ABSTRACT
American public markets have changed profoundly over the past several decades. Public offerings have declined precipitously since the heyday of the 1980s and 1990s, and small company IPOs have virtually disappeared. The determinants of the secular decline in IPOs are hotly debated, but one emergent phenomenon of the current market dynamic is that many firms go public with modified corporate governance structures aimed at insulating management from shareholder activism, the market for corporate control, and costly shareholder litigation. Among other things, IPO firms are increasingly adopting dual class share structures or, in the case of Snap, Inc, issuing public shares with no voting rights at all. Other firms have chosen to go public not as corporations, but rather as Limited Partnerships and LLCs, which have the statutory ability to waive fiduciary obligations entirely via contractual provisions in their operating agreements.
Jay B Kesten, Of Convergence and Contingency: Some Thoughts on Public Firm Fiduciary Duties (2024) 68 Florida Law Review Forum 136. Online 28 July 2024.
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