Law Commons^™

Unsettledness In Delaware Corporate Law: Business Judgment Rule, Corporate Purpose, Lyman P. Q. Johnson

Lyman P. Q. Johnson

This Article revisits two fundamental issues in corporate law. One — the central role of the business judgment rule in fiduciary litigation — involves a great deal of seemingly settled law, while the other — is there a mandated corporate purpose — has very little law. Using the emergent question of whether the business judgment rule should be used in analyzing officer and controlling shareholder fiduciary duties, the latter issue having recently been addressed by Chancellor Strine in the widely-heralded MFW decision, this Article proposes a fundamental rethinking of the rule’s analytical preeminence. For a variety of reasons, it is …

Beyond The Inevitable And Inadequate Regulation Of Bankers, Lyman P. Q. Johnson

Lyman P. Q. Johnson

None available.

Valuación De Empresas Familiares En Crisis, Carlos Molina Sandoval

Carlos Molina Sandoval

La valuación de empresas se ocupa de determinar ese valor en función de los distintos interesados en la empresa (accionistas, directores, familiares, proveedores, clientes, empleados, fisco, etc.) y suele fundarse no sólo en estrictas pautas económicas o financieras sino también en apreciaciones razonables tomadas sobre las llamadas prácticas comerciales y la organización interna familiar. Las especiales características familiares de una empresa incidente significativamente en las pautas de valuación.

The Enduring Illegitimacy Of The Poison Pill, Julian Velasco

Julian Velasco

The poison pill is the ultimate defense against a hostile takeover. From management's perspective, it is almost too good to be true. Originally, the poison pill was seen as a way to guard against the worst of hostile takeover tactics. It has been successful; the poison pill has virtually eliminated these tactics from the repertoires of hostile bidders. However, the poison pill is extremely potent, capable of preventing all hostile takeovers, regardless of their underlying merit. Thus, the poison pill eventually became the means to employ a just say no defense of resisting hostile takeovers, regardless of the interests of …

Shareholder Ownership And Primacy, Julian Velasco

Julian Velasco

According to the traditional view, the shareholders own the corporation. Until relatively recently, this view enjoyed general acceptance. Today, however, there seems to be substantial agreement among legal scholars and others in the academy that shareholders do not own corporations. In fact, the claim that shareholders do own corporations often is dismissed as merely a “theory,” a “naked assertion,” or even a “myth.” And yet, outside of the academy, views on the corporation remain quite traditional. Most people - not just the public and the media, but also politicians, and even bureaucrats and the courts - seem to believe that …

Just Do It: An Antidote To The Poison Pill, Julian Velasco

Julian Velasco

The poison pill is the most powerful defense against hostile takeovers. It can render a company takeover-proof, or nearly so. Efforts at developing an antidote have focused largely on shareholder-adopted bylaws, but the legality of such proposals has been questioned by many. In any event, shareholder-adopted bylaws have not been very successful in eliminating poison pills thus far. In order to effect takeovers, hostile bidders cannot rely on the courts or the target company's shareholders; they can rely only on themselves. In this article, I propose a strategy for hostile bidders to counteract the poison pill and to consummate hostile …

Taking Shareholder Rights Seriously, Julian Velasco

Julian Velasco

The great corporate scandals of the recent past and the resulting push for legal reform have revived the role of the shareholder in the corporation as a subject of great debate. Those who favor an expanded role for shareholders in corporate governance tend to focus on developing new legal rights for shareholders, and their critics respond with reasons why such rights are unnecessary and inappropriate. While these issues certainly are worthy of consideration, issues concerning existing shareholder rights are more fundamental. If existing rights are adequate or could be improved, then new rights may not be necessary; but if existing …

How Many Fiduciary Duties Are There In Corporate Law?, Julian Velasco

Julian Velasco

Historically, there were two main fiduciary duties in corporate law, care and loyalty, and only the duty of loyalty was likely to lead to liability. In the 1980s and 1990s, the Delaware Supreme Court breathed life into the duty of care, created a number of intermediate standards of review, elevated the duty of good faith to equal standing with care and loyalty, and announced a unified test for review of breaches of fiduciary duty. The law, which once seemed so straightforward, suddenly became elaborate and complex. In 2006, in the case of Stone v. Ritter, the Delaware Supreme Court rejected …

