Law Commons^™

Redefining Corporate Law, David K. Millon

David K. Millon

None available.

Tax Laws Of Indiana As They Relate To Corporations For Profit, Harriet W. Bouslog, Robert C. Brown

Dr Robert Brown

No abstract provided.

Beyond Incentives: Making Corporate Whistleblowing Moral In The New Era Of Dodd-Frank Act "Bounty Hunting", Matt A. Vega

Matt A Vega

In this article, I examine the SEC's new whistleblower bounty program authorized by the Dodd-Frank Act. Under the program, which went into effect last year, the SEC is required to pay a bounty to whistleblowers who voluntarily provide the agency with "original information" about a potential securities law violation that leads to a successful SEC or "related" enforcement action and that results in monetary sanctions of sufficient size. When the average SEC settlement is over $18.3 million, whistleblowers can expect the average bounty to be well in the range of $2-5 million.

My contention is that this new program is …

New Directions In Corporate Law Communitarians, Contractarians, And The Crisis In Corporate Law, David K. Millon

David K. Millon

No abstract provided.

Theories Of The Corporation, David Millon

David K. Millon

No abstract provided.

Crime, War & Romanticism: Arthur Andersen And The Nature Of Entity Guilt, David N. Cassuto

David N Cassuto

In 2002, Arthur Andersen, LLP stood trial for obstruction of justice. The prosecution offered several theories as to who at the firm had committed the crime but no one theory satisfied all twelve jurors. In an attempt to break its deadlock, the jury asked whether it could convict i f some jurors thought Person A at Andersen had done it and some thought it was Person B. Following argument, the judge ruled that it could convict. This article argues that the court's response to the jury's query was wrong as a matter of law and policy. The ruling misconstrues the …

A U.S./Canadian Dialogue About The Current State Of Poison Pills, Lawrence A. Hamermesh, Pierre-Yves Leduc

Lawrence A. Hamermesh

No abstract provided.

New Owners And Old Managers: Lessons From The Socialist Camp, Richard M. Buxbaum

Richard M. Buxbaum

No abstract provided.

The Foundation Of Rectification In The Corporate Opportunity Doctrine, Xueping Chen

xueping chen

Professor Xueping Chen Law School, Southcentral University for Nationalities, Wuhan, Hubei, China 430074 Academic visitor, Law Faculty, Oxford University, Oxford, UK, OX1 3UL Correspondance:Law School, Southcentral University for Nationalities, Minyuan Road 708, Hongshan District,Wuhan, Hubei, China 430074 xpchen189@126.com or xueping.chen@law.ox.ac.uk Abstract: In this paper, I discuss the proposal that directors or officers’ breaching the loyalty duty to the corporation by usurping the corporate opportunities is a wrong which ought to rectify according to the corrective justice. My aims are to clarify that usurping a corporate opportunity is a civil wrong and to discuss the rationale of the Corporate Opportunity Doctrine …

Employers United: An Empirical Analysis Of Corporate Political Speech In The Wake Of The Affordable Care Act, Elizabeth Weeks Leonard, Susan Scholz, Raquel Meyer Alexander

Elizabeth A. Weeks

Is the Patient Protection and Affordable Care Act (ACA) bad for business? Did the countries' most prominent companies game the Securities and Exchange Commission (SEC) disclosure process to make negative political statements about ObamaCare? Immediately following the ACA's enactment on March 23, 2010, a number of companies drew scrutiny for issuing SEC filings writing off millions – and in AT&T's case, one billion dollars – against expected earnings for 2010 alone, based on a single, discrete tax-law change in the ACA. Congressional and Administration officials accused the firms of being “irresponsible” and using “big numbers to exaggerate the health reform's …

Out Of The Shadows: Requiring Strategic Management Disclosure, Nadelle Grossman

Nadelle Grossman

Under federal securities laws and related regulations, public companies must disclose a host of information about their risk management processes to protect firm value. By contrast, these companies need not disclose virtually anything about their strategic management processes to generate firm value. As a result, investors are given a lopsided picture of firm processes to create value, undermining one of the federal securities laws’ central purposes of ensuring that investors receive complete information about public firms.

