COMPARATIVE CORPORATE LAW:
GOVERNANCE, TRANSACTIONS, AND PRACTICE
Georgia State University Summer Legal and Policy Study in Rio de Janeiro
May 2009
Joan M. Heminway
The University of Tennessee College of Law
Room 384
865-974-3813
jheminwa@tennessee.edu
Biographical information available at: http://www.law.utk.edu/faculty/heminway/index.shtml
Course Syllabus and Outline
Class Meetings: Class is scheduled for the first module of the program (with classes held on May 18-29, 2009). Class meetings generally will be held from 8:30 am – 12:30 pm (three 70-minute sessions with
two 15-minute breaks), Monday through Friday, except for our field trip day (May 20).
Course Materials: There are two required texts for this course, STEPHEN M. BAINBRIDGE, MERGERS
AND ACQUISITIONS (Foundation Press, 2d ed. 2009), referenced as ―BAINBRIDGE‖ below, and FRANKLIN
GEVURTZ, GLOBAL ISSUES IN CORPORATE LAW (Thomson West, 2006), referenced as ―GEVURTZ‖ below.
These books are not readily available in Brazil and therefore should be purchased in the United States or through U.S. vendors in advance of the start date for the course. Other course materials, as designated in the Course Outline included with this Course Syllabus, (1) must be obtained by you through resources at 1your school before you leave for Brazil or (2) are being distributed on a CD-ROM (with this syllabus) or
in class. Please let me know as soon as possible if you have a special interest in any aspect of this course. I may be able to address your area of interest by bringing some additional materials with me or suggesting additional materials for you to assemble on your own.
In addition to the required texts and other materials designated in the Course Outline included with this Course Syllabus, your course CD-ROM includes selected sections from the Delaware General 23Corporation Law (―DGCL‖) and the Model Business Corporations Act (―MBCA‖), two key corporate
law sources in the United States. In addition, certain U.S. federal laws and regulations have been copied 4onto the CD-ROM for your reference. These state and federal statutes and rules may be referenced in
class, and you may want to use them in assignments. The CD-ROM also includes English translations of selected Brazilian laws and guidance from the CVM, Brazil’s federal securities exchange commission.
Sections from these Brazilian sources also may be referenced in class or used by you in your work for the course. The English translations of the Brazilian rules are somewhat rough and include formatting errors, repetitious wording, typos, and other errors, none of which should impair your ability to understand key
1 Materials on the CD-ROM are designated ―[CD-ROM]‖ in the Course Outline included with this Course Syllabus and have
been given file names that key into the relevant statutes or descriptions in the Course Outline. 2 The General Corporation Law of the State of Delaware (―DGCL‖) is found in Title 8 of the Delaware Code. Please note that,
due to some issues with Lexis, these are statutes from 2008. Accordingly, rely on these only for our course work this spring.
Do not rely on them for work product outside this course. 3 Citations are to the 1984 version of the Model Business Corporation Act, as amended through 2004 (―MBCA‖). 4 Please note that, due to some issues with Lexis, these are statutes from 2008. Accordingly, rely on these only for our course
work this spring. Do not rely on them for work product outside this course.
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provisions. Overall, these U.S. and Brazilian statutory and regulatory materials are important to corporate governance and transactions; they provide a basis for and illuminate the assigned readings. 5Accordingly, you should review or skim them throughout the course with these purposes in mind.
Course Administration and Grading Policy: This class involves an intense learning environment
spread out over only ten class days. Accordingly, attendance at and preparedness for our class
meetings are absolute essentials for this course and the program has policies in this regard. Active
participation in class meetings and completion of written assignments also is required. In sum, you are expected to meet or exceed the attendance policy for the program, and you must be mentally and physically present in class. To reinforce these values, 25% of your grade in this course is based on your
class attendance and participation in class meetings and in-class exercises. As for the remainder of your course grade, 35% is based on two short written projects completed outside class and 40% is based on
an expository essay and your in-class presentation of the idea for that essay, each as briefly described below.
