John Coates

John F. Cogan, Jr. Professor of Law and Economics

Research Director, Center on the Legal Profession

Biography

John Coates is the John F. Cogan, Jr. Professor of Law and Economics at Harvard Law School, where he also serves as Special Advisor for Planning, Chair of the Committee on Executive Education and Online Learning, and Research Director of the Center on the Legal Profession. Before joining Harvard, he was a partner at Wachtell, Lipton, Rosen & Katz, specializing in financial institutions and M&A. At HLS and at Harvard Business School, he teaches corporate governance, M&A, finance, and related topics, and is a Fellow of the American College of Governance Counsel. He has testified before Congress and provided consulting services to the U.S. Department of Justice (DOJ), the U.S. Department of Treasury, the New York Stock Exchange, and participants in the financial markets, including hedge funds, investment banks, and private equity funds. He served as independent consultant for the Securities and Exchange Commission (SEC) in one of the first “Fair Fund” distributions (an enforcement action regarding payment for order flow), and one of the largest distributions ($306 million relating to market timing and late trading), and is currently the Chair of the Investor-as-Owner Subcommittee of the Investor Advisory Committee of the SEC. He has served as an independent representative of individual and institutional clients of institutional trustees and money managers, and currently is serving as a DOJ-appointed independent monitor for one of the Global Systemically Important Financial Institutions.

Areas of Interest

John C. Coates, Mergers, Acquisitions and Restructuring: Types, Regulation, and Patterns of Practice, in The Oxford Handbook of Corporate Law and Governance (Jeffrey N. Gordon & Wolf-Georg Ringe eds. 2017).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Corporate Law
,
Corporate Governance
Type: Book
Abstract
An important component of corporate governance is the regulation of significant transactions – mergers, acquisitions, and restructuring. This paper (a chapter in Oxford Handbook on Corporate Law and Governance, forthcoming) reviews how M&A and restructuring are regulated by corporate and securities law, listing standards, antitrust and foreign investment law, and industry-specific regulation. Drawing on real-world examples from the world’s two largest M&A markets (the US and the UK) and a representative developing nation (India), major types of M&A transactions are reviewed, and six goals of M&A regulation are summarized – to (1) clarify authority, (2) reduce costs, (3) constrain conflicts of interest, (4) protect dispersed owners, (5) deter looting, asset-stripping and excessive leverage, and (6) cope with side effects. Modes of regulation either (a) facilitate M&A – collective action and call-right statutes – or (b) constrain M&A – disclosure laws, approval requirements, augmented duties, fairness requirements, regulation of terms, process and deal-related debt, and bans or structural limits. The paper synthesizes empirical research on types of transactions chosen, effects of law on M&A, and effects of M&A. Throughout, similarities and differences across transaction types and countries are noted. The paper concludes with observations about what these variations imply and how law affects economic activity.
John C. Coates, Mergers, Acquisitions and Restructuring: Types, Regulation, and Patterns of Practice, in The Oxford Handbook of Corporate Law and Governance (Jeffrey N. Gordon & Wolf-Georg Ringe eds. 2017).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Corporate Law
,
Corporate Governance
Type: Article
Abstract
An important component of corporate governance is the regulation of significant transactions – mergers, acquisitions, and restructuring. This paper (a chapter in Oxford Handbook on Corporate Law and Governance, forthcoming) reviews how M&A and restructuring are regulated by corporate and securities law, listing standards, antitrust and foreign investment law, and industry-specific regulation. Drawing on real-world examples from the world’s two largest M&A markets (the US and the UK) and a representative developing nation (India), major types of M&A transactions are reviewed, and six goals of M&A regulation are summarized – to (1) clarify authority, (2) reduce costs, (3) constrain conflicts of interest, (4) protect dispersed owners, (5) deter looting, asset-stripping and excessive leverage, and (6) cope with side effects. Modes of regulation either (a) facilitate M&A – collective action and call-right statutes – or (b) constrain M&A – disclosure laws, approval requirements, augmented duties, fairness requirements, regulation of terms, process and deal-related debt, and bans or structural limits. The paper synthesizes empirical research on types of transactions chosen, effects of law on M&A, and effects of M&A. Throughout, similarities and differences across transaction types and countries are noted. The paper concludes with observations about what these variations imply and how law affects economic activity.
John C. Coates, Cost-Benefit Analysis of Financial Regulation: Case Studies and Implications, 124 Yale L. J. 882 (2015).
Categories:
Banking & Finance
Sub-Categories:
Finance
,
Financial Reform
,
Economics
Type: Article
Abstract
Some members of Congress, the D.C. Circuit, and the legal academy are promoting a particular, abstract form of cost-benefit analysis for financial regulation: judicially enforced quantification. How would CBA work in practice, if applied to specific, important, representative rules, and what is the alternative? Detailed case studies of six rules—(1) disclosure rules under Sarbanes-Oxley section 404; (2) the SEC’s mutual fund governance reforms; (3) Basel III’s heightened capital requirements for banks; (4) the Volcker Rule; (5) the SEC’s cross-border swap proposals; and (6) the FSA’s mortgage reforms—show that precise, reliable, quantified CBA remains unfeasible. Quantified CBA of such rules can be no more than “guesstimated,” as it entails (a) causal inferences that are unreliable under standard regulatory conditions; (b) the use of problematic data; and/or (c) the same contestable, assumption-sensitive macroeconomic and/or political modeling used to make monetary policy, which even CBA advocates would exempt from CBA laws. Expert judgment remains an inevitable part of what advocates label “gold-standard” quantified CBA, because finance is central to the economy, is social and political, and is non-stationary. Judicial review of quantified CBA can be expected to do more to camouflage discretionary choices than to discipline agencies or promote democracy.
John C. Coates, IV, Darius Palia & Ge Wu, Reverse Termination Fees in M&A: Design, Signals, and Bidder Returns (Aug. 11, 2017).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Other
Abstract
Reverse termination fees (RTFs) are required payments for bidders to “walk away” from a merger or acquisition, and vary significantly in size and design, even within apparently similar deals. Using a large sample of manually collected U.S. deal contracts involving publicly traded bidders and targets, we examine the impact of different types of RTFs. Consistent with efficient contract theory, we find that inefficient RTF sizes and triggers correlate with significantly lower bidder abnormal returns, while efficient RTF sizes and triggers correlate with significantly higher bidder abnormal returns. Consistent with signaling theory, we also find evidence that the inclusion of some RTF triggers in the merger agreements reveals private information to the market, correlating with significant abnormal returns. Our findings have implications for how practitioners approach the design and negotiation of RTFs.