The Fundamental Rights Of The Shareholder, Julian Velasco

Julian Velasco

Shareholders have many legal rights, but they are not all of equal significance. This article will argue that two rights — the right to elect directors and the right to sell shares — are more important than any others, that these rights should be considered the fundamental rights of the shareholder, and that, as such, they deserve a great deal of respect and protection by law. The history of corporate law has been one of increasing flexibility for directors and decreasing rights for shareholders. Although the law seems to have coalesced around the norm of shareholder primacy, this is not …

The Role Of Aspiration In Corporate Fiduciary Duties, Julian Velasco

Julian Velasco

Corporate law is characterized by a pervasive divergence between standards of conduct and standards of review. Courts often opine on the relatively demanding standard of conduct, but their judgments must be based on the more forgiving standard of review. Commentators defend this state of affairs by insisting that it provides guidance to directors without imposing ruinous liability. However, the dichotomy can lead many, especially those who focus on the bottom line, to call into question the meaningfulness of standards of conduct. Of particular concern is the increasing popularity, in legal and scholarly circles, of the notion that fiduciary duty standards …

Fiduciary Duties And Fiduciary Outs, Julian Velasco

Julian Velasco

Fiduciary outs are virtually ubiquitous in acquisition agreements, but almost unheard of in other contexts. This is because the fiduciary out is an inherently problematic device. Although it is not intended to do so, it almost necessarily transforms an agreement into an option in the hands of one party. Nevertheless, fiduciary outs make sense in the context of acquisition agreements. This is because fiduciary outs are essentially contractual proxies for fiduciary duties. As such, they have the same purpose: to protect shareholders from abuse at the hands of directors. Fiduciary outs do this in the context of acquisition agreements by …

Shareholder Primacy In The Classroom After The Financial Crisis, David Millon

David K. Millon

No abstract provided.

Back To The Future: Rediscovering Equitable Discretion In Trademark Cases, Mark P. Mckenna

Mark P. McKenna

Courts in recent years have increasingly made blunt use of their equitable powers in trademark cases. Rather than limiting the scope of injunctive relief so as to protect the interests of a mark owner while respecting the legitimate interests of third parties and of consumers, courts in most cases have viewed injunctive relief in binary terms. This is unfortunate, because greater willingness to tailor injunctive relief could go a long way to mitigating some of the most pernicious effects of trademark law’s modern expansion. This Essay urges courts to reverse this trend towards crude injunctive relief, and to re-embrace their …

The Congressional Response To Corporate Expatriations: The Tension Between Symbols And Substance In The Taxation Of Multinational Corporations, Michael Kirsch

Michael Kirsch

During the past few years, several high-profile U.S.-based multinational corporations have changed their tax residence from the United States to Bermuda or some other tax haven. They have accomplished these expatriations, and the resulting millions of dollars of annual tax savings, merely by changing the place of incorporation of their corporate parent, without the need to make any substantive changes to their business operations or their U.S.-based management structure. Congress and the media have focused significant attention on this phenomenon. Despite this attention, Congress initially enacted only a non-tax provision targeting corporate expatriations - a purported ban on expatriated companies …

Corporate Initiatives: A Second Human Rights Revolution?, Douglass Cassel

Douglass Cassel

This Essay examines the role of multinational corporations in protecting human rights around the globe. Part I analyzes the conduct of corporations, describes examples of corporations' involvement in human rights violations, and discusses the merits of greater responsibility of corporations. Part II suggests that the level of responsibility for a multinational corporation depends on the proximity of the corporation's operations to human rights violations, in combination with the seriousness of the violations, and proposes five gradations of responsibility. This Essay concludes that the evolving nature of the global economy is producing a shift in responsibilities from government to the private …

Government Enforcement Policy Of Section 7 Of The Clayton Act: Carte Blanche For Conglomerate Mergers?, Joseph P. Bauer

Joseph P. Bauer

This Article argues that the Department of Justice's recently articulated enforcement intentions with respect to conglomerate mergers are inconsistent with the case law applying section 7 of the Clayton Act to these transactions and also represent unsound policy. Part I will review the conglomerate merger jurisprudence of the past two decades - looking at the theories that have been used to challenge them, at the important judicial decisions interpreting and applying those theories, and at the Guidelines adopted by the Department of Justice in 1968 to codify these developments. It will then briefly discuss certain developments regarding conglomerate mergers the …

Sarbanes-Oxley, Kermit The Frog, And Competition Regarding Audit Quality, Matthew J. Barrett

Matthew J. Barrett

No abstract provided.

