Unequal Treatment and Shareholders' Welfare Growth: 'Fairness' v. 'Precise Equality'

48 Pages Posted: 2 Feb 2009 Last revised: 18 Mar 2009

See all articles by Nicola de Luca

Nicola de Luca

Università degli Studi della Campania - Luigi Vanvitelli; LUISS Guido Carli University - Faculty of Law

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2009

Abstract

This paper argues that a strong or rather mechanical equal treatment rule in share repurchases, distributions in kind or capital reductions is not efficient. An economic analysis of the law shows that disparate treatments of shareholders may increase shareholders' welfare. Disparate treatment, however, should not result in the oppression of minorities. Rather, oppression of minorities shall be prevented with the fairness standard. Fairness requires one to consider others' interests, but not to pursue others' interest to the detriment of one's own. Unfair is a disregard of the interests of the minorities which could be taken into consideration at no cost.

Keywords: Equal Treatment, Equal Opportunity, Share Repurchase, Distribution, Fairness

JEL Classification: K22

Suggested Citation

de Luca, Nicola, Unequal Treatment and Shareholders' Welfare Growth: 'Fairness' v. 'Precise Equality' (February 1, 2009). Delaware Journal of Corporate Law (DJCL), Vol. 34, No. 3, 2009. Available at SSRN: https://ssrn.com/abstract=1336273

Nicola De Luca (Contact Author)

Università degli Studi della Campania - Luigi Vanvitelli ( email )

Via Antonio Vivaldi, 43
Caserta CE, Caserta 81100
Italy

LUISS Guido Carli University - Faculty of Law ( email )

Via Parenzo, 11
Rome, Roma 00100
Italy

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