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Articles 1 - 8 of 8
Full-Text Articles in Law
Lipton And Rowe's Apologia For Delaware: A Short Reply, Ronald J. Gilson
Lipton And Rowe's Apologia For Delaware: A Short Reply, Ronald J. Gilson
Faculty Scholarship
Three themes animate Martin Lipton and Paul Rowe's thoughtful response to my critical evaluation of Unocal's fifteen-year history. First, they maintain that affording shareholders a primary role in the governance of takeovers depends on a commitment to the stock market's informational efficiency. Second, they claim that allowing shareholders to amend or repeal a poison pill ignores empirical evidence that the existence of a poison pill is associated with higher takeover premiums. Third, they assert that the Delaware General Corporation Law (DGCL) reflects an implicit mega-principle that assigns control over takeovers to managers. This short reply corrects Lipton and Rowe's …
A Reexamination Of Glanzer V. Shepard: Surveyors On The Tort- Contract Boundary, Victor P. Goldberg
A Reexamination Of Glanzer V. Shepard: Surveyors On The Tort- Contract Boundary, Victor P. Goldberg
Faculty Scholarship
In international commodity transactions, intermediary certifiers of quantity and quality play a crucial role. Sometimes they err, and when they do, the aggrieved party can pursue remedies against the counterparty or against the intermediary, either in contract or tort. The remedy against the intermediary has depended, at least in part, on whether the plaintiff was in privity. Even absent privity, the aggrieved party could possibly recover in tort (or perhaps as a third-party beneficiary). So held Cardozo in the leading New York case Glanzer v. Shepard. Section I of this paper reviews the Glanzer litigation, with special emphasis on how …
Endowment Effects Within Corporate Agency Relationships, Jennifer H. Arlen, Matthew L. Spitzer, Eric L. Talley
Endowment Effects Within Corporate Agency Relationships, Jennifer H. Arlen, Matthew L. Spitzer, Eric L. Talley
Faculty Scholarship
Behavioral economics is an increasingly prominent field within corporate law scholarship. A particularly noteworthy behavioral bias is the "endowment effect" – the observed differential between an individual's willingness to pay to obtain an entitlement and her willingness to accept to part with one. Should endowment effects pervade corporate contexts, they would significantly complicate much common wisdom within business law, such as the presumed optimality of ex ante agreements. Existing research, however, does not adequately address the extent to which people manifest endowment effects within agency relationships. This article presents an experimental test for endowment effects for subjects situated in an …
What Enron Means For The Management And Control Of The Modern Business Corporation: Some Initial Reflections, Jeffrey N. Gordon
What Enron Means For The Management And Control Of The Modern Business Corporation: Some Initial Reflections, Jeffrey N. Gordon
Faculty Scholarship
The Enron case plays on many different dimensions, but its prominence is not merely part of popular culture's obsession with scandal du jour. Rather, the Enron situation challenges some of the core beliefs and practices that have underpinned the academic analysis of corporate law and governance, including mergers and acquisitions, since the 1980s. These amount to an interlocking set of institutions that constitute "shareholder capitalism," American-style, 2001, that we have been aggressively promoting throughout the world. We have come to rely on a particular set of assumptions about the connection between stock market prices and underlying economic realities; the reliability …
The Evolution Of Corporate Law: A Cross- Country Comparison, Katharina Pistor, Yoram Keinan, Jan Kleinheisterkamp, Mark D. West
The Evolution Of Corporate Law: A Cross- Country Comparison, Katharina Pistor, Yoram Keinan, Jan Kleinheisterkamp, Mark D. West
Faculty Scholarship
The importance of law and legal institutions for economic development is widely acknowledged today. The invention of credit mechanisms to support long-distance trade has been hailed as one of the preconditions for the development of capitalism in Europe. The corporate form is regarded as another milestone for industrialization, the creation of viable market economies, and ultimately economic prosperity. Many former socialist countries quickly enacted new corporate codes or revived their pre-World War Two ("WWII") legislation. The failure of major privatization efforts to enhance enterprise efficiency is attributed to weaknesses in corporate governance, of which the corporate law is a crucial …
On The Demise Of Shareholder Primacy ( Or, Murder On The James Trains Express), Eric Talley
On The Demise Of Shareholder Primacy ( Or, Murder On The James Trains Express), Eric Talley
Faculty Scholarship
The hypothetical introduced by Vice Chancellor Leo Strine's Essay exposes an important arena of corporate governance where adherence to the traditional norm of "shareholder primacy" is particularly troublesome. In fact, it is hard to find an analogous domain of corporate governance law that is as jarringly discontinuous as that found in the factual circumstances suggested by Strine's hypothetical. Explicitly, the legal scrutiny accorded to managers who resist a hostile acquisition depends critically on whether a court invokes the Revlon doctrine or the Unocal doctrine as the appropriate governing standard. Under the former (and its progeny), shareholder primacy arguments carry …
Playing Favorites With Shareholders, Stephen J. Choi, Eric Talley
Playing Favorites With Shareholders, Stephen J. Choi, Eric Talley
Faculty Scholarship
One of the most vexing historical debates in corporate law concerns whether regulations or markets are better equipped to address managerial agency costs within public corporations. Although corporate law scholars have traditionally favored immutable legal imperatives as an elixir for misaligned incentives,an increasing number of commentators place greater faith in market mechanisms to accomplish the same task. While many such mechanisms operate simultaneously (including markets for output, labor, and capital), perhaps none has received more attention than the oft-celebrated "market for corporate control" as a means for achieving deterrence. By providing a constant and credible risk of hostile acquisitions, the …
Understanding Enron: "It's About Gatekeepers, Stupid", John C. Coffee Jr.
Understanding Enron: "It's About Gatekeepers, Stupid", John C. Coffee Jr.
Faculty Scholarship
What do we know after Enron's implosion that we did not know before it? The conventional wisdom is that the Enron debacle reveals basic weaknesses in our contemporary system of corporate governance. Perhaps, this is so, but where is the weakness located? Under what circumstances will critical systems fail? Major debacles of historical dimensions – and Enron is surely that – tend to produce an excess of explanations. In Enron's case, the firm's strange failure is becoming a virtual Rorschach test in which each commentator can see evidence confirming what he or she already believed.