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Full-Text Articles in Law

Politics And The Business Corporation, Robert H. Sitkoff Dec 2003

Politics And The Business Corporation, Robert H. Sitkoff

Law & Economics Working Papers Archive: 2003-2009

This essay explores the policy bases for, and the political economy of, the law's long-standing regulation of corporate political speech. The essay has three parts. First, it contends that the conventional justifications for regulating corporate interventions in politics -- that corporate donations unnaturally skew the political discourse (bad politics) and that corporate political donations harm shareholders (agency costs) -- assume irrational investors and substantial capital market inefficiency. Drawing on public choice theory, the essay also explores the aim of retarding rent-seeking as an alternative justification for regulating corporate interventions in politics. Second, the essay reexamines the history of the regulation of ...


Trust Law, Corporate Law, And Capital Market Efficiency, Robert H. Sitkoff Nov 2003

Trust Law, Corporate Law, And Capital Market Efficiency, Robert H. Sitkoff

Law & Economics Working Papers Archive: 2003-2009

In both the publicly-traded corporation and the private donative trust a crucial task is to minimize the agency costs that arise from the separation of risk-bearing and management. But where the law of corporate governance evolved in the shadow of capital-market checks on agency costs, trust governance did not. Thus, even more than that of close corporations, the law and study of private trusts offers an illuminating counterfactual -- a control, as it were -­ for a playful thought experiment about the importance of capital market efficiency to the law and study of public corporations. The animating idea for this essay is ...


Beyond The Busihess Judgment Rule: Protecting Bidder Firm Shareholders From Value-Reducing Acquisitions, Ryan Houseal Oct 2003

Beyond The Busihess Judgment Rule: Protecting Bidder Firm Shareholders From Value-Reducing Acquisitions, Ryan Houseal

University of Michigan Journal of Law Reform

During the takeover transactions of the 1980s, bidder firms paid target firm shareholders average premiums of approximately 50% for their shares. Did the sizable premiums paid to target firm shareholders during the 1980s reflect post-takeover improvement in the target's performance? Or were the premiums a result of the mismanagement of the bidder firms' assets?

The answer will help determine whether additional legal mechanisms should be established to protect bidder firm shareholders from the threat of management's consummation of value reducing acquisitions. Accordingly, this Note examines various studies which attempt to identify the source of the premiums paid to ...


Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard Jan 2003

Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard

Other Publications

The Private Securities Litigation Reform Act of 1995 was designed to curtail class action lawsuits by the plaintiffs’ bar. In particular, the high-technology industry, accountants, and investment bankers thought that they had been unjustly victimized by class action lawsuits based on little more than declines in a company’s stock price. Prior to 1995, the plaintiffs’ bar had free rein to use the discovery process to troll for evidence to support its claims. Moreover, the high costs of litigation were a powerful weapon with which to coerce companies to settle claims. The plaintiffs’ bar and its allies in Congress have ...


Competition, Corporate Responsibility, And The China Question, Jospeh Vining Jan 2003

Competition, Corporate Responsibility, And The China Question, Jospeh Vining

Other Publications

"Corporate responsibility" is not a peripheral matter. It is at the core of all decision-making on behalf of business corporations under American law. This paper examines the effort to add an exemption for "business" in corporate form to the exemptions from ordinary responsibility that are seen in other areas of activity - e.g., for the military, for lawyers in adversarial litigation, or for investigators in scientific research. It looks at a number of well known cases and points to the often neglected relevance of both the criminal law applicable to corporations as such, and the evolving professional responsibility of corporate ...


Protection Against Unwarranted Searches And Seizures Of Corporate Premises Under Article 8 Of The European Convention On Human Rights: The Colas Est Sa V. France Approach, Marius Emberland Jan 2003

Protection Against Unwarranted Searches And Seizures Of Corporate Premises Under Article 8 Of The European Convention On Human Rights: The Colas Est Sa V. France Approach, Marius Emberland

Michigan Journal of International Law

In this Article, the author considers the judgment delivered April 16, 2002, by the European Court of Human Rights in the case of Colas Est SA v. France. The judgment concerned the interpretation of Article 8 of the European Convention on Human Rights (ECHR), which provides: (1) Everyone has the right to respect for his private and family life, his home and his correspondence. (2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of ...


Questions To Ask Before You Join A Club, Laura N. Beny, Paul S. Bird, Franci J. Blassberg, Michael P. Harrell Jan 2003

Questions To Ask Before You Join A Club, Laura N. Beny, Paul S. Bird, Franci J. Blassberg, Michael P. Harrell

Articles

Despite the recent flurry of large transactions in which a consortium of private equity firms have teamed up to make joint bids and acquisitions, “club deals” themselves are not breaking news. In fact, they have been a staple of small- and middle-sized private equity M&A transactions for years. Recently, however, there has been a growing trend toward large club deals with enterprise values over $1 billion.1 Due to their size, complexity and, often, international dimension, these transactions have generated considerable attention in the business press and have prompted much discussion among private equity professionals and the limited partners ...


