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

Law Commons

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

Series

Business Organizations Law

Faculty Scholarship

Institution
Keyword
Publication Year

Articles 1 - 30 of 681

Full-Text Articles in Law

Public Relations Litigation, Kishanthi Parella Jul 2019

Public Relations Litigation, Kishanthi Parella

Faculty Scholarship

Conventional wisdom holds that lawsuits harm a corporation’s reputation. So why do corporations and other businesses litigate even when they will likely lose in the court of law and the court of public opinion? One explanation is settlement: some parties file lawsuits not to win but to force the defendant to pay out. But some business litigants defy even this explanation; they do not expect to win the lawsuit or to benefit financially from settlement. What explains their behavior?

The answer is reputation. This Article explains that certain types of litigation can improve a business litigant’s reputation in ...


How Did We Get Here? Dissecting The Hedge Fund Conundrum Through An Institutional Theory Lens, Cary Martin Shelby Jul 2019

How Did We Get Here? Dissecting The Hedge Fund Conundrum Through An Institutional Theory Lens, Cary Martin Shelby

Faculty Scholarship

This article dissects both the origins and resulting harms of what the author terms the "hedge fund conundrum," in which institutional investors, such as pension plans and endowments, have consistently increased hedge fund allocations over the past decade despite pervasive evidence of excessive fees and subpar returns. It then utilizes an historical institutionalist lens to examine how lawmakers may have enabled a conundrum of this magnitude. By and large, this phenomenon is a symptom of regulatory loopholes that have permitted the private hedge fund market to increase in "publicness" through its expanding access and subsequent harm to retail investors. Such ...


It's Complicated: The Challenge Of Prosecuting Tncs For Criminal Activity Under International Law, Jena Martin Jul 2019

It's Complicated: The Challenge Of Prosecuting Tncs For Criminal Activity Under International Law, Jena Martin

Faculty Scholarship

This essay aims to tackle an increasingly thorny and relevant issue: what do you do if a Transnational Corporation (TNC) commits a crime? The question raises a number of challenges, both philosophically and practically. First, what does it mean to prosecute an organization? Although there are some limited examples (the United States’ prosecution of accounting firm Arthur Andersen being among the most note-worthy), we have relatively little precedence regarding what this would entail; how exactly do you put a corporation on trial? Second, practically speaking, where do you hold the trial? This challenge is magnified by the fact that, by ...


The Specter Of The Giant Three, Scott Hirst, Lucian Bebchuk May 2019

The Specter Of The Giant Three, Scott Hirst, Lucian Bebchuk

Faculty Scholarship

This Article examines the large, steady, and continuing growth of the Big Three index fund managers — BlackRock, Vanguard, and State Street Global Advisors. We show that there is a real prospect that index funds will continue to grow, and that voting in most significant public companies will come to be dominated by the future “Giant Three.”

We begin by analyzing the drivers of the rise of the Big Three, including the structural factors that are leading to the heavy concentration of the index funds sector. We then provide empirical evidence about the past growth and current status of the Big ...


Board Governance For The Twenty-First Century, Faith Stevelman, Sarah C. Haan Apr 2019

Board Governance For The Twenty-First Century, Faith Stevelman, Sarah C. Haan

Faculty Scholarship

A decade after the global financial crisis, corporate governance is in a state of flux. A conceptual shift is underway. Years ago, in "first wave" governance, boards had a cozy relationship with the company C-suite. In "second wave" governance, which took hold in the 1970s, legal academics reimagined the board's role, conceptualizing directors as monitors charged with limiting waste and abuse that can arise in agency relationships. Now, we find ourselves at the threshold of "third wave" governance, in which boards are asked to grapple immediately and candidly with both the financial aspects of business and new environmental, social ...


The Supreme Court Bar At The Bar Of Patents, Paul Gugliuzza Mar 2019

The Supreme Court Bar At The Bar Of Patents, Paul Gugliuzza

Faculty Scholarship

Over the past two decades, a few dozen lawyers have come to dominate practice before the U.S. Supreme Court. By many accounts, these elite lawyers—whose clients are often among the largest corporations in the world—have spurred the Court to hear more cases that businesses care about and to decide those cases in favor of their clients. The Supreme Court’s recent case law on antitrust, arbitration, punitive damages, class actions, and more provides copious examples.

