Sky Blog
Delaware’s regime governing controlling shareholders relies on the courts’ ability to police conflicted transactions under the stringent “entire fairness” standard of review. In theory, judicial review under this standard allows judges to distinguish between fair transactions and those that are …
The January 2023 study “ESG Performance and Enterprise Value: Do Firms with Stronger ESG Performance Have Higher Valuation Ratios?” investigated the relationship between the ISS ESG Performance Score (a normalized version of the ISS ESG Corporate Rating) and two …
On March 21, 2022, the Securities and Exchange Commission (SEC) released its statement on proposed mandatory climate risk disclosure. In the statement, Chairman Gensler said, “Today, investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize …
In our recent paper, Can Governance Help in Making an IPO “Successful”? New Evidence from Europe, we find that corporate governance affects company performance after an IPO in different ways. We consider an IPO to be successful if it …
The widespread economic uncertainty caused by COVID-19 poses distinct challenges for buyers and sellers seeking to identify M&A opportunities, as companies evaluate the impact of the pandemic on their businesses to date, and seek to predict its future impact. Continued …
It is widely accepted among investors that compensation committees should align executive pay with performance in part by using incentive metrics that contribute directly to shareholder value. For this reason, it is common for incentive metrics to overlap with performance …
Stock-based compensation (SBC) is a significant and growing expense for many firms. From fiscal year 2006 to 2018, average SBC has increased steadily from 2.6 percent to 3.8 percent of operating expenses for publicly-traded companies. Despite its importance, however, most …
Complex capital structures are prevalent in many recent high-profile Chapter 11 bankruptcy cases. One recent example is Toys ‘R’ Us, whose debt structure was, as characterized by Bloomberg Businessweek, “as complex and precarious as a Jenga tower. [1]” It …
In 2000, Overnite Transportation Co. halted its IPO because of a highly disruptive 10-month strike by the Teamsters’ Union. Teamster officials said they had achieved some gains through the strike, noting that Overnite had increased its employees’ hourly wages by …
In a new paper, we seek to fill a gap in research on the possible benefits of dual class share structures and how they might promote innovation. We start with a bit of history.
Shareholder democracy has been fundamental to …
In bankruptcy, as in corporate law, valuation drives disputes. Prior bankruptcy scholarship points to disagreements about valuation and judicial valuation error as key drivers of Chapter 11 outcomes, including the decision whether to reorganize the distressed firm or sell it …
In 2013, Michael Dell and his private equity partner, Silver Lake, brought the previously publicly-held Dell Corporation private at a price of $13.75 per share, a price that was approved by Dell’s board and by a 57 percent majority vote …
In 2015, Hewlett Packard acquired Aruba for a negotiated price of $24.67 per share, or about $2.8 billion. Several stockholders sought appraisal. On February 15, the Delaware Court of Chancery found that, for purposes of appraisal, the fair value of …
In our recent study, we find that institutional investors follow high-performing directors to new firms and make larger initial investments in those firms than in other firms. Fama (1980) and Fama and Jensen (1983) support our finding and propose that …
We examine the relations among various types of family firms, including those named after their founders (founder-named, or FN, firms), those managed by their founders (founder-managed, or FM, firms), and those named after and managed by their founders (founder-named-and-managed, or …
An M&A appraisal case before the Delaware Supreme Court has drawn amicus briefs from two groups of esteemed professors — including three from Columbia Law School — with opposing views on how a company should be valued.
The case involves …
What is the value of an asset? That is the ultimate financial question, the equivalent of Hamlet’s “To be or not to be.” Of course, we all “know” the answer: the present value of its future cash flows. Push an …
Merger activity seems to rise in step with the market. Academic papers suggest this may be due to bidders exploiting overvalued shares, a pro-cyclicality of merger economies of scale or available capital for deals, or simply the behavioral pressures of …
Amid much fanfare, Square Inc. went public in an IPO at the New York Stock Exchange on November 19, 2015. Founded in San Francisco by, among others, Jack Dorsey who still runs the company to this day, the company has …
In December 2013, the SEC at the direction of Congress under the JOBS Act dutifully provided an initial SEC staff report addressing securities disclosure requirements for public companies to question whether the SEC’s detailed disclosure mandates for public company disclosure …