Law Commons^™

Looking Back With A Legend: Ira Millstein Reflects On The Impact Of Milton Friedman's Views On Corporate Governance, Eric L. Talley, Ira M. Millstein, Leo E. Strine Jr.

Faculty Scholarship

In this discussion, corporate governance legend and frequent The Business Lawyer contributor Ira M. Millstein reflects on the impact of Milton Friedman and his adherents on our corporate governance system and economy generally, as well as the path forward to an economy that functions better for the many. Millstein takes an historical perspective in conversation with former Chief Justice and Chancellor of Delaware, Leo E. Strine, Jr., moderated by Professor Eric Talley of Columbia Law School. Millstein situates the evolution of our corporate governance system, including the effect of Friedman and the Chicago school on it, within the political dynamics …

Corporate Finance For Social Good, Dorothy S. Lund

Faculty Scholarship

Corporations are under pressure to use their outsized power to benefit society, but this advocacy is unlikely to result in meaningful change because corporate law’s incentive structure rewards fiduciaries who maximize shareholder wealth. Therefore, this Essay proposes a way forward that works within the wealth-maximization framework and yet could result in dramatic social change. The idea is simple: Use private debt markets to provide incentives for public-interested corporate action. Specifically, individuals who value prosocial corporate decisions could finance them by contributing to corporate social responsibility (CSR) bonds that would offset the corporation’s implementation costs. To provide an incentive to depart …

Corporate Crime And Punishment: An Empirical Study, Dorothy S. Lund, Natasha Sarin

Faculty Scholarship

For many years, law and economics scholars, as well as politicians and regulators, have debated whether corporate punishment chills beneficial corporate activity or, in the alternative, lets corporate criminals off too easily. A crucial and yet understudied aspect of this debate is empirical evidence. Unlike most other types of crime, the government does not measure corporate crime rates; therefore, the government and researchers alike cannot easily determine whether disputed policies are effectively deterring future incidents of corporate misconduct. In this Article, we take important first steps in addressing these questions. Specifically, we use three novel sources as proxies for corporate …

Validation Capital, Alon Brav, Dorothy S. Lund, Edward B. Rock

Faculty Scholarship

Although it is well understood that activist shareholders challenge management, they can also serve as a shield. This Article describes “validation capital,” which occurs when a bloc holder’s — and generally an activist hedge fund’s — presence protects management from shareholder interference and allows management’s pre-existing strategy to proceed uninterrupted. When a sophisticated bloc holder with a large investment and the ability to threaten management’s control chooses to vouch for management’s strategy after vetting it, this support can send a credible signal to the market that protects management from disruption. By protecting a value-creating management strategy that might otherwise be …

The Coming Shift In Shareholder Activism: From "Firm-Specific" To "Systematic Risk" Proxy Campaigns (And How To Enable Them), John C. Coffee Jr.

Faculty Scholarship

This article distinguishes two types of shareholder activism: (1) firm-specific activism, which has a long history and focuses on changes at a specific target company, and (2) systematic risk activism, which seeks to reduce the systematic risk in a portfolio and thereby benefit diversified investors. Typically, such a systematic risk campaign may force a portfolio company to internalize negative externalities to benefit the other companies in the portfolio (such as by reducing carbon emissions or undertaking climate risk reforms). But, systematic risk activism faces an inherent difficulty: the party that leads this campaign and invests in the target company may …

Constructing Countervailing Power: Law And Organizing In An Era Of Political Inequality, Kate Andrias

Faculty Scholarship

This Article proposes an innovative approach to remedying the crisis of political inequality: using law to facilitate organizing by the poor and working class, not only as workers, but also as tenants, debtors, welfare beneficiaries, and others. The piece draws on the social-movements literature, and the successes and failures of labor law, to show how law can supplement the deficient regimes of campaign finance and lobbying reform and enable lower-income groups to build organizations capable of countervailing the political power of the wealthy. As such, the Article offers a new direction forward for the public-law literature on political power and …

Common Ownership: Do Managers Really Compete Less?, Merritt B. Fox, Manesh S. Patel

Faculty Scholarship

This Article addresses an important question in modern antitrust: when large investment funds have holdings across an industry, is competition depressed?

