Law Commons^™

Individual And Collective Sovereignty In The Corporate Enterprise (Reviewing Frank H. Easterbrook & Daniel R. Fishel, The Economic Structure Of Corporate Law (1991) And Robert N. Bellah Et Al., The Good Society (1991), Lyman P. Q. Johnson

Lyman P. Q. Johnson

Not available.

Four Pillars To Build A New Corporate Law Federalism: Crowd Funding Exchanges, A Codified Internal Affairs Doctrine, City-Based Incorporation, And An Arbitrated Corporate Code, J.W. Verret

John W Verret

This article examines the event window opened by the pending creation of new crowdfunding platforms, a new means of creating publicly traded equity for smaller, early stage firms than have ever been permitted by the Securities and Exchange Commission to access the public securities markets. That event window could support a completely new paradigm for the development of corporation law and completely upend existing wisdom about interstate competition to develop corporate governance. This article considers the economics of crowdfunding precursors which share some of the attributes of equity crowdfunding, and also considers the expected attributes of equity crowdfunding, to demonstrate …

Lessons From Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, Tammi S. Etheridge

Michigan Business & Entrepreneurial Law Review

Almost one hundred years ago, Henry Ford, as CEO of the Ford Motor Company, announced a plan to cease payment of special dividends to shareholders. Instead, the company would reinvest its profits to employ more workers and build more factories. Investing in new workers and factories would cut the cost of cars and make them affordable to more people. Ford publicly declared that his “ambition [was] to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting …

The Non-Merger Virtual Merger: Is Corporate Law Ready For Virtual Reality?, Stuart Cohn

Stuart R. Cohn

The term virtual mergers describes the relatively recent phenomenon of companies entering into contractual arrangements that are functionally, but not legally, equivalent to mergers prescribed by corporate statutes. Virtual mergers usually involve the shared use of assets contributed by each of the companies. A central element of the transaction is that the two companies remain legally independent, each with its own directors, officers, and shareholders. The arrangements can usually be terminated by either party, allowing each company to return to the status quo ante or exercise buyout rights if contractually provided. Although virtual mergers have occurred among public companies in …

The Reform Of The Corporate Duty Of Care In China -- From The Introspection Of Delaware And Taiwan, Jui-Chien Cheng

Maurer Theses and Dissertations

The concept of fiduciary duty, derived from common law, was introduced to the Company Law of People’s Republic of China in 2005. The fiduciary duty plays an extremely important role in common law, particularly in U.S. corporate law. For this reason, one might have expected dramatic consequences from its introduction to Chinese law. In reality, however, few fiduciary lawsuits have been brought to the courts of China since 2005. There are three main reasons for the rarity of due care lawsuits.

First, Chinese fiduciary law has neither clear content nor a practical enforcement. This is especially true of the body …

Shareholders Do Not Have Standing To Bring An Individual Action Against Third Parties Who Have Damaged The Corporation: Adair V. Wozniak, Frank Carrino

Akron Law Review

Apart from the context of a derivative action, can a shareholder in a corporation sue individually for wrongful acts committed against the corporation by third parties?

The general rule of corporate law states that a shareholder cannot attain standing for such a suit. This rule is grounded on the theory that all shareholders should incur loss from third party wrongdoing in proportion to the amount of shares he or she holds, and likewise should proportionately benefit when the corporate entity wins an action. In addition, courts are fearful that if this rule were not in force, then there would be …

Does Corporate Law Matter? Legal Capital Restrictions On Stock Distributions, Craig A. Peterson, Norman W. Hawker

Akron Law Review

This paper consists of five sections, including this introduction. The background section of this article consists of several parts. First, we provide an historical overview of the legal capital doctrines restricting dividends. Second, we briefly summarize and illustrate six basic types of state statutory restrictions on dividends and other distributions to shareholders. Third, we examine the criticisms of legal capital that has led many states to abandon the use of concepts like stated capital and surplus to restrict financial distributions to shareholders. Fourth, a discussion of the generally accepted accounting principles ("GAAP") and mechanics of legal capital and stock distributions …

Competing With Delaware: Recent Amendments To Ohio's Corporate Statutes, David Porter

Akron Law Review

House Bill 301 is evolutionary, not revolutionary, in its content, but its changes are nonetheless significant for Ohio corporations and their lawyers. To place these changes in context, this article summarizes corporate statutory developments since 1997 that highlight Ohio’s previous initiatives to keep up with Delaware, America’s dominant state of incorporation, and then discusses at greater length the recent amendments contained in House Bill 301, concluding with a look ahead at some additional changes that may occur as early as this year.

