RT Article
T1 The unethical exploitation of shareholders in management buyout transactions
JF Journal of business ethics
VO 9
IS 7
SP 595
OP 602
A1 Schadler, F. P.
A1 Karns, J. E.
A2 Karns, J. E.
LA English
YR 1990
UL https://ixtheo.de/Record/1785600923
AB The accurate pricing of securities in the capital markets depends upon the markets being both efficient and fair. In management buyout transactions (MBOs), the price bid by inside managers enhances the efficient pricing of securities but raises a reasonable doubt about the fairness to existing shareholders. This study addresses this fairness question in MBOs and offers short-term and long-term legal alternatives which allow both the efficiency and fairness criteria to be met. In the short-term the case law established in the Basic v. Levinson decision for merger negotiation disclosures should be applied to MBO transactions. Over the longer horizon, legislative changes should be made to existing securities laws. Applying the investor protection principles of the 1933 and 1934 securities acts to MBO transactions will suppress the temptation of managers to extract shareholder wealth for their personal gain.
K1 Shareholder Wealth
K1 Personal Gain
K1 Reasonable Doubt
K1 Investor Protection
K1 Capital Market
DO 10.1007/BF00383215