• xmlui.mirage2.page-structure.header.title
    • français
    • English
  • Help
  • Login
  • Language 
    • Français
    • English
View Item 
  •   BIRD Home
  • DRM (UMR CNRS 7088)
  • DRM : Publications
  • View Item
  •   BIRD Home
  • DRM (UMR CNRS 7088)
  • DRM : Publications
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Browse

BIRDResearch centres & CollectionsBy Issue DateAuthorsTitlesTypeThis CollectionBy Issue DateAuthorsTitlesType

My Account

LoginRegister

Statistics

Most Popular ItemsStatistics by CountryMost Popular Authors
Thumbnail - Request a copy

Creditors’ holdup, releveraging and the setting of private appropriation in a control contract between shareholders

De La Bruslerie, Hubert; Gueguen, Simon (2021), Creditors’ holdup, releveraging and the setting of private appropriation in a control contract between shareholders, International Review of Law and Economics, 68, p. 106023. 10.1016/j.irle.2021.106023

Type
Article accepté pour publication ou publié
Date
2021
Journal name
International Review of Law and Economics
Volume
68
Publisher
Elsevier
Pages
106023
Publication identifier
10.1016/j.irle.2021.106023
Metadata
Show full item record
Author(s)
De La Bruslerie, Hubert
Dauphine Recherches en Management [DRM]
Gueguen, Simon
Théorie économique, modélisation et applications [THEMA]
Abstract (EN)
Debt is analyzed in relation to the conflict between three parties, a controlling shareholder, outside investors and creditors. We follow Jensen and Meckling’s (1976) and Myers’ (1977) intuitions that leverage may result in excess value appropriation by creditors while at the same time acting to discipline private benefits appropriation. Creditors’ holdup refers to the appropriation by the incumbent debtholders of a large part of the additional value created by an incentivized controlling shareholder. This paper introduces a negotiation framework between controlling and outside shareholders in which releveraging and private benefits are decided while the process of value creation initiates a transfer of value to the creditors. The admissible contracts of control involve a minimum jump in leverage. This result gives a theoretical foundation for the leveraged recap decisions observed in the market and one-off variations of the capital structure.
Subjects / Keywords
Creditors’ holdup; Private benefits; Controlling shareholder; Debt leverage; Releveraging; Corporate governance
JEL
G30 - General
G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
G34 - Mergers; Acquisitions; Restructuring; Corporate Governance

Related items

Showing items related by title and author.

  • Thumbnail
    The setting of a coalition contract between controlling shareholder, managers and executives: How to mix incentive and political logics? 
    de La Bruslerie, Hubert (2011) Article accepté pour publication ou publié
  • Thumbnail
    Equal opportunity rule vs. market rule in transfer of control: How can private benefits help to provide an answer? 
    de La Bruslerie, Hubert (2013-12) Article accepté pour publication ou publié
  • Thumbnail
    Does debt curb controlling shareholder's private benfits? Modelling in a contingent claim framework 
    de La Bruslerie, Hubert (2016) Article accepté pour publication ou publié
  • Thumbnail
    Crossing takeover premiums and mix of payment: An empirical test of contractual setting in M&A transactions 
    de La Bruslerie, Hubert (2012) Communication / Conférence
  • Thumbnail
    Crossing takeover premiums and mix of payment : an empirical test of contractual setting in M&A transactions 
    de La Bruslerie, Hubert (2013-06) Article accepté pour publication ou publié
Dauphine PSL Bibliothèque logo
Place du Maréchal de Lattre de Tassigny 75775 Paris Cedex 16
Phone: 01 44 05 40 94
Contact
Dauphine PSL logoEQUIS logoCreative Commons logo