Open Access. Powered by Scholars. Published by Universities.®
- Keyword
-
- Corporations (14)
- Shareholders (13)
- Stockholder (11)
- Liquidation (10)
- Fraud (9)
-
- Corporate governance (8)
- Securities and Exchange Commission (8)
- Common stock (7)
- Delaware (7)
- Impact of Sarbanes-Oxley on Doing Business (7)
- Reorganization (7)
- Symposia (7)
- Corporation (6)
- Dividends (6)
- Stocks (6)
- Executive compensation (5)
- Securities regulation (5)
- Compensation (4)
- Employees (4)
- Fiduciary duty (4)
- Insider trading (4)
- Insolvency (4)
- Liability (4)
- Market value (4)
- Merger (4)
- Profits (4)
- Shareholder (4)
- Uniform Stock Transfer Act (4)
- Bad faith (3)
- Corporate director (3)
Articles 1 - 30 of 144
Full-Text Articles in Business Organizations Law
The Corporation’S Place In Society, Gabriel Rauterberg
The Corporation’S Place In Society, Gabriel Rauterberg
Michigan Law Review
The vast majority of economic activity is now organized through corporations. The public corporation is usurping the state’s role as the most important institution of wealthy capitalist societies. Across the developed world, there is increasing convergence on the shareholder-owned corporation as the primary vehicle for creating wealth. Yet nothing like this degree of convergence has occurred in answering the fundamental questions of corporate capitalism: What role do corporations serve? What is the goal of corporate law? What should corporate managers do? Discussion of these questions is as old as the institutions involved.
A Blended Approach To Reducing The Costs Of Shareholder Litigation, Valian A. Afshar
A Blended Approach To Reducing The Costs Of Shareholder Litigation, Valian A. Afshar
Michigan Law Review
Multiforum litigation and federal securities law class actions impose heavy costs on corporations and their shareholders without producing proportionate benefits. Both are largely the result of the agency problem between shareholders and their attorneys, driven more by the attorneys’ interests in generating fees than by the interests of their clients. In response to each of these problems, commentators have recommended a number of solutions. Chief among them are forum selection and mandatory arbitration provisions in a corporation’s charter or bylaws. This Note recommends that corporations unilaterally adopt both forum selection and mandatory arbitration bylaws to address shareholder lawsuits under state …
Securities Class Actions And Bankrupt Companies, James J. Park
Securities Class Actions And Bankrupt Companies, James J. Park
Michigan Law Review
Securities class actions are often criticized as wasteful strike suits that target temporary fluctuations in the stock prices of otherwise healthy companies. The securities class actions brought by investors of Enron and WorldCom, companies that fell into bankruptcy in the wake of fraud, resulted in the recovery of billions of dollars in permanent shareholder losses and provide a powerful counterexample to this critique. An issuer's bankruptcy may affect how judges and parties perceive securities class actions and their merits, yet little is known about the subset of cases where the company is bankrupt. This is the first extensive empirical study …
Has Corporate Law Failed? Addressing Proposals For Reform, Antony Page
Has Corporate Law Failed? Addressing Proposals For Reform, Antony Page
Michigan Law Review
Part I of this Review discusses the modem "nexus of contracts" approach to corporations and highlights how Greenfield's views differ. Part II examines corporate goals and purposes, suggesting that Greenfield overstates the impact of the shareholder-primacy norm and does not offer a preferable alternative. Part III critiques the means to the ends--Greenfield's proposals for changing the mechanics of corporate governance. Although several of his proposals are intriguing, they seem unlikely to achieve their pro-social aims. This Review remains skeptical, in part because-even given its problems-the U.S. "director-centric governance structure has created the most successful economy the world has ever seen." …
Gatekeeper Failures: Why Important, What To Do, Merritt B. Fox
Gatekeeper Failures: Why Important, What To Do, Merritt B. Fox
Michigan Law Review
The United States was hit by a wave of corporate scandals that crested between late 2001 and the end of 2002. Some were traditional scandals involving insiders looting company assets - the most prominent being Tyco, HealthSouth, and Adelphia. But most were what might be called "financial scandals": attempts by an issuer to maximize the market price of its securities by creating misimpressions as to what its future cash flows were likely to be. Enron and WorldCom were the most spectacular examples of these financial scandals. In scores of additional cases, the companies involved and their executives were sued by …
The Social Construction Of Sarbanes-Oxley, Donald C. Langevoort