To address this concern, I propose that the Securities and Exchange Commission require public firms to disclose those qualities of their strategic management processes …

Out Of The Shadows: Requiring Strategic Management Disclosure, Nadelle Grossman

Nadelle Grossman

Under federal securities laws and related regulations, public companies must disclose a host of information about their risk management processes to protect firm value. By contrast, these companies need not disclose virtually anything about their strategic management processes to generate firm value. As a result, investors are given a lopsided picture of firm processes to create value, undermining one of the federal securities laws’ central purposes of ensuring that investors receive complete information about public firms.

To address this concern, I propose that the Securities and Exchange Commission require public firms to disclose those qualities of their strategic management processes …

The Cooperative As Proletarian Corporation: Property Rights Between Corporation, Cooperatives And Globalization In Cuba, Larry Cata Backer

Larry Cata Backer

Since the 1970s, the issue of the relationship between productive property, the state and the individual has been contested in Marxist Leninist states. While China has moved to a more managerial form of relationship, states like Cuba continue to adhere to more strict principles of state control of productive property. However, in the face of recent financial upheavals and Cuba’s long effort to create alternative forms of regional economic engagement, Cuba’s approach to economic regulation has been undergoing limited change. This essay considers the form and scope of Cuban approaches to economic reorganization in the wake of the adoption of …

Cadbury Twenty Years On, Cally Jordan

Cally Jordan

This year marks the twentieth anniversary of the publication of the Cadbury Report, one of the most significant events in modern corporate governance. The Cadbury Report, and its simple two page “best practices”, triggered a global debate on corporate governance. “Cadbury” codes of corporate governance spread like wildfire. The legacy of the Cadbury Report lives on in the UK with no diminution in the appeal of its voluntary code/comply or explain approach to corporate governance. But there are several clouds looming on the horizon. Comply or explain and voluntary codes of corporate governance appear to have run their course elsewhere …

Charging Less To Make More: The Causes And Effects Of The Corporate Inversion Trend In The U.S. And The Implications Of Lowering The Corporate Tax Rate, Tyler Dumler

Tyler M. Dumler

This article explores the effect lowering the corporate tax rate would have on U.S. multinational corporations (MNCs). Instead of creating patchwork legislation, such as section 7874 to the Internal Revenue Code, this article advocates adopting changes to the underlying problems which give MNCs incentives to expatriate. By attacking the underlying problems of corporate tax legislation, this article concludes that lowering the corporate tax rate is the long-term solution for the U.S. government to address MNC tax avoidance.

Major Violations For The Ncaa: How The Ncaa Can Apply The Dodd-Frank Act To Reform Its Own Corporate Goverance Scheme, Jason Rudderman

Jason Rudderman

This paper applies the Dodd-Frank Act, and specifically its corporate governance laws, to the National Collegiate Athletic Associate (NCAA). The NCAA has experienced rapid, largely uncontrolled growth over the past decade that has led to an influx of corporate governance and regulatory problems within its member institutions. As with financial institutions, the influx of money itself is not the inherent problem. Money in college athletics is good. When large schools succeed, they help support smaller schools in their conference through revenue sharing plans. It is the lack of control and governance mechanisms regulating the influx of money that poses the …

Law Firm Ethics In The Shadow Of Corporate Social Responsibility, Christopher J. Whelan

Christopher J Whelan

Corporate clients, and in particular global corporations, are gaining influence and control of law firm practices in ways that would have been unthinkable in the past. Through various mechanisms, such as ‘Outside Counsel Guidelines,’ ‘Codes of Practice’ and the like, corporate clients set standards which lawyers are expected to follow. We have examined over 20 sets of Guidelines and conducted over 20 interviews with outside, in-house and general counsel.

