The Deal Decade

What Takeovers and Leveraged Buyouts Mean for Corporate Governance

Margaret Blair

• Publisher: Brookings Institution Press
• Year: 2010
• eBook ISBN: 9780815719533
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

U.S. companies are still reeling from the takeovers, leveraged buyouts, junk bond issues, re-capitalizations, and other financial restructuring transactions that reshaped corporations in the 1980s. In this book, distinguished economists and scholars in the business administration, management, and law discuss how those transactions affected corporate management and the financial markets. The authors examine why so much corporate restructuring occurred and, particularly, what corporate governance problems were behind it. They evaluate the causes and effects of restructuring, the economic, political, and legal environment that encouraged it, and the new laws and court rulings that resulted. The contributors explain that financial restructuring was driven by a dispute over who should control large public corporations, what their goals should be, to whom the organizations and their managers should be accountable, and how to make them more accountable. Although the wave of financial restructuring itself has subsided, this conflict remains unsolved and will continue to influence the business climate. The Deal Decade addresses such issues as: Why did long-dormant questions about corporate performance and governance surface in the 1980s? Why did they manifest themselves in takeovers and financial restructurings? Why would capital structure be likely to affect corporate performance? Were the increased use of debt and rapid pace of innovation in financial markets, and the explosion in takeover activity independent phenomena or related? And if related, which caused which? Finally, why did the impulse to restructure subside without having resolved the controversies that underlay it?

Table of contents

• Cover
• Half Title
• Title
• Copyright
• THE BROOKINGS INSTITUTION
• Foreword
• Contents
• Financial Restructuring and the Debate about Corporate Governance
• Theories of Optimal Capital Structure: A Managerial Discretion Perspective
• Routines, Cash Flows, and Unconventional Assets: Corporate Change in the 1980s
• Industry-Level Indicators of Free Cash Flow
• Industry-Level Pressures to Restructure
• Decade of Debt: Lessons from LBOs in the 1980s
• Corporate Restructuring in the Chemicals Industry
• Financing Acquisitions in the Late 1980s: Sources and Forms of Capital
• Takeover Politics
• Conference Participants