(4)

The Noise Trading Approach and Other Alternatives to the Efficient Market Hypothesis

136

(12)

Shleifer and Summers, The Noise Trader Approach to Finance

137

(5)

Notes

142

(1)

Note: The Crash of 1987

143

(3)

Closing Note

146

(2)

PART II: SENIOR SECURITIES

Introduction

148

(2)

Section A. Bondholders' Rights

150

(185)

Debt Financing

150

(23)

Overview

150

(13)

Innovation

163

(1)

The Law of Corporate Trust and the Trust Indenture Act of 1939

164

(9)

Corporate Trust

164

(1)

Elliott Associates v. J. Henry Schroder Bank & Trust Co

164

(2)

Note: Corporate Trust

166

(1)

The Trust Indenture Act of 1939

167

(3)

Trust Indenture Act of 1939 as Amended 1990, Section 315

170

(1)

Senate Report No. 101-155

171

(1)

Notes

172

(1)

The Bondholder and the Going Concern

173

(81)

The Promise to Pay

173

(14)

1 Dewing, The Financial Policy of Corporations

173

(1)

Van Horne, Financial Management and Policy

174

(2)

Brigham and Gapenski, Financial Management; Theory and Practice

176

(2)

Morgan Stanley & Co., Inc, v. Archer Daniels Midland Co

178

(7)

Note: Refunding Cases

185

(1)

Note: Bondholder Remedies Upon Default

186

(1)

Promises That Protect the Value of the Promise to Pay

187

(44)

Business Covenants

187

(1)

Debt Contracts and Debtor Misbehavior

187

(6)

Judicial Interpretation of Covenants

193

(1)

Sharon Steel Corp. v. The Chase Manhattan Bank, N. A.

193

(6)

Note: Contract Interpretation

199

(1)

Bonds Without Covenants and High Leverage Restructuring

200

(1)

The Disappearance and Reappearance of Covenants

200

(1)

Bratton, Corporate Debt Relationships: Legal Theory in a Time of Restructuring

200

(7)

Fiduciary and Good Faith Duties in the Absence of Covenants

207

(1)

Metropolitan Life Insurance Company v. RJR Nabisco, Inc

207

(12)

Note: The Aftermath of the RJR Nabisco Restructuring

219

(1)

Note: Spin Offs

220

(1)

Note: Fiduciary Theory, Good Faith Duties, and Other Bases for Judicial Protection of Public Bondholders

221

(5)

The Unprotected Bond and the Antifraud Rules of the Federal Securities Laws

226

(1)

McMahan & Co. v. Wherehouse Entertainment, Inc

226

(5)

Altering the Bond Contract---Coerced Votes and Hold Outs

231

(23)

Aladdin Hotel Co. v. Bloom

232

(4)

Note: Amendment Under the Trust Indenture Act

236

(2)

Katz v. Oak Industries Inc

238

(8)

Rievman v. Burlington Northern Railroad Co.

246

(5)

Note: Coerced Votes and Hold Outs

251

(2)

Note: Prepackaged Bankruptcy

253

(1)

Fraudulent Conveyance Law

254

(15)

Uniform Fraudulent Transfer Act, 7A U.L.A. (1985)

254

(1)

Wieboldt Stores, Inc, v. Schottenstein

254

(10)

Note: Fraudulent Conveyance Avoidance of Leveraged Buyouts

264

(5)

Insolvency Reorganization

269

(59)

Introduction: The Reorganization Bargain and the Limits of the Parties' Bargaining Freedom

269

(4)

Reorganization by Judicial Proceedings

269

(2)

The Parameters of the Bankruptcy Bargain

271

(2)

The Rise, Decline and Resurgence of Absolute Priority

273

(36)

The Evolution of Absolute Priority Under the Bandruptcy Act of 1938

274

(1)

Ayer, Rethinking Absolute Priority After Ahlers

274

(5)

Consolidated Rock Products Co. v. Du Bois

279

(7)

Note: The Aftermath of the Consolidated Rock Products Company Case

286

(1)

Note: Absolute Priority and the Definition of the Claim

287

(2)

Note: ``Full Satisfaction'' in Insolvency Reorganization Under Chapter X

289

(7)

