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Articles 1 - 30 of 31
Full-Text Articles in Law
The Value Of Soft Variables In Corporate Reorganizations, Michelle M. Harner
The Value Of Soft Variables In Corporate Reorganizations, Michelle M. Harner
Michelle M. Harner
When a company is worth more as a going concern than on a liquidation basis, what creates that additional value? Is it the people, management decisions, the simple synergies of the operating business, or some combination of these types of soft variables? And perhaps more importantly, who owns or has an interest in these soft variables? This article explores these questions under existing legal doctrine and practice norms. Specifically, it discusses the characterization of soft variables under applicable law and in financing documents, and it surveys related judicial decisions. It also considers the overarching public policy and Constitutional implications of …
Deal Deconstructions, Case Studies, And Case Simulations: Toward Practice Readiness With New Pedagogies In Teaching Business And Transactional Law, Michelle M. Harner, Robert J. Rhee
Deal Deconstructions, Case Studies, And Case Simulations: Toward Practice Readiness With New Pedagogies In Teaching Business And Transactional Law, Michelle M. Harner, Robert J. Rhee
Michelle M. Harner
In this short commentary, we explore the use of two interrelated pedagogical methods for teaching transactional and business law. The first method is deal deconstruction, which analyzes the set of final deal documents and outcomes. This method is backward-looking, conducting a post-mortem on business transactions and analyzing the parties’ choices memorialized in the agreement against the legal and financial alternatives. The second method involves case studies and simulations, which are commonly seen in business schools. This method is forward-looking, exposing students to the uncertainties and situational contexts of doing deals and deal-related litigation. Together, these complementary methods help students understand …
Activist Investors, Distressed Companies, And Value Uncertainty, Michelle M. Harner, Jamie Marincic Griffin, Jennifer Ivey-Crickenberger
Activist Investors, Distressed Companies, And Value Uncertainty, Michelle M. Harner, Jamie Marincic Griffin, Jennifer Ivey-Crickenberger
Michelle M. Harner
Hedge funds, private equity firms, and other alternative investment funds are frequently key players in corporate restructurings. Most commentators agree that the presence of a fund can change the dynamics of a chapter 11 case. They cannot agree, however, on the impact of this change—i.e., do funds create or destroy enterprise value? This essay contributes to the dialogue by analyzing data from chapter 11 cases in which funds are in a position to influence the debtor’s exit strategy. The data shed light on what such funds might achieve in chapter 11 cases and the potential implications for debtors and their …
A More Realistic Approach To Directors' Duties, Michelle M. Harner
A More Realistic Approach To Directors' Duties, Michelle M. Harner
Michelle M. Harner
Expectations for what fiduciary duties can achieve in the corporate context are unrealistic. This segment of the law—and the alleged deficiencies therein—are blamed for corporate scandals, securities fraud, failed business plans, and even a company's insolvency. Risk is, however, inherent in business, and human beings are flawed. Fiduciary duty law cannot change these basic facts. To the extent we think it can, we will continue to be disappointed and frustrated. This essay considers recasting (and to a greater extent codifying) directors’ duties in a positive frame to help foster better director oversight. It does not suggest that codifying greater clarity …
Corporate Culture And Erm, Michelle M. Harner
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.
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Michelle M. Harner
No abstract provided.
Teaching Business Law Through An Entrepreneurial Lens, Michelle M. Harner
Teaching Business Law Through An Entrepreneurial Lens, Michelle M. Harner
Michelle M. Harner
The legal market has changed. Although change creates uncertainty and fear, it also can create opportunity. This essay explores the opportunity for innovation in the business law curriculum, and the role of simulation to help create more practice-aware new lawyers.
The Potential Cost And Value Of Erm, Michelle M. Harner
The Potential Cost And Value Of Erm, Michelle M. Harner
Michelle M. Harner
The concept of enterprise risk managment (ERM) as a holistic approach to managing a company's risk profile has tremendous appeal. However, companies are frequently skeptical about its value and whether the results will justify the cost, effort, and challenges of implementing a meaningful ERM process. This report considers some of those concerns and highlights the governance, compliance, and cultural value of ERM.