Though it is often overlooked in discussions of the emergent Supreme Court bar, patent law is another area in which the Court ...


Common Ownership And Executive Incentives: The Implausibility Of Compensation As An Anticompetitive Mechanism, David Walker Mar 2019

Common Ownership And Executive Incentives: The Implausibility Of Compensation As An Anticompetitive Mechanism, David Walker

Faculty Scholarship

Mutual funds, pension funds and other institutional investors are a growing presence in U.S. equity markets, and these investors frequently hold large stakes in shares of competing companies. Because these common owners might prefer to maximize the values of their portfolios of companies, rather than the value of individual companies in isolation, this new reality has lead to a concern that companies in concentrated industries with high degrees of common ownership might compete less vigorously with each other than they otherwise would. But what mechanism would link common ownership with reduced competition? Some commentators argue that one of the ...


Veil Piercing And The Untapped Power Of State Courts, Catherine A. Hardee Jan 2019

Veil Piercing And The Untapped Power Of State Courts, Catherine A. Hardee

Faculty Scholarship

The U.S. Supreme Court in recent years has embraced an anti-majoritarian trend toward providing constitutional protections for the elite who own or control corporations. This trend is especially troubling as it threatens to undermine the balance found in state corporate law between private ordering for internal corporate matters and government regulation to police the negative externalities of the corporate form. The Court's interventions also have the potential to leave vulnerable groups without the protection of religiously-neutral laws designed to prevent discrimination, protect workers, or provide essential services such as health care. While the U.S. Supreme Court has ...


Justice Kavanaugh, Lorenzo V. Sec, And The Post-Kennedy Supreme Court, Matthew C. Turk, Karen E. Woody Jan 2019

Justice Kavanaugh, Lorenzo V. Sec, And The Post-Kennedy Supreme Court, Matthew C. Turk, Karen E. Woody

Faculty Scholarship

This Article analyzes a recent Supreme Court case, Lorenzo v. Securities and Exchange Commission, and explains why it provides a valuable window into the Court's future now that Justice Kennedy has retired and his seat filled by Justice Brett Kavanaugh. Lorenzo is an important case that raises fundamental interpretative questions about the reach of federal securities statutes. But most significant is its unique procedural posture: when the Supreme Court issues its decision on Lorenzo in 2019, Justice Kavanaugh will be recused while the other eight Justices rule on a lower court opinion from the D.C. Circuit in which ...


Teaching Communication Skills In Transactional Simulations, Eric J. Gouvin, Katherine M. Koops, James E. Moliterno, Carol E. Morgan, Carol D. Newman Jan 2019

Teaching Communication Skills In Transactional Simulations, Eric J. Gouvin, Katherine M. Koops, James E. Moliterno, Carol E. Morgan, Carol D. Newman

Faculty Scholarship

This Article describes the role of communication exercises in transactional law and skills education, and provides several examples of such exercises. After a discussion of fundamental differences between communication in the context of litigation and transactional law, the Article discusses exercises designed to improve written communication skills, including the use of e-mail, in the context of transactional law. It follows with a similar discussion of exercises focusing on oral communication skills, including listening, interviewing, counseling, negotiation, and presentations. The Article concludes with examples of exercises combining oral and written communication skills in the context of simulated transactions.


Regulating Offshore Finance, William J. Moon Jan 2019

Regulating Offshore Finance, William J. Moon

Faculty Scholarship

From the Panama Papers to the Paradise Papers, massive document leaks in recent years have exposed trillions of dollars hidden in small offshore jurisdictions. Attracting foreign capital with low tax rates and environments of secrecy, a growing number of offshore jurisdictions have emerged as major financial havens hosting thousands of hedge funds, trusts, banks, and insurance companies.

While the prevailing account has examined offshore financial havens as “tax havens” that facilitate the evasion or avoidance of domestic tax, this Article uncovers how offshore jurisdictions enable corporations to evade domestic regulatory law. Specifically, recent U.S. Supreme Court cases restricting the ...