Note: The Composition Tradition and the Best Interest of Creditors Standard

296

(1)

The Attack on Absolute Priority and the Bankruptcy Act of 1978

297

(1)

House Report No. 95-595

298

(3)

The New Case for Absolute Priority

301

(1)

The ``Creditor's Bargain''

302

(1)

Alternative Modes of Reorganization

303

(2)

Counter--Attacks Against Absolute Priority

305

(1)

Defenses of Reorganization

306

(1)

Valuation and Risk

307

(1)

Note: Empirical Studies of Reorganization Procedings

308

(1)

Reorganization Under the Bankruptcy Code

309

(19)

Overview of the Chapter 11 Proceedings

309

(7)

Excerpt From Debates on Bankruptcy Reform Act of 1978

316

(2)

Notes

318

(1)

The Treatment of Secured Creditors

319

(1)

The New Value Exception to the Absolute Priority Rule

319

(2)

Kham & Nate's Shoes No. 2, Inc. v. First Bank of Whiting

321

(5)

Note: The New Value Exception

326

(2)

Lender Liability

328

(7)

Note: Lender Liability as a Controlling Party

333

(2)

Section B. Preferred Stockholders' Rights

335

(62)

Preferred Stock Financing

335

(8)

Introduction

335

(3)

Hunt, Williams and Donaldson, Basic Business Finance

335

(3)

The Preferred Stock Contract

338

(5)

Claims to Dividends

343

(5)

Claims to Principal, Including Arrearages

348

(37)

Alteration by Amendment

348

(18)

Liquidation Provisions

348

(1)

Goldman v. Postal Telegraph, Inc

349

(3)

Redemption Provisions

352

(3)

Bowman v. Armour & Co

355

(10)

Notes

365

(1)

Alteration by Merger

366

(13)

Bove v. The Community Hotel Corporation of Newport, Rhode Island

366

(6)

Rothschild International Corporation v. Liggett Group Inc

372

(3)

Notes

375

(2)

Dalton v. American Investment Co

377

(2)

Other Modes of Alternation or Elimination

379

(6)

Repurchase

380

(3)

Dissolution

383

(1)

Coerced Exchange

384

(1)

Limitations on Permissible Alternations

385

(12)

Fairness

385

(9)

Doctrinal Bases

387

(2)

Substantive Criteria

389

(5)

Disclosure

394

(1)

Class Voting

395

(2)

Section C. Convertible Securities and Warrants

397

(43)

Introduction

397

(1)

Valuation

398

(12)

Bratton, The Economics and Jurisprudence of Convertible Bonds

401

(5)

Klein, The Convertible Bond: A Peculiar Package

406

(2)

Note: Convertible Bond Valuation and Investor Protection

408

(2)

Conflicts of Interest

410

(30)

Protective Contract Provisions

410

(6)

Gardner and Florence Call Cowles Foundation v. Empire Inc

411

(3)

Note: Convertible Bond Contracts

414

(2)

Duties Implied in Law

416

(24)

Harff v. Kerkorian

416

(3)

Harff v. Kerkorian

419

(2)

Problem: Fair and Unfair Dividends

421

(1)

Pittsburgh Terminal Corporation v. The Baltimore and Ohio Railroad Company

422

(11)

Note: Subsequent Proceedings in Pittsburgh Terminal

433

(1)

Gardner & Florence Call Cowles Foundation v. Empire Inc

434

(2)

Note: Judicial Fairness Standards and Convertible Bonds

436

(4)

Section D. Corporate Law Legal Capital Rules

440

(9)

The Stated Capital Requirement

440

(2)

Dividends and Distributions

442

(7)

Traditional Statutes

442

(3)

New Model Statutes

445

(3)

PART III: CAPITAL STRUCTURE AND LEVERAGE

Introduction

448

(1)

Section A. The Leverage Effect

449

(38)

The Cost of Capital and the Value of the Firm

449

(10)

Durand, Costs of Debt and Equity Funds for Business: Trends and Problems of Measurement

454

(5)

The Modigliani--Miller Position and the Revised Concept of Optimal Capital Structure

459

(19)

Van Horne, Financial Management and Policy

459

(16)

