Law Commons^™

Law School News: Logan To Serve As Adviser On Restatement Third Of Torts 11-07-2019, Michael M. Bowden

Life of the Law School (1993- )

No abstract provided.

Civil Rights And Shareholder Activism: Sec V. Medical Committee For Human Rights, Sarah C. Haan

Washington and Lee Law Review

This article builds upon the author's remarks at the 2018-2019 Lara D. Gass Annual Symposium: Civil Rights and Shareholder Activism at Washington and Lee University School of Law, February 15, 2019.

What does “corporate democracy” mean? How far does federal law go to guarantee public company investors a say in a firm’s policies on important social, environmental, or political issues? In 1972, the U.S. Supreme Court appeared ready to start sketching the contours of corporate democracy—and then, at the last minute, it pulled back. This Article tells the story of Securities and Exchange Commission v. Medical Committee for Human Rights …

From Public Policy To Materiality: Non-Financial Reporting, Shareholder Engagement, And Rule 14a-8’S Ordinary Business Exception, Virginia Harper Ho

Washington and Lee Law Review

This article builds upon the author's remarks at the 2018-2019 Lara D. Gass Annual Symposium: Civil Rights and Shareholder Activism at Washington and Lee University School of Law, February 15, 2019.

In 2017, shareholder proposals urging corporate boards to report on their climate-related risk made headlines when they earned majority support from investors at ExxonMobil, Occidental Petroleum, and PPL. The key to this historic vote was the support of Blackrock, State Street, and Vanguard, which broke with management and cast their votes behind the proposals. The 2018 proxy season saw several more climate-related proposals earn majority support, and in 2018 …

Chancery’S Greatest Decision: Historical Insights On Civil Rights And The Future Of Shareholder Activism, Omari Scott Simmons

Washington and Lee Law Review

This article builds upon the author's remarks at the 2018-2019 Lara D. Gass Annual Symposium: Civil Rights and Shareholder Activism at Washington and Lee University School of Law, February 15, 2019.

Shareholder activism—using an equity stake in a corporation to influence management—has become a popular tool to effectuate social change in the twenty-first century. Increasingly, activists are looking beyond financial performance to demand better corporate performance in such areas as economic inequality, civil rights, human rights, discrimination, and diversity. These efforts take many forms: publicity campaigns, litigation, proxy battles, shareholder resolutions, and negotiations with corporate management. However, a consensus on …

Shareholders United?, Andrew K. Jennings

Notre Dame Law Review Reflection

Securities regulation has a way of crossing into other lanes. What public companies do is substantive regulation. How they govern themselves while doing it—or more importantly, how they disclose it—is securities regulation. So it is no surprise that the perennial concern over regulating money in politics should also become a question of federal securities regulation. The Shareholders United Act (the “Act”)—passed by the House of Representatives as part of House Bill 1, an early, major piece of legislation in the 116th Congress—does just that. The Act would require that before engaging in political spending, public companies poll shareholders on how …

Corporate And Business Law, Laurence V. Parker Jr.

University of Richmond Law Review

This year there were a number of significant legislative changes to the Virginia Stock Corporation Act (“VSCA”) and the Virginia Limited Liability Company Act. Part I discusses certain statutory changes related to Virginia Corporations. Part II summarizes the changes to VSCA, including changes related to ratification of defective corporate acts, appraisal rights in asset sale transactions, multiple changes related to interspecies transactions, improving and making the effect of merger, domestication, and conversion language more uniform, refining the process for abandoning fundamental transactions, regulating the second step merger following a tender offer, modifying the corporate opportunity doctrine, allowing for a court …

The Other Janus And The Future Of Labor’S Capital, David H. Webber

Faculty Scholarship

Two forms of labor’s capital—union funds and public pension funds—have profoundly reshaped the corporate world. They have successfully advocated for shareholder empowerment initiatives like proxy access, declassified boards, majority voting, say on pay, private fund registration, and the CEO-to-worker pay ratio. They have also served as lead plaintiffs in forty percent of federal securities fraud and Delaware deal class actions. Today, much-discussed reforms like revised shareholder proposal rules and mandatory arbitration threaten two of the main channels by which these shareholders have exercised power. But labor’s capital faces its greatest, even existential, threats from outside corporate law. This Essay addresses …

