Law Commons^™

Politics And The Business Corporation, Robert H. Sitkoff

Law & Economics Working Papers Archive: 2003-2009

This essay explores the policy bases for, and the political economy of, the law's long-standing regulation of corporate political speech. The essay has three parts. First, it contends that the conventional justifications for regulating corporate interventions in politics -- that corporate donations unnaturally skew the political discourse (bad politics) and that corporate political donations harm shareholders (agency costs) -- assume irrational investors and substantial capital market inefficiency. Drawing on public choice theory, the essay also explores the aim of retarding rent-seeking as an alternative justification for regulating corporate interventions in politics. Second, the essay reexamines the history of the regulation …

Shareholder As Ulysses: Some Empirical Evidence On Why Investors In Public Corporations Tolerate Board Governance, Lynn A. Stout

Cornell Law Faculty Publications

This Article evaluates two possible explanations for why shareholders of public corporations tolerate board control of corporate assets and outputs: the widely accepted monitoring hypothesis, which posits that shareholders rely on boards primarily to control the "agency costs" associated with turning day-to-day control over the firm over to self-interested corporate executives, and the mediating hypothesis, which posits that shareholders also seek to "tie their own hands" by ceding control to directors as a means of attracting the extracontractual, firm-specific investments of such stakeholder groups as executives, creditors, and rank-and- file employees.

Part I reviews each hypothesis and concludes that each …

Valuation Averaging: A New Procedure For Resolving Valuation Disputes, Keith Sharfman

Rutgers Law School (Newark) Faculty Papers

In this Article, Professor Sharfman addresses the problem of "discretionary valuation": that courts resolve valuation disputes arbitrarily and unpredictably, thus harming litigants and society. As a solution, he proposes the enactment of "valuation averaging," a new procedure for resolving valuation disputes modeled on the algorithmic valuation processes often agreed to by sophisticated private firms in advance of any dispute. He argues that by replacing the discretion of judges and juries with a mechanical valuation process, valuation averaging would cause litigants to introduce more plausible and conciliatory valuations into evidence and thereby reduce the cost of valuation litigation and increase the …

Business Associations, Paul A. Quirós, Lynn S. Scott, James F. Brumsey

Mercer Law Review

This Article surveys noteworthy cases in the areas of corporate, securities, partnership, and banking law decided during the survey period' by the Georgia Supreme Court, the Georgia Court of Appeals, the United States Court of Appeals for the Eleventh Circuit, and the United States district courts located in Georgia. The Article also summarizes recent enactments of the Georgia General Assembly with respect to the foregoing subject matters.

Trust Law, Corporate Law, And Capital Market Efficiency, Robert H. Sitkoff

Law & Economics Working Papers Archive: 2003-2009

In both the publicly-traded corporation and the private donative trust a crucial task is to minimize the agency costs that arise from the separation of risk-bearing and management. But where the law of corporate governance evolved in the shadow of capital-market checks on agency costs, trust governance did not. Thus, even more than that of close corporations, the law and study of private trusts offers an illuminating counterfactual -- a control, as it were -­ for a playful thought experiment about the importance of capital market efficiency to the law and study of public corporations. The animating idea for this …

U.S. Exemption/Territorial System Vs. Credit-Based System, Hugh Ault

Hugh J. Ault

No abstract provided.

Using Charitable Contribution Planning Opportunities With Family Business Succession Planning, J. William Gray Jr.

William & Mary Annual Tax Conference

No abstract provided.

Practical Issues When Appraising Privately Held Business, Robert F. Mizell, Craig G. Bell

William & Mary Annual Tax Conference

No abstract provided.

Selected Buyer And Seller Issues When Contemplating M&A Transactions In An Uncertain Economy, Thomas R. Frantz

William & Mary Annual Tax Conference

No abstract provided.

Analyzing The Noncompensatory Partnership Option Proposed Regulations, Dennis A. Diersen

William & Mary Annual Tax Conference

No abstract provided.

