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Journal: LAW AND INNOVATIONS (Vol.1, No. 4)

Publication Date:

Authors : ;

Page : 63-72

Keywords : corporate conflict; merger; absorption; joint-stock company; minority stockholder; majority stockholder; corporate management.;

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An attempt to study the external actions directed on unfair acquisition of corporate right as the cause of corporate conflicts’ origin within joint-stock companies is made in the article. The absence of a unique approach to the definition of the terms ?merger? and ?absorption? in the legislation of Ukraine, Russia, Moldova and the EU countries, is one of the stumbling blocks in the harmonization of European legal system. The result of the research is the conclusion that the cause of a corporate conflict’s origin is actions directed on a hostile merger (absorption) of the target company. The technologies used while a hostile absorption can have both manifestly illegal character and create the appearance of using legislative norms. While preparing a hostile absorption of a joint-stock company, artificial creation of a corporate conflict is considered by interested parties as one of the techniques. Its use allows to destabilize the business entity’s activity and further is used for the absorption. The author believes that in the case of a hostile merger (absorption) the object is a positive corporate control, and the subject is the legal merger and reorganization of the initiator corporation, and the target corporation in the form of a merger or acquisition. The most strict way of a hostile absorption is a direct attack of a creditor on the target company. Such a mechanism may be implemented in the process of the bankruptcy proceedings, that is confirmed by the provisions of the Law of Ukraine ?About the Reconstruction of the Debtor's Solvency or its Recognition as a Bankrupt?, when the invader organization without having any contractual relations with the target company actively buys its debts. The result of these actions is, on the one hand, the initiation of the proceedings for bankruptcy by the invader organization and on the other hand - resistance to such proceedings by the other stockholders, which inevitably leads to a corporate conflict between the stockholders of the target company.

Last modified: 2016-06-02 17:13:31