The question of the impact of common ownership on competition has gained much attention as the role of institutional shareholding has grown, with the funds of the three largest management companies holding in aggregate approximately 21% of the shares of a typical S&P 500 firm. It is a source of acute disagreement among scholars and policymakers, with some who believe common ownership does depress competition seeking antitrust law reforms that would significantly constrain how investment funds operate. Neglected in …

Should Human Rights Practice Be Rights-Based?, Sarah Knuckey, Margaret Satterthwaite

Faculty Scholarship

Human rights scholars and organizations often call on governments to adopt ‘human rights-based approaches’ (HRBAs) to many policy areas, from climate change to health policy. HRBAs identify rights and obligations, and advance the principles of participation, accountability, equality, and non-discrimination. This chapter argues that HRBAs have been exported to many fields without ever being sufficiently integrated within human rights advocacy. We find that NGOs often fail to adhere to foundational human rights principles in their own work, reproducing unjust power hierarchies, objectifying victims, and disempowering rights-holders. Were HRBAs adopted by more human rights organizations, the face of human rights advocacy …

Corporate Adolescence: Why Did “We” Not Work?, Donald C. Langevoort, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

This article explores a series of rent-seeking behaviors and fiduciary deficits that are playing a role in the “growth” and demise of U.S. companies. Start-up financing occurs through exemptions that remove disclosure obligations required in public markets, assuming that private ordering suffices. The exemptive-privilege premise is that parties to financing rounds will be faithful agents, i.e., fiduciaries, to their sources of capital. Where there are conflicts of interest, fiduciary deficits will arise unless either the threat of litigation for breaches of duty sufficiently deters the resulting opportunism or the sources of capital are themselves sufficiently watchful and savvy to combat …

Does Tax Matter? Evidence On Executive Compensation After 162(M)'S Repeal, Gregg Polsky, Brian Galle, Andrew Lund

Scholarly Works

As part of the most sweeping federal tax reform in a generation, the Tax Cuts and Jobs Act (“TCJA”) radically altered the tax treatment of compensation paid to senior executives of public companies. Prior to the TCJA, payment of such compensation in excess of one million dollars was non-deductible except to the extent the compensation was performance-based. The TCJA eliminated the exception so that all senior executive compensation above one million dollars is now non-deductible regardless of whether it is performance-based or not.

This reform provides a natural experiment to study the role of tax law in influencing managerial pay …

From Property Rights To Liberty Rights: We The Corporations, A Review Essay, Laura Phillips-Sawyer

Scholarly Works

A long-standing, and deeply controversial, question in constitutional law is whether or not the Constitution's protections for “persons” and “people” extend to corporations. Law professor Adam Winkler's We the Corporations chronicles the most important legal battles launched by corporations to “win their constitutional rights,” by which he means both civil rights against discriminatory state action and civil liberties enshrined in the Bill of Rights and the Constitution (p. xvii). Today, we think of the former as the right to be free from unequal treatment, often protected by statutory laws, and the latter as liberties that affect the ability to live …

Debt’S Emotional Encumbrances, Pamela Foohey

Scholarly Works

This chapter focuses on the role of emotions in the theory and practice of commercial and consumer credit laws, including bankruptcy, in the United States. It assesses knowledge about people’s emotions regarding personal and business financial problems, and evaluates how “money law” systems account for these emotions. This assessment finds that emotions surrounding taking on and being able to pay back debt differ between business leaders and people who shoulder household debt. These differences are traceable in large part to historical understandings of the respectability of incurring debt. This history has shaped the development of bankruptcy, commercial, and consumer credit …

Dr. Marye. Maida Order Denying Defendant Clerisy Corporation’S Motion For Interlocutory Injunction And Plaintiffs’ Motion For Judgment On The Pleadings, John J. Goger

Georgia Business Court Opinions

No abstract provided.

