Preemptive Rights Research Articles

Powering Preemptive Rights with Presubscription Disclosure

Preemptive rights can prevent cheap-issuance tunneling by a controller when outside investors know that the offered securities are cheap. But when outsiders cannot tell whether the securities are cheap or overpriced, preemptive rights fail to prevent such tunneling. Afraid of purchasing overpriced securities, outsiders may rationally refrain from purchasing (even when the securities are in fact cheap), and then suffer cheap-issuance losses. I put forward a mechanism to make preemptive rights more effective: requiring disclosure of a controller’s subscription commitment, before outside investors must finalize their own, so that outsiders can choose to mimic it.

O opravdanosti zakonskog prava preče kupovine suvlasnika nepokretnosti

Pre-emption right, at the same time, can be regarded as limitation of the co-owner's freedom to dispose of his share, and as a part of the legal mechanism which leads to the 'relaxation' of a complex social relationship. When examining reasons thatfavour the existence of a statutory pre-emption right of a co-owner, one ought to commence with the legal position of the co-owner - seller. Indeed, one ought to assess if the optimal protection of his economical interests has been compromised by favouring other co-owners as buyers. In the given context, this article enumerates reasons that justify the subsistence of the statutory pre-emption right of the co-owner.

Cheap-Stock Tunneling Around Preemptive Rights

Preemptive rights are thought to protect minority shareholders from cheap-stock tunneling by a controlling shareholder. We show that preemptive rights, while making cheap-stock tunneling more difficult, cannot prevent it when asymmetric information about the value of the offered shares makes it impossible for the minority to know whether these shares are cheap or overpriced. Our analysis can help explain why sophisticated investors in unlisted firms and regulators of listed firms do not rely entirely on preemptive rights to address cheap-stock tunneling, supplementing them with other restrictions on equity issues.

Tribal Courts, Restorative Justice and Native Land Claims

The Native American tribes in the United States have maintained distinctive customs which they practice within their ‘eviscerated’ sovereignty. The tribes exercise their jurisdiction as ‘sovereign’ nations under devolution of their lands granted by the federal government, which still has a right of preemption and the power of alienation. The tribal courts exercise the restorative justice principles that are integral to their judicial procedures and where the emphasis is on healing. The disputes in tribal courts are settled by mediation through Peacekeeping Circles that restore the parties to the pre-trial status and there is input from elders in the community. The Native people not only have to differentiate and preserve their justice framework, but also claim title to land where it has been extinguished by treaty, eminent domain or Executive order of the us government. The argument in this paper is that the restorative justice principle is part of the customary law of the tribes in the us and in Canada, and their dormant land claims can be revisited if this judicial process is maintained in the context of sustaining their customs within the federal legal framework.

The Oil and Gas ROFR: Understanding Current ROFR Issues from the Point of View of the Transactional Lawyer, the Litigator, and In-House Counsel

Rights of first refusal and other preferential or pre-emptive rights (together, ROFRs, and individually a ROFR) routinely find their way into oil and gas industry agreements. Disputes often arise because of the complex nature and significant economic consequences of ROFRs. In recent years, a number of reported cases, either relating directly to ROFRs or more generally relating to contractual interpretation, have clarified (or at times muddied) the waters surrounding the use, application, and interpretation of ROFRs. However, most ROFR disputes never result in a reported decision because the parties typically negotiate solutions long before trial.The authors consider current trends involving ROFRs in oil and gas agreements, and how they believe the law and legal practice surrounding ROFRs might continue to evolve in the years to come. The authors do not attempt to rehash the fundamentals of the law surrounding ROFRs; instead, they focus on how the courts have dealt with ROFRs in recent cases as well as how corporate lawyers and in-house counsel grapple with ROFRs day-today. The authors utilize the ROFR provisions found in industry standard contracts to analyze outstanding areas of uncertainty as well as what lawyers should contemplate prior to including a ROFR in an agreement. Additionally, the article examines the implications of recent rulings on the duty of good faith that may affect ROFRs. Finally, the article considers selected subjects of topical interest, including ROFRs in the context of busted butterfly transactions, insolvency proceedings, and package deals.

Prawo pierwokupu nieruchomości rolnej a prawo pierwokupu gospodarstwa rolnego

The application of the right of pre-emption in case of sale of agricultural farm is much more complicated than the application of the above-mentioned right in case of agricultural property. The sale of agricultural farm is complicated since the subject of sale is not one property right (as it does not exist) but many rights of access to tangible or intangible assets which form or may form the agricultural farm, however, only negotiable ones. In fact, the disposal of the whole agricultural farm is permitted only in case of universal succession, which is not always the case. However, in case of sale of agricultural farm, the right holder can exercise the right of pre-emption of sold agricultural farm and, thus, the whole negotiable assets covered by the sale contract.

