Law Commons^™

Interested Voting, Matteo Gatti

BYU Law Review

Corporate law is attentive to transactions with a controlling shareholder, but such transactions hardly cover all instances in which an interested shareholder may harm the corporation by casting a pivotal vote to pass a resolution. Interested votes cast by directors, managers, acquirers, cross-holders, arbitrageurs, institutional investors, hedge funds, and several other actors can be as detrimental as votes by a controlling shareholder. Yet, despite the ever growing influence of shareholders in corporate governance, interested voting has received scant attention.

This Article is the first to offer a systematic mapping of interested voting based on type of shareholder and type of …

Gender, Credentials, And M&A, Tracey E. George, Mitu Gulati, Albert Yoon

BYU Law Review

For the past several decades, women have made up roughly half of law school classes and the ranks of entering law firm associates. Attrition between entry to law firms and partnership results in women comprising 20% to 25% of partners. But is there yet more attrition to the top of the partnership pyramid? Analyzing the past decade of data on publicly filed M&A deals and detailed biographical information of M&A lawyers, we find that women make up fewer than 10% of deal leaders. When we look at the factors that determine who becomes a deal leader, we find that credentials—both …

The Failure Of Market Efficiency, William Magnuson

BYU Law Review

Recent years have witnessed the near total triumph of market efficiency as a regulatory goal. Policymakers regularly proclaim their devotion to ensuring efficient capital markets. Courts use market efficiency as a guiding light for crafting legal doctrine. And scholars have explored in great depth the mechanisms of market efficiency and the role of law in promoting it. There is strong evidence that, at least on some metrics, our capital markets are indeed more efficient than they have ever been. But the pursuit of efficiency has come at a cost. By focusing our attention narrowly on economic efficiency concerns—such as competition, …

The Original “Market” Understanding Of The Commerce Clause: Insights From Early Federal Government Practice And Precedent, Robert J. Pushaw Jr.

BYU Law Review

No abstract provided.

Nontraditional Investors, Jennifer S. Fan

BYU Law Review

In recent years, nontraditional investors have become a major player in the startup ecosystem. Under the regulatory regime of U.S. securities law, those in the public realm are heavily regulated, while those in the private realm are largely left alone. This public-private divide, which is a fundamental organizing principle of securities law, has eroded with the rise of nontraditional investors. While legal scholars have addressed the impact of some of these nontraditional investors individually, their collective impact on deal terms, deal timelines, due diligence, and board configuration has not been discussed in a holistic manner; neither has their impact on …

Strict Liability For The Information Age, Kevin Alden

BYU Law Review

No abstract provided.

Spotify’S Direct Listing And Foreign Private Issuers: Protecting Investors When Foreign Private Issuers List On A U.S. Exchange But Not On Their Home Exchange, Tayler Tanner

BYU Law Review

No abstract provided.

The Importance Of Inferior Voting Rights In Dual-Class Firms, Dov Solomon

BYU Law Review

Over the past several years, corporate law scholarship has carefully analyzed the effects of dual-class capital structures, which allocate superior voting rights to insiders and inferior voting rights to public shareholders. This Article adds to the literature by focusing on a unique and novel type of dual-class structure—one in which the public shares have no voting rights at all. It notes that this structure is fundamentally different because in the absence of even highly diluted voting rights in public hands, the firm does not have to abide by certain types of disclosure rules and corporate governance standards. Nonvoting shareholders are …

Sovereign Resilience: Reviving Private-Sector Economic Institutions In Indian Country, Robert J. Miller

BYU Law Review

No abstract provided.

Center-Left Politics And Corporate Governance: What Is The "Progressive" Agenda?, Christopher M. Bruner

BYU Law Review

No abstract provided.