Use Of Limited Liability Entities In Tax Strategies And Techniques For Business Acquisitions And Dispositions, Thomas P. Rohman

William & Mary Annual Tax Conference

No abstract provided.

The Impact Of The 2003 Tax Act On Privately Held Business, Samuel P. Starr

William & Mary Annual Tax Conference

No abstract provided.

Corporation Law After Enron: The Possibility Of A Capitalist Reimagination, David A. Westbrook

Journal Articles

No abstract provided.

The Ethical Obligation Of Transactional Lawyer To Act As Gatekeepers, Rutheford B. Campbell Jr., Eugene R. Gaetke

Law Faculty Scholarly Articles

Recent examples of managerial misconduct at major corporations have called into question the adequacy of the gatekeeper role provided by transactional lawyers representing corporations. That role is governed by Model Rule 1.13(b), which obligates the lawyer for a corporation to take remedial action if the lawyer knows that corporate managers are engaged in actions that amount to a "violation of a legal obligation" to the corporation or that are unlawful and likely to result in substantial injury to the corporation. In addition, Model Rule 1.2(d) forbids a lawyer from lending assistance to any action by corporate managers "that the lawyer …

The Petrochina Syndrome: Regulating Capital Markets In The Anti-Globalization Era, Stephen F. Diamond

Cornell Law Faculty Publications

No abstract provided.

Inevitable Disclosure Through An Internet Lens: Is The Doctrine's Demise Truly Inevitable?, Joseph F. Phillips

William & Mary Law Review

No abstract provided.

Lawyers In The Perfect Storm, Mark A. Sargent

Working Paper Series

The multiple corporate collapses and scandals of recent years, for which "Enron" is a convenient shorthand, resulted from a perfect storm in which regulatory oversight, the law of fiduciary duty, gatekeepers, market discipline, and contractual incentives all failed to prevent gross self-dealing, conflicts of interest, and deception, or themselves produced perverse consequences. The story of this simultaneous failure of the structures in place since the New Deal and before, has received considerable attention in both the popular and scholarly literature, but is summarized here to provide a context for consideration of the contributions that lawyers made to the perfect storm. …

The Supreme Court's Labor And Employment Decisions: 2002-2003 Term, Maria O'Brien

Faculty Scholarship

This article summarizes U.S. Supreme Court cases from the October 2002 term that related directly or indirectly to labor or employment law or have implications for labor and employment practitioners. Of particular interest are the University of Michigan affirmative action cases' and the Texas criminal sodomy case. ² Although not nominally "labor and employment" cases, these cases will profoundly affect labor and employment issues. Lawrence v. Texas has already altered the lenses through which society views homosexuality and altered public discourse related to homosexuality and same-sex relationships. ³ The reasoning of the Court shows how far issues of sexuality have …

Conflicts In The Regulation Of Hostile Business Takeovers In The United State And The European Union, Barbara Ann White

All Faculty Scholarship

This essay focuses on hostile business takeovers to illustrate the significance that cultural differences among nations can play in developing a harmonized European Union law. After 12 years of development, the EU Directive regulating hostile takeovers, to everyone’s surprise, was voted down in the EU Parliament in 2001. The EU Parliament consists of the member nations and the movement to defeat the Directive was led by Germany, which had just suffered a brutal hostile takeover of its largest company by British raiders.

The “harmonization” efforts within the EU (i.e., establishing uniform laws among the member nations) mirrors the federalism movement …

A Broader View Of Corporate Inversions: The Interplay Of Tax, Corporate And Economic Implications, Orsolya Kun

ExpressO

Multinational corporations have, in substantial numbers, moved their corporate residence from the U.S. to Bermuda, for the purpuse of minimizing U.S. taxation on their worldwide income. This study reviews the forms of these "corporate inversion transactions," and explores their tax implications, as well as their corporate governance implications and motivations. It is the first scholarly study to examine the corporate governance implications of inversions, and it concludes that previously unexplored aspects of the change of corporate domicile result in substantial reduction of accountability of directors and officers and significant impediments to enforcement of shareholder rights.