The Other Janus And The Future Of Labor’S Capital, David H. Webber

Vanderbilt Law Review

Two forms of labor’s capital—union funds and public pension funds— have profoundly reshaped the corporate world. They have successfully advocated for shareholder empowerment initiatives like proxy access, declassified boards, majority voting, say on pay, private fund registration, and the CEO-to-worker pay ratio. They have also served as lead plaintiffs in forty percent of federal securities fraud and Delaware deal class actions. Today, much-discussed reforms like revised shareholder proposal rules and mandatory arbitration threaten two of the main channels by which these shareholders have exercised power. But labor’s capital faces its greatest, even existential, threats from outside corporate law. This Essay …

Automating Securities Class Action Settlements, Jessica Erickson

Vanderbilt Law Review

This Article argues that the time has come to modernize the distribution of settlement funds in securities class actions. There are two possible ways to modernize this process. The first approach relies on market innovation, proposing an automated system that collects the relevant transaction data from individual banks and brokers. Claims administrators could then use this data to calculate every class member’s pro rata share of the settlement and send them their money. The second approach relies on regulatory innovation using the SEC’s Consolidated Audit Trail, which, once it is up and running, will contain a complete record of nearly …

Corporate Oversight And Disobedience, Elizabeth Pollman

Vanderbilt Law Review

This Article explores the public-regarding purpose of the obedience and oversight duties in corporate law and provides a descriptive account of how they are applied in practice. The Article argues that the fidelity to external law required by the duty of good faith largely serves a legitimizing role for corporate law. Expressing obligations of legal compliance and oversight within corporate law acknowledges societal interests in the rule of law and preserves the ability of courts to flexibly respond to particularly salient and egregious violations of public trust, should they arise, without upending case law developed over decades.

Further, this Article …

Functional Corporate Knowledge, Mihailis Diamantis

William & Mary Law Review

The line between guilt and innocence often turns on what a defendant knew. Although the law’s approach to knowledge may be relatively straightforward for individuals, its doctrines for corporate defendants are fraught with ambiguity and opportunities for gamesmanship. Corporations can spread information thinly across employees so that it is never “known.” And prosecutors can exploit legal uncertainties to bring knowledge-based charges where corporations were merely negligent in how they handled information. Whereas knowledge as a mens rea has unique practical and normative properties that vary with a corporation’s size and industry, corporate law treats knowledge just like any other mental …

Data First – Tax Next: How Fiji’S Technology Can Improve New Zealand’S ‘Netflix Tax’ (Part 4), Richard Thompson Ainsworth

Faculty Scholarship

This is the fourth paper examining the recent amendments to the New Zealand Goods and Services Tax (GST); amendments that are collectively known as the Netflix Tax. These papers assess the effectiveness of the Netflix provisions, and how they could be enhanced if New Zealand adopted the technology and vision of Fiji’s VAT Monitoring System (VMS). The Netflix provisions were effective, July 1, 2017.

This final paper considers:

(a) the treatment of domestic agents when they are used by remote service providers to facilitate sales to New Zealand customers;

(b) how New Zealand intends to respond to resident consumers who …

Members Only: Can A Trustee Govern An Llc When Its Member Files For Bankruptcy?, Theresa J. Pulley Radwan

Loyola of Los Angeles Law Review

Limited-liability entities allow owners to limit their personal risk similar to shareholders of a corporation while enjoying the ability to operate the business more in the manner traditionally used for a partnership. These attributes have made these business forms increasingly popular business over the past few decades because they offer the best of partnership world—control and pass-through taxation—while also offering the best of corporate world—limited liability to all of its owners. But if financial problems arise for these businesses and their owners, bankruptcy may be the final option to remedy financial difficulties. The current bankruptcy code, adopted at the same …

Addressing The Auditor Independence Puzzle: Regulatory Models And Proposal For Reform, Aurelio Gurrea-Martinez, Martin Gelter