Obowiązek zawiadomienia o nabyciu własności nieruchomości rolnej wynikający z ustawy o kształtowaniu ustroju rolnego

As a result of the amendment of the Act on Shaping of Agricultural System of 11 April 2003, numerous restrictions have been imposed on the agricultural real estate turnover. Pre-emption of agricultural property has been modified. The scope of the right to acquire agricultural real estate by the Agricultural Property Agency has been widen, now it encompasses any acquisition of ownership of agricultural real estate through any legal action or legal event. The principle of acquisition of agricultural real estate only by an individual farmer introduced by the aforementioned amendment leads to marginalization of the institutions of the pre-emption of agricultural property and the right to acquisition of agricultural real estate, which can be executed only in several cases. This article describes the issues concerning execution of the obligation to notify the entitled of the pre-emption of agricultural property and the right to acquisition of agricultural real estate, such as the time of occurrence of this obligation, manner and term of its execution. Fulfilment of this obligation commences the term in which entitled party can execute its pre-emption or acquisition right. Failing to meet this obligation results in invalidity of the acquisition of agricultural real estate.

Determinants of underwriting spreads internationally: Evidence from SEOs

We examine the effect of country-level factors on gross underwriting spreads in seasoned equity offerings. Controlling for issue, issuer and underwriter characteristics, we find that primary legal factors that impose direct court costs on underwriters significantly increase spreads. However, secondary legal, economic, and governance factors do not impact spreads significantly. We provide corroborative evidence that preemptive rights lower spreads, and thus, rights offering price concession is a form of transaction cost. We conclude that the non-primary legal factors not captured by market risk are likely incorporated at the time of underwriter-issuer contracting.

Shareholderss Preemptive Rights in Listed and Closely-Held Corporations and Shareholderss Protection Methods

The present Article argues that the regulation of the shareholders’ preemptive right (i.e. the normative choice between a mandatory and a pure contractual approach) should be differentiated according the ownership structure. Therefore, legislators and Courts should introduce different rules for different kinds of companies. In order to support such conclusion, the Article first attempts to reassess the correctness of the traditional understanding of the interests protected by the shareholders’ preemptive right (“the preemptive right aims at protecting the voting rights and the financial rights of the existing shareholders”). In this framework, I explore the development of pre-emptive rights in different legal systems, taking into account the historical evolutions. Among the jurisdictions examined, a division between two different groups can be traced, those which rely on a (possibly mandatory) right (preemptive right) for shareholders’ protection and those that depend on other protection mechanisms (e.g. direct purchase of the new shares on the market; fiduciary duties). The first group consists of European countries, where the Second Company Law Directive imposes a mandatory preemptive right, however permitting some exceptions. Into the second category fall the United States and other countries whose corporate law was strongly influenced by American law (for example, Japan). The consequence deriving from this analysis is twofold. On the one hand, despite the prevalence in European countries of the mandatory approach to the preemptive right, such right is neither the only nor necessarily a superior way to protect the shareholders’ interests, since it fails to take into proper account other relevant interests. The rule of preemptive right is not the only protection mechanism, especially for listed companies. On the other hand, it can be used in close corporations. The regulatory choice concerning the shareholders’ pre-emption right should be adjusted to the underlying ownership structure, which by itself shapes the shareholders’ interests. The Article proceeds as follow. Part I focuses on the problem and on the different interests at play when a corporation raises its share capital. In Part II, I analyse and compare the European approach (“mandatory”) with the American one (“contractual opt-in”). In particular, I shed light on how the two different regulatory approaches to the preemptive right relate with the ownership structure (concentrated or not) of the corporation. I also underline the differences existing between the two approaches with regard to the scope of the protective effects caused by the preemptive right. I come to the conclusion that the two systems show a common feature, namely – in contrast to dominant understanding – that the preemptive right in listed companies serves mainly, if not exclusively, the purpose of protecting the existing shareholders’ financial (but not voting) interests. Under this assumption, in Part III I turn to other possible methods of protecting shareholders’ interests when the corporation raises its capital, instead of granting a preemptive right.

Uji Komparasi Abnormal Return, Trading Volume, Trading Frequency, Dan Bid-Ask Spread Sebelum Dan Sesudah Share Split

This study is event study that was conduct to examine the differences of abnormal return, trading volume, trading frequency and bid-ask spread before and after the events of share split. The object of this research is the companies that did share split and listed in Indonesia Stock Exchange in 2008 - 2015. The samples are 30 companies chosen by purposive sampling method. The criteria are the company did not do corporate action right issue, pre-emptive rights, a share dividend and bonus shares in the same year with share split. Event window used in this study was 30 days consisting of 15 days before and 15 days after the share split. Data analysis technique begins with a test of normality using Kolmogorov – Smirnov and transform for unnormally distributed data. Then, test of hypothesis using Paired t – test to compare the differences before and after share split. The results of this study showed that volume trading activity and trading frequency had significant differences before and after the share split. While, variable abnormal return and bid-ask spread had not significant differences before and after the share split.
 Keywords: Abnormal return, bid-ask spread, share split, trading frequency, trading volume.