The topics incorporated in the guidelines vary to a great extent. However, while some clearly protect the direct and immediate interests of the client – provisions relating to billing and conflicts …

Janus Capital Group V. First Derivative Traders: A Call To Rewind Securities Law Jurisprudence To Protect Investors – A Practitioner’S Guide And Policy Perspective, Max Schatzow

Max Schatzow

As of 1989, the federal courts were inundated with more Rule 10b-5 litigation than all of the other provision of the federal securities law combined. The Securities Enforcement Commission’s (“SEC”) Rule 10b-5 (“Rule 10b-5,” “the rule,” or “10b-5”) makes it unlawful for certain persons to make material misrepresentations. On June 12, 2011, The Supreme Court in Janus Capital held that those certain persons were those who have the “ultimate authority” over a statement. The Supreme Court in Janus left many litigators and regulators in the securities field grasping for answers. A progeny of cases have been tried under Rule 10b-5 …

The Big Banks: Background, Deregulation, Financial Innovation And Too Big To Fail, Charles W. Murdock

Charles W. Murdock

Summary: The Big Banks: Background, Deregulation, Financial Innovation and Too Big to Fail

The U.S. economy is still reeling from the financial crisis that exploded in the fall of 2008. This article asserts that the big banks were major culprits in causing the crisis, by funding the non-bank lenders that created the toxic mortgages which the big banks securitized and sold to unwary investors. Paradoxically, banks which were then too big to fail are even larger today.

The article briefly reviews the history of banking from the Founding Fathers to the deregulatory mindset that has been present since 1980. It …

Predicting The Frequency Of Large Public Company Bankruptcies, Patrick Liu

Patrick Liu

From 1980 to 2010, the number of large corporate bankruptcies in the U.S. spanned the gamut from five in 1981 to ninety-seven in 2001. In 2009, there were ninety-one large corporate bankruptcies. Past researchers have used firm-specific characteristics to predict the likelihood of bankruptcy for a given firm. However, limited research exists regarding which factors can explain nationwide fluctuations in the number of large corporate bankruptcies. Because macroeconomic variables pose systematic risk for all firms, macroeconomic variables’ yearly variations could shed light on bankruptcy filings’ yearly variations. Moreover, utilizing lagged variables, using the prior year’s change in a macroeconomic variable, …

The Evolution Of The Supreme Court’S Rule 10b-5 Jurisprudence: Protecting Fraud At The Expense Of Investors, Charles W. Murdock

Charles W. Murdock

Summary: The Evolution of the Supreme Court’s Rule 10b-5 Jurisprudence:

Protecting Fraud at the Expense of Investors

This article traces the evolution of Supreme Court jurisprudence over the past forty years through the prism of Rule 10b-5. It uses four “trilogies” to develop this evolution. At the start of the 1970s, the liberal trend characterized by the Warren Court still prevailed. An implied private cause of action was still in favor and litigators were viewed as private attorneys general, enforcing the securities laws to further the policy of protecting investors.

The expansion of Rule 10b-5 was slowed and more judicial …

The Private Sector’S Pivotal Role In Combating Human Trafficking, Jonathan Todres

Jonathan Todres

Human trafficking is big business, with industry estimates running in the billions of dollars annually. Much of that profit accrues to traffickers, illegal profiteers, and organized crime groups. However, the private sector-including legitimate businesses and industries-also reaps economic benefits, directly and indirectly, from the trafficking and related exploitation of persons. Despite these economic realities, the dominant approach to combating human trafficking has been to rely almost exclusively on governments and social services organizations to do the job. Little has been asked of the private sector. Two important bills-one adopted by the State of California and the otherintroduced in the U.S. …

Down-Sizing The Little Guy Myth In Legal Definitions, Mirit Eyal-Cohen

Mirit Eyal-Cohen

What is “small” in the eyes of the law? In fact, there is not one standard definition. Current lax legal definitions of firm’s size are inconsistent and overinclusive. They result in data distortion that reinforces favoritism toward small entities as studies on the contribution of small business to the economy are greatly dependent on those studies’ delineation of the term “small.” Therefore, I argue that the current focus on size in legal definitions is a waste of time and money. In this time of huge deficits and rise in economic inequality, a lot of money is being spent based on …