Series Llcs: What Happens When One Series Fails? Key Considerations And Issues, Michelle M. Harner, Jennifer Ivey-Crickenberger, Tae Kim
Series Llcs: What Happens When One Series Fails? Key Considerations And Issues, Michelle M. Harner, Jennifer Ivey-Crickenberger, Tae Kim
Michelle M. Harner
Entity choice law is constantly evolving and innovating. The series LLC form is one such example. Although the form provides governance and operational flexibility and efficiencies, the law governing the form is still developing. As such, uncertainties linger, particularly in the context of a financially distressed or insolvent series. This article explores many of the issues that arise when a master LLC or one of its series experiences financial distress and contemplates a bankruptcy filing. It also identifies strategies for parties to potentially mitigate certain of these issues in the planning stage. The article concludes by suggesting parties using the …
Gender And Securities Law In The Supreme Court, Lyman Johnson, Michelle M. Harner, Jason A. Cantone
Gender And Securities Law In The Supreme Court, Lyman Johnson, Michelle M. Harner, Jason A. Cantone
Michelle M. Harner
The 2010 appointment of Elena Kagan to the United States Supreme Court meant that, for the first time, three female justices would serve together on that court. Less clear is whether Justice Kagan’s gender will really matter in how she votes as a justice. This question is an especially visible aspect of a larger issue: do female judges display gendered voting patterns in the cases that come before them? This article makes a novel contribution to the growing literature on female voting patterns. We investigated whether female justices on the United States Supreme Court voted differently than, or otherwise influenced, …
Protective Orders In The Bankruptcy Court: The Congressional Mandate Of Bankruptcy Code Section 107 And Its Constitutional Implications, Michelle M. Harner, William T. Bodoh
Protective Orders In The Bankruptcy Court: The Congressional Mandate Of Bankruptcy Code Section 107 And Its Constitutional Implications, Michelle M. Harner, William T. Bodoh
Michelle M. Harner
No abstract provided.
The Denial Of Future Tort Claims In In Re Piper Aircraft: Will The Court's Quick-Fix Solution Keep The Debtor Flying High Or Bring It Crashing Down?, Michelle M. Harner
The Denial Of Future Tort Claims In In Re Piper Aircraft: Will The Court's Quick-Fix Solution Keep The Debtor Flying High Or Bring It Crashing Down?, Michelle M. Harner
Michelle M. Harner
No abstract provided.
A Chapter 11 Debtor's Life After Oct. 17: Not So Bad If You Effectively Plan, Michelle M. Harner, Carl E. Black
A Chapter 11 Debtor's Life After Oct. 17: Not So Bad If You Effectively Plan, Michelle M. Harner, Carl E. Black
Michelle M. Harner
No abstract provided.
Sublicensing From A Distressed Company: Are You Placing Your Future In The Debtor's Hands?, Michelle M. Harner, David A. Beck
Sublicensing From A Distressed Company: Are You Placing Your Future In The Debtor's Hands?, Michelle M. Harner, David A. Beck
Michelle M. Harner
No abstract provided.
The Naked Fiduciary, Michelle M. Harner, Jamie Marincic
The Naked Fiduciary, Michelle M. Harner, Jamie Marincic
Michelle M. Harner
Business law is grounded in the common law of fiduciary duty. Courts and policymakers have been loath to abandon that principle. Yet, particularly in the contractual context of limited liability companies (LLCs), the fiduciary label is illusory and may undercut sound governance practices for those entities. This Article presents an in-depth empirical study about governance provisions included in LLC operating agreements and examines the implications of the data in the context of various types of businesses that might choose to organize as LLCs. The Article uses the data and related case studies to offer a new approach to LLC governance …
Mitigating Financial Risk For Small Business Entrepreneurs, Michelle M. Harner
Mitigating Financial Risk For Small Business Entrepreneurs, Michelle M. Harner
Michelle M. Harner
Financial distress by definition threatens a company’s viability. Entrepreneurial and start-up entities are particularly vulnerable to this threat. Yet, much of the discussion following the recent recession focuses almost exclusively on financial institutions and “too-big-to-fail” entities. This essay re-examines lessons gleaned from the recession in the context of smaller, entrepreneurial entities. Specifically, it analyzes how small business entrepreneurs might invoke principles of enterprise risk management to mitigate the long-term impact of financial distress on their business models. It also considers related refinements to extant small business regulations, including the U.S. bankruptcy laws. The essay’s primary objective is to help policymakers, …
Licensing Intellectual Property And Technology From The Financially-Troubled Or Startup Company: Prebankruptcy Strategies To Minimize The Risk In A Licensee's Intellectual Property And Technology Investment, Richard M. Cieri, Michelle M. Harner
Licensing Intellectual Property And Technology From The Financially-Troubled Or Startup Company: Prebankruptcy Strategies To Minimize The Risk In A Licensee's Intellectual Property And Technology Investment, Richard M. Cieri, Michelle M. Harner
Michelle M. Harner
No abstract provided.