The Myth Of The Unbiased Director, Regina F. Burch

Akron Law Review

This Article seeks to use social science research to better understand why these and other corporate governance problems persist. One reason may be that boards are biased as to how they respond to these issues. Social science research on risk perception informs us that individuals’ “preferences among different types of risk taking (or avoiding), correspond to cultural biases—that is, to worldviews or ideologies entailing deeply held values and beliefs defending different patterns of social relations.” Cultural theorists have identified four competing worldviews: communitarian, individualistic, hierarchical, and egalitarian. The communitarian and individualistic worldviews are at opposite ends of a spectrum measuring …

Executive Compensation In Controlled Companies, Kobi Kastiel

Indiana Law Journal

Conventional wisdom among corporate law theorists holds that the presence of a controlling shareholder should alleviate the problem of managerial opportunism because such a controller has both the power and incentives to curb excessive executive pay. This Article challenges that common understanding by proposing a different view based on an agency problem paradigm. Controlling shareholders, this Article suggests, may in fact overpay managers in order to maximize controllers’ consumption of private benefits, due to their close social and business ties with professional managers or for other reasons, such as being captured by professional managers. This tendency to overpay managers is …

Is The Quest For Corporate Responsibility A Wild Goose Chase? The Story Of Lovenheim V. Iroquois Brands, Ltd., D.A. Jeremy Telman

Akron Law Review

This Article is a Law Story. Law Stories have many purposes, but their main goal is to supplement and demystify the case method of legal pedagogy. The case method has been criticized for presenting students with the law more or less as a fait accompli. The case method assumes a pre-existing body of law that students passively learn rather than learning to think of the law as something that they will have a hand in shaping...In Part II, this Article explores the law of shareholder proposals and the reasons why the SEC and the courts permit proposals relating to social …

Can Peltz Score?: What’S Behind The May 13 Dupont Vs. Trian Contest, Lawrence A. Hamermesh

Lawrence A. Hamermesh

No abstract provided.

Voter Primacy, Sarah C. Haan

Fordham Law Review

This Article argues that Citizens United v. FEC expanded the audience for campaign finance disclosure to include a group that had never before been held relevant to campaign finance disclosure—corporate shareholders—and explores the constitutional, policy, and political consequences of this change. In part IV of Citizens United, the U.S. Supreme Court departed from more than thirty years of campaign finance disclosure analysis to treat corporate shareholders as a target audience for corporate electoral spending disclosure, holding that the governmental interest advanced by campaign finance disclosure laws includes an interest in helping corporate shareholders “determine whether their corporation’s political speech advances …

A Defense Of The Corporate Law Duty Of Care, Julian Velasco

Journal Articles

Most people would acknowledge the importance of the duty of loyalty, but the same is not true of the duty of care. Historically, the corporate law duty of care has been underenforced at best, and arguably unenforced entirely. Some scholars do not consider the duty of care to be a fiduciary duty at all, and there are those who would do away with it entirely. In this paper, I intend to provide a comprehensive defense of the corporate law fiduciary duty of care. I hope to show that the duty of care is not simply an ill-fitting appendage to the …

A Defense Of The Corporate Law Duty Of Care, Julian Velasco

Julian Velasco

Most people would acknowledge the importance of the duty of loyalty, but the same is not true of the duty of care. Historically, the corporate law duty of care has been underenforced at best, and arguably unenforced entirely. Some scholars do not consider the duty of care to be a fiduciary duty at all, and there are those who would do away with it entirely. In this paper, I intend to provide a comprehensive defense of the corporate law fiduciary duty of care. I hope to show that the duty of care is not simply an ill-fitting appendage to the …

Exalting The Corporate Form Over Environmental Protection The Corporate Shell Game And The Enforcement Of Water Management Law In Florida, Mary Jane Angelo, Charles Lobdell, Tara Boonstra

Mary Jane Angelo

Current laws in Florida afford substantial protection to the “people behind the corporations” (corporate principals) and generally do not allow environmental permitting agencies such as the water management districts to consider such people in their permitting or enforcement efforts. This article poses the question “Do existing corporate law principles of limited liability defeat the important public policy of water resource protection in Florida?” First, in Parts II and III, this article introduces the problem and provides an overview of Florida water management district permitting and enforcement authorities and processes. Next, in Part IV, this article explores the existing legal authorities …

Democracy In The Private Sector: The Rights Of Shareholders And Union Members, Michael Goldberg

Michael J Goldberg

In the years since Enron, there has been a lively debate over the value of shareholder democracy as a means to improve corporate performance and reduce the likelihood of future Enrons or Lehman Brothers. That debate has been enriched by comparative scholarship looking at corporate governance abroad, and comparing corporate governance with public government. This Article explores a different comparison, between corporations and their sometime adversaries across bargaining tables and picket lines – labor unions. More specifically, this article compares the regulation of corporate governance and the regulation of the internal affairs of unions, and the rights of shareholders and …

Of Bitcoins, Independently Wealthy Software, And The Zero-Member Llc, Shawn Bayern

Northwestern University Law Review

No abstract provided.