An Issue Of Absolution: Section 391 Of The Companies Act, Pearlie Koh

Research Collection Yong Pung How School Of Law

There is an obvious tension in the imposition of directors’ duties. Whilst directors being the management, and therefore the eyes, ears and brain of the corporate person, must be given sufficient discretion to take on entrepreneurial (and hence risky) ventures with a view to profit maximisation, there is also the need to curb excesses, as the potential or opportunity for mismanagement, negligence and fraud is omnipresent. [T]his short article considers section 391 of the Companies Act (Cap 50), arguably the statutory nemesis of directors’ duties. Section 391 gives jurisdiction to the court hearing the case to relieve an officer from …

Building Sector-Based Consensus: A Review Of The Epa's Common Sense Initiative, Cary Coglianese, Laurie K. Allen

All Faculty Scholarship

In the late 1990s, the U.S. Environmental Protection Agency (EPA) conducted what the agency considered to be a "bold experiment" in regulatory reinvention, bringing representatives from six industrial sectors together with government officials and NGO representatives to forge a consensus on innovations in public policy and business practices. This paper assesses the impact of the agency's "experiment" - called the Common Sense Initiative (CSI) - in terms of the agency's goals of improving regulatory performance and technological innovation. Based on a review of CSI projects across all six sectors, the paper shows how EPA achieved, at best, quite modest accomplishments. …

The Rational Exuberance Of Structuring Venture Capital Startups, Victor Fleischer

ExpressO

This Article takes the bursting of the dot com bubble as an opportunity to reevaluate the tax structure of venture capital startups. By organizing startups as corporations rather than as partnerships, investors and entrepreneurs seem to leave money on the table by failing to fully use tax losses -- especially since the vast majority of startups fail. Conventional wisdom attributes the lack of attention paid to losses to a "gambler's mentality" or optimism bias. I argue here that the use of the corporate form is, in fact, rational, or at least that there is a method to the madness.

I …

The Trajectory Of (Corporate Law) Scholarship, Brian R. Cheffins

ExpressO

While considerable attention is devoted to legal scholarship, little has been written on the process by which academic writing on law evolves. This paper departs from the existing pattern and examines five potential trajectories for legal scholarship. One is based on the idea that knowledge “accumulates” as part of “progress” towards a better understanding of the matters under study. The second is the concept of the “paradigm”, derived from work done on the history and sociology of science. The third focuses on the idea that academic endeavor concerning law yields useful ideas since market forces are at work. The fourth …

Corporate Governance After Enron And Global Crossing: Comparative Lessons For Cross-National Improvement, Edward S. Adams

Indiana Law Journal

No abstract provided.

Softening Pharaoh's Heart: Harnessing Altruistic Theory And Behavioral Law And Economics To Rein In Executive Salaries, Michael B. Dorff

Buffalo Law Review

No abstract provided.

Once A Director, Always A Fiduciary?, Pearlie Koh

Research Collection Yong Pung How School Of Law

The corporate director is subject to duties of good faith and loyalty. As he stands in a fiduciary position vis-a-vis the company on whose board he sits, he is subject to strict obligations of self-denial. Indeed, ensuring adherence to an absolute rule in this regard is justified by the need to control, albeit in a necessarily imperfect and arguably ineffective manner, the exercise of discretion by the director who stands in an undoubted position of power with respect to the company. A director therefore is obliged to avoid a conflict of interests and is prohibited from profiting from his office. …

Is The Merger Of Participant-Directed 401(K) Plans Subject To Erisa's Fiduciary Standards: An Analysis Of The Franklin V. First Union Litigation And Its Aftermath, Bryan L. Tyson

West Virginia Law Review

No abstract provided.

Enron At The Margin, William H. Widen

Articles

No abstract provided.

Minority Shareholder, Minority Citizen: A Perspective Piece, Anthony Briggs

Washington and Lee Journal of Civil Rights and Social Justice

No abstract provided.