The BCE Decision: Reflections on the Firm as a Contractual Organization
Peer C Zumbansen
King’s College London, Dickson Poon Transnational Law Institute
Centre for Research in Comparative Law and Political Economy, Osgoode Hall Law School; York University - Osgoode Hall Law School
July 14, 2008
CLPE Research Paper No. 17/2008
The authors discuss the decision of the Supreme Court of Canada to approve a plan of arrangement privatizing BCE Inc. over the objections of bondholders. Summarizing the arguments for "shareholder primacy" and debenture covenants delimiting contractual rights against boards and management, they argue that an expanded conception of relational contract theory is useful in analyzing the competing claims in the BCE deal and litigation. This approach requires that broader contextual factors are necessary to consider in the functioning of the corporation, especially by after-the-fact decision-makers.
Number of Pages in PDF File: 28
Keywords: Corporate theory, takeovers, shareholder primacy, contracts, nexus-of-contracts, stakeholder theory of the corporation, relational contract theory, transnational law, legal pluralism
JEL Classification: K20, K22
Date posted: July 16, 2008 ; Last revised: October 29, 2014
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