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

68 Pages Posted: 9 Nov 2009  

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: November 9, 2009

Abstract

This article 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 treatment of shareholders may increase shareholders' overall welfare. Disparate treatment, however, should not result in the oppression of minorities Rather, oppression of minorities should be prevented with the fairness standard. Fairness requires one to consider the interests of others, but not to pursue others’ interests to the detriment of one’s own. Unfairness is a disregard for the interests of the minorities which could be taken into consideration at no cost.

Keywords: Delaware, Journal, Corporate, Law, DJCL, disparate treatment, fairness, minorities, comparative, Italy, Germany, France

Suggested Citation

de Luca, Nicola, Unequal Treatment and Shareholders' Welfare Growth: 'Fairness' V. 'Precise Equality' (November 9, 2009). Delaware Journal of Corporate Law (DJCL), Vol. 34, No. 3, 2009. Available at SSRN: https://ssrn.com/abstract=1503089

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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