Research Collection Yong Pung How School Of Law

Auditors play a major role in corporate governance and capital markets. They facilitate firms’ access to financing by creating trust among public investors with efforts to prevent misbehavior and financial fraud by corporate insiders. In order to fulfill these goals, however, in addition to having the adequate knowledge and expertise, auditors should perform their functions in an independent manner. Unfortunately, auditors are subject to conflicts of interest by, for example, providing non-audit services or the mere fact of being hired and paid by the audited company. Therefore, even if auditors act independently, investors have reason to think otherwise. This lack …

Gatekeepers, Cultural Captives, Or Knaves? Corporate Lawyers Through Different Lenses, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

Studying the behavior of high-status corporate lawyers is challenging. Much writing (including some of my own) addresses the risk of lawyer enabling of client misconduct by drawing from work in behavioral ethics suggesting that at least some apparent complicity is without full awareness of the impropriety. Is this naïve? The first part of this essay pushes harder on consciousness by looking more closely at the lengthy continuum—not a binary yes/no—in the awareness of wrongdoing risk as heavily influenced by the “slippery slope.” Looking at corporate lawyers’ professional responsibility through this lens has some interesting, and as far as I can …

The Social Costs Of Dividends And Share Repurchases, J.B. Heaton

The Journal of Business, Entrepreneurship & the Law

A long-held view in the academy is that shareholders are "residual claimants” in the sense that shareholders are paid in full only after the corporation pays its creditors. The reality on the ground is far different. Corporations give assets away to their shareholders long before they have satisfied creditors, both voluntary contract creditors and involuntary tort creditors. In particular, existing U.S. corporate and voidable transfer laws allow corporations to pay dividends and make share repurchases up to the point where the corporation is insolvent or nearly so. Voluntary creditors can limit dividends and share repurchases by contract, but involuntary creditors …

Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter

The Journal of Business, Entrepreneurship & the Law

This paper will first provide a critical, comparative look at the Canadian and the federal American responses to the under-representation of women on boards of large, publicly traded corporations. There will be a discussion about the competing conceptions which emerge in addressing the regulation of women on boards in the United States and Canada and why each jurisdiction implemented its policy when it did. The conceptions arising out of questions about under-representation of women on boards tend to fall within two categories: business case rationales and normative rationales. Given the competing conceptions of this issue, this paper will attempt to …

The Emergence And Influence Of Transactional Practice Within Clinical Scholarship, Paul R. Tremblay

Paul R. Tremblay

This essay, in honor of the twenty-fifth anniversary of the founding of the Clinical Law Review, reflects on the gradual emergence, and the limited influence, of transactional practice within clinical scholarship as reflected by writing in the Clinical Law Review since 1994. The essay offers three observations. First, a review of the fifty or so published issues of the journal demonstrates that writing about transactional practice has increased demonstrably between 1994 and 2019. Second, that development notwithstanding, it appears that when writers, even in recent years, write about lawyering in some generalizable fashion, the examples that appear in those works …

Law School News: A Busy, Busy Time In Admiralty Law 10-18-2019, Michael M. Bowden

Life of the Law School (1993- )

No abstract provided.

Behavioural Economics And The Non-Frustration Rule: Accounting For Bias, Matthew Cole

The Journal of Business, Entrepreneurship & the Law

The purpose of this paper is to argue how reforming the UK takeover and merger rules can lead to greater long-term investment by UK firms, while causing commensurate growth in productivity without hindering overseas investment or entrenching inefficient management.

Getting What You Bargained For: Avoiding Legal Uncertainty In Survival Clauses For A Seller's Representations And Warranties In M&A Purchase Agreements, Will Pugh

The Journal of Business, Entrepreneurship & the Law

This note will examine the variables that effect the way that courts may limit parties’ contractual freedom to shorten or lengthen statutes of limitation. It will describe the legal levers that determine the applicable survival period and suggest ways that parties can reduce legal uncertainty around the “basket” of provisions including reps, warranties, survival, and indemnification periods. One key detail examined by this note is “borrowing statutes ”that could operate to import another state’s controlling statute. Additionally, this note will discuss ways in which the contractual right to indemnification for breached reps and warranties is a substantive right that is …

Concept Release On Harmonization Of Securities Offering Exemptions; File Number S7-08-19, Robert Anderson, Samantha Prince, John Neil Conkle, Sarah Zomaya

Samantha J. Prince

No abstract provided.