John C. Coates, John D. Dionne & David S. Scharfstein, GE Capital After the Crisis (Harvard Bus. Sch. Case 217-071, Apr. 2017).
Categories:
Banking & Finance
Sub-Categories:
Financial Markets & Institutions
,
Risk Regulation
Type: Other
Abstract
Keith Sherin, CEO of GE Capital, faced a decision on which hinged billions of dollars and the fate of one of America’s most storied companies. On his desk sat two secret analyses: Project Beacon, a proposal to spin off most of GE Capital to GE shareholders, and Project Hubble, a proposal to sell off GE Capital in parts. A third document sketched out the implications should GE “stay the course” on its present strategy: a continued, massive build-up of regulatory and compliance personnel to meet GE Capital’s obligations as a “SIFI”—systemically important financial institution—in the wake of the 2010 Dodd-Frank Act. No path forward was clear. A divestiture, either through a spin-off or sell-off, would reduce GE’s size and financial connectedness and address market unease about GE’s position as the seventh-largest U.S. financial institution. It would also unlock substantial value not currently reflected in the stock. Each faced major obstacles and execution risks, however. In particular, no one knew the precise cut-off for a SIFI designation or the time required to shed the designation. If the process took too long, or generated unexpected costs, a divestiture might destroy more value than it would create. Retaining GE Capital was risky, too, of course. Which set of risks was the right one to propose that the GE board accept?
John C. Coates, Why Have M&A Contracts Grown? Evidence from Twenty Years of Deals (Harvard Law Sch. John M. Olin Ctr. for Law, Econ. & Bus., Discussion Paper No. 889, 2016).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Securities Law & Regulation
Type: Article
Abstract
Over 20 years, M&A contracts have more than doubled in size – from 35 to 88 single-spaced pages in this paper’s font. They have also grown significantly in linguistic complexity – from post-graduate “grade 20” to post-doctoral “grade 30”. A substantial portion (lower bound ~20%) of the growth consists not of mere verbiage but of substantive new terms. These include rational reactions to new legal risks (e.g., SOX, FCPA enforcement, shareholder litigation) as well as to changes in deal and financing markets (e.g., financing conditions, financing covenants, and cooperation covenants; and reverse termination fees). New contract language also includes dispute resolution provisions (e.g., jury waivers, forum selection clauses) that are puzzling not for appearing new but in why they were ever absent. A final, notable set of changes reflect innovative deal terms, such as top-up options, which are associated with a 18-day (~30%) fall in time-to-completion and a 6% improvement in completion rates. Exploratory in nature, this paper frames a variety of questions about how an important class of highly negotiated contracts evolves over time.
John C. Coates, Ronald A. Fein, Kevin P. Crenny & Li Wei Vivian Dong, Quantifying Institutional Block Ownership, Domestic and Foreign, at Publicly Traded U.S. Corporations (Harvard Law Sch. John M. Olin Ctr. for Law, Econ. & Bus., Discussion Paper No. 888, 2016).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Business Organizations
Type: Article
Abstract
This short technical report provides an empirical analysis of the level of institutional block ownership overall, and of foreign block ownership, at a broad set of publicly traded corporations. Disclosed institutional blockholders of every company in the Standard & Poor’s 500 index are analyzed, and the distribution of blockholders is presented. Blockholders are identified as domestic or foreign entities, and whether they were majority owned or controlled by foreign entities. Roughly one in three companies in the S&P 500 has one or more block holders with 20 % ownership, and one in eleven (9%) has one or more foreign institutions each owning five percent or more blocks of stock. The descriptive data reported here may assist lawmakers, analysts, and investors in assessing the effects of globalization of capital markets and the interaction of country and governance risk, and in developing policies. Among other things, these data may inform debates on the degree to which domestic political spending by U.S. corporations conveys any potential for foreign influence through governance, and the likely costs and benefits of disclosure laws regarding such influence.
John C. Coates, IV, M & A Contracts: Purposes, Types, Regulation, and Patterns of Practice, in Research Handbook on Mergers and Acquisitions (Steven Davidoff Solomon & Claire A. Hill eds. 2016).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Book
John C. Coates, IV, Lucian A. Bebchuk, Reinier Kraakman & Mark J. Roe (with Bernard S. Black, John C. Coffee, James D. Cox, Ronald J. Gilson, Jeffrey N. Gordon, Lawrence A. Hamermesh, Henry Hansmann, Robert J. Jackson, Marcel Kahan, Vikramaditya S. Khanna, Michael Klausner, Donald C. Langevoort, Brian J.M. Quinn, Edward B. Rock & Helen S. Scott, Supreme Court Amicus Brief of 19 Corporate Law Professors, Friedrichs v. California Teachers Association, No. 14-915 (U.S. Nov. 6, 2015).
Categories:
Corporate Law & Securities
,
Constitutional Law
Sub-Categories:
First Amendment
,
Corporate Law
,
Shareholders
Type: Article
Abstract
The Supreme Court has looked to the rights of corporate shareholders in determining the rights of union members and non-members to control political spending, and vice versa. The Court sometimes assumes that if shareholders disapprove of corporate political expression, they can easily sell their shares or exercise control over corporate spending. This assumption is mistaken. Because of how capital is saved and invested, most individual shareholders cannot obtain full information about corporate political activities, even after the fact, nor can they prevent their savings from being used to speak in ways with which they disagree. Individual shareholders have no “opt out” rights or practical ability to avoid subsidizing corporate political expression with which they disagree. Nor do individuals have the practical option to refrain from putting their savings into equity investments, as doing so would impose damaging economic penalties and ignore conventional financial guidance for individual investors.
John C. Coates, The Volcker Rule as Structural Law: Implications for Cost-Benefit Analysis and Administrative Law, 10 Cap. Mkt. L.J. 447 (2015).
Categories:
Corporate Law & Securities
,
Banking & Finance
Sub-Categories:
Banking
,
Economics
,
Finance
,
Corporate Law
Type: Article
Abstract
The Volcker rule – a key part of Congress’s response to the financial crisis – is best understood as a “structural law,” a traditional Anglo-American technique for governance of hybrid public-private institutions such as banks and central banks. The tradition extends much farther back in time than the Glass-Steagall Act, to which the Volcker Rule has been unfavorably (but unfairly) compared. The goals of the Volcker Rule are complex and ambitious, and not limited to reducing risk directly, but include reshaping banks’ organizational cultures. Another body of structural laws – part of the core of administrative law – attempts to restrain and discipline regulatory agencies, through process requirements such as cost-benefit analysis (CBA). Could the Volcker rule be the subject of reliable, precise, quantified CBA? Given the nature of the Volcker rule as structural law, its ambitions, and the current capacities of CBA, the answer is clearly “no,” as it would require regulators to anticipate, in advance of data, private market behavior in response to novel activity constraints. If administrative law is to improve regulatory implementation of structural laws such as the Volcker Rule, better fitting and more nuanced tools than CBA are needed.
John C. Coates, IV, Thirty Years of Evolution in the Roles of Institutional Investors in Corporate Governance, in Research Handbook on Shareholder Power ch. 4 (Jennifer G. Hill and Randall S. Thomas, eds., 2015).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Shareholders
Type: Book
Abstract
Much of the history of corporate law has concerned itself not with shareholder power, but rather with its absence. Recent shifts in capital market structure require a reassessment of the role and power of shareholders.
John C. Coates, IV, Corporate Speech & the First Amendment: History, Data, and Implications, 30 Const. Comment. 223 (2015).
Categories:
Constitutional Law
,
Corporate Law & Securities
Sub-Categories:
First Amendment
,
Corporate Law
,
Business Organizations
Type: Article
Abstract
This Article draws on empirical analysis, history, and economic theory to show that corporations have begun to displace individuals as direct beneficiaries of the First Amendment and to outline an argument that the shift reflects economically harmful rent seeking. The history of corporations, regulation of commercial speech, and First Amendment case law is retold, with an emphasis on the role of constitutional entrepreneur Justice Lewis Powell, who prompted the Supreme Court to invent corporate and commercial speech rights. The chronology shows that First Amendment doctrine long post-dated both pervasive regulation of commercial speech and the rise of the U.S. as the world’s leading economic power – a chronology with implications for originalists, and for policy. Supreme Court and Courts of Appeals decisions are analyzed to quantify the degree to which corporations have displaced individuals as direct beneficiaries of First Amendment rights, and to show that they have done so recently, but with growing speed since Virginia Pharmacy, Bellotti, and Central Hudson. Nearly half of First Amendment challenges now benefit business corporations and trade groups, rather than other kinds of organizations or individuals, and the trend-line is up. Such cases commonly constitute a form of corruption: the use of litigation by managers to entrench reregulation in their personal interests at the expense of shareholders, consumers, and employees. In aggregate, they degrade the rule of law, rendering it less predictable, general and clear. This corruption risks significant economic harms in addition to the loss of a republican form of government.
John C. Coates, IV, Jesse M. Fried, & Kathryn E. Spier, What Courses Should Law Students Take? Lessons from Harvard’s Big Law Survey, 64 J. Legal Educ. 443 (2015).
Categories:
Corporate Law & Securities
,
Legal Profession
,
Banking & Finance
Sub-Categories:
Finance
,
Legal Education
,
Legal Services
Type: Article
Abstract
We report the results of an online survey, conducted on behalf of Harvard Law School, of 124 practicing attorneys at major law firms. The survey had two main objectives: (1) to assist students in selecting courses by providing them with data about the relative importance of courses; and (2) to provide faculty with information about how to improve the curriculum and best advise students. The most salient result is that students were strongly advised to study accounting and financial statement analysis, as well as corporate finance. These subject areas were viewed as particularly valuable, not only for corporate/transactional lawyers, but also for litigators. Intriguingly, non-traditional courses and skills, such as business strategy and teamwork, are seen as more important than many traditional courses and skills.
John C. Coates, IV, Cost-Benefit Analysis of Financial Regulation: A Reply, 124 Yale L.J. F. 305 (Jan. 22, 2015).
Categories:
Government & Politics
Sub-Categories:
Administrative Law & Agencies
Type: Article
John C. Coates, IV, Securities Litigation in the Roberts Court: An Early Assessment, 57 Ariz. L. Rev. 1 (2015).
Categories:
Corporate Law & Securities
,
Government & Politics
Sub-Categories:
Securities Law & Regulation
,
Supreme Court of the United States
,
Judges & Jurisprudence
Type: Article
John C. Coates, IV, Towards Better Cost-Benefit Analysis: An Essay on Regulatory Management, 78 Law & Contemp. Probs. 1 (2015).
Categories:
Government & Politics
Sub-Categories:
Administrative Law & Agencies
Type: Article
John C. Coates & Suraj Srinivasan, SOX after Ten Years: A Multidisciplinary Review, 28 Accounting Horizons 627 (2014).
Categories:
Corporate Law & Securities
Sub-Categories:
Securities Law & Regulation
Type: Article
Abstract
We review and assess research findings from more than 120 papers in accounting, finance, and law to evaluate the impact of the Sarbanes-Oxley Act. We describe significant developments in how the Act was implemented and find that despite severe criticism, the Act and institutions it created have survived almost intact since enactment. We report survey findings from informed parties that suggest that the Act has produced financial reporting benefits. While the direct costs of the Act were substantial and fell disproportionately on smaller companies, costs have fallen over time and in response to changes in its implementation. Research about indirect costs such as loss of risk taking in the U.S. is inconclusive. The evidence for and social welfare implications of claimed effects such as fewer IPOs or loss of foreign listings are unclear. Financial reporting quality appears to have gone up after SOX but research on causal attribution is weak. On balance, research on the Act's net social welfare remains inconclusive. We end by outlining challenges facing research in this area, and propose an agenda for better modeling costs and benefits of financial regulation.
John C. Coates, Explaining Variations in Takeover Defenses: Blame the Lawyers, in Law and Economics of Mergers and Acquisitions (Steven M. Davidoff & Claire A. Hill eds., 2013).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Book
John C. Coates, Corporate Politics, Governance, and Value Before and After Citizens United, 9 J. Empirical Legal Stud. 657 (2012).
