• Corpus ID: 40283272

Creditors versus Capital Formation: The Case Against the European Legal Capital Rules

@article{Enriques2002CreditorsVC,
  title={Creditors versus Capital Formation: The Case Against the European Legal Capital Rules},
  author={Luca Enriques and Jonathan R. Macey},
  journal={Cornell Law Review},
  year={2002},
  volume={86},
  pages={1165-1204}
}
This article presents a critical economic analysis of the European Union's legal capital rules as codified by the Second Directive. Professors Enriques and Macey explore the fundamental differences between United States and European Union approaches to the conflict between fixed and equity claimants and argue that the European Union should abandon its inefficient approach. The costs associated with the European legal capital rules - particularly costs to shareholders, creditors, and society as… 

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See discussion supra Part IlI

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