Corporate Power And Campaign Finance, H. Kent Greenfield

Kent Greenfield

Chapter in a book about answers to the policy problems created by Citizens United, focusing on the possibility of using corporate governance to transform corporations into positive players in the public space.

Innovative Collaboration To Further Community Self-Determination, Matthew Currie, Amaha Sellassie

Biennial Conference: The Social Practice of Human Rights

The built urban environment is the product of more than a century of policy decisions that have both intentionally discriminated and have had the effect of discriminating, against African Americas, immigrants, the work class, low income individuals and other undesirables. While more than fifty years have passed since the passage of civil rights legislation in the United States, individuals in today’s cities are living out our discriminatory legacy.

In Dayton, Ohio, a new movement has risen from the community to disrupt the legacy of de jure and de facto discrimination by the collaborative efforts of the impactive individuals, neighborhood leaders, …

Emerging Trends In Corporate Enforcement And Corporate Compliance: Symposium Introduction, James Fanto, Miriam Baer

Faculty Scholarship

No abstract provided.

Insulation By Separation: When Dual-Class Stock Met Corporate Spin-Offs, Young Ran (Christine) Kim, Geeyoung Min

UC Irvine Law Review

The recent rise of shareholder engagement has revamped companies’ corporate governance structures so as to empower shareholder rights and to constrain managerial opportunism. The general trend notwithstanding, this Article uncovers corporate spin-off transactions—which divide a single company into two or more companies—as a unique mechanism that insulates the management from shareholder intervention. In a spin-off, the company’s managers can fundamentally change the governance arrangements of the new spun-off company without being subject to monitoring mechanisms, such as shareholder approval or market check. Furthermore, most spin-off transactions enjoy tax benefits. The potential agency problems associated with the managers’ unilateral governance changes …

Board Diversity By Term Limits?, Darren Rosenblum, Yaron Nili

Elisabeth Haub School of Law Faculty Publications

Four-fifths of the corporate board seats in the United States are held by men and a shocking number of companies lack any female representation on their boards. While institutional investors have pushed these companies for change, California took a more aggressive step and followed several European countries by mandating a quota for board representation. Heated argument has ensued over what diversity we should prioritize and what mechanisms should be used to promote diversity. Yet could these challenges be avoided altogether through the use of term limits?

This Article is the first academic inquiry exploring the connection between term limits and …

Liquid Business, Vanessa C. Perez

Florida State University Law Review

No abstract provided.

Public Or Private Venture Capital?, Darian M. Ibrahim

Washington Law Review

The United States has an unparalled entrepreneurial ecosystem. Silicon Valley startups commercialize cutting-edge science, create plentiful jobs, and spur economic growth. Without angel investors and venture capital funds (VCs) willing to gamble on these high-risk, high-tech companies, none of this would be possible. From a law-and-economics perspective, startup investing is incredibly risky. Information asymmetry and agency costs abound. In the United States, angels and VCs successfully mitigate these problems through private ordering and informal means. Countries without the robust private venture capital system that exists in the United States have attempted to fund startups publicly by creating junior stock exchanges …

Public Or Private Venture Capital?, Darian M. Ibrahim

Faculty Publications

The United States has an unparalled entrepreneurial ecosystem. Silicon Valley startups commercialize cutting-edge science, create plentiful jobs, and spur economic growth. Without angel investors and venture capital funds (VCs) willing to gamble on these high-risk, high-tech companies, none of this would be possible.

From a law-and-economics perspective, startup investing is incredibly risky. Information asymmetry and agency costs abound. In the United States, angels and VCs successfully mitigate these problems through private ordering and informal means. Countries without the robust private venture capital system that exists in the United States have attempted to fund startups publicly by creating junior stock exchanges …