Categories:
Corporate Law & Securities
,
Disciplinary Perspectives & Law
Sub-Categories:
Corporate Governance
,
Shareholders
,
Empirical Legal Studies
Type: Article
Abstract
How did corporate politics, governance, and value relate to each other in the S&P 500 before and after Citizens United? In regulated and government-dependent industries, politics is nearly universal, and uncorrelated with shareholder power, agency costs, or value. However, 11 percent of CEOs in 2000 who retired by 2011 obtained political positions after retiring and, in most industries, political activity correlates negatively with measures of shareholder power, positively with signs of agency costs, and negatively with shareholder value. The politics-value relationship interacts with capital expenditures, and is stronger in regressions with firm and time fixed effects, which absorb many omitted variables. After the shock of Citizens United, corporate lobbying and PAC activity jumped, in both frequency and amount, and firms politically active in 2008 had lower value in 2010 than other firms, consistent with politics at least partly causing and not merely correlating with lower value. Overall, the results are inconsistent with politics generally serving shareholder interests, and support proposals to require disclosure of political activity to shareholders.
John C. Coates, Evidence-based M&A: Less Can Be More When Allocating Risk in Deal Contracts, 27 J. Int'l Banking & Fin. L. 708 (2012).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Article
John C. Coates, Explaining Variation in Takeover Defenses: Blame the Lawyers, in Mergers and the Market for Corporate Control (Fred S. McChesney ed., 2012).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Book
John C. Coates, Managing Disputes Through Contract: Evidence from M&A, 2 Harv. Bus. L. Rev. 295 (2012).
Categories:
Corporate Law & Securities
,
Banking & Finance
,
Civil Practice & Procedure
Sub-Categories:
Contracts
,
Mergers & Acquisitions
,
Arbitration
,
Choice of Law
,
Dispute Resolution
,
Litigation & Settlement
Type: Article
Abstract
An important set of contract terms manages potential disputes. In a detailed, hand-coded sample of mergers and acquisition (M&A) contracts from 2007 and 2008, dispute management provisions correlate strongly with target ownership, state of incorporation, and industry, and with the experience of the parties’ law firms. For Delaware, there is good and bad news. Delaware dominates choice for forum, whereas outside of Delaware, publicly held targets’ states of incorporation are no more likely to be designated for forum than any other court. However, Delaware’s dominance is limited to deals for publicly held targets incorporated in Delaware, Delaware courts are chosen only 20% of the time in deals for private targets incorporated in Delaware, and they are never chosen for private targets incorporated elsewhere, or in asset purchases. A forum goes unspecified in deals involving less experienced law firms. Whole contract arbitration is limited to private targets, is absent only in the largest deals, and is more common in cross-border deals. More focused arbitration––covering price-adjustment clauses––is common even in the largest private target bids.Specific performance clauses––prominently featured in recent high-profile M&A litigation––are less common when inexperienced M&A lawyers involved. These findings suggest (a) Delaware courts’ strengths are unique in, but limited to, corporate law, even in the “corporate” context of M&A contracts; (b) the use of arbitration turns as much on the value of appeals, trust in courts, and value-at-risk as litigation costs; and (c) the quality of lawyering varies significantly, even on the most “legal” aspects of an M&A contract.
John C. Coates & Taylor Lincoln, A Campaign Finance Job for the SEC, Wash. Post, Sept. 7, 2011, at A19.
Categories:
Corporate Law & Securities
,
Government & Politics
Sub-Categories:
Shareholders
,
Securities Law & Regulation
,
Elections & Voting
Type: News
Abstract
The Supreme Court's January 2010 Citizens United decision to permit corporations to spend unlimited sums to influence federal elections was premised on a pair of yet-unfulfilled promises: Corporations would disclose their expenditures, and shareholders would be able to police such spending. The best chance to fulfill those promises may now rest with the Securities and Exchange Commission. The SEC could require disclosure of political spending by public companies and facilitate action by shareholders to sign off on such spending.
John C. Coates & Taylor Lincoln, Fulfilling the Promise of Citizens United, Wash. Post, Sept. 6, 2011, Opinion.
Categories:
Corporate Law & Securities
,
Government & Politics
Sub-Categories:
Securities Law & Regulation
,
Elections & Voting
Type: News
Abstract
The Supreme Court’s January 2010 Citizens United decision to permit corporations to spend unlimited sums to influence federal elections was premised on a pair of yet-unfulfilled promises: Corporations would disclose their expenditures, and shareholders would be able to police such spending. The best chance to fulfill those promises may now rest with the Securities and Exchange Commission. The SEC could require disclosure of political spending by public companies and facilitate action by shareholders to sign off on such spending. Contrary to the consensus view, however, SEC action may prove to be a favor to the owners of the affected corporations. Despite reflexive opposition to the disclosure of political spending from many self-appointed business advocates, research we are publishing Wednesday suggests that disclosure of political activity might benefit corporate valuations and, at the least, mandatory disclosure would pose no threat of a detrimental effect.
John C. Coates, Michele M. DeStefano, Ashish Nanda & David B. Wilkins, Hiring Teams, Firms, and Lawyers: Evidence of the Evolving Relationships in the Corporate Legal Market, 36 Law & Soc. Inquiry 999 (2011).
Categories:
Legal Profession
,
Disciplinary Perspectives & Law
,
Corporate Law & Securities
Sub-Categories:
Corporate Law
,
Empirical Legal Studies
,
Legal Services
Type: Article
Abstract
How are relationships between corporate clients and law firms evolving? Drawing on interview and survey data from 166 chief legal officers of S&P 500 companies from 2006–2007, we find that—contrary to standard depictions of corporate client-provider relationships—(1) large companies have relationships with ten to twenty preferred providers; (2) these relationships continue to be enduring; and (3) clients focus not only on law firm platforms and lead partners, but also on teams and departments within preferred providers, allocating work to these subunits at rival firms over time and following “star” lawyers, especially if they move as part of a team. The combination of long-term relationships and subunit rivalry provides law firms with steady work flows and allows companies to keep cost pressure on firms while preserving relationship-specific capital, quality assurance, and soft forms of legal capacity insurance. Our findings have implications for law firms, corporate departments, and law schools.
John C. Coates, M&A Break Fees: U.S. Litigation Versus UK Regulation, in Regulation versus Litigation: Perspectives from Economics and Law 239 (Daniel P. Kessler ed., 2011).