Assessment of the public protection of the legal interests of co-owners

Each right is valuable if it ensures the legal interests of a right-holder to the maximum extent possible. The legal system must develop and maintain tools that would facilitate the effective exercising of lawful rights.Public registration is one of such tools. This is a means of legal protection ensuring the right, making it known to and binding on third parties.In the case of legal relationships concerning encumbered properties, it is particularly vital for co-owners to safeguard their interests and rights in both mutual and third-party relationships. Equally important is the protection of third-party interests in transactions involving an individual co-owner or a group of co-owners.This research analyses the necessity of public registration of individual rights of co-owners associated with real estate (e.g. pre-emptive rights, divided use of co-owned property).

Effectiveness of pre-commitments on reducing asymmetrical information in equity issues

ABSTRACTThe aim of this article is to find out whether or not consideration of significant shareholders announcement of intention to exercise subscription rights makes a difference in eliminating or reducing the effects of asymmetrical information in equity offerings with pre-emptive rights on the Spanish Stock Market. For the 17 years of equity issues covered, we find that the type of underwriting arrangements has not a statistically significant impact on the issues’ Excess Risk Adjusted Return. The main contribution of this study is the finding of a statistically significant negative impact on returns either when the significant shareholders indicate their intention not to subscribe or when not enough information is provided about their intention. We also find a statistically significant reinforcing negative effect on returns in the case of simultaneous lack of commitment on the part of significant shareholders, and non-underwritten equity issues.

PROCESY TWORZENIA GMINNEGO ZASOBU NIERUCHOMOŚCI

The key issue is indicating a method of establishing municipal real estate resources. This willgive an answer to how a municipality self government becomes the owner or perpetual lessee ofa real estate. Real estates become a part of municipal real estate resources mainly as a result ofexecution of communalization regulations. Furthermore, the resources become larger due to theexecution of the pre-emption right, by acquisitive prescription, statutory inheritance or transfer ofa property. Due to the fact that every local self government unit has its own real estate resources,processes of establishing these are of crucial importance.

Wybrane problemy funkcjonowania parków narodowych w Polsce

The article is a reflection on selected problems related to the existence of national parks in Poland. It consists of five points: the problems of ownership of a property situated in the national park, the right of pre-emption of real property located within its boundaries, planning in national parks, especially in relation to other planning instruments relating to the territory covered by it and the problem of determining national park protection zone and the boundaries of a national park. The article concludes with the findings, both de lege lata and de lege ferenda.

Pre-Emption, Back-In And Redemption Rights As Well As The Right Of Priority In Acquisition Of Real Estate

Abstract Among factors that might significantly diversify common and economic trading, in particular trading in real estate, pre-emption, back-in and redemption rights, as well as the right of priority in acquisition play an important role. These legal instruments, despite certain differences in their legal structures, serve a similar function. Namely, they may be utilized for the purpose of affecting the preferred ownership structure. The legislator in pursuit of the assumed ownership structure may – through the instruments of the pre-emption right, back–in right, redemption right and the right of priority in acquisition – particularly with their statutory character - restrict freedom to trade in ownership with regard to the selection of the real estate purchaser. Simultaneously, in the contracting process, the parties face a certain manner of proceeding imposed, the purpose of which is to conclude the contract on transferring real estate ownership with the partner preferred by the legislator. In certain cases, the legislator goes even further, granting the eligible party a claim under which the eligible party may demand that the party obliged shall submit an appropriate declaration of will, and in the event that the party obliged refuses – the eligible party may seek the judgment of the court replacing that declaration. Proper navigation in the field of real estate trading, in particular with regard to transactions in which the pre-emption right, back-in right, and redemption right, or the right of priority in acquisition is reserved for defined entities, requires defining the legal character of the given instrument, the manner of executing the due right by the eligible party, results of the failure of the parties to the contracting process to fulfill the obligations imposed by the act, and finally, defining whether there are means for the compulsory execution of the power guaranteed by the act and, if yes, what these means are.

Pre-emption: Bangladesh Approach

Pre-emption is a prior right of a co-sharer of a land either by purchase or by inheritance, owner of adjoining property or neighbor of a land. When a piece of land is sold to a third party without acknowledging such owners of land, the question of right of pre-emption arises, i.e., the co-sharer of land is first entitled to purchase the land and claim the ownership. If he waves his right by consent either expressly or impliedly, a third party or a stranger can purchase it. In Bangladesh there are three legal approaches as regards pre-emption- (i) Muslim Law Approach, (ii) State Acquisition & Tenancy Act, 1950 Approach and (iii) Non-agricultural Tenancy Act, 1949 Approach. This paper will focus on pre-emption under Muslim law and statutory laws in Bangladesh and make a comparative study. It will analyze present situation or approach of pre-emption in Bangladesh and determine the drawbacks of the existing statutory law and problems in case of application of pre-emption, and give way of solution.

