Profit Sharing Contracts in Hollywood :
Evolution and Analysis
(Journal of Legal Studies, Vol XXVII (1), January, 1998, pp. 67-112).
This article examines the development of profit- or revenue-sharing contracts in the motion picture industry. Contrary to much popular belief, such contracts have been in use since the start of the studio era. However, early contracts differed from theose seen today. The evoloution of the current contract is traces, and evidence regarding the increased use of sharing contracts after 1948 is examined. I examine competing theories of the economic fucntin served by these contracts. I suggest that it its unlikely that these contracts are the result of a standard principal-agent problem.
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The Appraisal Remedy and
Merger Premiums
The appraisal remedy affords a shareholder the option to redeem her shares for
cash in the event of certain corporate actions, such as mergers. While appraisal appears
to have been developed to protect shareholders who might oppose a corporate action yet be
unable to sell their shares for fair value in a liquid market, the value of appraisal to
shareholders of publicly traded firms is questionable. This is especially true when we
realize that shareholder class actions for breach of fiduciary duty provide an alternative
avenue of recovery and are easier to initiate. In this paper we present the first
large-sample empirical study of the effect of access to appraisal on target shareholder
gains from acquisitions. We examine 1350 mergers involving publicly held firms. In some of
these mergers dissenting shareholders could seek an appraisal and in others appraisal was
not available. We find some evidence that appraisal offers dissenting shareholders hold-up
power that reduces average shareholder gains in certain transactions. However, for the
entire sample, we find no evidence that appraisal has any effect, positive or negative, on
target shareholder gains from takeovers.
Limited
Liability in California: 1928-1931
Limited liability for
corporations is a fairly recent innovation, going back only to the mid-19th
century in England and the United States. In California, limited liability did
not become available to corporate shareholders until 1931. This paper examines
the effect of adopting limited liability for firms incorporated in California.
Our results may help to inform the debate over corporate liability.
Working Paper, September, 2000