Law Commons^™

Why Do Venture Capital Funds Burn Research And Development Deductions?, Calvin H. Johnson

Calvin H. Johnson

Venture capital funds form a separate corporation for each venture that they support, within their portfolio of diverse ventures. The separate incorporation reduces the tax value that could be achieved from deducting research and development costs. The resulting taxes are draconian, sometimes confiscatory. If R&D deductions were used optimally, taxable investors could achieve a tax regime that does not reduce their pretax return, and taxable investors would drive tax-exempt investors out of the funds. If capital must come from tax-exempt investors, the funds should still be trying to use the R&D deductions against taxable income of the successful ventures. Tax …

Fuzzy Logic And Corporate Governance Theories, Z. Jill Barclift

The University of New Hampshire Law Review

[Excerpt] “Fuzzy logic is a theory that categorizes concepts or things belonging to more than one group. A methodology that explains how things function in multiple groups (not fully in one group or another) offers advantages when no one definition or membership in a group accounts for belonging to multiple groups. The principal/agent model of corporate governance has some characteristics of fuzzy logic theory.

Under traditional agency theory of corporate governance, shareholders, directors, and senior corporate officers each belong to groups having multiple attributes. In the principal/agent model of corporate governance, shareholders are owners or principals; directors are shareholders and …

Dukes V. Wal-Mart: A New Interpretation Of The Class-Action Model, Mark Fischer

Mark Fischer

Dukes V. Wal-Mart: A New Interpretation of the Class-Action Model By: Mark Fischer TABLE OF CONTENTS Dukes v. Wal-Mart: A New Interpretation of the Class-Action Model Page Introduction……………………………………………………………………………………..1 Background……………………………………………………………………………………..2 Federal Rule of Civil Procedure 23……………………………………………………..............5 I. Commonality………………………………………………………………………….6 II. Typicality…………………………………………………………………………….7 Due Process Concerns…………………………………………………………………..............8 Impermissible Predomination of Monetary Claims over Claims for Declaratory and Injunctive Relief…………………………………………………………………………………………....9 Ninth Circuit Panel Dissenting Opinion………………………………………………………...9 Wal-Mart’s Response: Petition for Rehearing En Banc……………………………………….12 I. Application of Rule 23……………………………………………………………....12 II. Plaintiff’s Lack of Article III Standing……………………………………………..16 III. Title VII and Due Process Impact of the Panel’s Ruling………………………….17 Dukes’ Trickle-Down Effect on Corporate America…………………………………………..19 Conclusion…………………………………………………………………………………......20 TABLE OF AUTHORITIES Page(s) …

Adhesion Contracts And The Twenty First Century Consumer, Leon E. Trakman

Leon E Trakman Dean

Ecommerce has transformed the law of contract. Consumers are increasingly subject to myriads of conditions in shrink-wrap, box-wrap, click-wrap and browse-wrap contracts. Opening software wrapping or clicking “I agree” in a dialog box on a computer subjects the user to a series of onerous conditions that restrict end use and limit the supplier’s liability. These developments are counterbalance by the growth of new market-savvy classes of consumers who are willing and able to sue brand name producers in class and other actions. Faced with these Twenty First Century developments, courts struggle to find middle ground between regulating mass transactions in …

Substitutes For Insider Trading, Ian Ayres, Joseph Bankman

Ian Ayres

When insider trading prohibitions limit the ability of insiders (or of a corporation itself) to use material non-public information to trade a particular firm’s stock, there may be incentive to use the information to trade instead on the stock of that firm’s rivals, suppliers, customers, or the manufacturers of complementary products. We refer to this form of trading as trading in stock substitutes. Stock substitute trading by a firm is legal. In many circumstance, substitute trading by employees is also legal. Trading in stock substitutes may be quite profitable, and there is anecdotal evidence that employees often engage in such …

Private Regulation Of Insider Trading In The Shadow Of Lax Public Enforcement (And A Strong Neighbor): Evidence From Canadian Firms, Anita I. Anand, Laura N. Beny