The Social Construction Of Sarbanes-Oxley, Donald C. Langevoort
Michigan Law Review
Part I will take a close look at the legitimacy of SOX by examining the two plausible stories of SOX's origins and considering the early post-SOX evidence on its costs and benefits. There is no clear-cut answer to the question of how much SOX benefits investors; both positive and critical positions are plausible. Costs have been far greater than expected, but more from SOX's implementation than from the legislative text. Before turning to how and why implementation has occurred that way-which to me is the central question of interpretation-Part II considers whether there is an alternative interpretation of SOX that …
The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun
The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun
Michigan Law Review
This Article discusses the economic impact of legal, tax, disclosure, and incentive issues arising from the revelation of dating games with regard to executive option grant dates. It provides an estimate of the value loss incurred by shareholders of firms implicated in backdating and compares it to the potential gain that executives might have obtained through backdating. Using a sample of firms that have already been implicated in backdating, we find that the revelation of backdating results in an average loss to shareholders of about 7%. This translates to about $400 million per firm. By contrast, we estimate that the …
The Corporate Monitor: The New Corporate Czar?, Vikramaditya Khanna, Timothy L. Dickinson
The Corporate Monitor: The New Corporate Czar?, Vikramaditya Khanna, Timothy L. Dickinson
Michigan Law Review
Following the recent spate of corporate scandals, government enforcement authorities have increasingly relied upon corporate monitors to help ensure law compliance and reduce the number of future violations. These monitors also permit enforcement authorities, such as the Securities & Exchange Commission and others, to leverage their enforcement resources in overseeing corporate behavior. However there are few descriptive or normative analyses of the role and scope of corporate monitors. This paper provides such an analysis. After sketching out the historical development of corporate monitors, the paper examines the most common features of the current set of monitor appointments supplemented by interviews …
Getting The Word Out About Fraud: A Theoretical Analysis Of Whistleblowing And Insider Trading, Jonathan Macey
Getting The Word Out About Fraud: A Theoretical Analysis Of Whistleblowing And Insider Trading, Jonathan Macey
Michigan Law Review
The purpose of this Article is to show that corporate whistleblowing is not analytically or functionally distinguishable from insider trading when such trading is based on "whistleblower information," that is, the information a whistleblower might disclose to the authorities. In certain contexts, both insider trading and whistleblowing, if incentivized, would reduce the incidence of corporate pathologies such as fraud and corruption. In light of this analysis, it is peculiar that whistleblowing is encouraged and protected, while insider trading on whistleblower information is not only discouraged but criminalized. Often, insider trading will be far more effective than whistleblowing at bringing fraud …
Reverse Monitoring: On The Hidden Role Of Employee Stock-Based Compensation, Sharon Hannes
Reverse Monitoring: On The Hidden Role Of Employee Stock-Based Compensation, Sharon Hannes
Michigan Law Review
This Article develops a new understanding of equity-based compensation schemes, such as employee stock option plans. Current literature views such schemes as a measure aimed at motivating the recipient employees to work harder for the firm. Under that view, this method of remuneration either complements or substitutes for other measures used to monitor the performance of the recipient employees. In contrast, this Article proposes that recipient employees be viewed as potential monitors of other employees and that stock options (or similar types of compensation) motivate them to fulfill this task. This view has many applications and can shed light on …
Fixing 404, Joseph A. Grundfest, Steven E. Bochner
Fixing 404, Joseph A. Grundfest, Steven E. Bochner
Michigan Law Review
Although debate persists as to whether the costs of Sarbanes-Oxley's Section 404 regulations exceed their benefits, there is broad consensus that the rules have been inefficiently implemented. Substantive and procedural factors contribute to the rules' inefficiency. From a substantive perspective, the terms "material weakness" and "significant deficiency" are central to the implementing regulations and are easily interpreted to legitimize audits of controls that have only a remote probability of causing an inconsequential effect on the issuer's financial statements. As a quantitative matter the literature suggests that a control with a remote probability of causing an inconsequential effect has an expected …