A Failure Of Substance And A Failure Of Process: The Circular Odyssey Of Oklahoma's Corporate Law Amendments In 2010, 2012, And 2013, Steven J. Cleveland

Oklahoma Law Review

No abstract provided.

Delaware's Familiarity, Brian J. Broughman, Darian M. Ibrahim

Articles by Maurer Faculty

Why do corporations choose to incorporate in Delaware over other states? The existing literature primarily falls into two camps — the “race-to-the-top” and the “race-to-the-bottom” — both of which credit Delaware’s success to the quality of its corporate law and the expertise of its judges. We consider an alternative explanation for Delaware’s continued success: familiarity. After decades of dominance, business parties have become increasingly familiar with Delaware law. Using data from a sample of startups financed by venture capital, we find that firms domicile in Delaware as much for familiarity reasons as for its substantive features. The Article finishes by …

Corporate Law Doctrine And The Legacy Of American Legal Realism, Edward B. Rock

All Faculty Scholarship

In this contribution to a symposium on "Legal Realism and Legal Doctrine," I examine the role that jurisprudence plays in corporate law doctrine. Through an examination of paired cases from the United States and United Kingdom, I offer a case study of the contrasting influence on corporate law judging of American Legal Realism versus traditional U.K. Doctrinalism.

Specialist judges in both systems, aided by specialist lawyers, clearly identify and understand the core policy issues involved in a dispute and arrive at sensible results. Adjusting for differences in background law and institutions, it seems likely that the disputes would ultimately be …

Income Inequality And Corporate Structure, Matthew T. Bodie

All Faculty Scholarship

Efforts to address income inequality generally focus on wealth redistribution through taxation and government benefits. But these efforts do not attack the core problem -- the unfair distribution of wealth at the firm level. This essay, a contribution to the "Inequality, Opportunity, and the Law of the Workplace" symposium, argues that workers need power within their firms to stake their claims to larger slices of the corporate pie. Even though the current law of the workplace does provide regulatory support for workers, it fails to change internal firm governance. Policymakers who want to take on income inequality as a structural …

Tax And Corporate Governance: The Influence Of Tax On Managerial Agency Costs, David M. Schizer

Faculty Scholarship

This chapter examines the influence of tax on managerial agency costs, with particular emphasis on public companies in the United States. Focusing on “C-corporations,” this chapter first considers why tax is an imperfect vehicle for mitigating managerial agency costs. It then discusses how tax influences the compensation of managers, both in ways policy makers intended, and in ways they did not. The chapter also considers how tax affects management decisions about capital structure, hedging, and acquisitions. In addition, this chapter explores the tax system’s influence on the ability and incentives of shareholders to monitor management. This chapter then concludes with …

Convergence And Persistence In Corporate Law And Governance, Jeffrey N. Gordon

Faculty Scholarship

This chapter discusses the question of “convergence or persistence” in corporate law and governance. It first considers efforts to measure convergence directly by focusing on the evolution of law-on-the-books governance provisions before analyzing capital market evidence on convergence, with particular emphasis on capital market indicators such as the decline in “cross-listings” onto US stock exchanges by firms from jurisdictions with weaker investor protection and the increase in initial public offerings (IPOs) on emerging market stock markets. The chapter proceeds by reviewing evidence of divergence, especially “divergence within convergence,” and the failure of the European Union to produce more convergent corporate …

Team Production Theory And Private Company Boards, Elizabeth Pollman

All Faculty Scholarship

In their path-breaking article, A Team Production Theory of Corporate Law, Margaret Blair and Lynn Stout provided a new theory of the board of directors in a corporation. Drawing on the economic theory of team production, Blair and Stout argued that the board of directors serves as a mediating hierarchy for the firm as a whole, encouraging firm-specific investments from team members and reducing shirking and opportunistic behavior. While Blair and Stout provided a dramatically different view of the corporation from the conventional principal-agent account, they also delineated limitations to their proposed theory. Most importantly, they suggested that the mediating …

Progressive Legal Thought, Herbert J. Hovenkamp

All Faculty Scholarship

A widely accepted model of American legal history is that "classical" legal thought, which dominated much of the nineteenth century, was displaced by "progressive" legal thought, which survived through the New Deal and in some form to this day. Within its domain, this was a revolution nearly on a par with Copernicus or Newton. This paradigm has been adopted by both progressive liberals who defend this revolution and by classical liberals who lament it.

Classical legal thought is generally identified with efforts to systematize legal rules along lines that had become familiar in the natural sciences. This methodology involved not …