Law & Economics Working Papers Archive: 2003-2009

Few studies have examined firms’ voluntary self-regulation of insider trading. In this article, we investigate the characteristics of Canadian firms that voluntarily adopt policies restricting trading by their insiders when they are already subject to insider trading laws. We hypothesize that certain firm-specific characteristics -- such as larger size, higher market-to-book ratio, greater firm-specific uncertainty, the presence of controlling shareholders, and cross-listing into the United States where insider trading laws are more vigorously enforced -- are positively related to a firm's propensity to adopt an insider trading policy (ITP), because insider trading is likely to be more costly for firms …

What Liquidation Does For Secured Creditors, And What It Does For You, Riz Mokal

Riz Mokal

A core objective of collective insolvency regimes is to preserve value in the insolvent estate. This value is then to be distributed in accordance with the appropriate statutory scheme. Value might be lost for any of a variety of reasons, including, in particular, (i) misuse of corporate assets by those with influence over the distressed company, and (ii) precipitate individualistic enforcement action by particular claimants, which dismembers the corporate estate and thus destroys synergetic values. The statutory liquidation regime attempts to counter this, in order not simply to benefit those with claims against the company, but also with a view …

Retail Investor Remedies Under Rule 10b-5, Jennifer O'Hare

Working Paper Series

This paper assesses the private remedies available under Rule 10b-5 to retail investors who have been defrauded by false corporate disclosures. After comparing the treatment received by retail investors to the treatment received by institutional investors, I identify several areas in which the federal securities laws disfavor retail investors who have been defrauded by false corporate disclosures, including the creation of a two-tiered system of investor remedies for securities fraud. Institutional investors are permitted to pick and choose which law and forum offers them the most attractive chance for recovery, but retail investors typically do not have this opportunity. They …

French Judges' Far Reaching Powers In Partners And Shareholders Disputes, Jean-Charles Bancal

Jean-Charles Bancal

FRENCH JUDGES’ FAR REACHING POWERS IN PARTNERS AND SHAREHOLDERS DISPUTES ABSTRACT At the time of the French Revolution, one of the main concerns of the new regimes was to fight what was called the gouvernement des juges. The Napoleonic codification reduced judges powers to interpret the law and negated their role as law makers. But since then, French judges, have corrected what they consider inequitable situations. Through various self defined rules such as abuse of right or Principes généraux du droit, these judge implemented rules have cast off the yoke of the Civil Code in many field, particularly in property …

The "Carrot" Approach To Accounting Standard Setting, Neal F. Newman

Neal F Newman

For years, accounting standard setters have been waging a battle against financial fraud and obfuscated and distorted financial reporting. The standard setters, however, have been steadily losing ground as accounting fraud and obfuscated financial reporting continues to proliferate the public company landscape. The ongoing battle between financial information prepares and regulators has resulted in an accounting and financial reporting regime that is fragmented, overly complex and allows for accounting results that are devoid of economic substance. Poor financial reporting has been deemed to be of such significance, that the Securities and Exchange Commission has formed an advisory committee whose purpose …

Taxing Blackstone, Victor Fleischer

Victor Fleischer

No abstract provided.

The Fortunes & Foibles Of Exchange-Traded Funds, William A. Birdthistle

William Birdthistle

One of the most dynamic and complex new investment vehicles on the market today is the exchange-traded fund, a security that provides the diversification of a mutual fund but trades on an exchange like a stock. In just over a decade, the number of ETFs has proliferated to well over 500, attracting almost half a trillion dollars in investment. Most of that growth has occurred in just the past two years, and ETFs are projected to continue growing at a pace far faster than hedge funds and mutual funds in the coming years. Yet for all this extraordinary growth, legal …

Guests At The Table?: Independent Directors In Family-Influenced Public Companies, Deborah A. Demott

Deborah A DeMott

By some measures, family-controlled companies account for about a third of public companies in the United States. Public companies that retain characteristics of family companies pose a series of intriguing questions about corporate governance that center in particular on the roles and duties of directors. These are surprisingly unexplored in legal scholarship. Although concentrated ownership is more extensive in many capital markets outside the United States, numerous recent examples raise questions about governance within publicly-held family companies. In such companies, shareholders who are members of the founding family often have perspectives and interests that diverge from those of non-family public …