A Business Ethics Perspective On Sarbanes-Oxley And The Organizational Sentencing Guidelines, David Hess
A Business Ethics Perspective On Sarbanes-Oxley And The Organizational Sentencing Guidelines, David Hess
Michigan Law Review
This Article assesses the ability of Sarbanes-Oxley and other recent changes in the law and stock exchange listing requirements to reduce the incidence of fraud and to increase the reporting of financial misconduct. It begins by examining the individual decision-makers within a corporation and analyzing their intentions and behaviors under the Theory of Planned Behavior. It then examines the ability of the organization to influence the employees' intentions and behaviors through codes of ethics and compliance programs, and finds growing support for the usefulness of integrity based compliance programs. Finally, the Article considers how the Sarbanes-Oxley legislation and Organizational Sentencing …
Mickey, Can You Spare A Dime? Disneywar, Executive Compensation, Corporate Governance, And Business Law Pedagogy, Kenneth M. Rosen
Mickey, Can You Spare A Dime? Disneywar, Executive Compensation, Corporate Governance, And Business Law Pedagogy, Kenneth M. Rosen
Michigan Law Review
American business executives are under fire. Recent, notorious difficulties at companies such as the Enron Corporation brought attention to these individuals. Notwithstanding the conclusion of the trials of some of those top executives, skepticism remains about the inner workings of U.S. corporations and the quality of corporate governance. Drawing special scrutiny from some quarters is the compensation granted to corporate officers and directors. For instance, the timing of certain stock option grants, a key component of some compensation packages, raised ire because of those options' supposed backdating and fortuitous proximity to increases in share prices. Further, some questioned more generally …
Sarbanes-Oxley And The Cross-Listing Premium, Kate Litvak
Sarbanes-Oxley And The Cross-Listing Premium, Kate Litvak
Michigan Law Review
This article tests whether the Sarbanes-Oxley Act ("SOX") affected the premium that investors are willing to pay for shares of foreign companies cross-listed in the United States. I find that from year-end 2001 (pre-SOX) to year-end 2002 (after SOX adoption), the Tobin's q and market/book ratios of foreign companies subject to SOX (cross-listed on levels 2 or 3) declined significantly, relative to Tobin's q and market/book ratios of both (i) matching non-cross-listed foreign companies from the same country, the same industry, and of similar size, and (ii) cross-listed companies from the same country that are not subject to SOX (listed …
Conscripting Attorneys To Battle Corporate Fraud Without Shields Or Armor? Reconsidering Retaliatory Discharge In Light Of Sarbanes-Oxley, Kim T. Vu
Michigan Law Review
This Note advocates that federal courts should allow attorneys to bring retaliatory discharge claims under SOX. Traditional rationales prohibiting the claims of retaliatory discharge by attorneys do not apply in the context of Sarbanes-Oxley. This Note contends that the Department of Labor and the federal courts should interpret the whistleblower provisions of § 806 as protecting attorneys who report under § 307. Assuring reporting attorneys that they have protection from retaliation will encourage them to whistleblow and thereby advance SOX's policy goal of ferreting out corporate fraud. Part I explores the legal landscape of retaliatory discharge suits by attorneys. This …
Brand New Deal: The Branding Effect Of Corporate Deal Structures, Victor Fleischer
Brand New Deal: The Branding Effect Of Corporate Deal Structures, Victor Fleischer
Michigan Law Review
Consider the unusual legal structures of the following four deals: When Google went public in 2004, it used an Internet auction to sell its stock to shareholders. When Ben & Jerry's went public in 1984, it sold its stock only to Vermont residents. Steve Jobs's contract with Apple entitles him to an annual cash salary of exactly one dollar. Stanley Works, a Connecticut toolmaker, considered reincorporating in Bermuda to reduce its tax liability. Under public pressure, it changed its mind and remains legally incorporated in Connecticut. What do these deals have in common? In each case, the legal infrastructure of …
Megasubsidiaries And Asset Sales Under Section 271: Which Shareholders Must Approve Subsidiary Asset Sales, Yaman Shukairy
Megasubsidiaries And Asset Sales Under Section 271: Which Shareholders Must Approve Subsidiary Asset Sales, Yaman Shukairy
Michigan Law Review