When Vertical Is Horizontal: How Vertical Mergers Lead To Increases In “Effective Concentration”, Serge Moresi, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This article explains the inherent loss of an indirect competitor and reduction in competition when a vertical merger raises input foreclosure concerns. We then calculate a measure of the effective increase in the HHI measure of concentration for the downstream market, and we refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward pricing pressure (“UPP”) involved in two alternative types of acquisitions: (i) vertical mergers that raise unilateral input foreclosure concerns (and the associated vertical GUPPI measures), and (ii) horizontal acquisitions of partial ownership interests among …

Greenlife Energy Solutions Order Denying Defendants’ Motion To Strike Patterson’S Third Affidavit, Kelly Lee Ellerbee

Georgia Business Court Opinions

No abstract provided.

Greenlife Energy Solutions Order Granting Defendants’ Motions For Summary Judgment And Order Finding Moot Defendants’ Motion In Limine To Exclude Plaintiff’S Expert Witness, Kelly Lee Ellerbee

Georgia Business Court Opinions

No abstract provided.

A Babe In The Woods: An Essay On Kirby Lumber And The Evolution Of Corporate Law, Lawrence Hamermesh

All Faculty Scholarship

This essay examines the development of corporate law during the time span of the author's career, focusing on the interrelated subjects of valuation, corporate purpose, and shareholder litigation.

United Sciences Order On Various Motions, John J. Goger

Georgia Business Court Opinions

No abstract provided.

How Does The Capability Of Top Management Influence Financial Reporting Fraud?, Michael Wojcikiewicz

Honors Projects in Finance

This study examines the attributes which capture the capability of a perpetrator to engage in financial reporting fraud. Fraudulent financial reporting can be devastating for a company and its employees. Capability includes such measures as the person’s position and the function in which they work. The study reveals how capability influences the occurrence of fraud, the amount of the fraud, and whether capability interacts with concealing the fraud from an audit. The results of the thesis should assist fraud professionals, investors, and regulators as well as stakeholders of corporations by examining publicly available data and highlighting characteristics that can contribute …

Recalibrating A Doctor’S Duty To Advise, Kee Yang Low

Research Collection Yong Pung How School Of Law

Section 37 of the Civil Law ActThe past two decades have witnessed significant developments in the area of a doctor’s duty to advise his patient. Whilst observers are still digesting the full implications of the Hii Chii Kok modifications to the Montgomery test, the legal position has been altered yet again, this time by the statutory addition of s 37 of the Civil Law Act. This article examines the changes and their implications.

Dispute Settlement Under The African Continental Free Trade Area Agreement: A Preliminary Assessment, Olabisi D. Akinkugbe

Articles, Book Chapters, & Popular Press

The African Continental Free Trade Area Agreement (AfCFTA) will add a new dispute settlement system to the plethora of judicial mechanisms designed to resolve trade disputes in Africa. Against the discontent of Member States and limited impact the existing highly legalized trade dispute settlement mechanisms have had on regional economic integration in Africa, this paper undertakes a preliminary assessment of the AfCFTA Dispute Settlement Mechanism (DSM). In particular, the paper situates the AfCFTA-DSM in the overall discontent and unsupportive practices of African States with highly legalized dispute settlement systems and similar WTO-Styled DSMs among other shortcomings. Notwithstanding the transplantation of …

Afghanistan's New Vat, Part 1: Invoice Matching Or A Unitary Digital Invoice, Richard Thompson Ainsworth, Musaad Alwohaibi, Andrew Leahey, Yujin Li, Haseena Rahman

Faculty Scholarship

In the summer of 1990 two groundbreaking articles on business process re-engineering (BPR) were published, one by Thomas H. Davenport (a professor in information technology at Babson College) in the MIT Sloan Management Review, the other by Michael Hammer (a professor of computer science at MIT) in the Harvard Business Review. BPR is a management strategy that analyzes IT-intensive workflow designs and business processes within an organization.