All In The Family As A Single Shareholder Of An S Corporation, Douglas A. Kahn, Jeffrey H. Kahn, Terrence G. Perris

Articles

Subject to a few exceptions, a corporation that has elected to be taxed under subchapter S of chapter 1 of subtitle A of title 26 of the United States tax code is not taxed on its net income. Instead, the income, deductions, credits, and other tax items of an S corporation pass through to its shareholders on a pro rata basis. To qualify for subchapter S treatment, an electing corporation must satisfy the requirements that are set forth in section 1361, one of which is that the corporation can have no more than 100 shareholders. One aspect of that requirement …

Does An Independent Board Improve Nonprofit Corporate Governance?, Kathleen M. Boozang

Kathleen M. Boozang

No abstract provided.

Piercing The Corporate Veil In Regulated Industries, Douglas G. Smith

Douglas G Smith

This article addresses the theoretical justifications for limited liability and the exceptions to limited liability under the various veil piercing doctrines. In particular, the article considers whether veil piercing is appropriate in regulated industries such as insurance and banking, which have comprehensive regulatory structures that are designed to prevent much of the conduct that veil piercing is designed to remedy. The article concludes that veil piercing is not justified under such circumstances because the economic costs outweigh any benefits.

Worldwide Corporate Governance Convergence Within A Pluralistic Business Legal Order---Company Law And Independent Director System In Contemporary China , Chi-Wei Huang

Chi-Wei Huang

Worldwide Corporate Governance Convergence within A Pluralistic Business Legal Order—Company Law and Independent Director System in Contemporary China

Chi-Wei Huang, S.J.D. University of Pennsylvania Law School March 29, 2007

Abstract:

A deeper tendency across developed market jurisdictions has been a convergence toward a single, standard corporate structure. The essential legal features of a shareholder-oriented ideology are well established among those developed market jurisdictions and noticeably dominate the development of worldwide corporate forms. Striving to increase long-term shareholder value has become the most competitive corporate governance theory among developed economies. A series of examinations of worldwide corporate governance and ownership have …

Bond Defaults And The Dilemma Of The Indenture Trustee , Steven L. Schwarcz, Gregory M. Sergi

Steven L Schwarcz

This article, attached for your review, rethinks the standard of care for trustees of public bonds. The present standard is intolerably vague, generating cost and inefficiency in the public bond markets. Yet bondholder governance is increasingly recognized as a critical component of the larger realm of corporate governance, and indeed more than eighty percent of capital market financing raised by U.S. corporations now occurs through public bond offerings. This article examines how that standard of care should be modified to make indenture trustees more effective.

Does An Independent Board Improve Nonprofit Corporate Governance?, Kathleen M. Boozang

Kathleen M. Boozang

A variety of forces have converged to pressure nonprofit boards to follow the lead of the for-profit sector to become independent, even while empirical evidence from the business sector suggests that board independence from management is not fulfilling expectations, and may be related to weakened firm performance. This background, and the paucity of governance studies in the nonprofit sector, suggests that nonprofits are prematurely jumping onto the independent board bandwagon. There is no convincing articulation of why nonprofit boards should be independent–what is it that independent boards are supposed to be able to uniquely accomplish, how many independent directors are …

Stock Market, Corporations And Their Regulation: A Few Glimpses Into Reality, Palladam M. Vasudev

Palladam M Vasudev

The paper examines events in three public companies – Enron Corp., Sycamore Networks and Amazon.com, from the perspective of corporate law and securities law. The events are interpreted in terms of the applicable law, and explain how it influences them. In particular, the paper demonstrates how the prevailing loose legal regime for corporations and the stock market-centricity of corporate arrangements give rise to specific varieties of negative behaviour. The paper adopts a critical approach, and is an effort to describe the consequences of the minimalist philosophy underlying corporate and securities regulation.