Course Objective: This course compares and contrasts systems of corporate law by exploring corporate
law and governance in general and in a cross-border transactional context. The primary comparison will be between the United States and Brazil, but the laws of other countries also will be explored as necessary or desirable.
The cross-border transactional focus of the course comprises negotiated and hostile business combinations—mergers, stock purchases (including tender offers), asset transfers, and other available transactions. The course therefore includes examinations of merger and acquisition and related laws and regulations on both national and sub-national levels, as appropriate.
Throughout, emphasis is placed on underlying theory and policies and effects on corporate constituencies in and outside the core corporate governance structure (i.e., ―other constituencies‖—like
employees, distributors, suppliers—as well as directors, officers, and shareholders). In this vein, the course will address managerialism and the market for corporate control, as well as evidence of board primacy or shareholder primacy in merger and acquisition regulation, in various countries and identify implications of these themes for corporate governance in particular countries and in the global marketplace. In addition, the course will involve discussions and analyses of underlying/overarching comparative law themes, e.g.: common and civil law traditions; the convergence/path dependence debate; overall social, political, and economic forces that determine acquisition and takeover regulation; whether law matters; and the differing roles of regulatory organizations. The course also will illustrate and allow for the practice of related research techniques, legal planning and drafting skills, and expository writing proficiency.
5 Students who have not taken a course in corporations or business associations/organizations may want to spend more time with the Delaware and Model Business Corporation Act statutory sections to familiarize themselves with the statutory origins of general corporate structure, governance, and merger and acquisition processes under state law. For others, this statutory material should represent a review of items assigned in a basic course covering state corporation law.
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Written Projects: You are required to complete and submit three principal written projects, as briefly
described below. Together (and including a brief oral presentation on the third project), they comprise 75% of your grade for the course. Detailed guidelines for each project (other than the Course
Questionnaire, which is attached) will be distributed and discussed in class.
; Course Questionnaire – You are required to (1) print out and complete the attached Course
Questionnaire and bring it with you to our first class meeting or (2) electronically submit the
attached Course Questionnaire to me as an email attachment on or before Thursday, May 14.
This project comprises 10% of your grade for the course. Due date: Thursday, May 14 (for
electronic submissions); Monday, May 18 (for hard-copy submissions).
; Planning/Drafting Memorandum – You will draft and comment on specified provisions for a
cross-border merger or acquisition agreement, as directed. This project comprises 25% of your
grade for the course. Due date: Wednesday, May 27.
; Expository Essay (and Related Presentation) – You must (1) identify one aspect of U.S. law
relating to corporate governance or mergers and acquisitions, (2) critique that aspect of U.S. law
using materials and themes from this course, and (3) suggest possible changes to U.S. law based
on the materials and themes from this course. Look for ideas as the course proceeds. It will
not benefit you to wait until the last minute on this. Suggested changes may include, e.g.,
amending existing statutes or rules, suggesting new statutes or rules, repealing existing statutes
or rules, or (as and if appropriate) recommending changes in related decisional law. This project,
together with your in-class presentation of the idea for this project, comprises 40% of your grade
for the course. Due date: Friday, May 29 (in-class idea presentation); Monday, June 25
(expository essay).
6Course Outline
Set forth below is a day-by-day summary of the course coverage and assignments. Please review this
summary upon receipt of this Course Syllabus and Outline and contact me with any questions you may have.
I am privileged to have access to two instructors form Brazil to assist me in teaching you during this course. They are Fernando de Souza Penteado (corporate governance and cross-border transactions) and Patrícia Regina Pinheiro Sampaio (antitrust) from Fundação Getulio Vargas Law School in Rio. Their academic backgrounds complement mine, and they are extremely valuable resources for us in learning about Brazilian law and practice. As you’ll see from the Course Outline set forth below, we also plan to
visit a local law firm on a field trip and be graced by a few other guest speakers. Our current plans for these experiences are noted in this Course Outline.
