Contracts, Markets, and Laws in the US and Japan
Edited by Zenichi Shishido
Chapter 13: Appraisal or injunction? Corporate takeovers under uncertain judicial valuation
The rise of the corporate takeover market in Japan in the mid-2000s caused a great deal of attention to be drawn to hostile takeover attempts and judicial decisions regarding takeover defense strategies. From outside Japan, much less attention has been paid to other areas of Japanese corporate takeover law. One such area is judicial remedy for shareholders who believe consideration for a corporate acquisition is inadequate. Since the enactment of the Companies Act of 2005 (hereafter: Japan Companies Act), the Japanese legal system has relied heavily on the appraisal remedy to relieve such shareholders. Building upon this short-lived tradition, the government has recently proposed partially expanding the scope of injunctive relief to long-form mergers and certain other types of corporate transactions. Unlike common law jurisdictions, it is generally accepted in Japan that statutory authorization is required for a court to award shareholders with injunctive relief, and the choice of available remedies depends on the form of transactions rather than their substance.
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