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Full-Text Articles in Law
Corporate Officers As Agents, Deborah A. Demott
Corporate Officers As Agents, Deborah A. Demott
Faculty Scholarship
Although officers are crucial to corporate operations, scholarly and theoretical accounts tend to slight officers and amalgamate them with directors into a single category, "managers." This essay anchors officers within the common law of agency-as does black-letter law-which crisply differentiates officers from directors. Understanding that agency is central of the legal account of officers' positions and responsibilities is crucial to seeing why, like directors, officers are fiduciaries, but distinctively so, not as instances of generic "corporate fiduciaries." Officers, like directors, owe duties of loyalty, but also particularized duties of care, competence, and diligence. Additionally, officers' duties of performance encompass two …
Corporate Control And The Need For Meaningful Board Accountability, Michelle M. Harner
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 …
The Duty To Creditors Reconsidered - Filling A Much Needed Gap In Corporation Law, Richard A. Booth
The Duty To Creditors Reconsidered - Filling A Much Needed Gap In Corporation Law, Richard A. Booth
Faculty Scholarship
The most fundamental question of corporation law is to whom does the board of directors of a corporation owe its fiduciary duty. Recently, the question has tended to be whether and under what circumstances the board of directors has the duty to maximize stockholder wealth. But if a corporation is insolvent (or close to it), business decisions designed to maximize stockholder wealth may result in a reduction of creditor wealth. Although the conventional wisdom is that creditors must protect themselves by contractual means, there is a substantial body of case law that says that creditors can assert claims sounding in …
Why Not Good Faith?-The Foibles Of Fairness In Closely Held Corporations, Daniel S. Kleinberger
Why Not Good Faith?-The Foibles Of Fairness In Closely Held Corporations, Daniel S. Kleinberger
Faculty Scholarship
This essay describes the contours of the shareholder’s duty to be fair and explores some of the problems caused by the law’s imprecision in defining the duty of fairness. Because this duty is best understood as a rejection of old norms, part one of this essay describes the traditional doctrines of intra-corporate responsibility. Part two describes the special characteristics of a close corporation and outlines how those characteristics pushed close corporation law to new concepts of fairness and shareholder duties. Part three attempts to delineate those duties of fairness and also to highlight some of the dangers that arise when …