Notes

475

(3)

Lerverage and Management Discipline

478

(9)

Management's View of Optimal Capital Structure

478

(6)

Donaldson, Managing Corporate Wealth

478

(6)

Debt as Discipline

484

(3)

Section B. Capital Structure, Public Policy, and Legal Standards

487

(58)

High Leverage

487

(12)

The Governance Defense

487

(5)

Jensen, Eclipse of the Public Corporation

487

(3)

Note: Debt and Corporate Governance

490

(1)

Note: Bankruptcy Costs

491

(1)

Objections to Leveraged Restructurings

492

(2)

Regulatory Responses

494

(5)

Legal Standards That Affect Capital Structure

499

(46)

Standards of Feasibility Under the Bankruptcy Code

499

(7)

Regulation of Excessive Risk Under the Public Utility Holding Company Act of 1935

506

(20)

In the Matter of Consumers Power Co

513

(13)

Regulation of Risk Shifting

526

(7)

Investment Companies and Variance

526

(3)

Van Horne, Financial Management and Policy

529

(1)

Band Capital Structures

530

(1)

Margin Requirements

531

(2)

Hypothetical Capital Structure in Rate--Making Proceedings

533

(11)

New England Tel. & Tel. Co. v. Department of Public Utilities

533

(8)

Note: Cost of Capital and Utility Rate--Making

541

(3)

PART IV: DIVIDENDS AND RETAINED EARNINGS

Introduction

544

(1)

Section A. Dividends and Dividend Policy

545

(42)

A Theory of Stock Valuation

545

(5)

Dividend Capitalization Model

545

(3)

The Retention Ratio

548

(2)

The Role of Dividend Policy

550

(21)

The Traditional View

550

(3)

Graham, Dodd and Cottle, Security Analysis

550

(3)

Dividends as a Financing Decision

553

(5)

Clienteles and Market Imperfections

558

(3)

Van Horne, Financial Management and Policy

558

(2)

Note: The Signaling Effect of Dividends

560

(1)

Management Dividend Policies and Agency Theory

561

(10)

Linter, Distributions of Incomes of Corporations Among Dividends, Retained Earnings and Taxes

561

(8)

Note: Dividends and New Issues of Common Stock

569

(2)

Applicable Legal Standards

571

(16)

Dodge v. Ford Motor Co

572

(3)

Note: Dividends and ``Corporate Opportunity''

575

(3)

Berwald v. Mission Development Company

578

(3)

Cochran v. Channing Corp

581

(3)

Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies

584

(2)

Note: Dividends and Conflicts of Interest

586

(1)

Section B. Stock Dividends

587

(13)

Lewellen, The Cost of Capital

587

(3)

Note: Explaining Stock Splits and Stock Dividends

590

(2)

Note: Stock Dividends as Information and the Regulation of Disclosure

592

(1)

Securities Exchange Act Release No. 8268

592

(3)

Note: Stock Dividends and Capital Gains; Saga of G.P.U.

595

(5)

Section C. Repurchase of Outstanding Shares

600

(52)

The Economics of Share Repurchases

600

(9)

Brigham, The Profitability of a Firm's Purchase of Its Own Common Stock

600

(6)

Note: Repurchases---Volume and States Purpose

606

(3)

Regulation of Repurchases---Fiduciary and Disclosure Obligations

609

(27)

Selective Repurchases at High Prices---Greenmail and Bailouts

610

(7)

Fiduciary Duties

611

(5)

Federal Antifraud Provisions

616

(1)

Tax Legislation

617

(1)

The Problem of the Low Priced Repurchase

617

(19)

Fiduciary Duties

618

(1)

Kahn v. United States Sugar Corporation

618

(7)

Note: Coercive Repurchases

625

(1)

Federal Securities Laws

626

(1)

Antifraud Rules

626

(1)

Coyne v. MSL Industries, Inc

626

(5)

Rules 13e--4 and 13e--1

631

(1)

Securities Exchange Act Release No. 16,112

632

(4)

Regulation of Stock Repurchases to ``Correct'' the Market Price

636

(16)

The Problem of Repurchases to Bring Market Price up to Management's Judgment of Correct Value