The Case For Retaining The Corporate Amt, Reuven S. Avi-Yonah Jan 2003

The Case For Retaining The Corporate Amt, Reuven S. Avi-Yonah

Articles

PROFESSORS Chorvat and Knoll present us with a strong argument for repealing the corporate alternative minimum tax (AMT). In 2001, repeal was recommended by the Joint Committee on Taxation as part of their simplification study, endorsed by the ABA/AICPA/TEI tax simplification project, and included in a bill passed by the House of Representatives. Since this issue is likely to arise again, it seems worthwhile to review the arguments raised by Chorvat and Knoll. Upon review, none of these arguments seem particularly persuasive; at best, they make a case for reforming the corporate AMT, not for repealing it. On ...


Self-Regulation And Securities Markets, Adam C. Pritchard Jan 2003

Self-Regulation And Securities Markets, Adam C. Pritchard

Articles

Enron, Arthur Andersen, Tyco, ImClone, WorldCom, Adelphia - as American investors reel from accounting scandals and self-dealing by corporate insiders, the question of trust in the securities markets has taken on a new urgency. Securities markets cannot operate without trust. Markets known for fraud, insider trading, and manipulation risk a downward spiral as investors depart in search of safer investments. Today, many investors are rethinking the wisdom of entrusting their financial futures to the stock market. Absent trust in the integrity of the securities markets, individuals will hoard their money under the proverbial mattress.


Litigator's Thumbnail Guide To The Warn Act, David A. Santacroce Jan 2003

Litigator's Thumbnail Guide To The Warn Act, David A. Santacroce

Articles

When large companies choose to lay off workers or close down plants without prior notice, they can be subject to extensive liability under the federal Worker Adjustment and Retraining Notification Act (WARN), including 60 days backpay to all affected workers, daily fines to local government, and attorney fees generated during the suit. In the following article, the author presents the bare bones basics of WARN in order for employees and their advocates to understand how and when WARN applies.


Why We Need The Independent Sector: The Behavior, Law, And Ethics Of Not-For-Profit Hospitals, Jill R. Horwitz Jan 2003

Why We Need The Independent Sector: The Behavior, Law, And Ethics Of Not-For-Profit Hospitals, Jill R. Horwitz

Articles

Among the major forms of corporate ownership, the not-for-profit ownership form is distinct in its behavior, legal constraints, and moral obligations. A new empirical analysis of the American hospital industry, using eleven years of data for all urban general hospitals in the country, shows that corporate form accounts for large differences in the provision of specific medical services. Not-for-profit hospitals systematically provide both private and public goods that are in the public interest, and that other forms fail to provide. Two hypotheses are proposed to account for the findings, one legal and one moral. While no causal claims are made ...


National Regulation Of Multinational Enterprises: An Essay On Comity, Extraterritoriality, And Harmonization, Reuven S. Avi-Yonah Jan 2003

National Regulation Of Multinational Enterprises: An Essay On Comity, Extraterritoriality, And Harmonization, Reuven S. Avi-Yonah

Articles

Despite the economic importance of multinational enterprises ("MNEs"), there is a surprising paucity of law governing foreign direct investment ("FDI"), especially in comparison with the abundance of law governing trade. There is no multilateral legal arrangement governing FDI that is similar to the General Agreement on Tariffs and Trade ("GATT"), no organization similar to the World Trade Organization, and almost no courses in law schools on FDI law. The goal of this Article is to begin to remedy this state of affairs by proposing a conceptual model for analyzing the application of the national laws of home and host countries ...


A Taxing Settlement, Hanoch Dagan, James J. White Jan 2003

A Taxing Settlement, Hanoch Dagan, James J. White

Articles

The following essay is based on the talk "Government, Citizens, and Injurious Industries: A Case Study of the Tobacco Litigation," delivered by Hanoch Dagan last May to the Detroit Chapter of the International Association of Jewish Lawyers and Jurists, and on the article "Governments, Citizens, and Injurious Industries," by Dagan and James J. White, '62, which appeared in 75.2 New York University Law Review 254-428 (May 2000). The authors hold conflicting view on the underlying issue of this topic: tobacco company product liability. Professor Dagan holds the position that tobacco companies are liable for harm done by their products ...


Too Busy To Mind The Business? Monitoring By Directors With Multiple Board Appointments, Stephen P. Ferris, Murali Jagannathan, Adam C. Pritchard Jan 2003

Too Busy To Mind The Business? Monitoring By Directors With Multiple Board Appointments, Stephen P. Ferris, Murali Jagannathan, Adam C. Pritchard

Articles

We examine the number of external appointments held by corporate directors. Directors who serve larger firms and sit on larger boards are more likely to attract directorships. Consistent with Fama and Jensen (1983), we find that firm performance has a positive effect on the number of appointments held by a director. We find no evidence that multiple directors shirk their responsibilities to serve on board committees. We do not find that multiple directors are associated with a greater likelihood of securities fraud litigation. We conclude that the evidence does not support calls for limits on directorships held by an individual.