Corporate Ostracism: Freezing Out Controlling Shareholders by ProQuest

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									Dammann Ready for CEC                                                                  3/17/2008 11:55 AM




           Corporate Ostracism: Freezing Out Controlling
                           Shareholders

                                               Jens Dammann∗

    I. INTRODUCTION ...................................................................................................... 683 
   II. THE TRANSACTION-CENTERED APPROACH ........................................................... 687 
  III. DISTORTING OWNERSHIP STRUCTURES.................................................................. 689 
       A. Background ...................................................................................................... 689 
       B. Allocating the Costs and Benefits of Control ................................................... 690 
            1. The Upper Limit for the Extraction of Private Benefits .............................. 690 
            2. The Lower Limit for the Extraction of Private Benefits .............................. 691 
       C. The Failure of the Transaction-Centered Approach ........................................ 692 
            1. Excessive Private Benefit Extraction .......................................................... 692 
                a. The Basic Problem ................................................................................. 693 
                    i. Indirect Forms of Self-Dealing ........................................................... 693 
                    ii. Direct Forms of Self-Dealing ............................................................ 694 
                b. Counterpoint: Going-Private Transactions............................................ 695 
            2. Insufficient Private Benefit Extraction ........................................................ 697 
                a. The Problem ........................................................................................... 697 
                b. Counterpoint: Going-Private Transactions............................................ 698 
       D. Empirics ........................................................................................................... 699 
            1. Private Benefits ........................................................................................... 700 
                a. Block Trades ........................................................................................... 700 
                    i. Insufficient Private Benefit Extraction .....
								
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