636

(4)

Note: Stock Repurchases and Disclosure of Dividend Policy

639

(1)

Corporate Repurchases and the Regulation of Market Manipulation

640

(11)

Manipulation

640

(3)

Stabilization

643

(2)

Safe Harbor for Potentially Manipulative Repurchases

645

(6)

PART V: MERGERS AND ACQUISITIONS

Introduction

651

(1)

Section A. The Move to Merge

652

(17)

Kraakman, Taking Discounts Seriously: The Implications of ``Discounted'' Share Prices as an Acquisition Motive

654

(11)

Note: Motivations for Mergers

665

(4)

Section B. Accounting and Taxes

669

(8)

Accounting for Mergers---Purchase or Pooling

669

(1)

Tax Treatment of Mergers

669

(8)

Reorganization Transactions

669

(6)

Nonreorganization Transactions

675

(2)

Section C. Formal Aspects of Merger

677

(54)

The Mechanics of the Process

677

(21)

Schulman and Schenk, Shareholders' Voting and Appraisal Rights in Corporate Acquisition Transactions

677

(5)

Farris v. Glen Alden Corp

682

(6)

Note

688

(1)

Hariton v. Arco Electronics, Inc

689

(6)

Note: Other Consequences of De Facto Merger

695

(3)

Appraisal

698

(33)

Francis I. DuPont & Co. v. Universal City Studios, Inc

698

(10)

Note: Valuation of Dissenters' Stock Under the ``Delaware Block''

708

(4)

Rapid--American Corp. v. Harris

712

(5)

Note: Valuation of Dissenters' Stock After the ``Delaware Block''

717

(7)

Note: The Debate Over Appraisal Rights

724

(7)

Section D. Fairness and Disclosure

731

(184)

Introduction

731

(2)

Freeze--Outs: ``Business Purpose'' and the Appraisal Remedy

733

(68)

Introductory Note

733

(2)

Going Private

735

(9)

Coggins v. New England Patriots Football Club, Inc

735

(6)

Note: Business Purpose and Fairness

741

(3)

Management Buyouts

744

(16)

Introductory Note

744

(3)

Field v. Allyn

747

(7)

Edelman v. Fruehauf Corporation

754

(4)

Notes

758

(1)

Note: The ``Market Check'' and ``Fairness'' Opinions

758

(2)

Freeze--Outs, Fiduciary Standards and Appraisal Rights

760

(41)

Introductory Note

760

(6)

Weinberger v. UOP, Inc

766

(15)

Note: Rabkin v. Hunt Chemical

781

(5)

Note

786

(2)

Cede & Co. v. Technicolor, Inc

788

(7)

Note

795

(1)

Note: The Exclusivity of the Appraisal Remedy

796

(5)

Fairness

801

(31)

Rosenblatt v. Getty Oil Co

802

(11)

Note: The Standard of Review

813

(1)

Mills v. Electric Auto--Lite Co

813

(7)

Note: Market Price as a Measure of Fair Share

820

(3)

Easterbrook and Fischel, Corporate Control Transactions

823

(9)

Federal Disclosure Rules

832

(83)

Disclosure of Facts Implication State Remedies

832

(25)

Introductory Note

832

(4)

Goldberg v. Meridor

836

(5)

Note: Field v. Trump

841

(3)

Note: The Problematic Integration of State Law and Federal Antifraud Rules

844

(3)

Virginia Bankshares, Inc. v. Sandberg

847

(9)

Note

856

(1)

Federal Disclosure Requirements in Connection With Freeze--Outs

857

(11)

Securities Exchange Act Release No. 16,075

857

(4)

Note: Proxy Statements Involving Freeze--Outs

861

(1)

Note: Rule 13e--3 in Operation

862

(1)

Howing Co. v. Nationwide Corp

863

(5)

Note: Further Proceedings in Howing

868

(1)

Disclosure in Aid of Informed Choice: Uses of ``Materiality''

868

(47)

Prevailing Definitions of ``Materiality''

868

(3)

The Materiality of ``Soft'' Information

871

(1)

Starkman v. Marathon Oil Co

872

(13)

Basic Incorporated v. Levinson

885

(16)