6 Please note that this Course Outline remains subject to change, in particular because of the schedules of our local faculty, guest speakers, and field trip host.
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7Assignments; Required Readings Date Coverage
Monday, Laying a Foundation: Basics Please submit: the attached Course Questionnaire and bring 8May 18 of U.S. and Brazilian the completed hard copy with you to class for submission,
Corporate Law and unless you submitted your Course Questionnaire
Governance (with F. electronically on or before Thursday, May 14. Please read:
BAINBRIDGE, chs. 1 & 2, pp. 1-48; Erica Gorga, Culture and Penteado)
Corporate Law Reform: A Case Study of Brazil, 27 U. PA. J.
INT’L ECON. L. 803 (2006); Andre Antunes Soares de
Camargo, Three Essential Aspects of Corporate Law: A Brief
Overview of Brazilian and American Approaches, 9 SW. J.L. 9& TRADE AM. 89 (2002/2003); and the PowerPoint slides on
BOVESPA and the Novo Mercado, available at
http://www.google.com/url?sa=t&source=web&ct=res&cd=
2&url=http%3A%2F%2Fwww.ifc.org%2Fifcext%2Fcgf.nsf
%2FAttachmentsByTitle%2FBelgrade_Stock_Exchange_C
onf_Bovespa_ppt%2F%24FILE%2F5th%2BBelex%2B151
106%2BMHelena.ppt&ei=0ojjScSnJZbItgeqxoSwDA&usg
=AFQjCNGnVgHnN65cYT_eOBXeyX03FVzYiQ.
Tuesday, AINBRIDGE, ch. 3, pp. 49-128; GEVURTZ, chs. More on Corporate Law and Please read: B10May 19 Governance: Structures and I, II & IV.
Rules; Introduction to
Mergers & Acquisitions 12Wednesday, Overview of Cross-Border Roger S. Aaron, et al., Chapter 2: 2006 Please read:
May 20 Transactions: Theory, Trends in Cross-Border M&A: A European Perspective with
Policy, and Practice (incl. a U.S. Commentary, in THE INTERNATIONAL COMPARATIVE
GUIDE TO: MERGERS & ACQUISITIONS 2007, available at field trip – Machado,
http://www.skadden.com/content/Publications/Publications1Meyer, Sendacz e Opice, 11Rio office) 245_0.pdf; Dana Stringer, Note: Choice of Law and Choice
of Forum in Brazilian International Commercial Contracts:
7 Please note that the first two days of reading are the heaviest in the entire course. However, they form the basis of your understanding for the rest of our two weeks together. Consider starting these readings before you arrive in Brazil (where there
are many enticing distractions—trust me). Also, the texts for this course are published in a relatively small page-size format, the GEVURTZ text is printed in relatively large type, and you are required to read only the text of assigned law review articles, not the footnotes. Accordingly, the aggregate number of assigned pages may mislead you as to the amount of reading required for any given day. Many of the readings are news articles available on the Web. Most of them are quite short and easy to read. If a hypertext link does not work, please cut and paste the url into your browser. It then should work. Contact
me if you have any questions not addressed here. 8 Please note that this assignment is due no later than the beginning of class. Accordingly, ensure that you arrive early enough
to submit the assignment on time. Late submissions are subject to a penalty. 9 The text of the Gorga article is about 44 pages, and a number of these pages are charts. Accordingly, it is not as lengthy as
it appears. 10 You will receive detailed guidelines for the Planning/Drafting Memorandum, due on Wednesday, May 27, at this class meeting. Optimally, you should work on this assignment a little bit each day during the time that you have the assignment. You are responsible for getting a copy of the assignment even if you are not in class. 11 The field trip is expected to run from (approximately 3:00 pm to 5:00 pm, not including travel to and from the Machado, Meyer offices. I also will teach a class session for 1.5 hours earlier in the day to prepare you for the field trip. We will arrange
the exact timing of that class session once we get to Brazil. 12 This assignment looks ridiculous, but many of the items are quite short. Remember to dress appropriately (business attire)!
