FTC takes the initiative with Hart-Scott-Rodino; innovations in the antitrust laws proposed by the commission should streamline its processes

Article Abstract:

The Federal Trade Commission and the Dept of Justice's Antitrust Division have sought in recent months to reduce the costs to business of merger enforcement. On Mar 23 they released a revised model second request with deadlines, improved procedures and an appeal process. On July 21 the FTC proposed five changes in the Hart-Scott-Rodino filing requirements, exempting various transactions. On July 22 it declared that it no longer demands prior approval in consent orders, and administrative litigation will see less use.

United States. Federal Trade Commission, United States. Department of Justice. Antitrust Division

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Fraudulent conveyance laws can nullify buyouts; if intentional or constructive fraud is found, a bankruptcy court will void leveraged deals

Article Abstract:

Such high-risk transactions as leveraged buyouts necessitate an independent opinion on the company's capital adequacy, evaluating both the balance-sheet and the cash-flow tests posed by the Bankruptcy Code. These precautions make more difficult any eventual fraudulent conveyance suits should the business later fail. A successful suit under fraudulent conveyance laws, allowed up to six years after the initial transaction, makes secured lenders, sellers, directors, and perhaps their agent liable to unsecured creditors.

Leveraged buyouts, Fraudulent conveyances

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Control-share laws may miss the mark

Article Abstract:

Control-share statutes have not proven effective in derailing corporate takeovers. Though the statutes are designed to limit the voting rights of an acquirer, the acquirer may exercise a rule requiring a special stockholders' meeting in order to approve those voting rights. The target may opt out of the control-share statute but should do so before the takeover bid commences, as the bidder may argue successfully that opting out after the takeover bid impairs the shareholders' franchise.

Corporate anti-takeover measures, Antitakeover strategies

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