Institutional shareholder activism has often been viewed as a positive corporate governance tool to ameliorate shareholder collective action problems and keep management teams and boards of directors in check, particularly for large public companies with a widely dispersed group of shareholders. Typically, an activist shareholder (ranging from large individual stockholders to institutional investors) will use…
Month: March 2014
Did You Hear That Tweet, Wall Street?
Almost every user of social media like Facebook and Twitter knows that information they post online will be read by someone else, and might even be repeated to others. But what if the social media user was someone in the financial industry or a giant corporation announcing a strategic move or product development, and the…
In Re Lyondell Chemical Company, The Long Arm of a Failed LBO
To the interested observer of private equity, a typical leveraged buyout follows a relatively predictable sequence. Most buyouts begin with a sponsor such as KKR or Blackstone forming a limited partnership, serving as the general partner, and acquiring initial capital from investors who form the partnership’s limited partners.1 Once a target company has been identified,…
There Is Still Hope for Bitcoin
Mt. Gox has recently shut down and filed for bankruptcy, claiming that it has an outstanding debt of $63.6 million.1 The company, which was the largest Bitcoin exchange, disclosed that it had lost 850,000 units of Bitcoin, including 750,000 that belonged to customers.2 That amount is worth about $477 million, based on current exchange rates,…
Venture Capitalists Target Untapped Markets in the “MidBest”
Venture capitalists and entrepreneurs have recently started to make an unexpected move east from Silicon Valley to put down roots in an unlikely location: the Midwest.1 Historically, the majority of serious entrepreneurs from around the country have flocked to Silicon Valley and New York in search of easily accessible and trendy tech industry jobs.2 The…
The Popping Bubble of Starting Startups
So you have a great idea, an idea that will change the world. But you have a few problems: no money, no experience in managing any project, and absolutely no connections whatsoever. What do you do? Believe it or not, there are some companies (or startups) that actually deal with these types of startup problems….
The Rise of Third-Party Litigation Financing in the United States
Litigation financing is a central concern for parties before any serious litigation is undertaken. Given the high costs associated with high stakes litigation, many law firms are willing to create financing plans with clients that will enable the parties to move forward with their cases. Arrangements where law firms work on a contingency basis have…
ABA Drops Suit Against Volcker Rule but Issues Remain
In January, the five regulatory agencies responsible for carrying out the Volcker Rule—the Federal Reserve, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and the Securities and Exchange Commission—issued an interim final rule modifying portions of the initial version of the final rule released in December.1 The modifications…
China’s Increasing Private Equity Investment in the US
The United States and China recently planned to restart talks for an investment treaty with “Beijing dropping previous efforts to protect certain sectors of its economy from the start.”1 While government-directed investment into resources and finance remain the vast majority of overall Chinese investment in the United States (over 90%), many private investment players have…
Petroleum and Private Equity: PE Firms Increase Investments in the Oil and Gas Industry
Demand for global energy resources has made the energy industry an attractive target for private equity investment. According to a 2013 report by Bain & Company, the strength of recent fundraising activity by PE funds indicates that energy investments will be popular in years to come.1 Within the energy industry, the most attractive area for…