Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Series

Business Organizations Law

PDF

2010

Institution
Keyword
Publication

Articles 31 - 60 of 125

Full-Text Articles in Law

Asset Specificity And Transaction Structures: A Case Study Of @Home Corporation, Brian J.M. Quinn Apr 2010

Asset Specificity And Transaction Structures: A Case Study Of @Home Corporation, Brian J.M. Quinn

Boston College Law School Faculty Papers

This is a case study of asset specific investments, a class of transactions that is well understood in the context of economic theory but that is under-analyzed empirically. Because specific investments are particular to a single location, use or customer, their next best use is of much lower value than the use for which they are initially intended. Consequently, asset specific investments face the threat of ex post opportunism and allocative inefficiency. This contracting problem is particularly difficult when firms that are otherwise rivals must coordinate individual investments to create a shared resource. In such cases, generating credible expectations of ...


Bond Limited Liability, Robert J. Rhee Mar 2010

Bond Limited Liability, Robert J. Rhee

UF Law Faculty Publications

Limited liability is considered a “birthright” of corporations. The concept is entrenched in legal theory, and it is a fixed reality of the political economy. But it remains controversial. Scholarly debate has been engaged in absolute terms of defending the rule or advocating its abrogation. Though compelling, these polar positions, often expressed in abstract arguments, are associated with disquieting effects. Without limited liability, efficiency may be severely compromised. With it, involuntary tort creditors bear some of the cost of an enterprise. Most other proposals for reforming limited liability have been incremental, such as modifying veil piercing. However, neither absolutism nor ...


Regulatory Dualism As A Development Strategy: Corporate Reform In Brazil, The U.S., And The Eu, Henry Hansmann, Ronald J. Gilson, Mariana Pargendler Mar 2010

Regulatory Dualism As A Development Strategy: Corporate Reform In Brazil, The U.S., And The Eu, Henry Hansmann, Ronald J. Gilson, Mariana Pargendler

Faculty Scholarship Series

Countries pursuing economic development confront a fundamental obstacle. Reforms that increase the size of the overall pie are blocked by powerful interests that are threatened by the growth-inducing changes. This problem is conspicuous in efforts to create effective capital markets to support economic growth. Controlling owners and managers of established firms successfully oppose corporate governance reforms that would improve investor protection and promote capital market development. In this article, we examine the promise of regulatory dualism as a strategy to diffuse the tension between future growth and the current distribution of wealth and power. Regulatory dualism seeks to mitigate political ...


Should Firms Be Allowed To Indemnify Their Employees For Sanctions?, Wallace P. Mullin, Christopher M. Snyder Feb 2010

Should Firms Be Allowed To Indemnify Their Employees For Sanctions?, Wallace P. Mullin, Christopher M. Snyder

Open Dartmouth: Faculty Open Access Scholarship

Policymakers have questioned whether firms should be allowed to indemnify their employees for personal sanctions for corporate crimes. This article provides the first formal analysis of this form of indemnification. Targeting employees with unindemnifiable sanctions carries the social cost of exposing employees of law-abiding firms to the risk of mistaken government prosecution. Deterrence is typically achieved more efficiently by sanctioning the firm alone. We find the circumstances under which the government shouldadditionally sanction employees to be quite limited and the circumstances under which the government should ban indemnification of these sanctions to be more limited still. One circumstance is when ...


To Be Or Not To Be? Citizens United And The Corporate Form, Reuven S. Avi-Yonah Feb 2010

To Be Or Not To Be? Citizens United And The Corporate Form, Reuven S. Avi-Yonah

Law & Economics Working Papers

In Citizens United vs. FEC, the Supreme Court struck down a Federal ban on direct corporate expenditures on political campaigns. The decision has been widely criticized and praised as a matter of First Amendment law. But it is also interesting as another step in the evolution of our legal views of the corporation. The thesis of this Article is that by viewing Citizens United through the prism of theories about the corporate form, it is possible to understand why both the majority and the dissent departed from previous Supreme Court cases on the First Amendment rights of corporations, and to ...


Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard Jan 2010

Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard

Law & Economics Working Papers

This essay compares the current effort to reform financial services regulation with the regulatory initiatives that come out of the Great Depression. Unlike the 1930s, policymakers today must account for the impact of regulatory competition in crafting responses to the financial crisis. The available evidence suggests that jurisdictional competition is no match for the forces of populist retribution in modern democratic states.


Corporate Law In The Shanghai People's Courts, 1992-2008: Judicial Autonomy In A Contemporary Authoritarian State, Nicholas C. Howson Jan 2010

Corporate Law In The Shanghai People's Courts, 1992-2008: Judicial Autonomy In A Contemporary Authoritarian State, Nicholas C. Howson

Law & Economics Working Papers

In late 2005 China adopted a largely rewritten Company Law that radically increased the role of courts. This study, based on a review of more than 1000 Company Law-related disputes reported between 1992 and 2008 and extensive interactions with PRC officials and sitting judges, evaluates how the Shanghai People’s Court system has fared over 15 years in corporate law adjudication. Although the Shanghai People’s Courts show generally increasing technical competence and even intimations of political independence, their path toward institutional autonomy is inconsistent. Through 2006, the Shanghai Court system demonstrated significantly increased autonomy. After 2006 and enactment of ...


The Role Of Corporate Law In Preventing A Financial Crisis: Reflections On In Re Citigroup Inc. Shareholder Derivative Litigation, Franklin A. Gevurtz Jan 2010

The Role Of Corporate Law In Preventing A Financial Crisis: Reflections On In Re Citigroup Inc. Shareholder Derivative Litigation, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

No abstract provided.


You Can Come Under The Tarp, But First... The Bank Of America-Merrill Lynch Merger Was A Failure Of Corporate Governance, James K. Donaldson Jan 2010

You Can Come Under The Tarp, But First... The Bank Of America-Merrill Lynch Merger Was A Failure Of Corporate Governance, James K. Donaldson

Law Student Publications

In response to the financial credit crisis in the fall of 2008, Congress, the U.S. Treasury, and the Federal Reserve Board of Governors took unprecedented action to prevent both large and small financial institutions from insolvency. Ultimately, the Troubled Asset Relief Program was created to inject various banks with the cash necessary to prevent the banks' insolvency and the threat that bank failures posed to the nation's economy. In the midst of that crisis, Bank of America agreed to acquire Merrill Lynch. Each institution, in their individual capacity, received TARP funds from the Treasury several weeks after entering ...


Corporate Governance Ii – Accountability Rules, Franklin A. Gevurtz Jan 2010

Corporate Governance Ii – Accountability Rules, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

No abstract provided.


Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner Jan 2010

Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner

Faculty Scholarship

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 ...


Crisis, Rescue And Corporate Social Responsibility Under American Corporate Law, Robert J. Rhee Jan 2010

Crisis, Rescue And Corporate Social Responsibility Under American Corporate Law, Robert J. Rhee

Faculty Scholarship

This chapter discusses the legal issues of rescue and corporate social responsibility during times of public crisis. It analyzes a corporate board’s fiduciary duty related to the management of a public crisis and the provision of aid to government and the public. The thesis is that American corporate law adequately provides corporate boards authority to assume broad principles of corporate social responsibility, and that during a public crisis this authority is specially recognized in the enabling statutes of corporate law and should be broadened even further to pursue the public good in exigent circumstances.


The Madoff Scandal, Market Regulatory Failure And The Business Education Of Lawyers, Robert J. Rhee Jan 2010

The Madoff Scandal, Market Regulatory Failure And The Business Education Of Lawyers, Robert J. Rhee

Faculty Scholarship

This essay suggests that a deficiency in legal education is a contributing cause of the regulatory failure. The most scandalous malfeasance of this new era, the Madoff Ponzi scheme, evinces the failure of improperly trained lawyers and regulators. It also calls into question whether the prevailing regulatory philosophy of disclosure of disclosure is sufficient in a complex market. This essay answers an important question underlying these considerations: What can legal education do to better train business lawyers and regulators for a market that is becoming more complex? One answer, it suggests, is a simple one: law schools should teach a ...