Companies And Corporations: Their Transition From Status To Contract And Its Political Economy, Palladam M. Vasudev

Palladam M Vasudev

This article traces the state of corporate law in the English-speaking world since 1720, identifies the political economy of the changes that occurred since mid-nineteenth century, and the consequences for corporate law. During this period, there was a transition from the position that incorporation was a status to be conferred by the law to the position that they were the products of private contracts. In addition, they came to be treated as the property of their shareholders. These conceptual changes have had far-reaching consequences for the growth of corporations and were used to largely abandon the public regulation of corporations. …

Fitting The Pension Protection Act Of 2006 Into The Defined Contribution Paradigm, Crystal L. Lyons

Crystal L. Lyons

No abstract provided.

Slides: Meaningful Engagement: The Public's Role In Resource Decisions, Mark Squillace

The Future of Natural Resources Law and Policy (Summer Conference, June 6-8)

Presenter: Mark Squillace, Director, Natural Resources Law Center, University of Colorado Law School

22 slides

“Fees On Fees” In New York: Attention Coporate Agents, George Klidonas

George Klidonas

It is well settled law in New York that corporate officers and directors shall be indemnified for suits brought against them as agents of the corporation. The only limitation is that they are successful on the merits of the case and the corporate agent did not engage in conduct pursuant to bad faith. But what happens when that agent asks the corporation to indemnify them and the corporation refuses? According to a recent Court of Appeals case, if that agent files a subsequent indemnification suit, the agent is not entitled to legal fees for costs arising out of the subsequent …

Contract-Centered Veil Piercing, Nicholas L. Georgakopoulos

Nicholas L Georgakopoulos

The application of the doctrine of piercing the corporate veil to contract disputes has been attacked as undesirable. This article shows that applying piercing to contracts is desirable. Contract-centered veil piercing functions akin to a penalty-default clause that encourages the efficient production of information, avoids wasteful precaution, and promotes the use of the corporate form for entrepreneurship.

Patent Dispute Identification In China :Harmony Between The Protection And Restraint, Dong Zhang

Dr. Dong Zhang

How to keep a balance between restraining patent abuse and weakening local intervention has been a global issue, especially in such developing countries as China, while meeting a serious challenge of intellectual property protection. This article argues that patent right is definitely a kind of property, which must remain fully within the reach of antitrust law and it is against regulating special independent provisions in the drafted Chinese antitrust law to emphasize unduly on IP abuse. This requires an inquiry into intent that is consistent with antitrust essentials and preserves legitimate patent claims.

The Cameroonian Experience Under Ohada: Business Organizations In A Developing Economy, Claire Moore Dickerson

Claire Moore Dickerson

The Cameroonian experience underscores that corporate social responsibility is socio-political contruct implemented by governance concepts. In the US, we have not yet engaged in a sufficiently broad discussion of what is our understanding of corporate social responsibilty.

Overcoming Chad’S Oil Curse: The African Union Convention On Preventing And Combating Corruption As A Framework For Securing Foreign Investments, Jennifer L. Akre

Jennifer L Akre

This comment addresses the issue of corruption in Africa, particularly with regard to Chad’s “partial expropriation” of foreign oil companies in the summer of 2006. It argues Chad violated principles of customary international law and key provisions of the African Union Convention on Preventing and Combating Corruption by unilaterally altering the regulatory scheme of the Chad-Cameroon Pipeline Project. The comment contends that such partial expropriations essentially amount to extortion, and therefore fall under the purview of regional anti-corruption agreements like the AU Corruption Convention. It will focus on the Convention as a possible solution for addressing scenarios like the one …

The State Of The Judiciary: A Corporate Perspective, Larry D. Thompson, Charles J. Cooper

Scholarly Works

The rule of law depends on highly talented, independent judges who conscientiously strive to ensure that the law is consistently applied in a principled and predictable manner. This Essay addresses two potential threats to judicial independence and the rule of law that we believe warrant special attention at this time. First, inadequate judicial salaries pose a threat to the quality and independence of the judiciary. Judges' real pay has declined substantially over the past generation, even as the compensation of other callings within the legal profession has risen dramatically. This growing disparity in pay has prompted an increasing number of …

The One Minute Manager Prepares For Mediation: A Multidisciplinary Approach To Negotiation Preparation, Donald R. Philbin, Jr.

Donald R. Philbin Jr.

No abstract provided.