Kenju Watanabe: “Control Transaction Governance: Collective Action and Asymmetric Information – Problems and ex Post Policing”

This article is highly original and of great importance to the debate about private enforcement of corporate and securities laws in that it is the first to 1)articulate the doctrinal prerequisites for effective ex post judicial policing of fiduciaries in control transactions and 2) theoretically unify two seemingly distinct approaches to police control transactions‐‐the ex post judicial policing in the United States and the ex ante policing by the Takeover Panel in the UnitedKingdom. Shareholder collective action and asymmetric information problems, and the extent of gatekeeping by fiduciaries together determine the mode of third‐party interventions, such as those by judiciaries and the Takeover Panel, in control transactions. The article’s analysis yields normative conclusions about how judiciaries in the United States, including Delaware’s, should fine‐tune gatekeeping by corporate fiduciaries in control transactions. It predicts that multijurisdictional shareholder litigation that seeks anticipatory adjudication will produce negative consequences.Further, it gives policy makers outside of the United States the theoretical foundation for crafting third‐ party interventions that are optimal for their own jurisdictions.

Uploaded on behalf of Kenju Watanabe of Columbia Law School

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