Bonding Limited Liability, Robert J. Rhee Jan 2010

Bonding Limited Liability, Robert J. Rhee

Faculty Scholarship

Limited liability is considered a “birthright” of corporations. The concept is entrenched in legal theory, and it is a fixed reality of the political economy. But it remains controversial. Scholarly debate has been engaged in absolute terms of defending the rule or advocating its abrogation. Though compelling, these polar positions, often expressed in abstract arguments, are associated with disquieting effects. Without limited liability, efficiency may be severely compromised. With it, involuntary tort creditors bear some of the cost of an enterprise. Most other proposals for reforming limited liability have been incremental, such as modifying veil piercing. However, neither absolutism nor ...


Corporate Control And The Need For Meaningful Board Accountability, Michelle M. Harner Jan 2010

Corporate Control And The Need For Meaningful Board Accountability, Michelle M. Harner

Faculty Scholarship

Corporations are vulnerable to the greed, self-dealing and conflicts of those in control of the corporation. Courts historically have regulated this potential abuse by designating the board of directors and senior management as fiduciaries. In some instances, however, shareholders, creditors or others outside of corporate management may influence corporate decisions and, in the process, extract corporate value. Courts generally address this type of corporate damage in one of two ways: they designate controlling shareholders as corporate fiduciaries and they characterize creditors, customers and others as contract parties with no fiduciary duties. The traditional roles of corporate shareholders and creditors may ...


Barriers To Effective Risk Management, Michelle M. Harner Jan 2010

Barriers To Effective Risk Management, Michelle M. Harner

Faculty Scholarship

“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 ...


Trusts Versus Corporations: An Empirical Analysis Of Competing Organizational Forms, A. Joseph Warburton Jan 2010

Trusts Versus Corporations: An Empirical Analysis Of Competing Organizational Forms, A. Joseph Warburton

College of Law Faculty - Scholarship

This paper studies the effects of organizational form on managerial behavior and firm performance, from an empirical perspective. Managers of trusts are subject to stricter fiduciary responsibilities than managers of corporations. This paper examines the ramifications empirically, by exploiting data generated by a change in British regulations in the 1990s that allowed mutual funds to organize as either a trust or a corporation. I find evidence that trust law is effective in curtailing opportunistic behavior, as trust managers charge significantly lower fees than their observationally equivalent corporate counterparts. Trust managers also incur lower risk. However, evidence suggests that trust managers ...


Managerial Entrenchment And Shareholder Wealth Revisited: Theory And Evidence From A Recessionary Market, Jay B. Kesten Jan 2010

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

Scholarly Publications

Does managerial entrenchment create or destroy shareholder value? This Article presents both theory and evidence that the answer to this question is not monolithic, but rather depends on factors that vary greatly with the macroeconomic climate, such as firm profitability, takeover frequency, and valuation of takeover premiums. The mainstream view, both of academics and market participants, is that entrenchment reduces accountability to shareholders and amplifies agency costs, thus decreasing shareholder wealth. Two influential studies (Bebchuk, Cohen & Ferrell (2009) and Gompers, Ishii & Metrick (2003)) present empirical evidence consistent with this conclusion, finding statistically significant negative correlations between entrenchment and stock returns ...


Freeze-Outs: Transcontinental Analysis And Reform Proposals, Marco Ventoruzzo Jan 2010

Freeze-Outs: Transcontinental Analysis And Reform Proposals, Marco Ventoruzzo

Journal Articles

One of the most crucial, but systematically neglected, comparative differences between corporate law systems in Europe and in the United States concerns the regulations governing freeze-out transactions in listed corporations. Freeze-outs can be defined as transactions in which the controlling shareholder exercises a legal right to buy out the shares of the minority, and consequently delists the corporation and brings it private. Beyond this essential definition, the systems diverge profoundly. This gap exists despite the fact that minority freeze-outs are one of the most debated issues in corporate law, in the public media, in a vast body of scholarly work ...


