Law Commons^™

Annual Survey Of Virginia Law: Business And Corporate Law, Rosalie Wacker O'Brien

University of Richmond Law Review

This article reviews recent developments in the law affecting Virginia businesses and corporations. Part II discusses judicial decisions, including: a United States Supreme Court decision concerning private rights of action under section 14(a) of the Securities Exchange Act of 1934; a Fourth Circuit Court of Appeals opinion denying absolute priority to the FDIC as liquidator; two decisions interpreting the Virginia Stock Corporation Act, one by the Fourth Circuit denying the protection of the good faith standard to directors and one by the United States District Court for the Western District of Virginia refusing to characterize a failed LBO/cash merger as …

Liquidity Versus Control: The Institutional Investor As Corporate Monitor, John C. Coffee Jr.

Faculty Scholarship

Within academia, paradigm shifts occur regularly, some more important than others. As the takeover wave of the 1980s ebbs, a significant shift now appears to be in progress in the way the public corporation is understood. Above all, the new thinking emphasizes that political forces shaped the modern corporation. While the old paradigm saw the structure of the corporation as the product of a Darwinian competition in which the most efficient design emerged victorious, this new perspective sees political forces as constraining that evolutionary process and possibly foreclosing the adoption of a superior organizational form. Thus, my colleague Professor Mark …

Reinventing The Outside Director: An Agenda For Institutional Investors, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

Managerialist rhetoric puts the institutional investor between a rock and a hard place. The institutional investor is depicted as a paper colossus, alternatively greedy and mindless, but in all events a less important corporate constituency than that other kind of investor, the "real" shareholder. The unspoken corollary is that, regardless of the institution's investment strategy, its interests may appropriately be ignored.

An institution that trades stock frequently is considered a short-term shareholder without a stake in the future of the corporation. According to the familiar argument, the short-term shareholder has no more legitimate claim on management's attention than does a …