Note: Misrepresentations, Silence, Mergers and Other Soft Information

901

(3)

Note: Materiality and Context

904

(1)

Brudney, A Note on Materiality and Soft Information Under the Federal Securities Laws

905

(4)

Note: Sources of Legal Obligations to Disclose on the Part of Non--transactors

909

(5)

Note: Fraud on the Market Doctrine

914

(1)

Section E. Transfer of Control

915

(21)

Sale of Stock

915

(18)

Perlman v. Feldmann

915

(8)

Note: The Proposed Rule of Equal Opportunity

923

(8)

Note: Federal Disclosure Requirements and Sales of Control

931

(2)

Sale of Office

933

(3)

Section F. The Tender Offer

936

(1)

Background

936

(36)

Why Tender Offers?

936

(23)

Introduction

936

(2)

Social Gain

938

(1)

Securities and Exchange Commission Report of Recommendations of Advisory Committee on Tender Offers (Advisory Committee Report

939

(1)

Advisory Committee Report, Seperate Statement of Frank H. Easterbrook and Gregg A. Jarrell

940

(4)

Herman and Lowenstein, The Efficiency Effects of Hostile Take--Overs

944

(5)

Notes

949

(1)

The Market and Sole Owner Standards

950

(6)

Note: Tender Offers as Steps Toward Friendly Mergers

956

(3)

Tactics in Tender Offers

959

(13)

Bidders and Target Shareholders

959

(1)

Short Duration

959

(2)

Limited Information

961

(1)

Management Defenses

962

(1)

Defenses Requiring Amendment of the Corporate Charter

962

(1)

Defenses Not Requiring Amendment of the Corporate Charter

963

(2)

Empirical Studies of Defensive Tactics and Shareholder Value

965

(2)

Dual Class Common Recapitalizations

967

(1)

Description

968

(2)

Empirical Studies

970

(1)

Regulatory Follies

970

(1)

The Sole Owner Standard and Tender Offer Tactics

971

(1)

The Williams Act

972

(80)

Introduction

972

(3)

Cohen, Address on Proposed Legislation to Regulate Tender Offers

973

(2)

Tender Offer Legislation

975

(6)

Disclosure by the Bidder

981

(18)

Electronic Speciality Co. v. International Controls Corp

985

(4)

Flynn v. Bass Bros. Enterprises, Inc

989

(8)

Note: Local Law

997

(2)

Disclosure by the Target

999

(11)

Radol v. Thomas

1000

(7)

Note: The Williams Act and Target Defensive Tactics

1007

(3)

Undistorted Choice for Target Shareholders

1010

(33)

Withdrawal and Proration

1010

(1)

Pryor v. United States Steel Corp

1010

(5)

Schreiber v. Burlington Northern, Inc

1015

(7)

Equal Treatment

1022

(1)

Note: The All Holders Rule and The SEC's Rulemaking Authority

1023

(2)

Note: Contract as a Regulatory Alternative

1025

(2)

Note: Rule 10B--13

1027

(1)

Securities Exchanges Act Release No. 8712

1027

(3)

Coverage Problems

1030

(1)

Field v. Trump

1030

(5)

Note: Defining (and Not Defining) ``Tender Offer''

1035

(5)

Note: Defining ``Persons,'' ``Groups,'' and ``Bidders''

1040

(3)

Standing, Relief, and the Problems of Williams Act Litigation

1043

(9)

Standing

1044

(5)

Relief

1049

(3)

Federal Insider Trading Restrictions

1052

(22)

Introduction

1052

(5)

Securities Exchange Act Release No. 17120

1057

(3)

Questions

1060

(1)

United States v. Chestman

1061

(13)

Management Defensive Tactics and Management Duties Under State Corporate Law

1074

(68)

Defensive Tactis and Structural Provisions of Corporate Law

1074

(3)

Shareholder Voting

1074

(2)

Structural Limits

1076

(1)

The Duty of Loyalty

1077

(54)

Introduction: Defensive Tactics and Business Judgment---The Evolution of the Delaware Rule

1077

(3)

The Operation of the Unical Standard

1080

(1)

Poison Pills

1080

(1)

Moran v. Household International, Inc

1080

(5)