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7 Assignments; Required ReadingsDate Coverage
Party Autonomy, International Jurisdiction, and the
Emerging Third Way, 44 COLUM. J. TRANSNAT’L L. 959 13(2006); Elzio Barreto, Citigroup sees record Brazil M&A
deals in 2007, REUTERS, Aug. 7, 2007, available at
http://www.reuters.com/article/innovationNews/idUSN0737
369620070807; Brazil Legal, Market Overview, Mergers
and Acquisitions, available at
http://www.iflr1000.com/PracticeArea/309/Mergers-and-ac
quisitions.html; Tony Danby, Mergers, Acquisitions Loom
Over Brazil Sugar, Ethanol Indus, available at
http://royaldutchshellplc.com/2009/01/22/mergers-acquisitio
ns-loom-over-brazil-sugar-ethanol-indus/; Priscilla Murphy,
Companies rush to complete M&A deals in Brazil ahead of
uncertainty about tax break after 2009, available at
http://www.ft.com/cms/s/2/016ff6a4-fe84-11dd-b19a-00007
7b07658.html; Guillermo Parra-Bernal, Brazil Mergers,
Acquisitions Poised for „Hot‟ 2008 (Update1),
BLOOMBERG.COM, March 25, 2008, available at
http://www.bloomberg.com/apps/news?pid=20601086&sid
=aVtLH6GpI76E&refer=latin_america
14Thursday, Factors Other Than Please read: European Commission, Mergers,
May 21 Corporate Law – Part I: Legislation, Notices and Guidelines, Notices on Substance,
Antitrust (with P. Pinheiro); available at
Drafting Principles http://ec.europa.eu/competition/mergers/legislation/notices_
on_substance.html; ICN Merger Working Group:
Investigation and Analysis Subgroup, ICN Merger
Guidelines Workbook, available at
http://www.internationalcompetitionnetwork.org/media/libr
ary/conference_5th_capetown_2006/ICNMergerGuidelines
Workbook.pdf; Ministry of Finance, Ministry of Justice,
Horizontal Merger Guidelines, available at
http://www.mj.gov.br/services/DocumentManagement/File
Download.EZTSvc.asp?DocumentID=%7B5661A56A-64A
3-4B2D-8D75-E9B5C31AA7A5%7D&ServiceInstUID=%7
B2E2554E0-F695-4B62-A40E-4B56390F180A%7D
U.S. Department of Justice, Horizontal Merger Guidelines,
available at
http://www.usdoj.gov/atr/public/guidelines/hmg.pdf;
13th This reading relates specifically to your assignment due May 27. You should consider using the opportunity you will have
at Machado, Meyer (to interact with Brazilian lawyers who do cross-border transactions) to your advantage by asking our
field trip hosts questions relating to choice of law provisions for cross-border transactions. 14 A detailed reading of the various horizontal merger guidelines assigned for review is not necessary. Read these with
enough focus and in enough detail to be able to understand the basics of merger review and discuss the similarities and
differences in approach and content as among the different nations represented.
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7 Assignments; Required ReadingsDate Coverage
Organisation for Economic Cooperation and Development
(OECD), Competition Law and Policy in Brazil: A Peer
Review (2005), pp. 1-44 & 102-19, available at
http://www.oecd.org/dataoecd/12/45/35445196.pdf.
Thomas Krümmel, Influences of Anglo-American Legal
Language on Civil Law Contracts, EUROPÄISCHE UNION /
INTERNATIONALES, Sept. 2007 [CD-ROM].
