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5 Entrepreneurial Bus. L.J. 561 (2010)
The U.S. as Reluctant Shareholder: Government, Business and the Law

handle is hein.journals/eblwj5 and id is 565 raw text is: THE U.S. AS RELUCTANT SHAREHOLDER: GOVERNMENT, BUSINESS AND THE LAW BARBARA BLACK* I. INTRODUCTION In October 2008, Congress passed the Emergency Economic Stabilization Act of 2008 (EESA) that created the Troubled Asset Relief Program (TARP) and appropriated $700 billion to restore liquidity and stability to the financial system... .' Pursuant to TARP, the U.S. Government's extraordinary investment in private business was undertaken to combat the financial crisis.2 The amount of federal assistance to financial institutions and the automotive industry was staggering. As of March 31, 2010, the U.S. Department of the Treasury (Treasury) had planned TARP expenditures of approximately $497 billion, of which approximately $382 billion had been disbursed. Financial institutions accounted for the largest amount of funds, primarily in the form of direct investment of capital through financial institution support programs ($320.7 billion) as well as another $51 billion categorized as asset support programs, the purpose of which was to support the liquidity and market * Charles Hartsock Professor of Law and Director, Corporate Law Center, University of Cincinnati College of Law. Thanks to the editors of the Entrepreneurial Business Law Journal for inviting me to participate in the March 2010 Symposium, The Relationship Between American Government and American Business. John Wolfenden, University of Cincinnati College of Law, expected 2012, and Aaron Bernay, Rosina Caponi and Jerrod Kuhn (all University of Cincinnati College of Law, expected 2010) provided excellent research assistance. This article reflects events as of July 1, 2010. 'Emergency Economic Stabilization Act of 2008 § 2(1), 12 U.S.C.A. § 5201 (West 2008). 2 While government bailouts are not new, earlier forms of assistance generally took the form of loans, guaranties, insurance or other subsidies. See Cheryl D. Block, Overt and Covert Bailouts: Developing a Public Bailout Policy, 67 IND. L.J. 951, 1031-34 (1992) (describing past government bailouts). In the savings and loan crisis of the 1980s, the FDIC took preferred shares or warrants in a number of failed banks; the U.S. government received warrants in Chrysler Corp. in the automaker's previous bailout. Id. 3 OFFICE OF THE SPECIAL INSPECTOR GEN. FOR THE TROUBLED ASSET RELIEF PROGRAM, QUARTERLY REPORT TO CONGRESS, 33 (Apr. 2010) [hereinafter SIGTARP, QUARTERLY REPORT TO CONGRESS Apr. 2010].