Law Commons^™

Normative Justifications For Lax (Or No) Corporate Fiduciary Duties: A Tale Of Problematic Principles, Imagined Facts And Inefficient Outcomes, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Corporate fiduciary duty standards are at an all-time low in this country. Ironically, the deterioration in standards has come to full maturity during the last two decades, a period of significant and notorious corporate managerial failures.

The deterioration in the standards by which we measure the appropriateness of the actions of corporate managers has been fueled by influential judges' and scholars' ("Advocates"'), who vigorously-and seemingly quite effectively-argue in favor of a lax fiduciary duty regime for corporate managers.

Normative justifications for lax corporate fiduciary duty standards, however, are weak. The justifications fail to provide a persuasive reason to abandon the …

The “New” Fiduciary Standards Under The Revised Uniform Liability Company Act: More Bottom Bumping From Nccusl, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Between 1995 and 2001, the influential National Conference of Commissioners on Uniform State Laws (NCCUSL) promulgated iterations of uniform laws pertaining to partnerships, limited partnerships and limited liability companies. One or more of those acts have been widely adopted by state legislatures.

Each of the three acts—the Uniform Partnership Act (1997) (RUPA), the Uniform Limited Partnership Act (2001) (ULPA (2001)), and the Uniform Limited Liability Company Act (1996) (ULLCA)—contains identical fiduciary duty provisions. The acts all adopt the same standards for the duty of care and the duty of loyalty, and offer parties the same limited rights to opt out …

Bumping Along The Bottom: Abandoned Principles And Failed Fiduciary Standards In Uniform Partnership And Llc Statutes, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Over the last decade or so, the National Conference of Commissioners on Uniform State Laws (NCCUSL) has promulgated a series of uniform laws dealing with unincorporated business entitites. The Uniform Partnership Act (1997) (RUPA), the Uniform Limited Partnership Act (2001) (ULPA (2001)), and the Uniform Limited Liability Company Act (1996) (ULLCA) are recent and important iterations of these uniform laws. One or more of these Acts have been adopted in many states and are certain to garner additional adoptions in the coming years.

Each of the Acts contains provisions that prescribe the fiduciary duties of the entity's managers. The managers' …

Managers’ Fiduciary Duties In Financially Distressed Corporations: Chaos In Delaware (And Elsewhere), Rutheford B. Campbell Jr., Christopher W. Frost

Law Faculty Scholarly Articles

The inherent conflict between creditors and shareholders has long occupied courts and commentators interested in corporate governance. Creditors holding fixed claims to the corporation's assets generally prefer corporate decision making that minimizes the risk of firm failure. Shareholders, in contrast, have a greater appetite for risk, because, as residual owners, they reap the rewards of firm success while sharing the risk of loss with creditors.

Traditionally, this conflict is mediated by a governance structure that imposes a fiduciary duty on the corporation's managers-its officers and directors-to maximize the value of the shareholders' interests in the firm. In this traditional view, …

Kentucky Corporate Fiduciary Duties, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

In this article I offer an interpretation of Kentucky's corporate fiduciary law. The article is positive, in that it attempts to explain our law by reference to certain principles. The article is also normative, however, in that it offers constructive criticism regarding parts of Kentucky fiduciary law and suggests changes, refinements, and clarifications intended to promote fairness and economic efficiency in Kentucky corporations.

Both the positive and the normative aspects of this piece recognize the importance of the common law developments in Delaware (and other states) and the importance of the law and economics movement. I suggest, however, that Kentucky …

Fair Value And Fair Price In Corporate Acquisitions, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

In statutory corporate acquisitions, dissenters' rights entitle shareholders of acquired corporations to obtain a "fair value" for their consideration, while common-law fiduciary duties ensure that such shareholders receive a "fair price" in the transaction. Courts, however, have had difficulty defining and measuring fair value and fair price, leaving this area of the law in disarray. This Article reviews the current framework of appraisal rights and fiduciary duties and proposes refined definitions of fair value and fair price that are based on attractive moral and economic values widely shared by society. The proposal respects the expectations of shareholders and provides guidance …

A Positive Analysis Of The Common Law Of Corporate Fiduciary Duties, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

The purpose of this Article is to offer a positive analysis of the common law of corporate managers' fiduciary duties. The Article attempts to explain the present shape of these corporate fiduciary duties by reference to Pareto criteria.

A particular state of affairs ("state B") is considered to be Pareto superior to another state of affairs ("state A") if at least one person in state B is better off than he or she is in state A and no one in state B is worse off than he or she is in state A. Since in a move from state …

Corporate Fiduciary Principles For The Post-Contractarian Era, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

The impact of the law and economics movement on legal scholarship, legal analysis, and, ultimately, on the rules under which our society operates is substantial. The proponents of this movement ("Contractarians") articulate their positions skillfully and apply their principles broadly across the entire spectrum of our laws, including, of course, the area of corporate law.

The purpose of this Article is to propose, explain, and defend broad and unifying principles to guide the development of fiduciary duties of corporate managers in the post-Contractarian period. These principles are based on Pareto criteria, which are demonstrably appealing to society and provide workable …