On December 21, 2020 (Jadi 1, 1399) Afghanistan was scheduled to implement a 10% VAT. It has been delayed one year by the pandemic. When it does implement, Afghanistan will have significant workflow …

In Defense Of Breakups: Administering A “Radical” Remedy, Rory Van Loo

Faculty Scholarship

Calls for breaking up monopolies—especially Amazon, Facebook, and Google—have largely focused on proving that past acquisitions of companies like Whole Foods, Instagram, and YouTube were anticompetitive. But scholars have paid insufficient attention to another major obstacle that also explains why the government in recent decades has not broken up a single large company. After establishing that an anticompetitive merger or other act has occurred, there is great skepticism of breakups as a remedy. Judges, scholars, and regulators see a breakup as extreme, frequently comparing the remedy to trying to “unscramble eggs.” They doubt the government’s competence in executing such a …

Whitman And The Fiduciary Relationship Conundrum, Lisa Fairfax

All Faculty Scholarship

While the law on insider trading has been convoluted and, in Judge Jed S. Rakoff’s words, “topsy turvy,” the law on insider trading is supposedly clear on at least one point: insider trading liability is premised upon a fiduciary relationship. Thus, all three seminal U.S. Supreme Court cases articulating the necessary elements for demonstrating any form of insider trading liability under § 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 made crystal clear that a fiduciary relationship represented the lynchpin for such liability.

Alas, insider trading law is not clear about the source from which the fiduciary …

Strategic Jubilee Holdings Order On Plaintiffs’ Motion For Partial Summary Judgment, Kelly Lee Ellerbee

Georgia Business Court Opinions

No abstract provided.

Competitive Harm From Vertical Mergers, Herbert J. Hovenkamp

All Faculty Scholarship

The antitrust enforcement Agencies' 2020 Vertical Merger Guidelines introduce a nontechnical application of bargaining theory into the assessment of competitive effects from vertical acquisitions. The economics of such bargaining is complex and can produce skepticism among judges, who might regard its mathematics as overly technical, its game theory as excessively theoretical or speculative, or its assumptions as unrealistic.

However, we have been there before. The introduction of concentration indexes, particularly the HHI, in the Merger Guidelines was initially met with skepticism but gradually they were accepted as judges became more comfortable with them. The same thing very largely happened again …

Stewardship 2021: The Centrality Of Institutional Investor Regulation To Restoring A Fair And Sustainable American Economy, Leo E. Strine Jr.

All Faculty Scholarship

In this essay, which formed the basis for the luncheon keynote speech at the Rethinking Stewardship online conference presented by the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School and ECGI, the European Corporate Governance Institute, the essential, but not sufficient, role of regulation to promote more effective stewardship by institutional investors is discussed. To frame specific policy recommendations that align the responsibilities of institutional investors with the best interests of their human investors in sustainable wealth creation, environmental responsibility, the respectful treatment of stakeholders, and, in particular, the fair pay and treatment of …

J.P. Carey Enterprises Amended Order On Cross Motions For Summary Judgment, Kelly Lee Ellerbee

Georgia Business Court Opinions

No abstract provided.

Notice Risk And Registered Agency, Andrew K. Jennings

Faculty Scholarship

No abstract provided.

International Standards: Catalyst Or Barrier For Innovative Entrepreneurship In Singapore?, Tan K. B. Eugene

Research Collection Yong Pung How School Of Law

This research, under the Competition and Consumer Commission of Singapore inaugural Research Grant 2018, considers whether and how international standards, specifically those of the International Organization for Standardization (ISO), can function as a catalyst or barrier to innovative entrepreneurship in Singapore. It also interrogates how private (and quasi-public regulation) affect competition and whether such barriers are anti-competitive. In essence, while innovation and entrepreneurship are necessary, they may not be sufficient in ensuring that a product or service is competitive and able to access export markets. The growing movement towards and the expectation of businesses engaging in responsible behaviour has led …