House Oversight and Government Reform committee at a hearing, who did not rule out changing first-class deliver standards or other significant changes.ĭeJoy, a supporter of former President Donald Trump appointed to head the Postal Service last year, suspended operational changes in August after heavy criticism over postal delays. 'I would suggest that we are on a death spiral,' DeJoy told the U.S. Postmaster General Louis DeJoy told lawmakers on Wednesday. mail system is losing $10 billion a year and urgently needs reform and legislative relief from Congress, U.S. Park, Jin-Woo and Jae-Seung Baek (2003), “Corporate Governance and Shareholder Wealth Maximization: An Analysis of Convertible Bond Issuance (in Korean),” The Korean Journal of Financial Management Vol.20, pp.WASHINGTON, Feb 24 (Reuters) - The U.S.

“The Value of Corporate Voting Rights and Control: A Cross-country Analysis”. Majluf (1984), “Corporate financing decisions when firms have investment information that investors do not,” Journal of Financial Economics 13, pp. La Porta, Rafael, Florencio Lopez de Silanes, and Andrei Shleifer (1999), “Corporate Ownership around the World,” The Journal of Finance Vol.54 No.2 pp.471-517 Kang, Hyo-Seok, Jinwoo Park, and Jae-Seung Baek (2007), “International Financing and the Efficiency of Corporate Governance: An Analysis of Overseas Securities Issues (in Korean),” Korean Academy of International Business Vol.18, pp.53-81 Jung, Mookwon (2003), “Long-Term Performance Following Convertible Debt Issuance (in Korean),” The Korean Journal of Finance Vol.16, pp.96-127 (2000), “Tunneling,” American Economic Review Papers and Proceedings Vol. Johnson, S., La Porta, R., Lopez-de-Silanes, F., Shleifer, A. Hillion, Pierre and Theo Vermaelen (2004), “Death Spiral Convertibles,” Journal of Financial Economics Vol.71, pp.381-415 Allen (2006), Corporate Finance, 8th edition, McGraw-Hillīrophy, David, Paige Ouimet, and Clemens Sialm (2009), “Hedge Funds as Investors of Last Resort?” Review of Financial Studies, Vol.22, pp.541-574ĬGCG (2002), “Doosan’s Preferential BWs Serve Double Purpose for Controlling Shareholder: Power Extension and Inheritance,” Center for Good Corporate Governance Issue Report (October 24, 2002)ĬGCG (2003), “The Controlling Shareholders of Doosan Renounce Their Doosan Warrants,” Center for Good Corporate Governance Issue Report (February 24, 2003) G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy Financial Risk and Risk Management Capital and Ownership Structure Value of Firms Goodwillīrealey, R.A., Myers, S.C., and F. G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers Acquisitions Restructuring Corporate Governance Item Type:ĭeath Spiral Issues in Emerging Market: A Control Related Perspectiveĭeath spirals Convertibles Warrants Control enhancing mechanisms Korea

Finally, in approximately half of these firms, at least one member of the controlling party holds hybrid securities that can later be converted into voting shares. Fourth, this same set of firms do not experience a decrease in proportional ownership by the controlling party, while family members other than the controlling shareholder experience the most pronounced increases in the number of shares held. Third, we do not observe subsequent changes in the controlling shareholder in more than 60% of the issuers and these firms exhibit superior operating performance at the time of the issue compared to other death spiral or non-death spiral issuers. Second, operating performance of chaebol issuers are not necessarily low at the time of the issue nor does it deteriorate over time, but they still prefer to issue death spirals over traditional fixed-priced hybrid securities. First, abnormal returns subsequent to death spiral issuance is negative, but more so in poorly governed firms. Using a total of 199 death spiral issuances by public firms listed in the Korea Stock Exchange during 1998-2006, we find a number of pieces of empirical evidence that are less consistent with the conventional last resort financing hypothesis, but rather consistent with the control enhancing or control transferring hypothesis.

This paper studies the motive of issuing floating-priced convertibles or warrants, known as death spirals, in a country where the private benefit of control is high.

Death spiral financing