Reinstatement V. Cramdown: Do Secured Creditors Win Or Lose?, Heather Lennox, Michelle M. Harner, Eric R. Goodman
Reinstatement V. Cramdown: Do Secured Creditors Win Or Lose?, Heather Lennox, Michelle M. Harner, Eric R. Goodman
Michelle M. Harner
No abstract provided.
The Potential Value Of Dynamic Tension In Restructuring Negotiations, Michelle M. Harner, Jamie Marincic
The Potential Value Of Dynamic Tension In Restructuring Negotiations, Michelle M. Harner, Jamie Marincic
Michelle M. Harner
No abstract provided.
Activist Distressed Debtholders: The New Barbarians At The Gate?, Michelle M. Harner
Activist Distressed Debtholders: The New Barbarians At The Gate?, Michelle M. Harner
Michelle M. Harner
The term “corporate raiders” previously struck fear in the hearts of corporate boards and management teams. It generally refers to investors who target undervalued, cash-flush or mismanaged companies and initiate a hostile takeover of the company. Corporate raiders earned their name in part because of their focus on value extraction, which could entail dismantling a company and selling off its crown jewels. Today, the term often conjures up images of Michael Milken, Henry Kravis or the movie character Gordon Gekko, but the alleged threat posed to companies by corporate raiders is less prevalent—at least with respect to the traditional use …
The Value Of "Thinking Like A Lawyer", Michelle M. Harner
The Value Of "Thinking Like A Lawyer", Michelle M. Harner
Michelle M. Harner
The legal profession was hit particularly hard by the recent recession. Law firms laid off lawyers in record numbers, and law school graduates found few if any employment opportunities. Clients also started rethinking the terms of the lawyer-client relationship, at least in the larger law firm context. Some commentators suggest that these changes are indicative of things to come; that the legal profession is undergoing a long-overdue paradigm shift that will permanently change the nature of the legal profession. This Essay examines these developments through the lens of Larry Ribstein’s The Death of Big Law and Richard Susskind’s The End …
Behind Closed Doors: The Influence Of Creditors In Business Reorganizations, Michelle M. Harner, Jamie Marincic
Behind Closed Doors: The Influence Of Creditors In Business Reorganizations, Michelle M. Harner, Jamie Marincic
Michelle M. Harner
General corporate law delegates the power to manage a corporation to the board of directors. The board in turn acts as a fiduciary and generally owes its duties to the corporation and its shareholders. Many courts and commentators summarize the board’s primary objective as maximizing shareholder wealth. Accordingly, one would expect a board’s conduct to be governed largely by the interests of the corporation and its shareholders. Yet, anecdotal and increasing empirical evidence suggest that large creditors wield significant influence over their corporate debtors. Although this influence is most apparent as the corporation approaches insolvency, the strength of the creditors’ …
Is Legal Scholarship Out Of Touch? An Empirical Analysis Of The Use Of Scholarship In Business Law Cases, Michelle M. Harner, Jason A. Cantone
Is Legal Scholarship Out Of Touch? An Empirical Analysis Of The Use Of Scholarship In Business Law Cases, Michelle M. Harner, Jason A. Cantone
Michelle M. Harner
Commentators have observed two apparent trends in the use of legal scholarship by the judiciary. First, judges now cite law review articles in their opinions with less frequency. Second, despite this general decline in the invocation of legal scholarship, judges now cite articles in specialty journals with more frequency. Some commentators attribute the apparent decline in the courts’ use of legal scholarship to the increasingly theoretical and impractical nature of that scholarship. A few studies even suggest that the increasing use of specialty journals by the courts reflects the gap between the content of legal scholarship in general law reviews …
Is Legal Scholarship Out Of Touch? An Empirical Analysis Of The Use Of Scholarship In Business Law Cases, Michelle M. Harner, Jason A. Cantone
Is Legal Scholarship Out Of Touch? An Empirical Analysis Of The Use Of Scholarship In Business Law Cases, Michelle M. Harner, Jason A. Cantone
Michelle M. Harner
Commentators have observed two apparent trends in the use of legal scholarship by the judiciary. First, judges now cite law review articles in their opinions with less frequency. Second, despite this general decline in the invocation of legal scholarship, judges now cite articles in specialty journals with more frequency. Some commentators attribute the apparent decline in the courts’ use of legal scholarship to the increasingly theoretical and impractical nature of that scholarship. A few studies even suggest that the increasing use of specialty journals by the courts reflects the gap between the content of legal scholarship in general law reviews …
Barriers To Effective Risk Management, Michelle M. Harner
