Chapter 6: bond and director power

Question 1

corpo + and - of bonds

Answer 1

+ tax deductible, dont grant control
- mandatory payment

Question 2

art 2412 ICC

Answer 2

caps bond issuance at 2x K + reserve

Question 3

(US): trust indenture act (TIA)

Answer 3

independent trustee to rpz bondholder interests

Question 4

Trust indenture

Answer 4

legal contract between bond issuer and bond holder:
- terms (interest, maturity)
- covenants
+ (thou shalt) provide fin statement
- (thou shalt out) limit debt, prohibit asset sales

Question 5

Spain VS EU (2008)

Answer 5

granting preemptive right to bond and share holders -> undermine SH protection and dilute their stake

Question 6

dividend distribution

Answer 6

US: director decide
EU: director propose -> SH approve

Question 7

contractual vs institutional view

Answer 7

serve SH vs. include stakeholder

Question 8

Germany 1937 nazi-era law

Answer 8

director serve SH but also state

Question 9

UK companies act 2006

Answer 9

LT consequence, employee interest, business relationships, reputation, ESG, fairness among SH

Question 10

Holzmuller doctrine

Answer 10

SH approval require if
- ↓ company asset
- change SH rights
- alter company core business

Question 11

Blasius vs Atlas

Answer 11

forced leveraged reK
-> not too protect but to maintain power