Soft And Hard Strategies: The Role Of Business In The Crafting Of International Commercial Law, Susan Block-Lieb Jan 2019

Soft And Hard Strategies: The Role Of Business In The Crafting Of International Commercial Law, Susan Block-Lieb

Faculty Scholarship

Part I returns to the classic definition of hard international law initially put forward by Kenneth Abbott and Duncan Snidal and related IR scholars and analyzes existing commercial law treaties in light of this definition. It concludes that virtually none of these commercial law treaties constitute “hard” international law because nearly all commercial law treaties rely on national courts for enforcement. But Abbott and Snidal’s focus on the extent to which international law is legalized—and especially the extent to which it is enforced by international actors—may matter less with commercial than other more public international lawmaking. This ...


Being True To Trulia: Do Disclosure-Only Settlements In Merger Objection Lawsuits Harm Shareholders?, Eric L. Talley, Giuseppe Dari‐Mattiacci Jan 2019

Being True To Trulia: Do Disclosure-Only Settlements In Merger Objection Lawsuits Harm Shareholders?, Eric L. Talley, Giuseppe Dari‐Mattiacci

Faculty Scholarship

A significant debate within mergers and acquisitions law concerns the explosive popularity of the “merger objection lawsuit” (MOL), a shareholder action seeking to enjoin an announced deal on fiduciary duty grounds. MOLs blossomed during the Financial Crisis, becoming popularly associated with “shareholder shakedowns,” whereby quick-triggered plaintiff attorneys would file against – and then rapidly settle with – acquirers, typically on non-monetary terms containing modest added disclosures in exchange for blanket class releases and attorney fee awards. This practice unleashed a torrent of criticism from lawyers, commentators, academics, and (ultimately) judges, culminating in a doctrinal shift in Delaware law in the January 2016 ...


Board 3.0 – An Introduction, Ronald J. Gilson, Jeffrey N. Gordon Jan 2019

Board 3.0 – An Introduction, Ronald J. Gilson, Jeffrey N. Gordon

Faculty Scholarship

This paper sketches out the case for a new board model, Board 3.0, as an option for public company boards. The goal is to develop a model of thickly informed, well-resourced, and highly motivated directors who could credibly monitor managerial strategy and operational skill in cases where this would be particularly valuable. Unlike the present board model of thinly informed, under-resourced, and boundedly motivated directors, Board 3.0 directors could credibly defend management against shareholder activist incursions, where appropriate, with institutional investor owners. Similarly, such directors could find a place in extremely complex enterprise, such as finance, where the ...


Long-Term Bias, Eric L. Talley, Michal Barzuza Jan 2019

Long-Term Bias, Eric L. Talley, Michal Barzuza

Faculty Scholarship

An emerging consensus in certain legal, business, and scholarly communities maintains that corporate managers are pressured unduly into chasing short-term gains at the expense of superior long-term prospects. The forces inducing managerial myopia are easy to spot, typically embodied by activist hedge funds and Wall Street gadflies with outsized appetites for next quarter’s earnings. Warnings about the dangers of “short termism” have become so well established, in fact, that they are now driving changes to mainstream practice, as courts, regulators and practitioners fashion legal and transactional constraints designed to insulate firms and managers from the influence of investor short-termism ...


Index Funds And The Future Of Corporate Governance: Theory, Evidence, And Policy, Scott Hirst Dec 2018

Index Funds And The Future Of Corporate Governance: Theory, Evidence, And Policy, Scott Hirst

Faculty Scholarship

Index funds own an increasingly large proportion of American public companies, currently more than one fifth and steadily growing. The stewardship decisions of index fund managers—how they monitor, vote, and engage with their portfolio companies can be expected to have a profound impact on the governance and performance of public companies and the economy. Understanding index fund stewardship, and how policy making can improve it, is critical for corporate law scholarship. This Article contributes to such understanding by providing a comprehensive theoretical, empirical, and policy analysis of index fund stewardship.

We begin by putting forward an agency-costs theory of ...


Sorting Out White-Collar Crime, Miriam Baer Dec 2018

Sorting Out White-Collar Crime, Miriam Baer

Faculty Scholarship

No abstract provided.