Freeze-Outs: Transcontinental Analysis And Reform Proposals, Marco Ventoruzzo Jan 2010

Freeze-Outs: Transcontinental Analysis And Reform Proposals, Marco Ventoruzzo

Journal Articles

One of the most crucial, but systematically neglected, comparative differences between corporate law systems in Europe and in the United States concerns the regulations governing freeze-out transactions in listed corporations. Freeze-outs can be defined as transactions in which the controlling shareholder exercises a legal right to buy out the shares of the minority, and consequently delists the corporation and brings it private. Beyond this essential definition, the systems diverge profoundly.

This gap exists despite the fact that minority freeze-outs are one of the most debated issues in corporate law, in the public media, in a vast body of scholarly work ...


Preserving The Corporate Attorney-Client Privilege, Katrice Bridges Copeland Jan 2010

Preserving The Corporate Attorney-Client Privilege, Katrice Bridges Copeland

Journal Articles

This Article argues that, while legislation such as the Attorney-Client Privilege Protection Act ("ACPPA") is necessary to preserve that corporate attorney-client privilege, any such legislation must include judicial oversight to deter prosecutorial misconduct effectively. Part II examines the costs and benefits of granting corporations the attorney-client privilege in criminal investigations. It concludes that the benefits of the privilege fat outweigh the costs and that the privilege must be safeguarded from unnecessary infringement. Part III traces the evolution of the DOJ's waiver policies that have threatened the corporate attorney-client privilege. It also examines the costs and benefits of the waiver ...


In Defence Of The Sphere Of Influence: Why The Wgsr Should Not Follow Professor Ruggie's Advice On Defining The Scope Of Social Responsibility, Stepan Wood Jan 2010

In Defence Of The Sphere Of Influence: Why The Wgsr Should Not Follow Professor Ruggie's Advice On Defining The Scope Of Social Responsibility, Stepan Wood

Faculty Publications

The Working Group on Social Responsibility (WGSR) of the International Organization for Standardization (ISO) will meet in Copenhagen from May 17 to 21, 2010 for what is likely to be its last meeting to work on ISO 26000, an international guide on social responsibility. One of the central challenges for the WGSR is to define the scope of an organization’s responsibility for human rights abuses committed by third parties. ISO 26000, approved by a large majority in a recent "Draft International Standard" ballot, answers this question largely in terms of an organization’s degree of control or influence over ...


Corporate War Crimes: Prosecuting Pillage Of Natural Resources, James G. Stewart Jan 2010

Corporate War Crimes: Prosecuting Pillage Of Natural Resources, James G. Stewart

Faculty Publications

Pillage means theft during war. Although the prohibition against pillage dates to antiquity, pillaging is a modern war crime that can be enforced before international and domestic criminal courts. Following World War II, several businessmen were convicted for the pillage of natural resources. And yet modern commercial actors are seldom held accountable for their role in the illegal exploitation of natural resources from modern conflict zones, even though pillage is prosecuted as a matter of course in other contexts. This book offers a doctrinal road-map of the law governing pillage as applied to the illegal exploitation of natural resources by ...


Power Without Property, Still: Unger, Berle, And The Derivatives Revolution, Cristie Ford, Carol Liao Jan 2010

Power Without Property, Still: Unger, Berle, And The Derivatives Revolution, Cristie Ford, Carol Liao

Faculty Publications

This paper was produced for “In Berle’s Footsteps,” a symposium marking the launch of the Adolf A. Berle, Jr. Center on Corporations, Law and Society at the University of Seattle School of Law. It considers the light that the “derivatives revolution” sheds on the theoretical perspectives of Roberto Unger and Adolf Berle. While an unlikely pair, both Unger and Berle focused, in different ways, on the same issues: property, the power associated with property, and the impact of “smashing the atom” of traditional property rights. For Unger, breaking down consolidated property holding at the societal level was a pro-democratic ...


Why Culture Matters In International Institutions: The Marginality Of Human Rights At The World Bank, Galit A. Sarfaty Jan 2010

Why Culture Matters In International Institutions: The Marginality Of Human Rights At The World Bank, Galit A. Sarfaty

Faculty Publications

Why do international organizations (IOs) behave as they do? Scholarship in international law and international relations reflects an emerging interest in IOs, yet it overemphasizes the role of states in shaping how IOs behave and make policy. Understanding institutional behavior and change requires an ethnographic analysis of the internal dynamics of IOs, including their formal and informal norms, incentive systems, and decision-making processes. This Article analyzes the organizational culture of one particularly powerful international institution - the World Bank - based on ethnographic fieldwork at the Bank over four years. It seeks to understand why the institution has not adopted a human ...


