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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
Working Paper Series
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 …
Give Me Equity Or Give Me Death - The Role Of Competition And Compensation In Building Silicon Valley, Richard A. Booth
Give Me Equity Or Give Me Death - The Role Of Competition And Compensation In Building Silicon Valley, Richard A. Booth
Working Paper Series
In this essay, I argue that the preeminence of Silicon Valley as an incubator of technology companies is attributable to equity compensation. Ronald Gilson, relying on the work of AnnaLee Saxenian and others who have noted the tendency of Silicon Valley employees to job hop, has suggested that California law prohibiting the enforcement of non-compete agreements was a major factor in the rise of Silicon Valley (and the demise of Route 128). I extend this line of thought by suggesting that California employers may have relied on equity compensation as a substitute way to bind employees. I argue further that …