Business Organizations Law Commons^™

Governance In The Public Corporation Of The Future: The Battle For Control Of Corporate Governance, Z. Jill Barclift

Faculty Scholarship

Eight years after passage of the Sarbanes-Oxley Act, Congress has again passed sweeping legislation in response to a corporate crisis. In addition to changes in the regulatory environment for Wall Street financial firms and banks, the Dodd-Frank Act (D-F Act) also proposes reforms to corporate governance.

In this article, the author examines the latest governance mandates under the D-F Act. In particular, this article focuses on the disclosure requirements on the CEO and chairman positions, and argues that disclosures of whether the CEO is also the chairman benefit shareholders' governance rights under state law. The new provisions under D-F Act …

Imitation Or Improvement? The Evolution Of Shareholder Derivative Litigation In The United States, United Kingdom, Canada, And Australia, Ann M. Scarlett

All Faculty Scholarship

Shareholder derivative litigation is a target of constant criticism within the United States (U.S.). Many scholars advocate for its abolition and others propose strict limitations on its use. If shareholder derivative litigation were universally disfavored, one would expect countries to be abandoning such litigation through legislative enactments or judicial rulings. Instead, many countries are expanding shareholder derivative litigation.

This Article compares the shareholder derivative action as developed in the U.S. with such actions in the United Kingdom, Canada, and Australia. The U.S. has the most recognized and frequent uses of shareholder derivative actions, whereas such actions are rare in the …

The Uncorporation And The Unraveling Of 'Nexus Of Contracts' Theory, Grant M. Hayden, Matthew T. Bodie

All Faculty Scholarship

This is a review of The Rise of the Uncorporation, by Larry E. Ribstein (Oxford University Press 2010). The Rise of the Uncorporation gives a compelling account of the increasing reliance on business forms other than the corporation. These new organizational forms - such as limited liability companies, limited liability partnerships, partnerships, and the like - give businesses greater freedom to structure themselves in ways that best facilitate their particular needs. And this, according to Ribstein, is an unqualified good, for it allows firms to operate more efficiently than if they were forced to assume an intensely regulated form.

Like …

Employees And The Boundaries Of The Corporation, Matthew T. Bodie

All Faculty Scholarship

Employees have no formal role in U.S. corporate law. According to most theories of the firm, however, employees play a critical role in differentiating firms from markets. This essay examines the disparity in treatment and seeks to understand the ramifications of the separation of employees from the corporation. After discussing the absence of employees from the corporate structure, the essay looks at the role of the employees in theories of the firm. In contrast to corporate law, these theories generally include employees within the core of the firm, and they often explain the nature and purpose of the firm in …

Nascar Green: The Problem Of Sustainability In Corporations And Corporate Law, Matthew T. Bodie

All Faculty Scholarship

The concept of "sustainability" is, at root, about a commitment to considering the future of the planet in our everyday affairs. In the corporate law context, supporters of sustainability seek to integrate these long-term environmental and social concerns into the corporation's DNA. This article seeks to explore sustainability as a corporate law concept by looking at the sustainability efforts of NASCAR and its affiliated firms. NASCAR has undertaken a series of "green" initiatives, most notably in the promotion of alternative fuels. These sustainability efforts are facilitated, in part, by the unusual structure of NASCAR and the sport of stock-car racing. …

Beyond Profit: Rethinking Corporate Social Responsibility And Greenwashing After The Bp Oil Disaster, Miriam A. Cherry, Judd F. Sneirson

All Faculty Scholarship

The explosion of the BP-leased Deepwater Horizon and subsequent oil spill stands as an indictment not just of our national energy priorities and environmental law enforcement; it equally represents a failure of Anglo-American corporate law and what passes for corporate social responsibility in business today. Using BP and the disaster as a compelling case study, this Article examines green marketing and corporate governance and identifies elements of each that encourage firms to engage only superficially in corporate social responsibility yet trumpet those efforts to eager consumers and investors. The Article then proposes reforms and protections designed to increase corporate social …

In Re Citigroup Inc. Shareholder Derivative Litigation: In The Heat Of Crisis, Chancery Court Scrutinizes Executive Compensation, Joseph W. Cooch

Journal of Business & Technology Law

No abstract provided.

Four Varieties Of Social Responsibility: Making Sense Of The 'Sphere Of Influence' And 'Leverage' Debate Via The Case Of Iso 26000, Stepan Wood

All Faculty Publications

One of the key controversies in social responsibility discourse is whether an organization’s responsibility should be based on its capacity to influence other parties or only on its actual contribution to social and environmental outcomes. On one side of the debate are those who argue that the limits of an organization’s responsibility should be defined in terms of its “sphere of influence” (SOI): the greater the influence, the greater the responsibility to act. On the other side are those who reject the SOI approach as ambiguous, misleading, normatively undesirable and prone to strategic manipulation. Foremost among the critics is the …

Corporate Governance Reform For The 21st Century: A Critical Reassessment Of The Shareholder Primacy Model, Carol Liao

All Faculty Publications

This article questions the efficiency of the shareholder primacy model of corporate governance in light of the financial calamities that have plagued the first decade of the 21st century. Reform efforts following the global financial crisis have focused on failures in securities regulation, but that is only part of the story. Effective reform measures must also address the legal and normative prescriptions found within existing governance structures, and the collateral effect those prescriptions have on political and regulatory inaction.