Categories:
Corporate Law & Securities
,
Civil Practice & Procedure
,
Disciplinary Perspectives & Law
,
International, Foreign & Comparative Law
Sub-Categories:
Mergers & Acquisitions
,
Litigation & Settlement
,
Law & Economics
,
European Law
Type: Book
Erik Ramanathan & John C. Coates, Corporate Purchasing Project: How S&P Companies Evaluate Outside Counsel (Harvard L. Sch. Program on the Legal Profession, 2011).
Categories:
Legal Profession
,
Corporate Law & Securities
Sub-Categories:
Corporate Law
,
Legal Services
Type: Other
Abstract
This report marks the culmination of the Program on the Legal Profession's Corporate Purchasing Project—more than four years of scholarly research dedicated to examination of the ways in which S&P 500 legal departments hire and manage outside counsel, drawing from six academic papers. How are relationships between clients and service providers in the corporate legal market evolving, and why? Answering this critically important question requires both the availability of unbiased quantitative information about how large corporations make law firm hiring and assessment decisions and a robust qualitative and theoretical framework to evaluate broader variations and trends. This novel empirical data is drawn from surveys and interviews of 166 chief legal officers (“CLOs”) of S&P 500 companies—one-third of all such large publicly traded companies. Specifically, this paper explores four topics of substantial importance about which there is little systematic information: • How do these companies evaluate the quality of legal service providers when making hiring and legal management decisions? • Under what circumstances do these companies discipline or terminate their relationship with their law firms? • How do these companies evaluate whether to follow “star” lawyers when they change law firms? • In what ways do these companies manage the intersection between law and public relations?
John C. Coates, The Downside of Judicial Restraint: The (Non-)Effect of Jones v. Harris, 6 Duke J. Const. L. & Pub. Pol'y 58 (2010).
Categories:
Corporate Law & Securities
Sub-Categories:
Fiduciaries
,
Shareholders
Type: Article
Abstract
In Jones v. Harris, the Supreme Court rejected Judge Easterbrook's decision for the Seventh Circuit to narrow the grounds on which a mutual fund shareholder could win a fiduciary duty case against a mutual fund adviser under the Investment Company Act. In this article, I assess the likely impact of Jones and evaluate the Supreme Court's decision to exercise what might be called "judicial restraint" in its analysis. I show that the decision is unlikely to have a significant impact on fiduciary duty cases, and present preliminary data consistent with the idea that such cases are currently being brought against the wrong defendants (advisers to large funds) and not against the right ones (advisers charging extraordinarily high fees). I suggest that the "judicial restraint" exercised in Jones is in fact pernicious in this context, one in which courts must necessarily interpret a vague statute.
Carol Bowie, John C. Coates, Justice Jack B. Jacobs, Stephen P. Lamb & Theodore N. Mirvis, Corporate Governance After the Financial Crisis, 6 N.Y.U. J.L. & Bus. 171 (2010)(Proceedings of the 2010 Annual Symposium: Legal Aftershocks of the Global Financial Crisis).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
Type: Article
John C. Coates, The Keynote Papers and the Current Financial Crisis, 47 J. Accounting Res. 427 (2009).
Categories:
Banking & Finance
Sub-Categories:
Finance
,
Financial Markets & Institutions
,
Risk Regulation
Type: Article
Abstract
One hesitates to write history as it happens, or to draw policy lessons from current events. The conference took place in May 2008 - after the government-assisted takeover of Bear Stearns but before a capital market downturn fueled a system-wide liquidity crisis, with successive insolvencies at IndyMac, Fannie Mae, Freddie Mac, Lehman, AIG, WaMu, and, as I write, Citigroup. But it would be odd to comment on capital market regulation without mentioning the events of the last three months. I am first to acknowledge that anything I might have written in May would not have foreseen the crisis or linked capital market regulation to financial institutions, which in the US have been conventionally treated as discrete in discourse and institutions (e.g., U.S. Treasury 2008; Leuz and Wysocki 2008).
John C. Coates & David S. Scharfstein, The Bailout is Robbing the Banks, N.Y. Times, Feb. 18, 2009, at A27.
Categories:
Banking & Finance
Sub-Categories:
Banking
,
Financial Markets & Institutions
Type: News
Abstract
Many Americans are angry at banks for taking bailout money while still cutting back on lending. But the government is also to blame. For reasons that remain unclear, the Troubled Asset Relief Program has channeled aid to bank holding companies rather than banks. The Obama administration’s new Financial Stability Plan will have more influence on bank lending if it actually directs its support to banks. To see why, it’s important to understand the distinction between banks and bank holding companies. Banks take deposits and make loans to consumers and corporations. Bank holding companies own or control these banks. The big holding companies also own other businesses, including ones that execute trades both on their clients’ behalf and for themselves.
John C. Coates & David Scharfstein, Lowering the Cost of Bank Recapitalization, 26 Yale J. on Reg. 373 (2009).
Categories:
Banking & Finance
Sub-Categories:
Banking
,
Financial Markets & Institutions
Type: Article
Abstract
Efforts to recapitalize banks in the current crisis have to date been focused on government assistance under the TARP, rather than private investment, and on bank holding companies, rather than banks. We describe three alternative or complementary approaches designed to lower the cost of bank recapitalizations by drawing in funds from the private sector and focusing on banks: rights offerings, debt restructurings, and FDIC-assisted bridge banks. Each approach was used in dealing with problem banks in the 1990s; each can be pursued without additional legislation; and each is worth considering now. We also propose two legal changes that would assist bank recapitalization: (1) the Fed should further modestly relax its rules under the Bank Holding Company Act to eliminate the presumption of "control" by investors at the current threshold of 5%, which would permit more capital to be invested in banks by private equity and other institutional investors; and (2) Congress should consider a new statute to streamline the recapitalization of bank holding companies by moving them outside current bankruptcy laws into a new resolution regime similar to the FDIC regime currently used for banks.
John C. Coates, Reforming the Taxation and Regulation of Mutual Funds: A Comparative Legal And Economic Analysis, 1 J. Legal Analysis 591 (2009).