Note: Poison Pills and Shareholder Choice

1085

(2)

All Cash All Shares Tender Offers

1087

(3)

ESOPs

1090

(2)

A Comment on Unocal as Applied

1092

(3)

The Revlon Auction Duty

1095

(1)

Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc

1095

(5)

Note: Constituencies

1100

(1)

Mills Acquisition Co. v. MacMillan, Inc

1101

(12)

Note: The Revlon Auction

1113

(2)

Retrenchment

1115

(1)

Paramount Communications, Inc. v. Time Inc

1115

(14)

Note: Legal Uncertainty and Corporate Politics

1129

(2)

The Duty of Care

1131

(11)

Hanson Trust PLC v. ML SCM Acquisition, Inc

1133

(8)

Notes

1141

(1)

State Anti--Takeover Legislation

1142

(1)

First Generation Statutes

1142

(2)

Second Generation Statutes

1144

(6)

Legislation

1144

(3)

Constitutionality

1147

(3)

Third Generation Statutes

1150

(1)

The Delaware Statute

1150

(1)

Pennsylvania and Massachusetts

1151

(1)

Constitutionality

1151

(1)

Amanda Acquisition Corp. v. Universal Foods Corp

1152

(9)

Note: Antitakeover Statutes and Shareholder Value

1161

(1)

Note: The Constituency Statutes

1162

Appendix A. Materials on Accounting

A-1

(1)

Section 1. Valuation and Accounting Earnings

A-1

(1)

(a) Accounting Income as a Predicate for Estimating Future Value Per Share

A-1

(4)

(b) Alternative Accounting Principles and Problems of Inter-company Comparison

A-5

(3)

A-8

(2)

Section 2. Accounting for Mergers--Purchase or Pooling

A-10

(9)

Hackney, Accounting for Mergers and Acquisitions Under the New Jersey Business Corporation Act

A-19

(6)

Note: APB Opinions No. 16 and No. 17

A-25

(1)

Olson, Accounting for Mergers

A-26

(4)

Note: The Legal Framework

A-30

(1)

Securities Act Release No. 4910

A-31

(2)

Note: Accounting for Leveraged Buyouts

A-33

(1)

Note: How Much Does It Matter

A-34

Appendix B. Capital Markets and Securities Regulation

B-1

(1)

Section 1. The Capital Markets

B-1

(1)

(a) Overview

B-1

(1)

Ross, Westerfield and Jordan, Fundamentals of Corporate Finance

B-1

(4)

(b) Institutional and Individual Investors

B-5

(1)

Section 2. The Federal Mandatory Disclosure System

B-6

(1)

Introduction

B-6

(1)

(A) Background: The Legal Framework

B-7

(3)

(B) Policy Justifications for the Mandatory Disclosure System

B-10

(5)

B-15

(2)

Easterbrook and Fischel, Mandatory Disclosure and the Protection of Investors

B-17

(5)

Notes

B-22

Appendix C. Additional Materials on Debt Securities

C-1

(1)

Section 1. Market Instability and Innovation

C-1

(8)

Section 2. The Leveraged Restructurings of the 1980s

C-9

(3)

Crabbe, Pickering, and Prowse, Recent Developments in Corporate Finance

C-12

(4)

Section 3. Debt Contract Forms

C-16

(1)

Model Simplified Indenture

C-17

(18)

American Bar Foundation, Commentaries on Indentures

C-35

Appendix D. The Bankruptcy Code

D-1

(14)

The House Report

D-15

Appendix E. Secured Creditors Under the Bankruptcy Code

E-1

(1)

(1) Problem

E-1

(5)

(2) Valuation

E-6

(1)

In re Pullman Construction Industries Inc

E-6

(15)

Note: Bankruptcy Valuation

E-21

(4)

Note: Adequate Protection and Post Petition Interest

E-25

Appendix F. Revised Model Business Corporation Act

F-1

(1)

Appendix G. Provisions of the Delaware and New York Statutes Concerning Senior Securities, Mergers, Sales of Assets, and Appraisal

G-1

(1)

Index

I-1

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Brudney and Chirelstein's Cases and Materials on Corporate Finance

9781566620598

1566620597

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