Law Commons^™

Beyond Mite-Cts V. Dynamics: Has Management Won The Battle In The Fight Against The Tender Offer, And What Injury Has The Individual Shareholder Suffered?, James S. Zmuda

Northern Illinois University Law Review

This Note examines two major Supreme Court cases addressing the conflict between federal and state law governing the use of the tender offer. Congress intended to protect the individual shareholder in making a decision whether to tender shares with voting rights, while balancing the legitimate interests of incumbent management and tender offerors. The Court upset this balance by upholding Indiana's Control Shares Acquisition Act as constitutional in the second of these two cases. This Note will highlight the inconsistencies between the cases, explain the present effect of both, and suggest an approach for states considering the adoption of takeover legislation.

Beyond Managerialism: Investor Capitalism?, Alfred F. Conard

University of Michigan Journal of Law Reform

Capitalism, in most large public corporations, has been subtly transformed from a system of dominance by the suppliers of capital to a system of dominance by the managers, dubbed "managerialism." In many respects, managerialism is beneficial to investors and other enterprise constituencies, since managers' rewards typically grow with the profitability of the enterprise. But managerialism permits drastic wastes of resources when managers hang on to their jobs after they have become inefficient or spend lavishly to defend themselves against takeover bids. Derivative suits, shareholder proposals, independent directors, and other prescriptions have failed to stifle managerial abuses. This is the message …

Two Models Of Corporate Governance: Beyond Berle And Means, Lynne L. Dallas

University of Michigan Journal of Law Reform

This Article introduces a new model of corporate governance, which challenges, as did Berle and Means, the conclusions drawn from the traditional ownership model. Rather than focusing upon the inefficiencies of the large complex firm resulting from the separation of share ownership and control, however, this new model, which I call the power model, focuses upon the political nature of decision making in the large corporation, which exists regardless of the identity of the entrepreneur.

The Promise Of State Takeover Statutes, Richard A. Booth

Michigan Law Review

The purpose of this article is, first, to describe the problems associated with two-tier tender offers and the closely related, and perhaps still more coercive, partial tender offer. Second, the article will address the natural question why such offers have not already been banned, suggesting a better view of what coercion means in the context of a tender offer. Third, the article will offer a management-oriented view of coercion, explaining the legitimate interests of managers (and other groups) in resisting takeovers, as well as how greenmail and poison pills, though subject to abuse, can be used quite properly to combat …

The Corporate Social Responsibility Movement - The Latest In Maginot Lines To Save Capitalism, H J. Glasbeek

Dalhousie Law Journal

The modem corporation bad a battle to be accepted as a legitimate institution. In England it was initially seen as a device which might lead to the undermining of individual responsibility, in the United States as subjugating the individual and individualism to the needs of the organization, and in Canada as offending the dignity of labour and endangering the political entente. In 1932, Berle and Means showed that most of the wealth in the United States was in the hands of corporations and a large proportion of that corporate wealth was controlled by a relatively small number of dominant corporations. …

Should General Utilities Be Reinstated To Provide Partial Integration Of Corporate And Personal Income—Is Half A Loaf Better Than None?, Douglas A. Kahn

Articles

The General Utilities doctrine is the name given to the now largely defunct tax rule that a corporation does not recognize a gain or a loss on making a liquidating or nonliquidating distribution of an appreciated or depreciated asset to its shareholders. The roots of the doctrine, can be traced to a regulation promulgated in 1919 that denied realization of gain or loss to a corporation when making a liquidating distribution of an asset in kind. No regulatory provision existed which specified the extent to which realization would or would not be triggered by a nonliquidating distribution such as a …

Accountable Accountants: Is Third-Party Liability Necessary?, Victor P. Goldberg

Faculty Scholarship

Should accountants be liable to third parties if they conduct an audit in negligent manner? A half century ago, in Ultramares Corporation v. Touche, Niven & Co., Cardozo argued that they should not, unless their performance could be characterized as fraud. In recent years, courts in a minority of jurisdictions have concluded that Cardozo's argument is no longer compelling and they have found that "foreseeable" third parties could bring a tort action for ordinary negligence against the accountants. In addition to being subject to tort actions, accountants may also be liable under federal and state securities laws.

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