The contemporary society in the 21st century is often referred to as 'the age of global competitiveness'. Now even without discussing the WTO system, the era where a given region or a nation can survive with the competitive edge can survive has passed and the entire world has become one market and only the strong survives in the market. What would be the most effective way to move further towards prosperity in this 'age of global competitiveness'?
The first way would be maximizing the use of all resources, both tangible and intangible to create a firm foundation.
Also, focusing all energy on the area that the nation possesses the competitive edge would be the only way to survive in this competition on a worldwide scale. One of such strategic methods is M&A. In other words, in order to grow and develop the organization called a corporation or maximize its efficiency, to be in line with the globalization and to adopt the advanced technology, M&A would be necessary.
Management Buyouts(MBO), which this thesis will be discussing, is a type of M&A. MBO began with banks discovering those with strong spirit of entrepreneurship and outstanding management competency to promote the rebuilding of the corporation by providing him with the funding in order to save the corporation at risk such as facing a bankruptcy.
The goal of MBO is the stability and independence of management and it can be the ultimate defensive measure against the aggressive buying from the outside. Furthermore, the increasing share of the management acts as an advantage and since the current management knows the status of the business thoroughly, MBO can be advantageous in effectively working on the corporation than the restructuring of the company.
The structure of MBO prevalent in U.S. and in particular, the standards of scrutiny by Delaware Courts will be examined. Also, the issue of self-dealing regarding MBO and the legal standards of scrutiny by the Delaware Courts related to MBO will be reviewed.
The legal standards of scrutiny by the Delaware Court were classified by the standards such as Ⅰ. business judgment rule, Ⅱ. entire fairness standards, Ⅲ. Unocal corporation standards and Revlon Inc standards and examined. There is a difficulty in organizing MBO unitarily and the universal legal standards of scrutiny that apply to MBO do not exist. MBO, the self-dealing by the directors is based on the entire fairness standards but as the premise, whether or not the independence of the board of directors are not lost should be screened. In reality, there are not many cases where the majority of the directors participate in MBO and for many casesthey are made according to the principle of the management decisions. However, stockholders-plaintiff may bring up an issue with the independence of the board of directors and deal with the application of entire fairness standards.
It is yet difficult to say that MBO market will be active in Korea as it has in U.S. and whether such transactions could be active with certainty. I think that the factors for the development of MBO market in Korea can be many.
Specific regulations on M&A have not been setin Korea and when the situations arise, Korea amends the related legislations such as the Securities and Exchange Act, the laws on monopoly regulations and fair trade, commercial laws and the tax laws.
However, I think MBO may be revitalized in Korea as well. It will not be too long when MBO which is still unfamiliar in Korea will be popular in Korea.
For the revitalization of M&A including MBO in Korea, the roles the experts such as the private enterprise investment funding, venture capitals, investment banks, certified accountants and lawyers perform are highly important and the practical study on the given field would be required.
Ⅱ. MBO의 개념과 경제적 기능
1. MBO의 의의
2. MBO의 구조
3. MBO의 장단점
Ⅲ. MBO에 있어서의 이익 상반 문제
1. MBO에 있어서의 양쪽의 이익 상반 문제
2. MBO는 이익 상반 문제를 이유로 금지
3. 이익 상반 문제를 보는 관점 - 공정성
Ⅳ. MBO에 관련한 델라웨어 법원의 사법심사기준
2. 완전한 공정기준
3. 유노컬(Unocal Corporation) 기준과 레블론(Revlon Inc) 기준