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Federal Interventions in Private Enterprise in the United States: Their Genesis in and Effects on Corporate Finance Instruments and Transactions

34 Pages Posted: 2 Feb 2011 Last revised: 24 Feb 2011

Joan MacLeod Heminway

University of Tennessee College of Law

Date Written: June 1, 2010

Abstract

In response to U.S. corporate failures involved in the current global financial crisis, traditional corporate finance vehicles and tools were widely used in new ways and for new purposes. Of course, one object of the U.S. government’s investment and intervention in, and exercise of influence over, private enterprise during the crisis was to provide for or ensure the provision of adequate capital funding. But its investment, intervention, and influence also represented a new way to oversee and otherwise regulate key business enterprises in the financial services and automotive sectors. This Article reviews certain aspects of the use of preferred stock, bankruptcy-related proceedings, and mergers and acquisitions in connection with the government’s recent, crisis-mode interventions in private enterprise. Further, it analyzes corporate finance aspects of these exploits and highlights potential effects of these activities on corporate finance instruments, transactions, and legal practice.

Keywords: corporate finance, preferred stock, bankruptcy, mergers, acquisitions, financial crisis, private enterprise, legal practice, Section 363

JEL Classification: G18, G32, G38, H59, K22, L19, M00, P19, P43

Suggested Citation

Heminway, Joan MacLeod, Federal Interventions in Private Enterprise in the United States: Their Genesis in and Effects on Corporate Finance Instruments and Transactions (June 1, 2010). Seton Hall Law Review, Vol. 40, No. 4, 2010; University of Tennessee Legal Studies Research Paper No. 138. Available at SSRN: https://ssrn.com/abstract=1752326

Joan MacLeod Heminway (Contact Author)

University of Tennessee College of Law ( email )

1505 West Cumberland Avenue
Knoxville, TN 37996
United States
865-974-3813 (Phone)
865-974-0681 (Fax)

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