Jump to ContentJump to Main Navigation
The Anatomy of Corporate LawA Comparative and Functional Approach$
Users without a subscription are not able to see the full content.

Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda, Mariana Pargendler, Wolf-Georg Ringe, and Edward Rock

Print publication date: 2017

Print ISBN-13: 9780198739630

Published to Oxford Scholarship Online: March 2017

DOI: 10.1093/acprof:oso/9780198739630.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use.date: 28 January 2022

Related-Party Transactions

Related-Party Transactions

Chapter:
(p.145) 6 Related-Party Transactions
Source:
The Anatomy of Corporate Law
Author(s):

Luca Enriques

Gerard Hertig

Hideki Kanda

Mariana Pargendler

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198739630.003.0006

This chapter centers on a technique that managers and controlling shareholders may use to divert value from the corporation: related-party transactions. These transactions range from traditional self-dealing to more subtle forms of potential misappropriation of company value, such as compensation agreements, intercompany guarantees, insider trading, and the usurpation of corporate opportunities. Despite the potential for abuse, related party-transactions provide countervailing economic benefits and are rarely outlawed. Instead, the representative “core jurisdictions” employ a variety of legal strategies to police them, including: applying affiliation strategies through disclosure requirements and dissolution rights; intervening on agent incentives by requiring disinterested board approval; granting decision rights to shareholders; and imposing legal constraints such as prohibitions, the duty of loyalty, and the special regime of group law. The chapter concludes by analyzing the effectiveness of the different approaches to related-party transactions in core jurisdictions in view of their enforcement, and their relationship to the underlying ownership structures.

Keywords:   related-party transactions, self-dealing, compensation agreements, insider trading, corporate opportunity, group law, duty of loyalty, enforcement, ownership structures

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .