23842 Words96 Pages

California Law Review
Volume 91 | Issue 2 Article 3
3-31-2003
The Efficiency of Controlling Corporate SelfDealing: Theory Meets Reality
Zohar Goshen
Follow this and additional works at: http://scholarship.law.berkeley.edu/californialawreview Recommended Citation
Zohar Goshen, The Efficiency of Controlling Corporate Self-Dealing: Theory Meets Reality, 91 Cal. L. Rev. 393 (2003). Available at: http://scholarship.law.berkeley.edu/californialawreview/vol91/iss2/3
This Article is brought to you for free and open access by Berkeley Law Scholarship Repository. It has been accepted for inclusion in California Law Review by an authorized administrator of Berkeley Law Scholarship Repository. For more information, please contact mhoffman@law.berkeley.edu.
The Efficiency of Controlling
Corporate Self-Dealing: Theory Meets Reality
Zohar Goshent
TABLE OF CONTENTS
Introduction .............................................................................................. I. The Problem of Self-Dealing and Possible Solutions ....................... A. Self-Dealing and the Voting Mechanism .................................... B. Possible Solutions to Self-Dealing .............................................. 1. Prohibition on Self-Dealing .................................................
396 399 399 401 401
2. The Majority-of-the-Minority Vote ......................................
3. The Fairness Test ................................................................. 4. N onintervention .................................................................... II. Characteristics of the Preferred Solutions ......................................... A. Property Rules Versus Liability Rules ........................................ B. Subjective Versus Objective Valuations ..................................... C. The Division of the Surplus

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