There was strong ideological support for the shareholder primacy model at the start of the century. Following the corporate and accounting …

Is Social Enterprise The New Corporate Social Responsibility?, Antony Page, Robert A. Katz

Faculty Publications

Since at least the famous Berle-Dodds debate, corporate social responsibility (CSR) and later its more muscular and structural iteration, progressive corporate law, have been discussed without much progress. The authors consider whether the social enterprise movement, which envisions a new sector of businesses created both to generate profits and pursue social goals, advances this debate. They conclude that it does. Proponents of social enterprise believe that such businesses can combine the dynamism of for-profit firms with the mission-driven zeal more typical of nonprofit organizations. Social enterprise and CSR have much in common: both want businesses to take the interests of …

Confronting The Certainty Imperative In Corporate Finance Jurisprudence, Diane Lourdes Dick

Faculty Articles

This Article argues that the methodological constraints of the Imperative have abandoned its underlying goals of certainty and stability in financial markets. Therefore, a new paradigm is needed that will enable courts to allocate rights and remedies in accordance with the economic substance of arrangements, and thus better enhance market stability.

This Article proceeds as follows: Part II articulates the jurisprudential underpinnings of the Imperative. Part III examines the economic theory and assumptions reflected in Imperative-driven decisions, as well as the interpretive methodology that has evolved across a range of judicial decisions and legislative enactments. Part IV introduces a recent …

Commentary: Campaign Finance In The Wake Of Citizens United, 44 J. Marshall L. Rev. 583 (2011), Thomas E. Mann

UIC Law Review

No abstract provided.

So What If Corporations Aren't People?, 44 J. Marshall L. Rev. 701 (2011), Ilya Shapiro, Caitlyn W. Mccarthy

UIC Law Review

No abstract provided.

Can The Rich Fend For Themselves?: Inconsistent Treatment Of Wealthy Investors Under The Private Fund Investment Advisers Registration Act Of 2010, Vijay Sekhon

UC Law Business Journal

In this comment, the author analyzes the inconsistent regulation of wealthy investors under the federal securities laws in light of the passage of the Private Fund Investment Advisers Registration Act of 2010. After summarizing the exemptions in the federal securities laws for wealthy investors and providing an overview of private equity and hedge funds, the author summarizes the regulation of private equity and hedge funds under the Private Fund Registration Act of 2010 and analyzes this regulation in light of the exemptions in the federal securities laws for wealthy investors. The author concludes with policy recommendations to eliminate the inconsistent …

The Fabricated Unwind Doctrine: The True Meaning Of Penn V. Robertson, John Prebble, Chye-Ching Huang

UC Law Business Journal

The Tax Unwind Doctrine allows taxpayers, who are parties to a prior taxable transaction, to effectively "undo" the transaction and return to the status quo as if the transaction never occurred. This article finds that Penn v. Robertson is not authority for the unwind doctrine, contrary to the routine assertions of the Internal Revenue Service, practitioners, taxpayers, and legal academics. This article shows that the unwind doctrine, and the large structure of tax practice built upon it, has no foundation in case law. The article considers the practical significance of the misunderstanding of Penn v. Robertson in Revenue Ruling 80-85 …

Implementation Of China's 2007 Open Government Information Regulation, Nolan R. Shaw

UC Law Business Journal

This note reviews the implementation of China's 2007 Open Government Information Regulation both in and outside the courts. Increased information about the workings of government promotes fairness, improved government work, civic participation, and faith in government. This note reviews the unsurprising hiccoughs in the initial implementation of the OGI Regulation, but also notes that most government offices are making positive efforts to comply with the OGI Regulation. The note concludes that the law is an important step in China's move towards greater transparency, but needs broader judicial application to be effective.

Creditor Claims In Arbitration And In Court, Christopher R. Drahozal, Samantha Zyontz

UC Law Business Journal

This article compares debt collection cases brought by business claimants in arbitration-both individual AAA debt collection arbitrations and cases brought under a program of debt collection arbitrations administered by the AAA-to debt collection cases brought in court. This research adds new information to the policy debate over consumer arbitration. The differing win rates for business claimants and consumer claimants appear to result from two factors, neither of which provides evidence of bias in favor of business claimants. First, the types of claims businesses bring in arbitration tend to differ from the types of claims consumers bring. Second, business claims are …

Access To United States Courts By Purchasers Of Foreign Listed Securities In The Aftermath Of Morrison V. National Australia Bank Ltd., Roger W. Kirby

UC Law Business Journal

This article evaluates and critiques the Morrison decision, which precluded access to United States federal courts for purchasers of securities listed on foreign exchanges bringing claims arising under section 10(b) of the Securities Exchange Act of 1934. The article also identifies alternative methods by which those purchasers may pursue claims for securities related fraud in United States courts.

Paying For Daniel Webster: Critiquing The Contract Model Of Advancement Of Legal Fees In Criminal Proceedings, Regina Robson

UC Law Business Journal

This article examines the contract paradigm used to structure the advancement of legal fees to employees facing criminal investigation. It posits that the current contract model does little to advance the traditional goals of advancement and prevents consideration of the legitimate purpose of advancement: to support fair and efficient prosecution of white-collar crimes. The article proposes adoption of a duty paradigm as an alternative to the contract analysis of advancement. It argues that the use of a duty model will allow for a reevaluation of the purpose of advancement in whitecollar criminal proceedings and will encourage conscious consideration of legitimate …

Webcaster Ii: A Case Study Of Business To Business Rate Setting By Formal Rulemaking, Andrew D. Stephenson

UC Law Business Journal

This note argues that The Copyright Royalty and Distribution Reform Act of 2004 is unsuccessful at achieving its goal of an effective administrative system for determining copyright royalty rates between the private parties that make up copyright owners and copyright users. To prove this, the note analyzes the Copyright Royalty Board's rate-setting in the proceeding, coined Webcaster II, announced February 16, 2005, the final rule and order determined on May 1, 2007, and the subsequent decision of the D.C. Circuit Court of Appeals issued on August 7, 2009.