Barriers To Effective Risk Management, Michelle M. Harner
Michelle M. Harner
“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.”** This now infamous quote by Charles Prince, Citigroup’s former Chief Executive Officer, captures the high-risk, high-reward mentality and overconfidence that permeates much of corporate America. These attributes in turn helped to facilitate a global recession and some of the largest economic losses ever experienced in the financial sector. They also represent certain cognitive biases and cultural norms in corporate boardrooms and management suites that make implementing a meaningful risk culture and thereby mitigating the impact of future economic downturns a challenging proposition. The …
Barriers To Effective Risk Management, Michelle M. Harner
Barriers To Effective Risk Management, Michelle M. Harner
Michelle M. Harner
“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.”** This now infamous quote by Charles Prince, Citigroup’s former Chief Executive Officer, captures the high-risk, high-reward mentality and overconfidence that permeates much of corporate America. These attributes in turn helped to facilitate a global recession and some of the largest economic losses ever experienced in the financial sector. They also represent certain cognitive biases and cultural norms in corporate boardrooms and management suites that make implementing a meaningful risk culture and thereby mitigating the impact of future economic downturns a challenging proposition. The …
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Michelle M. Harner
Enterprise risk management (ERM) targets overall corporate strategy and, when implemented correctly, can manage a corporation’s risk appetite and exposure. When ignored or underutilized, it can contribute to a corporation’s demise. In fact, many commentators point to ERM failures as contributing to the severity of the 2008 economic crisis. This essay examines the different approaches to ERM adopted by financial institutions affected by the 2008 economic crisis and how ERM contributed to the survival or failure of those firms. It then considers ERM in the broader context of corporate governance generally. This discussion reflects on ERM techniques for corporate boards …
Trends In Distressed Debt Investing: An Empirical Study Of Investors' Objectives, Michelle M. Harner
Trends In Distressed Debt Investing: An Empirical Study Of Investors' Objectives, Michelle M. Harner
Michelle M. Harner
Increased creditor control in chapter 11 cases has generated considerable debate over the past several years. Proponents of creditor control argue that, among other things, it promotes efficiency in corporate reorganizations. Critics assert that it destroys corporate value and frequently forces otherwise viable entities to liquidate. The increasing involvement of professional distressed debt investors in chapter 11 cases has intensified this debate. In this article, I present and analyze empirical data regarding the investment practices and strategies of distressed debt investors. Based on this data and actual case reports, I reach two primary conclusions. First, although relatively few in number, …
The Corporate Governance And Public Policy Implications Of Activist Distressed Debt Investing, Michelle M. Harner
The Corporate Governance And Public Policy Implications Of Activist Distressed Debt Investing, Michelle M. Harner
Michelle M. Harner
Activist institutional investors traditionally have invested in a company's equity to try to influence change at the company. Some of these investors, however, are now purchasing a company's debt for this same purpose. They may seek to change a company's management and board personnel, operational strategies, asset holdings or capital structure. The chapter 11 bankruptcy cases of Allied Holdings, Inc. and its affiliates exemplify the strategies of activist distressed debt investors. In the Allied cases, Yucaipa Companies, a distressed debt investor, purchased approximately 66% of Allied's outstanding general unsecured bond debt. Yucaipa used this debt position to exert significant influence …
The Search For An Unbiased Fiduciary In Corporate Reorganizations, Michelle M. Harner
The Search For An Unbiased Fiduciary In Corporate Reorganizations, Michelle M. Harner
Michelle M. Harner
When a company experiences financial distress, a control contest often follows. Management fights to remain in control of the company, and shareholders, creditors and others try to influence management’s exercise of that control—or wrest it away. This is not a new phenomenon. The degree of influence now exerted by corporate stakeholders in the distressed context, however, is strikingly different than in the past. Recent headlines highlight that stakeholder control issues are at the forefront of financially-distressed situations large and small. The U.S. government, as creditor, dictated the terms of Chrysler’s and General Motors’ bankruptcies. It also demanded and received preferred …