Resolving the Crisis in U.S. Merger Regulation: A Transatlantic Alternative to the Perpetual Litigation Machine

66 Pages Posted: 9 Mar 2018 Last revised: 12 Mar 2018

See all articles by Sean J. Griffith

Sean J. Griffith

Fordham University School of Law; European Corporate Governance Institute (ECGI)

Dan Awrey

Cornell Law School; European Corporate Governance Institute

Blanaid J. Clarke

Trinity College Dublin - School of Law

Date Written: March 8, 2018

Abstract

Regulation by litigation has driven U.S. merger regulation to crisis. The reliance on private lawsuits to police disclosures and potential conflicts of interest in mergers, takeovers, and other control transactions has resulted in the filing of claims after every major transaction. However, it has failed to achieve meaningful benefits for shareholders and has instead deprived them of potentially valuable rights. Regulation by litigation has devolved into attorney rent-seeking, and the raft of substantive and procedural reforms aimed at resolving the crisis has failed.

There is an alternative to regulation by litigation. Drawing upon the code and panel-based models of merger regulation in the United Kingdom and Ireland, this Article explores whether a regulatory model might be better at protecting shareholder interests in merger transactions. A regulatory alternative holds a number of significant advantages, including greater speed, responsiveness, certainty, and lower administrative costs. In light of these potential advantages, it is remarkable that no U.S. state has experimented with a code and panel-based model of merger regulation. We explain the persistent difference between the U.S. and Anglo-Irish models by reference to interest group politics and, in particular, the power of the bar to influence corporate law reforms in the United States.

Suggested Citation

Griffith, Sean J. and Awrey, Dan and Clarke, Blanaid J., Resolving the Crisis in U.S. Merger Regulation: A Transatlantic Alternative to the Perpetual Litigation Machine (March 8, 2018). Yale Journal on Regulation, Vol. 35, No. 1, 2018; Fordham Law Legal Studies Research Paper No. 3136458. Available at SSRN: https://ssrn.com/abstract=3136458

Sean J. Griffith (Contact Author)

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
United States

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Dan Awrey

Cornell Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

European Corporate Governance Institute ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Blanaid J. Clarke

Trinity College Dublin - School of Law ( email )

House 39, New Square
Dublin 2
Ireland
Ph 00353 (0)18961632 (Phone)

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