Economic analysis of pre-emptive right in the Serbian Law on property restitution and compensation

This paper is application of cost-benefit analysis on a pre-emptive rights, which is established by the Serbian Law on Property Restitution and Compensation. The basic hypothesis is that this law institute disturbs efficiency of resource allocation, and decreases social welfare. There are a few better and more efficient institutes which can be used for gaining of goods in public ownership. To prove this hypothesis, we used neo-institutional economy method and normative method. In the first part of the paper, we presented the law of pre-emptive rights in the legal system of Serbia. After that, we analyzed effects of pre-emptive rights on a deviation from resource allocation. The third part represents an analysis of institutional frame for optimal resource allocation. There is a special view on imprecise definition of property rights, as well as the increased transaction costs due to the existence of the right of pre-emption.

Особенности наследования некоторых категорий жилых помещений

The article considers the issues of inheritance of privatized dwellings with encumbered rights of citizens having the right to use the living quarters; premises in houses of housing and housing co-operatives; as well as the peculiarities of inheritance of shares in the common ownership of a dwelling.
 The author points out that the inheritance of privatized premises which are individually owned, carried out in a general manner. However, there are several problems associated with inheritance. In accordance with the Family Code property received by one spouse to the gratuitous transactions, is their property. Therefore, if privatization took place in the payment of certain sums of money, in this case, there is a common joint property of the spouses; if the transfer occurred gratuitously, the subject of property rights is a person with whom the contract was made.
 The question of inheritance of premises in houses of housing and housing cooperatives is studied. The specifics of the legal regulation of these relations are determined by the legal status of the cooperatives themselves. In contrast to the general rule, ownership does not arise from the state registration, and upon the payment of a contribution. Regardless of state registration and whether there is a document confirming the ownership of the dwelling, after the death of a member of the construction co-operative, who payd for shares, housing is inherited under the general procedure.
 The author studies the question about the features of transactions with shares in the common ownership of dwellings and residential premises belonging to the common ownership. In accordance with para. 2, Art. 246 of the Civil Code a co-owner has the discretion to sell, give, bequeath, pledge in its share or dispose of it.
 It should be borne in mind that the sale and exchange shares in the common property shall be permitted only as subject to the preemptive rights of other participants in the acquisition of such shares. Housing is not recognized as common property, when it was purchased at the actual termination of the marriage, and, consequently, the other spouse does not have any rights to housing.

Uji Komparasi Abnormal Return, Trading Volume, Dan Trading Frequency Sebelum Dan Sesudah Peristiwa Share Split Pada Perusahaan Yang Terdaftar Di Bursa Efek Indonesia Periode 2010 – 2013

This study is event study that was conducted to determine differences in abnormal returns, trading volume, and trading frequency before and after the events of the share split. The object of this research is the companies that did the share split and listed in Indonesia Stock Exchange in 2010 - 2013. Samples were taken by using purposive sampling as many as 24 companies. The criteria is the company did not do corporate action right issue, pre-emptive rights, a share dividend and bonus shares in the same year with share split, then the company share actively traded 15 days before and after the share split. Data analysis technique begins with a test of normality using Kolmogorov - Smirnov test, then test the hypothesis using a paired t test to compare the differences before and after share split. In testing the hypothesis showed that the difference was only found on variable trading frequency before and after share split. While the other variables are abnormal return and trading volume was not found significant differences before and after the share split.
 Keywords: Share split, abnormal returns, trading volume, trading frequency

"a massive colonial experiment": New Zealand architecture in the 1840s

It is more than obvious to say that the signing of the Treaty was the big event of the 1840s. The initial Treaty signing at Waitangi on 6 February 1840 by Lieutenant-Governor William Hobson, representing the British Crown, and "about 45 Maori chiefs" has become a defining moment in New Zealand's history, but, as Smith notes,
 [o]nly recently has the Treaty of Waitangi become central to national life ... Hastily devised at the time, the treaty sheets have become a national monument: they mean different things to different groups but have had an evolving official interpretation placed upon them.
 The Treaty "is the basis of the Crown's authority and legitimised European settlement in New Zealand," but important differences between the English version and the Māori version (which most Māori signed) include differences in the translations of article one (the cession of sovereignty vs "te kāwanatanga katoa" (governorship)), and silence in the te reo Māori text "on the Crown right of pre-emption. It promised the Queen "hokonga" - the buying and selling of land that Maori were willing to part with - but not exclusively, nor even as the highest priority.