Categories:
Banking & Finance
,
Taxation
,
Corporate Law & Securities
,
International, Foreign & Comparative Law
Sub-Categories:
Investment Products
,
Financial Reform
,
Financial Markets & Institutions
,
Securities Law & Regulation
,
Comparative Law
,
Tax Policy
Type: Article
Abstract
Most Americans invest through mutual funds. A comparison of US tax and securities law governing mutual funds with laws governing other collective investments, in both the US and in the EU, shows: (a) the US fund industry continues to be the world leader, but now lags domestic and foreign competitors, primarily because of US tax and securities law; (b) mutual funds are taxed less favorably and regulated more extensively in the US than direct investments or other collective investments, including alternatives available only to wealthy investors; (c) the structure of US regulation - numerous proscriptive bright-line rules written nearly 70 years ago, subject to SEC exemptions - makes success of US mutual funds dependent on the resources, responsiveness and flexibility of the SEC; (d) while the high-level formal framework for mutual funds in the EU is as or more restrictive and inflexible in most respects than the Investment Company Act, competitive pressures in the EU constrain supervisors in EU countries to be more flexible in adopting implementing regulations, and EU regulators have greater resources and are more responsive than the SEC, which could achieve the same flexibility and responsiveness through exemptive orders but has been unwilling or unable to do so in a timely fashion. The paper discusses a number of reforms to improve the treatment of middle class investments, including improvements in mutual fund taxation, ways to enhance the flexibility and resources of US fund regulators, modifications of the existing ban on asymmetric advisor compensation and the exclusion of foreign funds, and unjustified disparities in the treatment of mutual funds and mutual fund substitutes.
John C. Coates, The Goals and Promise of the Sarbanes-Oxley Act, 21 J. Econ. Persp. 91 (2007).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Corporate Law
Type: Article
John C. Coates & Reinier Kraakman, CEO Tenure, Performance and Turnover in S&P 500 Companies (John M. Olin Ctr. for Law, Econ., & Bus. Discussion Paper No. 595, ECGI - Finance Working Paper No. 191/2007, Sept. 2007).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Law
Type: Article
Abstract
The centrality of the CEO is reflected in the empirical literature linking CEO turnover to poor firm performance. However, less is known about the institutional and personal correlates of CEO turnover. In this study, we find two CEO characteristics interact with turnover: tenure and ownership. We interpret our results as indicating that CEOs of S&P 500 firms divide into two groups with different tenure patterns – “owners” (who have large personal shareholdings) and “managers” (who have smaller holdings). The tenure of manager-CEOs (as opposed to owner-CEOs) exhibits a term structure loosely similar to the one produced by the tenure process at academic institutions. Turnover significantly depends on firm performance during a CEO’s first four years on the job. In particular, external turnover by sale of the firm peaks a year 4 during a CEO tenure. By contrast, external turnover peaks at years 5 – 6, and plateaus at relatively high levels until year 9 of tenure. These term effects are strongest for relatively young CEOs. We also find that forced exit, retirement, and deals covary rather than substitute for one another as modes of CEO turnover. However, forced exits and deals both relate to poor performance by the firm on different metrics. Our evidence suggests that most internal turnover, particularly after a CEO’s first five years, is unrelated to firm performance.
John C. Coates & Glenn Hubbard, Competition in the Mutual Fund Industry: Evidence and Implications for Policy, 33 J. Corp. L. 151 (2007).
Categories:
Banking & Finance
,
Corporate Law & Securities
Sub-Categories:
Financial Markets & Institutions
,
Investment Products
,
Shareholders
,
Fiduciaries
,
Securities Law & Regulation
Type: Article
Abstract
Since 1960 the mutual fund industry has grown from 160 funds and $18 billion in assets under management to over 8,000 funds with $10.4 trillion in assets. Yet critics - including Yale Chief Investment Officer David Swensen, Vanguard founder Jack Bogle, and New York Governor Eliot Spitzer - call for more fund regulation, claiming that competition has not protected investors from excessive fees. Starting in 2003, the number of class action suits against fund advisors increased sharply, and, consistent with critics' views, some courts have excluded or treated skeptically evidence of competition and comparable fees of other funds. Skepticism about fund competition dates to the 1960s, when the SEC accepted the view that market forces fail to constrain advisory fees, in part because fund boards rarely fire advisors. In this article, we show that economic theory, empirical evidence, and careful analysis of the laws and institutions that shape mutual funds refute this view. Fund critics overlook the most salient characteristic of a mutual fund: redeemable shares. While boards rarely fire advisors, fund investors may fire advisors at any time by redeeming shares and switching into other investments. Industry concentration is low, new entry is common, barriers to entry are low, and empirical studies - including new evidence presented in this article - show higher advisory fees significantly reduce fund market shares, and so constrain fees. Fund performance is consistent with competition exerting a strong disciplinary force on funds and fees. Our findings lead us to reject the critics' views in favor of the legal framework established by §36(b) of the Investment Company Act and the lead case interpreting that law (the Gartenberg decision), while suggesting Gartenberg is best interpreted to allow the introduction of evidence regarding competition between funds.
John C. Coates, Ownership, Takeovers and EU Law: How Contestable Should EU Corporations Be?, in Reforming Company and Takeover Law in Europe (Guido Ferrarini, Klaus J. Hopt, Japp Winter & Eddy Wymeersch eds., 2004).
Categories:
Corporate Law & Securities
,
International, Foreign & Comparative Law
Sub-Categories:
Mergers & Acquisitions
,
European Law
Type: Book
Lucian A. Bebchuk, John C. Coates & Guhan Subramanian, The Trouble with Staggered Boards: A Reply to Georgeson's John Wilcox, 11 Corp. Governance Advisor 17 (2003).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Corporate Governance
Type: Article
Abstract
In recent work, we presented evidence indicating that staggered boards have adverse effects on target shareholders. John Wilcox, the Vice-Chair of Georgeson, recently published a critique of our work, urging shareholders to support staggered boards. We respond in this article to Wilcox's critique and explain why it does not weaken in any way our analysis of staggered boards. The study criticized by Wilcox, "The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy," 54 Stanford Law Review 887-951 (2002), is available at http://ssrn.com/abstract=304388. In a separate reply, "The Powerful Antitakeover Force of Staggered Boards: Further Findings and a Reply to Symposium Participants," 55 Stanford Law Review 885-917 (2002), which is available at http://ssrn.com/abstract=360840, we respond to several other responses to our original study and present additional evidence that confirms its conclusions.
