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Law and CapitalismWhat Corporate Crises Reveal about Legal Systems and Economic Development around the World$
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Curtis J. Milhaupt and Katharina Pistor

Print publication date: 2008

Print ISBN-13: 9780226525273

Published to Chicago Scholarship Online: March 2013

DOI: 10.7208/chicago/9780226525297.001.0001

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The Livedoor Bid and Hostile Takeovers in Japan: Postwar Law and Capitalism at the Crossroads

The Livedoor Bid and Hostile Takeovers in Japan: Postwar Law and Capitalism at the Crossroads

Chapter:
(p.87) Five The Livedoor Bid and Hostile Takeovers in Japan: Postwar Law and Capitalism at the Crossroads
Source:
Law and Capitalism
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226525297.003.0006

This chapter focuses on a corporate scandal in Japan: the hostile takeover bid by Livedoor, a brash Internet company, for Nippon Broadcasting System Inc., a radio broadcaster affiliated with a major Japanese media conglomerate. It shows that the bid—in a country where hostile takeovers have been rare and tainted with social stigma—caused enormous controversy and exposed major fissures in Japanese capitalism. It also added momentum to a series of important changes in governance structures in Japan, including the use of formal law (in the form of judge-made rules) in the transfer of corporate assets. It is striking that the dénouement of the episode includes a major transplantation of United States (specifically Delaware) corporate law into a set of nonbinding guidelines to help govern corporate responses to hostile takeovers in Japan and the subsequent arrest of Livedoor's president on charges of securities and accounting fraud. This rapid pace of the appearence of this series of events reflects important shifts in expectations about the role of law in the Japanese economy.

Keywords:   hostile takeovers, Livedoor, Nippon Broadcasting System Inc, capitalism, Japan, law, United States, Delaware, corporate law, accounting fraud

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