The Essential Unity Of Shareholders And The Myth Of Investor Short-Termism, George W. Dent Jan 2010

The Essential Unity Of Shareholders And The Myth Of Investor Short-Termism, George W. Dent

Faculty Publications

The separation of ownership and control publicized by Berle and Means in 1932 persists today. Domination of public companies by self-serving and ineffective executives costs America billions of dollars every year and contributed to the current economic meltdown. Repeated efforts to solve this problem--including the Sarbanes-Oxley Act, expanded disclosure duties, and more stringent requirements for director independence--have had little benefit and have sometimes made matters worse. The flaws in our corporate governance system are a growing problem for America’s economy as disillusioned investors increasingly place their capital in other countries.

Nonetheless, proposals for greater shareholder power have encountered criticisms ...


A Myth Deconstructed: “The Emperor’S New Clothes” On The Low-Profit Limited Liability Company, Daniel S. Kleinberger Jan 2010

A Myth Deconstructed: “The Emperor’S New Clothes” On The Low-Profit Limited Liability Company, Daniel S. Kleinberger

Faculty Scholarship

This article carefully debunks each major tenet of the L3C “movement” and reveals the legal and practical realities under “the Emperor’s New Clothes.” Using foundation funds to offer market-rate returns to “tranched” investors is, at best, a complicated device; not appropriate for “branding” and simplistic appeals to social conscience. When a foundation contemplates making a program-related investment, the matter requires careful, individualized, professional assessment, not reliance on a branded template. In this context, the L#C is but a snare and a delusion.


Shareholder Democracy And The Curious Turn Toward Board Primacy, Grant M. Hayden, Matthew T. Bodie Jan 2010

Shareholder Democracy And The Curious Turn Toward Board Primacy, Grant M. Hayden, Matthew T. Bodie

All Faculty Scholarship

Corporate law is consumed with a debate over shareholder democracy. The conventional wisdom counsels that shareholders should have more voice in corporate governance, in order to reduce agency costs and provide democratic legitimacy. A second set of theorists, described as “board primacists,” advocates against greater shareholder democracy and in favor of increased board discretion. These theorists argue that shareholders need to delegate their authority in order to provide the board with the proper authority to manage the enterprise and avoid short-term decision making.

In the last few years, the classical economic underpinnings of corporate law have been destabilized by a ...


Judicial Independence And Company Law In The Shanghai People's Courts, 1992-2008, Nicholas C. Howson Jan 2010

Judicial Independence And Company Law In The Shanghai People's Courts, 1992-2008, Nicholas C. Howson

Book Chapters

This chapter draws on a detailed study of corporate law adjudication in Shanghai from 1992 to 2008. The purpose of the study was to better understand the demonstrated technical competence, institutional autonomy, and political independence of one court system in the People's Republic of China ("PRC") in a sector outside of the criminal law. The study consisted of a detailed examination and comparison of full-length corporate law opinions for more than 200 reported cases, a 2003 Shanghai High Court opinion on the 1994 Company Law (describing a decade of corporate case outcomes), a 2007 report on cases implementing the ...


The Development Of Modern Corporate Governance In China And India, Nicholas C. Howson, Vikramaditya S. Khanna Jan 2010

The Development Of Modern Corporate Governance In China And India, Nicholas C. Howson, Vikramaditya S. Khanna

Book Chapters

Corporate governance reform has become a topic of considerable debate both in the US and in many emerging markets. Indeed, the discussion is important because these reforms may have potentially long-standing effects upon the global allocation of capital, and in understanding the ways in which governance norms are communicated across markets and nations in an ever-globalizing world. In this chapter we examine the corporate governance reform efforts of the world's two biggest and fastest growing emerging markets, the People's Republic of China (PRC or China) and India. In the process we find that our understanding of how and ...