Lucian A. Bebchuk, John C. Coates & Guhan Subramanian, The Powerful Antitakeover Force of Staggered Boards: Further Findings and a Reply to Symposium Participants, 55 Stan. L. Rev. 885 (2002).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Corporate Law
Type: Article
Lucian A. Bebchuk, John C. Coates & Guhan Subramanian, The Powerful Antitakeover Force of Staggered Boards: Theory, evidence, and policy, 54 Stan. L. Rev. 887 (2002).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Corporate Law
,
Mergers & Acquisitions
Type: Article
Abstract
Staggered boards, which a majority of public companies now have, provide a powerful antitakeover defense, stronger than is commonly recognized. They provide antitakeover protection both by (i) forcing any hostile bidder, no matter when it emerges, to wait at least one year to gain control of the board and (ii) requiring such a bidder to win two elections far apart in time rather than a one-time referendum on its offer. Using a new data set of hostile bids in the five-year period 1996-2000, we find that not a single hostile bid won a ballot box victory against an 'effective' staggered board (ESB). We also find that an ESB nearly doubled the odds of remaining independent for an average target in our data set, from 34% to 61%, halved the odds that a first bidder would be successful, from 34% to 14%, and reduced the odds of a sale to a white knight, from 32% to 25%. Furthermore, we find that the shareholders of targets that remained independent were made worse off compared with accepting the bid and that ESBs did not provide sufficient countervailing benefits in terms of increased premiums to offset the costs of remaining independent. Overall, we estimate that, in the period studied, ESBs reduced the returns of shareholders of hostile bid targets on the order of 8-10%. Finally, we show that most staggered boards were adopted before the developments in takeover doctrine that made ESBs such a potent defense. Selected by academics as one of the “top ten” articles in corporate/securities law for 2002, out of 350 articles published in that year.
Lucian A. Bebchuk, John C. Coates & Guhan Subramanian, The Powerful Antitakeover Force of Staggered Boards: Further Findings and a Reply to Symposium Participants, 55 Stan. L. Rev. 885 (2002).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Corporate Governance
Type: Article
Abstract
This paper develops and defends our earlier analysis of the powerful antitakeover force of staggered boards. We reply to five responses to our work, by Stephen Bainbridge, Mark Gordon, Patrick McGurn, Leo Strine, and Lynn Stout, which are to be published in a Stanford Law Review Symposium. We present new empirical evidence that extends our earlier findings, confirms our conclusions, and demonstrates that the alternative theories put forward by some commentators do not adequately explain the evidence. Among other things, we find that having a majority of independent directors does not address the concern that defensive tactics might be abused. We also find that effective staggered boards do not appear to have a significant beneficial effect on premia in negotiated transactions. Finally, we show that, unlike our approach, the approach that our critics advocate for Delaware takeover jurisprudence to follow is both inconsistent with its established principles and takes an extreme position in the overall debate on takeover defenses. Our analysis and new findings further strengthen the case for limiting the ability of incumbents armed with a staggered board to continue saying no after losing an election conducted over an acquisition offer.
John C. Coates, Explaining Variation in Takeover Defenses: Blame the Lawyers, 89 Calif. L. Rev. 1301 (2001).
Categories:
Corporate Law & Securities
,
Legal Profession
Sub-Categories:
Securities Law & Regulation
,
Shareholders
,
Corporate Governance
,
Legal Services
Type: Article
Abstract
Traditional law and economics scholarship predicts that no companies will adopt takeover defenses prior to IPOs, because defenses increase agency costs between shareholders and managers, and reduce IPO proceeds. In fact, data from 357 IPOs in the 1990s show that many companies adopt defenses prior to IPOs. Even more puzzling for conventional scholarship, defenses vary widely at the IPO stage. Analysis shows that more of this variation in defenses can be explained by characteristics of law firms advising owner-managers than by traditional theories about defenses. Among other findings: (1) Companies advised by larger law firms with more takeover experience adopt more defenses; (2) In 1991-92, companies with Silicon Valley lawyers adopted almost no defenses; by 1998, Silicon Valley lawyers' clients were as likely to use defenses as clients of other lawyers; (3) Companies with high-quality underwriters and venture capital backing adopt more defenses; (4) The overall rate of defense adoption increased in the 1990s. Together, these findings provide strong evidence that lawyers determine key terms in the "corporate contract," due to agency costs between owner-managers and their lawyers.
John C. Coates & Bradley C. Faris, Second-Generation Shareholder Bylaws: Post-Quickturn Alternatives, 56 Bus. Law. 1323 (2001).
Categories:
Corporate Law & Securities
Sub-Categories:
Shareholders
,
Corporate Governance
Type: Article
John C. Coates, Private vs. Political Choice of Securities Regulation: A Political Cost/Benefit Analysis, 41 Va. J. Int'l L. 531 (2001).
Categories:
Corporate Law & Securities
Sub-Categories:
Securities Law & Regulation
Type: Article
John C. Coates, Takeover Defenses in the Shadow of the Pill: A Critique of the Scientific Evidence, 79 Texas L. Rev. 271 (2000).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Article
Abstract
Two decades of research on poison pills and other takeover defenses does not support the belief - common among legal academics - that defenses reduce firm value. Even by their own terms, defense studies produced weak and inconsistent results, and failed to discriminate among information effects of defense adoptions. But prior studies suffer from serious, previously unrecognized design flaws: (1) pill studies assume pill adoption has an effect on takeover vulnerability and fail to recognize that nearly every firm already has a "shadow pill," making pill adoption relatively unimportant; and (2) all studies fail to account for ways defenses interact, such as the way that the shadow pill has made fair price and supermajority vote provisions unimportant. Not only do these flaws help explain the weak results of such studies, but the flaws are consistent with new evidence on bid outcomes, and recognizing them should improve future research on defenses.
John C. Coates, The Contestability of Corporate Control: A Critique of the Scientific Evidence on Takeover Defenses, 79 Texas L. Rev. 271 (2000).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Corporate Governance
Type: Article
Abstract
Two decades of empirical research on poison pills and other takeover defenses does not support the belief - common among legal academics - that defenses reduce firm value. Even by their own terms, such studies produced weak and inconsistent results, and have not been well designed to discriminate among information effects of midstream defense adoptions. But prior studies suffer from three additional, serious, and previously unrecognized design flaws: (1) pill studies wrongly assume that pill adoption has an effect on takeover vulnerability; (2) studies of antitakeover amendments (ATAs) focus on terms made vestigial by the pill; and (3) all studies fail to account for ways defenses interact. Recognition of these flaws helps explains the weak and mixed results of such studies, and should improve future empirical research on takeover defenses.