Corporate law statutes determine the nature of the relationship between shareholders, the principal owners of the corporation, and the board of directors, those w ho run and operate the corporation. Under the Delaware General Corporation Law ("DGCL"), many of the powers are delegated to the board of directors. More specifically, under section 141, "the business and affairs of every corporation . . . [are] managed by or under the direction of a board of directors . . . ." The Delaware courts have interpreted this provision by deferring to decisions by directors and their designated management under the business judgment …
Realigning Corporate Governance: Shareholder Activism By Labor Unions, Stewart J. Schwab, Randall S. Thomas
Realigning Corporate Governance: Shareholder Activism By Labor Unions, Stewart J. Schwab, Randall S. Thomas
Michigan Law Review
Labor unions are active again - but this time as capitalists. The potential strength of union pension funds has long been noted, but until recently unions have held their stock passively or invested in union-friendly companies. In the 1990s, however, unions have become the most aggressive of all institutional shareholders. In most cases, it is hard to find a socialist or proletarian plot in what unions are doing with their shares. Rather, labor activism is a model for any large institutional investor attempting to maximize return on capital. Unions, union pension funds, individual union members, and labor-oriented investment funds are …
Directorial Fiduciary Duties In A Tracking Stock Equity Structure: The Need For A Duty Of Fairness, Jeffrey J. Hass
Directorial Fiduciary Duties In A Tracking Stock Equity Structure: The Need For A Duty Of Fairness, Jeffrey J. Hass
Michigan Law Review
Part I of this article briefly describes the key distinctions between a tracking stock corporation and a conventional corporation. It then touches on the reasons why corporations have adopted tracking stock equity structures. Part II articulates the unique legal challenges presented by a tracking stock equity structure. Part III discusses the disclosure that tracking stock corporations have made with respect to these challenges. Part IV briefly summarizes the fiduciary duties of care and loyalty and explores why these duties are ill-equipped to address these challenges. Part V presents the duty of fairness and discusses the duty's elements in detail. In …
Cook And The Corporate Shareholder: A Belated Review Of William W. Cook's Publications On Corporations, Alfred F. Conard
Cook And The Corporate Shareholder: A Belated Review Of William W. Cook's Publications On Corporations, Alfred F. Conard
Michigan Law Review
A Review of A Treatise on the Law of Stock and Stockholders, as Applicable to Railroad, Banking, Insurance, Manufacturing, Commercial, Business, Turnpike, Bridge, Canal, and Other Private Corporations by William W. Cook
Shareholder Passivity Reexamined, Bernard S. Black
Shareholder Passivity Reexamined, Bernard S. Black
Michigan Law Review
This article argues that shareholder monitoring is possible: It's an idea that hasn't been tried, rather than an idea that has failed. I defer to a second article currently in draft the question of whether more monitoring by institutional shareholders is desirable. Will direct shareholder oversight, or indirect oversight through shareholder-nominated directors, improve corporate performance, prove counterproductive, or, perhaps, not matter much one way or the other? What are the benefits and risks in giving money managers - themselves imperfectly monitored agents - more power over corporate managers? If more shareholder voice is desirable, how much more and …
Shareholders Versus Managers: The Strain In The Corporate Web, John C. Coffee Jr.
Shareholders Versus Managers: The Strain In The Corporate Web, John C. Coffee Jr.
Michigan Law Review
Part I will seek to understand why firms trade in the stock market at a substantial discount from their asset value. It will answer that existing theories of the firm have not given adequate attention to a critical area where shareholders and managers have an inherent conflict, one that the existing structure of the firm does not resolve or mitigate. Despite the significant changes in the internal structure of the corporation over the last half century that have been described by business historians, there remains a deep internal strain between shareholders, on the one hand, and managers and employees, on …
The Effect Of Insider Trading Rules On The Internal Efficiency Of The Large Corporation, Robert J. Haft
The Effect Of Insider Trading Rules On The Internal Efficiency Of The Large Corporation, Robert J. Haft
Michigan Law Review
Academics have hotly debated these justifications for years, and none of the three has achieved universal acclaim. This Article suggests another perspective: Prohibiting insider trading may enhance business decision-making in large corporations. With the exception of proponents of the Business Property view, analysts have focused on how an insider trading rule affects the national securities markets and traders in those markets. The internal governance of the large corporation is a different matter, one deserving separate consideration.
