Do IPOs of Companies with an Innovative “Up-C” Structure Harm Public Shareholders?

The umbrella partnership corporation (“Up-C”) IPO structure allows an entity taxed as a partnership to go public by creating a shell corporation that sits above, and whose sole asset is units of, the historic partnership.  Unlike a traditional IPO where all owners hold shares of the public corporation, in an Up-C structure, shares of the public shell corporation are sold to the public while the pre-IPO owners continue to own their economic interests directly in the historic partnership (see Shobe 2017, Supercharged IPOs and the Up-C, for an overview).  A primary benefit of the Up-C IPO structure is that, … Read more