Disruptive Philanthropy: Chan-Zuckerberg, The Limited Liability Company, And The Millionaire Next Door, Dana Brakman Reiser Sep 2018

Disruptive Philanthropy: Chan-Zuckerberg, The Limited Liability Company, And The Millionaire Next Door, Dana Brakman Reiser

Faculty Scholarship

No abstract provided.


Serial Collusion By Multi-Product Firms, Michael Meurer, William Kovacic, Robert Marshall Aug 2018

Serial Collusion By Multi-Product Firms, Michael Meurer, William Kovacic, Robert Marshall

Faculty Scholarship

We provide empirical evidence that many multi-product firms have each participated in several cartels over the past 50 years. Standard analysis of cartel conduct, as well as enforcement policy, is rooted in the presumption that each cartel in which a given firm participates is a singular activity, independent of other cartel conduct by the firm. We argue that this analysis is deficient in many respects in the face of serial collusion by multi-product firms. We offer policy recommendations to reign in serial collusion, including a mandatory coordinated effects review for any merger involving a serial colluder, regardless of the apparent ...


The Governing Authority's Responsibilities In Compliance And Risk Management, As Seen In The American Law Institute's Draft Principles Of Compliance, Risk Management, And Enforcement, James Fanto Jul 2018

The Governing Authority's Responsibilities In Compliance And Risk Management, As Seen In The American Law Institute's Draft Principles Of Compliance, Risk Management, And Enforcement, James Fanto

Faculty Scholarship

No abstract provided.


Corporate Ethics: Approaches And Implications To Expanding The Corporate Mindset Of Profitability, 49 Loy. U. Chi. L.J. 637 (2018), Arthur Acevedo Jan 2018

Corporate Ethics: Approaches And Implications To Expanding The Corporate Mindset Of Profitability, 49 Loy. U. Chi. L.J. 637 (2018), Arthur Acevedo

Faculty Scholarship

This Article discusses the convergence of law and ethics in the context of corporations. It begins by detailing past attempts at and limitations on regulating corporate conduct. It then explores the business judgment rule in the context of ethical conduct. Finally, it considers the growing influence of millennials and social investing on corporate conduct, and concludes by cautioning corporate directors to adopt ethical practices in order to remain relevant in the marketplace.


Tax Havens As Producers Of Corporate Law, William J. Moon Jan 2018

Tax Havens As Producers Of Corporate Law, William J. Moon

Faculty Scholarship

This Review Essay situates Christopher Bruner’s new book, Re-imagining Offshore Finance, within the literature examining the regulation of cross-border finance and highlights its import for thinking about the complicated (and contested) relationship between territorially-configured domestic laws and the increasingly liberal movement of capital. Part I sets out the book’s central thesis. In addition to highlighting Bruner’s novel framework identifying the factors that propel certain small jurisdictions into becoming magnets for cross-border finance, I outline the limits of the framework in accounting for the stability in the overall demand for the commercialization of sovereignty, only one of which ...


Who's Causing The Harm?, Catherine A. Hardee Jan 2018

Who's Causing The Harm?, Catherine A. Hardee

Faculty Scholarship

My parents started a software company out of our family room when I was just five years old As a child, the business felt like the sixth member of our family A fourth child who grew up alongside my sisters and me and whom my parents struggled with, stressed over, and strove to infuse with their values just as they did their flesh and blood children. Take pride in your work and stand behind what you do applied equally to homework and product launches. The Golden Rule to treat others as you would like to be treated meant that, long ...


Will Delaware Be Different? An Empirical Study Of Tc Heartland And The Shift To Defendant Choice Of Venue, Ofer Eldar, Neel U. Sukhatme Jan 2018

Will Delaware Be Different? An Empirical Study Of Tc Heartland And The Shift To Defendant Choice Of Venue, Ofer Eldar, Neel U. Sukhatme

Faculty Scholarship

Why do some venues evolve into litigation havens while others do not? Venues might compete for litigation for various reasons, such as enhancing their judges’ prestige and increasing revenues for the local bar. This competition is framed by the party that chooses the venue. Whether plaintiffs or defendants primarily choose venue is crucial because, we argue, the two scenarios are not symmetrical.

