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The BCE Decision: Reflections on the Firm as a Contractual Organization

28 Pages Posted: 16 Jul 2008 Last revised: 29 Oct 2014

Peer C. Zumbansen

King’s College London, Dickson Poon Transnational Law Institute

Simon Archer

Centre for Research in Comparative Law and Political Economy, Osgoode Hall Law School; York University - Osgoode Hall Law School

Date Written: July 14, 2008

Abstract

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.

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

Suggested Citation

Zumbansen, Peer C. and Archer, Simon, The BCE Decision: Reflections on the Firm as a Contractual Organization (July 14, 2008). CLPE Research Paper No. 17/2008. Available at SSRN: https://ssrn.com/abstract=1160094 or http://dx.doi.org/10.2139/ssrn.1160094

Peer C. Zumbansen (Contact Author)

King’s College London, Dickson Poon Transnational Law Institute ( email )

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

Simon Archer

Centre for Research in Comparative Law and Political Economy, Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

York University - Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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