Friday, May BAINBRIDGE, chs. 4-5, pp. 129-191. Factors Other Than Please read:1522 Corporate Law – Part II:
Securities Regulation; Tax Brazil: Taxation of Cross-Border Mergers & Acquisitions
(2008 Edition) available at
http://www.kpmg.com/NR/rdonlyres/2C1DF9A9-8EF2-4CF
D-A9E1-AFE89E6EB26E/0/MA_Brazil_2008.pdf Deloitte
Touche Tohmatsu, International Tax 2009, Brazil
Highlights, available at
http://www.deloitte.com/dtt/cda/doc/content/dtt_tax_highlig
hts_2009_Brazil.pdf; PricewaterhouseCoopers,
Brazil: Additional new regulations for the tax on financial
transactions, available at
http://www.internationaltaxreview.com/?Page=10&PUBID
=35&ISS=25227&SID=715715&TYPE=20.
Monday, Cross-Border Case Studies – Please read: CNOOC Withdraws 18.5 billion offer for
May 25 Part I: Analysis of Three Unocal, available at
Cross-Border Deals (with F. http://www.redorbit.com/news/general/194745/cnooc_withd
raws_185b_offer_for_unocal/index.html; Jad Mouawad & Penteado)
David Barboza,
In Seeking Unocal, Chevron Ruffles an Asian Partner,
available at
http://www.thepowerhour.com/news/seeking_unocal.htm;
James Politi & Francesco Guerrera, U.S. Lawmakers meddle
in CNOOC‟s Unocal bid, available at
http://www.chinadaily.com.cn/english/doc/2005-07/06/cont
ent_457677.htm.
Arcelor-Mittal offers 13.7165 eur/share for minorities in
Brazil unit, FORBES.COM, Apr. 27, 2007, available at
http://www.forbes.com/markets/feeds/afx/2007/04/27/afx36
62482.html; Arcelor Mittal raises offer for Brazilian unit,
REUTERS, Apr. 6, 2007, available at
http://www.reuters.com/article/mergersNews/idUSL062635
6820070406; Jeb Blount, Regulators order Arcelor Mittal to
pay $5 billion for Arcelor‟s Brazilian unit, INTERNATIONAL
15 At or before this class meeting, you will receive detailed guidelines for the Expository Essay due on Monday, June 25 and
the related presentation on Friday, May 29.
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7 Assignments; Required ReadingsDate Coverage
HERALD TRIBUNE, March 23, 2007, available at
http://www.iht.com/articles/2007/03/22/bloomberg/bxsteel.p
hp; Brazil antitrust body OKs Mittal-Arcelor merger,
REUTERS, March 28, 2007, available at
http://www.reuters.com/article/governmentFilingsNews/idU
SN2837397520070329; James Kanter et al., Arcelor agrees
to Mittal takeover, HERALD TRIBUNE, July 7, 2006, available
at
http://www.iht.com/articles/2006/06/25/business/steel.php.
Brazil VCP buys $1.7 bln Aracruz stake, may merge,
available at
http://uk.biz.yahoo.com/06082008/323/brazil-vcp-buys-1-7-
bln-aracruz-stake-merge.html; Carlos Caminada, Aracruz,
VCP to Merge, Form Top Eucalyptus-Pulp Maker, available
at
http://www.bloomberg.com/apps/news?pid=20601086&refe
r=news&sid=a.0ZRPotKneA; Ben Rollin, Votorantim
Purchases 28% of Aracruz and May Take Control of the
Company, available at
http://www.incainvest.com/index.php/20090120545/Comm
odities-News/votorantim-purchase-28-of-aracruz-and-may-t
ake-control-of-the-company.html; VCP Expands Stake in
Aracruz Celulose, available at
http://www.euwid-paper.com/news_single.html?&tx_ttnews
[tt_news]=410&cHash=4ee20f2c3a.
Tuesday, Cross-Border Case Studies – Please read: BAINBRIDGE, ch 6, pp. 192-251; GEVURTZ, ch.
May 26 Part II: Unsolicited VII.
Transactions and Related
Defenses
Wednesday, The Practice of Law in a Please submit: your Planning/Drafting Memorandum, in 16May 27 Cross-Border Context: accordance with the detailed guidelines supplied to you.