The Puzzle Of Short-Termism, Kent Greenfield

Kent Greenfield

From the Introduction: When pondering the question of the “sustainable corporation,” as we did in this symposium, one of the intractable problems is the nature of the corporation to produce externalities. By noting this characteristic, I am not making a moral point but an economic one. The nature of the firm is to create financial wealth by producing goods and services for profit; without regulatory or contractual limits, the firm has every incentive to externalize costs onto those whose interests are not included in the firm’s current financial calculus. In fact, because of the corporation’s tendency to create benefits for …

Note: Guiding The Modern Lawyer Through A Global Economy: An Analysis On Outsourcing And The Aba's 2012 Proposed Changes To The Model Rules, Patrick Poole

Patrick Poole

Over the last few decades, the dramatic changes that have occurred in the global economy have similarly altered the landscape for outsourced work both domestically and internationally. One study estimates that as many as 3.3 million white-collar jobs could be shipped abroad by 2015. This growing trend has also substantially affected the unique nature of the legal field. For the past year and a half, the American Bar Association (ABA) Ethics 20/20 Commission has been considering changes to the Model Rules of Professional Conduct as they relate to domestic and international outsourcing. The revision process has included soliciting input from …

Tackling Investor And Managerial Myopia, Emeka Duruigbo

Emeka Duruigbo

Market observers and legal commentators link the collapse, a few years ago, of giant energy company Enron and some fabled financial firms to the short-termism phenomenon – investors acting like traders and influencing corporate managers to make policy decisions based on quarterly earnings statements. Opponents of short-termism note that the future well-being of many investors, corporations, overall economy and society at large is in jeopardy if investors with a near-term horizon, especially hedge funds, enjoy a dominant role in corporate governance. Skeptics dismiss the concerns, insisting that the notion of pervasive short-term investing is a figment of opponents’ imagination. Moreover, …

Stimulating Long-Term Shareholding, Emeka Duruigbo

Emeka Duruigbo

This article answers, in the affirmative, two core research questions: do we need long-term shareholders and can we find them? The economy needs long-term shareholders to provide prudent and profitable patient capital, generate an antidote to corporate short-termism and spearhead managerial accountability. Finding these shareholders requires a structure that provides the right environment and incentives for such investment. The article presents a novel application of the trust fund theory – the dominant philosophical paradigm of American corporate finance in the 19th century - as a vehicle for stimulating long-term shareholding. The central features of the reformulated trust fund theory include …

The Supreme Court As Prometheus: Breathing Life Into The Corporate Supercitizen, Robert Sprague, Mary Ellen Wells

Robert Sprague

This article examines the legal status of the corporation in light of the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission that corporations have political free speech rights equivalent to natural persons. In Citizens United, Justice Kennedy wrote that corporations were disadvantaged persons because the government had intruded upon their freedom of speech. The Citizens United majority portrays a misleading image of corporations. It is true most corporations are owned by small groups of individuals, managed by their owners, and limited in size and revenues. But what the Citizens United majority conveniently ignores is one particular attribute …

An Alternative Universe To §1113 Of The Bankruptcy Code: The Mediation Of American Airlines And Its Pension Obligations, Max L. Schatzow

Max Schatzow

This paper explores mandatory mediation as an alternative method to the current §1113 framework, where judges determine the fate of collective bargaining agreements. Through dialogue, this paper will explore one potential outcome to the ongoing dispute between the various labor unions with collective bargaining agreements with American Airlines.

The Iowa Business Corporation Act's Staggered Board Requirement For Public Corporations: A Hostile Takover Of Iowa Corporate Law?, Matthew G. Dore

Matthew G Dore

State legislatures are the latest arena in a long-running battle over the merits of staggered boards of directors. Several states, including Iowa, have recently amended their corporation laws to require, as a default proposition, that public corporations have staggered boards. These new staggered board laws are apparently designed to help local public corporations resist unwanted takeover bids, an understandable goal for legislators who want to keep home-grown public corporations headquartered in their states. But the laws come with a high pricetag: as this article explains, the new laws circumvent traditional notions of corporate governance and shareholder primacy, and may also …