Ceo Side Payments In Mergers And Acquisitions, Brian Broughman

BYU Law Review

In addition to golden parachutes, CEOs often negotiate for personal side payments in connection with the sale of their firms. Side payments differ from golden parachutes in that they are negotiated ex post in connection with a specific acquisition proposal, whereas golden parachutes are part of the executive’s employment agreement negotiated when she is hired. While side payments may benefit shareholders by countering managerial resistance to an efficient sale, they can also be used to redistribute merger proceeds to management. This Article highlights an overlooked distinction between pre-merger golden parachutes and merger side payments. Similar to a legislative rider attached …

Defending Worldwide Taxation With A Shareholder-Based Definition Of Corporate Residence, J. Clifton Fleming Jr., Robert J. Peroni, Stephen E. Shay

BYU Law Review

This Article argues that a principled, efficient, and practical definition of corporate residence is necessary even if some form of corporate integration is adopted, and that such a definition is a key element in designing either a real worldwide or a territorial income tax system as well as a potential restraint on the inversion phenomenon. The Article proposes that the United States adopt a shareholder-based definition of corporate residence that is structured as follows: 1. A foreign corporation is a U.S. tax resident for any year if fifty percent or more of its shares, determined by vote or value, was …

Competitiveness, Tax Base Erosion, And The Essential Dilemma Of Corporate Tax Reform, Kimberly A. Clausing

BYU Law Review

Label contradicts reality for the U.S. international corporate tax system. The U.S. system is typically labeled as a worldwide tax system with a statutory rate of 35%, both uncommon features among our trading partners. Yet these markers of the U.S. tax system do not accurately describe reality, where multinational firms routinely face far lower effective tax rates and little, if any, tax is collected on foreign income. Understanding this discrepancy between label and reality is essential to evaluate recent policy debates surrounding corporate inversions and the competitiveness of the U.S. international tax system. Although there is an essential policy tradeoff …

Inversions, Related Party Expenditures, And Source Taxation: Changing The Paradigm For The Taxation Of Foreign And Foreign-Owned Businesses, Julie A. Roin

BYU Law Review

The disconnect between the rules for the taxation of domestic businesses and foreign and foreign-owned businesses operating in the United States both diminishes the federal treasury and distorts taxpayer and business behavior. Yet bringing the sets of rules into closer coordination is no simple task. This Article examines many of the solutions proffered in the academic literature and details the difficulties and trade-offs that each entails.

Freedom Of Corporate Purpose, George A. Mocsary

BYU Law Review

No abstract provided.

The Social Relations Of Consumption: Corporate Law And The Meaning Of Consumer Culture, David G. Yosifon

BYU Law Review

A mature assessment of the society we are making for ourselves, and the legacy we are leaving to the future, must come to terms with consumer culture. Theoretical discourse, as well as common experience, betray persistent ambiguity about what consumerism means to and says about us. In this Article, I argue that this ambiguity can in part be explained by examining the social relations of consumption in contemporary society. These involve, crucially, the relationship between producer and consumer that is dictated by corporate governance law, and embodied in the decision-making dynamics of the directors who command corporate operations. The enigmatic …

Alternative Entities And Fiduciary Duty Waivers In Delaware, Michael Despres

BYU Law Review

No abstract provided.

Surveillant And Counselor: A Reorientation In Compliance For Broker-Dealers, James A. Fanto

BYU Law Review

This Article argues that the compliance officer should play a major role in the ongoing reform of broker-dealers and other financial firms. This role is facilitated by the fact that compliance is now well established and accepted and compliance officers are close to decision making at all levels of a firm. The contention is that the role of compliance must be rethought and reoriented if it is to contribute fully to the reform. Compliance officers now ensure that the firms and their employees comply with the numerous laws and regulations governing them and their activities, primarily by producing and then …

Shareholder Activism As A Corrective Mechanism In Corporate Governance, Paul Rose, Bernard S. Sharfman

BYU Law Review

Under an Arrowian framework, centralized authority and management provides for optimal decision making in large organizations. However, Kenneth Arrow also recognized that other elements within the organization, beyond the central authority, occasionally may have superior information or decision-making skills. In such cases, such elements may act as a corrective mechanism within the organization. In the context of public companies, this Article finds that such a corrective mechanism comes in the form of hedge fund activism, or, more accurately, offensive shareholder activism.