The Supreme Court’s recent decision in TC Heartland v. Kraft Foods illustrates this dynamic. There, the Court effectively shifted venue choice in many patent infringement cases from plaintiffs to corporate defendants. We use TC Heartland to empirically ...


Individual Autonomy In Corporate Law, Elisabeth De Fontenay Jan 2018

Individual Autonomy In Corporate Law, Elisabeth De Fontenay

Faculty Scholarship

The field of corporate law is riven with competing visions of the corporation. This Article seeks to identify points of broad agreement by negative implication. It examines two developments in corporate law that have drawn widespread criticism from corporate law scholars: the Supreme Court's recognition of corporate religious rights in Burwell v. Hobby Lobby and the Nevada legislature's decision to eliminate mandatory fiduciary duties for corporate directors and officers. Despite their fundamental differences, both resulted in expanding individual rights or autonomy within the corporation-for shareholders and managers, respectively.

The visceral critiques aimed at these two developments suggest a ...


Delaware's Retreat: Exploring Developing Fissures And Tectonic Shifts In Delaware Corporate Law, James D. Cox, Randall S. Thomas Jan 2018

Delaware's Retreat: Exploring Developing Fissures And Tectonic Shifts In Delaware Corporate Law, James D. Cox, Randall S. Thomas

Faculty Scholarship

No abstract provided.


Activist Directors And Agency Costs: What Happens When An Activist Director Goes On The Board?, John C. Coffee Jr., Robert J. Jackson Jr., Joshua Mitts, Robert Bishop Jan 2018

Activist Directors And Agency Costs: What Happens When An Activist Director Goes On The Board?, John C. Coffee Jr., Robert J. Jackson Jr., Joshua Mitts, Robert Bishop

Faculty Scholarship

We develop and apply a new and more rigorous methodology by which to measure and understand both insider trading and the agency costs of hedge fund activism. We use quantitative data to show a systematic relationship between the appointment of a hedge fund nominated director to a corporate board and an increase in informed trading in that corporation’s stock (with the relationship being most pronounced when the fund’s slate of directors includes a hedge fund employee). This finding is important from two different perspectives. First, from a governance perspective, activist hedge funds represent a new and potent force ...


Economic Democracy And Enterprise Form In Finance, William H. Simon Jan 2018

Economic Democracy And Enterprise Form In Finance, William H. Simon

Faculty Scholarship

This comment – a contribution to a project on “democratizing finance” – considers the relative advantages of alternative enterprise forms from the point of view of public accountability. It compares the business corporation to the state agency or authority, the cooperative, the state corporation, and the charitable nonprofit. These forms can be distinguished in terms of whether they aspire to enhance general electoral democracy or stakeholder democracy and in terms of whether their democratic controls operate directly or indirectly. I suggest that the more indirect democratic forms may be more promising than the more direct ones. I also argue that the project ...


Valuation Disputes In Corporate Bankruptcy, Kenneth M. Ayotte, Edward R. Morrison Jan 2018

Valuation Disputes In Corporate Bankruptcy, Kenneth M. Ayotte, Edward R. Morrison

Faculty Scholarship

Prior scholarship points to disagreements about valuation and judicial valuation error as key drivers of Chapter 11 outcomes. Avoiding valuation disputes and valuation errors is also the underlying driver of most proposed reforms, from Baird’s auctions to Bebchuk’s options. In this paper, we undertake a detailed examination of bankruptcy court opinions involving valuation disputes. Our paper has two goals. The first is to understand how parties and their expert witnesses justify their opposing views to the judge, and how judges decide between them. The second is to provide practical guidance to judges in resolving valuation disputes. We document ...


Regulating Fintech, William Magnuson Jan 2018

Regulating Fintech, William Magnuson

Faculty Scholarship

The financial crisis of 2008 has led to dramatic changes in the way that finance is regulated: the Dodd-Frank Act imposed broad and systemic regulation on the industry on a level not seen since the New Deal. But the financial regulatory reforms enacted since the crisis have been premised on an outdated idea of what financial services look like and how they are provided. Regulation has failed to take into account the rise of financial technology (or “fintech”) firms and the fundamental changes they have ushered in on a variety of fronts, from the way that banking works, to the ...