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This work analyzes the often suggested unlimited liability of controlling shareholders, especially in multinational groups. It is based upon an economic analysis of risk allocation between corporations and various corporate shareholders. The analysis also contrasts shareholders' limited liability with two other similar liability limitations: use of negligence as opposed to strict liability in tort law, and the non-liability for consequential damages in contract law.;The text suggests strongly that shareholder control cannot be used as a liability criterion. This indicates further that there are other legal regimes which can more efficiently eliminate inefficient or inequitable corporate risk allocation than unlimited shareholder liability. The author recommends using a liquidation priority for certain pre-insolvency claims in combination with a mandatory disclosure of shareholders' losses of their equity as such a regime. This book should be of interest to corporate attorneys, in-house counsel and legal scholars.