Offensive shareholder activism operates in the market for corporate influence, not control. Consistent with a theoretical framework that protects …

Aligning Corporate And Community Interests: From Abominable To Symbiotic, Barnali Choudhury

BYU Law Review

No abstract provided.

The Chapter 11 Efficiency Fallacy, Diane Lourdes Dick

BYU Law Review

This Article challenges the persistent claim that Chapter 11’s increasing utilization of market mechanisms will help facilitate economically efficient resolutions of corporate financial distress. Using two recent case studies, I show that, in fact, these mechanisms are used by stakeholders with existing market power to take control of the restructuring process and extract rents at the expense of other constituents: creditors, equity holders, and—in the case of companies that receive governmental bailouts—taxpayers. These distortionary effects are obscured by a dominant, neoclassical legal paradigm that ignores institutional and political dynamics. I advance a new explanatory model that draws upon modern social …

Rethinking The Dormant Commerce Clause: The Supreme Court As Catalyst For Spurring Legislative Gridlock In State Income Tax Reform, Brian L. Hazen

BYU Law Review

No abstract provided.

The End Of Shareholder Litigation? Allowing Shareholders To Customize Enforcement Through Arbitration Provisions In Charters And Bylaws, Paul Weitzel

BYU Law Review

Shareholder litigation has been heavily criticized for its inability to compensate harmed shareholders or deter managerial misconduct. While some have suggested abolishing shareholder litigation altogether, this Article takes a more moderate approach. I propose allowing shareholders to enforce charter and bylaw provisions that require arbitration of certain disputes. For example, an acquisitive company may require arbitration of merger-related suits while allowing non-merger suits to proceed in court. Likewise, a company in an industry known for volatile stock prices could require a price drop of three or four standard deviations before the suit could be brought in court, rather than arbitration. …

Mutiny By The Bounties? The Attempt To Reform Wall Street By The New Whistleblower Provisions Of The Dodd-Frank Act, Geoffrey Christopher Rapp

BYU Law Review

No abstract provided.

Adverse Publicity By Administrative Agencies In The Internet Era, Nathan Cortez

BYU Law Review

Nearly forty years ago, Ernest Gellhorn documented the potentially devastating impact that can occur when federal agencies issue adverse publicity about private parties. Based on his article, the Administrative Conference of the United States recommended that courts, Congress, and agencies hold agencies to clear standards for issuing such publicity. In the decades since, some agencies have adopted standards, but most have not, and neither the courts nor Congress has intervened to impose standards. Today, agencies continue to use countless forms of publicity to pressure alleged regulatory violators and to amplify their overall enforcement powers—all without affording due process or other …

Outsourcing, Modularity, And The Theory Of The Firm Margaret M. Blair, Erin O’Hara O’Connor, And Gregg Kirchhoefer, Margaret M. Blair, Erin R O’Hara O’Conno, Gregg Kirchhoefer

BYU Law Review

No abstract provided.

Separation Of Bank And State: Consolidating Bailed-Out Companies Into The U.S. Debt Ceiling And Government Financial Statements, J. W. Verret

BYU Law Review

No abstract provided.

Lawyers Keep Out: Why Attorneys Should Not Participate In Negotiating Critical Financial Numbers Reported By Public Company Clients, William O. Fisher

BYU Law Review

No abstract provided.

Managerial Entrenchment And Shareholder Wealth Revisited: Theory And Evidence From A Recessionary Financial Market, Jay B. Kesten

BYU Law Review

No abstract provided.

"If You Poison Us Do We Not Die?" - A Critical Analysis Of The Legality Of Poison Puts In The Wake Of San Antonio Fire And Police Pension Fund V. Amylin, Inc., Marcus Kai Hintze

BYU Law Review

No abstract provided.