John C. Coates & Guhan Subramanian, A Buy-Side Model of M&A Lockups: Theory and Evidence, 53 Stan. L. Rev. 307 (2000).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Article
Abstract
Lockups are an increasingly important element of M&A deals in the United States. We present, for the first time, descriptive data on lockup incidence, trends, and their relationship with Delaware case law. Prior commentators have used theoretical models to argue that lockups should have little or no impact on allocational efficiency in the market for corporate control. We use data from twelve years of M&A activity in the United States to show that prior models have little predictive power in real-world transactions. We then offer a new theoretical model of lockups that includes six "buy-side" distortions: agency costs, tax effects, informational effects, switching costs, reputational effects, and endowment effects for bidders. The implications of this new model suggest that courts and corporate boards should scrutinize lockups more closely than prior commentators have advocated.
John C. Coates, Empirical Evidence on Structural Takeover Defenses: Where Do We Stand?, 54 U. Miami L. Rev. 783 (2000).
Categories:
Disciplinary Perspectives & Law
,
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
,
Empirical Legal Studies
Type: Article
John C. Coates, "Fair Value" as an Avoidable Rule of Corporate Law: Minority Discounts in Conflict Transactions, 147 U. Pa. L. Rev. 1251 (1999).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Article
Abstract
At the center of every management buyout or freezeout is the question, how should minority shares be valued?, and in valuing minority shares, the principal valuation question is, should value be "discounted" to reflect the non-controlling status of minority shares? Minority discounts impact both ex post deal prices and ex ante share value. For example, in the 1996 Levi Strauss buyout, a minority discount of 35% would have reduced total fair value by $1.5 billion. Yet the law governing minority discounts is unpredictable and obscure. Although the Delaware Supreme Court has rejected discounts in theory, case law analysis reveals that lower courts have (erratically) applied them in practice. While the law on fair value is thought to be mandatory, it is not. Firms and investors may contract around law regarding discounts, as with nearly all rules of corporate law (a fact that has led Bernard Black to ask whether corporate law should be characterized as "trivial"). Firms can contract around the currently unpredictable discount law by adopting fair price charter provisions, entering into buy/sell agreements, or issuing redeemable stock. These two legal facts present an economic puzzle. Parties have an incentive to contract around nonmandatory (or "default") rules that create uncertainty. Yet issuing firms have generally not contracted for a clear discount rule. In fact, firms rarely contract around unclear default rules of corporate law. Economic theory provides three compatible answers: First, the cost of contracting for a ban on discounts -- including the cost of potential signalling effects -- may exceed the benefits of such a contract. Second, firms that attempt to contract around discount rules may encounter network and innovation externalities. Third, investors may overpay for minority shares by taking Delaware law at face value, an answer that is at odds with the efficient market hypothesis but supported by the lack of adequate disclosure and commentary regarding discount law. These constraints suggest that default rules of corporate law may be far from trivial. Minority discounts raise two difficult legal policy questions. First, what should the discount rule be? I argue that a rule excluding discounts is the better rule because it appears more likely to be the efficient rule and because non-efficiency rationales for accepting discounts are weak. This conclusion is contrary to a recent proposal by Benjamin Hermalin & Alan Schwartz, who argue for using minority share market prices in setting fair value, but who are too sanguine about the ability of existing laws to adequately constrain value-reducing transactions. This conclusion is supported by evidence of actual bargains and theoretical approaches that take account of the asymmetric information confronting firms and investors in the securities markets. Excluding discounts is also more likely to reduce transaction costs. Second, should the discount rule remain nonmandatory? I argue that, in the context of initial public offerings accompanied by adequate disclosure, the rule should remain nonmandatory. In my concluding remarks, I describe the practical difficulties of separating minority discounts from control premiums, and propose a procedural rule to assist courts in doing so.
John C. Coates, Measuring the Domain of Mediating Hierarchy: How Contestable are U.S. Public Corporations?, 24 J. Corp. L. 837 (1999).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Mergers & Acquisitions
Type: Article
Abstract
Recent scholarship by Blair & Stout has suggested that a "mediating hierarchy" version of a team production model can explain enduring features of corporate law that cannot easily be explained by agency theory. This article argues and reviews data demonstrating that "mediating hierarchy" (1) clearly does not describe a significant number of public companies, which are either manager-dominated or controlled by a single shareholder; (2) probably does not describe companies subject to the market for corporate control, which remains vigorous (notwithstanding the "poison pill"); but (3) may describe those public companies with both active "outsider" boards and a set of governance terms that delay takeovers sufficiently to dampen the effect of the market for corporate control, as well as close corporations that credibly commit to becoming such public companies. The article concludes with a review of significant, unanswered empirical questions bearing on the domain of mediating heirarchy in corporate law and on corporate governance more generally.
John C. Coates, Reassessing Risk-Based Capital in the 1990s: Encouraging Consolidation and Productivity, in Bank Mergers and Acquisitions 207 (Yakov Amihud & Geoffrey Miller, eds., 1998).
Categories:
Banking & Finance
,
Corporate Law & Securities
Sub-Categories:
Banking
,
Financial Markets & Institutions
,
Risk Regulation
,
Mergers & Acquisitions
Type: Book
Abstract
As the financial services industry becomes increasingly international, the more narrowly defined and historically protected national financial markets become less significant. Consequently, financial institutions must achieve a critical size in order to compete. Bank Mergers & Acquisitions analyses the major issues associated with the large wave of bank mergers and acquisitions in the 1990's. While the effects of these changes have been most pronounced in the commercial banking industry, they also have a profound impact on other financial institutions: insurance firms, investment banks, and institutional investors. Bank Mergers & Acquisitions is divided into three major sections: A general and theoretical background to the topic of bank mergers and acquisitions; the effect of bank mergers on efficiency and shareholders' wealth; and regulatory and legal issues associated with mergers of financial institutions. It brings together contributions from leading scholars and high-level practitioners in economics, finance and law.
John C. Coates, Freezeouts, Management Buyouts and Going Private, in Takeovers & Freezeouts (Martin Lipton & Erica H. Steinberger eds., 1998).
Categories:
Corporate Law & Securities
Sub-Categories:
Mergers & Acquisitions
Type: Book
John C. Coates, State Takeover Statutes and Corporate Theory: The Revival of an Old Debate, 64 N.Y.U. L. Rev. 806 (1989).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Law
,
Mergers & Acquisitions
Type: Article

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