Tender Offers For Corporate Control, Martin Lipton
Tender Offers For Corporate Control, Martin Lipton
Michigan Law Review
A Review of Tender Offers for Corporate Control by Edward Ross Aranow and Herbert A. Einhorn
The Public-Interest Proxy Contest: Reflections On Campaign Gm, Donald E. Schwartz
The Public-Interest Proxy Contest: Reflections On Campaign Gm, Donald E. Schwartz
Michigan Law Review
Proxy contests are generally fought for control of a corporation. The rules governing this form of corporate combat seek to provide shareholders with adequate information about the rival forces for control so that they can intelligently choose between them. The information furnished in proxy materials and discussions at annual meetings have traditionally been devoted almost entirely to subjects such as finance, production, acquisitions, and the like.
Fiduciary Ideology In Transactions Affecting Corporate Control, Victor Brudney
Fiduciary Ideology In Transactions Affecting Corporate Control, Victor Brudney
Michigan Law Review
The fiduciary role in which corporate insiders are cast in their dealings with, or affecting, their corporations embraces a multitude of parts. Hence the range of restrictions on their conduct varies from inhibitions as rigorous as those imposed on express trustees to limitations almost as flexible as those governing arm's length dealings among strangers. As has often been pointed out, the characterization of a corporate officer, a director, or a person controlling the corporation as a "fiduciary" does not define his status with precision; rather, it sets a tone to his role and suggests the existence of obligations and of …
The Solely-For-Voting-Stock Requirement In "B" Reorganizations Satisfied By Cash Payments For Fractional Shares-Mills V. Commissioner, Michigan Law Review
The Solely-For-Voting-Stock Requirement In "B" Reorganizations Satisfied By Cash Payments For Fractional Shares-Mills V. Commissioner, Michigan Law Review
Michigan Law Review
The Internal Revenue Code requires recognition of gains or losses realized upon a sale or exchange of property. An exception to this general rule is found in section 354(a)(1), the basic nonrecognition provision for stock-for-stock reorganizations. This section provides that a stockholder need not recognize gains or losses "if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization." However, before section 354 can be reached, the exchange must satisfy one of the …
Bosland: Estate Tax Valuation In The Sale Of Merger Of Small Firms, Herman L. Trautman
Bosland: Estate Tax Valuation In The Sale Of Merger Of Small Firms, Herman L. Trautman
Michigan Law Review
A Review of Estate Tax Valuation in the Sale of Merger of Small Firms. By Chelcie C. Bosland.
Insider Securities Dealings During Corporate Crises, Victor Brudney
Insider Securities Dealings During Corporate Crises, Victor Brudney
Michigan Law Review
The problem of assuring the fidelity of corporate insiders to the public investors in their enterprises figured prominently in legal literature and law reform proposals twenty-five or thirty years ago. In recent years, that question has attracted relatively less attention-in part because of the appearance or recognition of more significant problems in the relationship of publicly-held corporate enterprise to the national well-being, but in part also because of the development by courts, legislatures and administrative agencies-and to some extent by the insiders' community itself-of more exacting standards of loyalty. Recognition of broader obligations to their corporations and to public investors …
Taxation-Federal Income Taxation-Examination Of Certain Problems Under Section 335, Roger B. Harris S.Ed.
Taxation-Federal Income Taxation-Examination Of Certain Problems Under Section 335, Roger B. Harris S.Ed.
Michigan Law Review
Stock and securities of controlled corporations may be distributed to shareholders, tax free, in cases of corporate separations which qualify under section 355 of the Internal Revenue Code of 1954. A corporate separation is effected by the transfer of part of a corporation's assets to a subsidiary, the stock of which is distributed to the parent's stockholders. Such distributions are generally classified into three categories: spin-off, split-off, and split-up. A spin-off occurs when corporation A forms corporation B to which A transfers certain assets, receiving in exchange, the stock of corporation B. A then distributes the stock of …