Sustainability In The Boardroom: Reconsidering Fiduciary Duty Under Revlon In The Wake Of Public Benefit Corporation Legislation, Rugger Burke

Rugger Burke

On July 17, 2013, Delaware Governor Jack Markell signed into law legislation establishing the public benefit corporation. This legislation redefines the law of corporate fiduciary duties in Delaware, home to more than 50% of all publicly-traded companies in the United States and 64% of the Fortune 500.

Particularly, this legislation redefines director fiduciary duties within the sale of control context. For the typical Delaware corporation, director fiduciary duties in a sale of control are governed by the seminal corporate law case Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., which narrows the general fiduciary duties of loyalty and care …

Foreword, Robert J. Rhee

Robert Rhee

No abstract provided.

The Terrorism Risk Insurance Act: Time To End The Corporate Welfare, Robert J. Rhee

Robert Rhee

The terrorist attacks of September 11, 2001, inflicted enormous losses on the insurance industry and businesses. In the wake of the disruptions occurring in the insurance market at the time, the government enacted the Terrorism Risk Insurance Act of 2002 to create a “temporary” federal backstop against catastrophic losses. This program subsidized private risk with public funds through a cost-sharing program for which the government does not receive any compensation. The compelling need for the program was unclear even in the smoldering aftermath of 9/11. Yet in response to effective lobbying by the insurance industry and business interests, Congress has …

Incorporación De Herederos En La Sociedad De Responsabilidad Limitada: Lineamientos Normativos, Carlos Molina Sandoval

Carlos Molina Sandoval

El fallecimiento de una persona produce efectos sobre el patrimonio de los herederos. Si éste es socio de una sociedad de responsabilidad limitada, también producirá particulares efectos. El análisis de las diversas circunstancias requiere no sólo el análisis de la normativa societaria sino un adecuado balanceo con las normas del derecho sucesorio, muchas de ellas no disponibles por las partes.

Contratti Di Acquisizione E Rimedi Del Compratore (Seconda Parte), Valerio Sangiovanni

Valerio Sangiovanni

No abstract provided.

Corporate Governance Issues, Peter Peterson, John Foster, Jeffrey M. Colon, William Treanor

Jeffrey M. Colon

No abstract provided.

What's Love Got To Do With It?: The Corporations Model Of Marriage In The Same-Sex Marriage Debate, Jeremiah A. Ho

Jeremiah A. Ho

The time may come, far in the future, when contracts and arrangements between persons of the same sex who abide together will be recognized and enforced under state law. When that time comes, property rights and perhaps even mutual obligations of support may well be held to flow from such relationships. But in my opinion, even such a substantial change in the prevailing mores would not reach the point where such relationships would be characterized as "marriages". At most, they would become personal relationships having some, but not all, of the legal attributes of marriage. And even when and if …

Corporations And Commercial Speech, Ron Collins, Mark Lopez, Tamara Piety, David Vladeck

Tamara R. Piety

Today's discussion will be about a rather famous case-actually, a non-case, Nike v. Kasky.

Corporate Culture And Erm, Michelle M. Harner

Michelle M. Harner

The attitudes and actions of those viewed as leaders within a company (commonly referred to as “tone at the top”) help to define corporate culture and are critical to implementing a successful enterprise risk management (ERM) program. This paper explores the challenges and benefits of creating a risk-aware corporate culture, including the potential legal implications for boards of directors.

Contratti Di Acquisizione E Rimedi Del Compratore (Prima Parte), Valerio Sangiovanni

Valerio Sangiovanni

No abstract provided.

The United States, Lawrence A. Hamermesh

Lawrence A. Hamermesh

No abstract provided.

La Empresa Familiar Y El Concurso, Carlos Molina Sandoval

Carlos Molina Sandoval

Las empresas familiares también deberían merecer un adecuado y diferenciado tratamiento concursal, en función de las especiales características que suele ofrecer la práctica empresaria de este tipo de sujetos. El ordenamiento concursal establece algunas pautas vinculadas con los matices familiares de algunos acreedores o socios, pero que no son suficientes para contemplar los problemas específicos que suele presentar el estado de cesación de pagos de una empresa familiar.

Limited Liability Companies In The Decade Of The 1990'S. Legislative And Case Law Developments And Their Implications For The Future, Charles W. Murdock

Charles W. Murdock

No abstract provided.