Law Commons^™

Hidden Agendas In Shareholder Voting, Scott Hirst, Adriana Z. Robertson

Faculty Scholarship

Nothing in either corporate or securities law requires companies to notify investors what they will be voting on before the record date for a shareholder meeting. We show that, overwhelmingly, they do not. The result is “hidden agendas”: for 88% of shareholder votes, investors cannot find out what they will be voting on before the record date. This poses an especially serious problem for investors who engage in securities lending: they must decide whether the expected benefit of voting exceeds the expected benefit of continuing to lend their shares (or making them available for lending) without knowing what they will …

The Rise Of Fiduciary Law, Tamar Frankel

Faculty Scholarship

The law that defines and regulates fiduciary relationships appears in many legal areas, such as family law, surrogate decision-making, international law, agency law, employment law, pension law, remedies rules, banking law, financial institutions' regulation, corporate law, charities law not for profit organizations law, and the law concerning medical services.

Fiduciary relationships, and the concepts on which they are grounded, appear not only in the law. They appear in other areas of knowledge: economics, psychology; moral norms and pluralism. Fiduciary law has a very long history. It was recognized in Roman law and the British common law and appeared decades ago …

The New Death Of Contract: Creeping Corporate Fiduciary Duties For Creditors, Frederick Tung

Faculty Scholarship

The article identifies a worrisome trend in corporate law and scholarship. Across seemingly unrelated issue areas, courts and scholars have lost faith in private corporate bargains. They invite judicial intervention into private contract, proposing to expand fiduciary duties beyond their traditional shareholder centered focus to protect non-shareholder claimants from managerial opportunism. When conflict between claimant classes becomes acute, managers pursuing shareholder value may make inefficient investments that benefit shareholders but harm other claimants and the firm generally. I argue that claimants' private contracts with the firm are superior to expanded duty for constraining this opportunism. I focus on one specific …

Gap Filling In The Zone Of Insolvency, Frederick Tung

Faculty Scholarship

This paper was prepared for a symposium - Twilight in the Zone of Insolvency: Fiduciary Duty and the Creditors of Troubled Companies - at the University of Maryland School of Law.

Attacks on shareholder primacy have come from numerous quarters, arguing for expansion of the class of beneficiaries of directors' fiduciary duties. Regarding duties to creditors - the focus of this symposium - a long line of cases has recognized that once a firm is insolvent, creditors should be the primary beneficiaries of directors' fiduciary duties. Then in 1991, Chancellor Allen's famous discussion in Credit Lyonnais identified a special vicinity …