Theory, Policy, Practice, and Please read: Laurel S. Terry, A “How To” Guide for
Professional Responsibility Incorporating Global and Comparative Perspectives into the
Required Professional Responsibility Course, 51 ST. LOUIS (with Timothy J. Smith,
L.J. 1135 (2007); Jamie Y. Whitaker, Note: Current Esq. and Salim J. Saud,
Development 2005-2006: Remedying Ethical Conflicts in a Esq., Squire, Sanders &
Global Legal Market, 19 GEO. J. LEGAL ETHICS 1079 (2006); Dempsey LLP, Rio office) ;
Carolyn J. Buller, Managing Your Cross-Border
Transactions, available at
http://library.findlaw.com/2004/Jul/22/133528.html;
Wachtel, Lipton, Rosen & Katz, Cross-Border M&A – 2008
Checklist for Making Acquisitions in the U.S., Dec. 20, 2007,
16 Please note that this assignment is due no later than the beginning of class. Accordingly, ensure that you arrive early
enough to submit the assignment on time. Late submissions are subject to a penalty.
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7 Assignments; Required ReadingsDate Coverage
available at
http://blogs.law.harvard.edu/corpgov/files/2008/01/2008010
2-cross-border-ma-checklist.pdf.
Thursday, Insider Trading Regulation: Please read: Comparative insider trading regulation 17May 28 Example of an International readings [CD-ROM].
and Comparative
Cross-Border Transaction Jennifer G. Hill, The Persistent Debate about Convergence
Problem in Comparative Corporate Governance, Sydney Law School
Research Paper No. 06/3, available at SSRN:
Summary of Cross-cutting http://ssrn.com/abstract=881896.
Comparative Law Themes:
Common Law/Civil Law;
Convergence/Path-Depende
nce; Social, Political,
Economic, and Cultural
Forces; the (Un?)Importance
of Law; and Regulatory
Organizations and
Institutions
Friday, May Applying Knowledge: Please prepare and deliver in class: a five-to-ten-minute
29 Student Presentations on presentation on your Expository Essay topic, in accordance
Expository Essay Topics with the detailed guidelines supplied to you.
17 These are all in a single folder named Insider Trading: Global Developments and Analysis 2008 (eds. Ali & Gregoriou) on
the CD-ROM.
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COMPARATIVE CORPORATE LAW:
GOVERNANCE, TRANSACTIONS, AND PRACTICE
Georgia State University Summer Legal and Policy Study in Rio de Janeiro
May 2009
Joan M. Heminway
The University of Tennessee College of Law
Room 384
865-974-3813
jheminwa@tennessee.edu
Course Questionnaire
Please answer the questions set forth below. Your answers will be evaluated based on their degree of responsiveness to the questions posed. Your performance on this Course Questionnaire comprises
10% of your course grade. You may complete this Course Questionnaire in typewritten or handwritten form. You may supply your answers in the spaces provided in this Course Questionnaire or on attached sheets (with appropriate cross-references noted on the Course Questionnaire to any attached sheets) or both. You must either (a) bring a hard copy of the completed Course Questionnaire to our first class meeting (Monday, May 18) and submit it to me at the beginning of that class meeting or (b) submit a copy of the completed Course Questionnaire to me in electronic format (by email attachment) on or before Thursday, May 14.
1. Have you taken one or more courses covering the law of business associations (e.g., Business
Associations, Business Organizations, Corporations, Unincorporated Business Associations, etc.)
or corporate finance (including, e.g., Business Planning or Mergers & Acquisitions, as well as
courses denominated ―Corporate Finance‖)? If so, please list those courses and briefly describe
their coverage.
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2. Why are you taking this course?
3. What do you expect to learn (and otherwise take away) from this course? Be as specific as
possible. You may answer this question by listing items (i.e., you need not write in full
sentences).
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