Law Commons^™

Shareholder Wealth Maximization As Means To An End, Robert P. Bartlett, Iii

Robert Bartlett

In several recent cases, the Delaware Chancery Court has emphasized that where a conflict of interest exists between holders of a company’s common stock and holders of its preferred stock, the standard of conduct for directors requires that they strive to maximize the value of the corporation for the benefit of its common stockholders rather than for its preferred stockholders. This article interrogates this view of directors’ fiduciary duties from the perspective of incomplete contracting theory. Building on the seminal work of Sanford Grossman and Oliver Hart, incomplete contracting theory examines the critical role of corporate control rights for addressing …

Shareholder Wealth Maximization As Means To An End, Robert P. Bartlett, Iii

Seattle University Law Review

In several recent cases, the Delaware Chancery Court has emphasized that where a conflict of interest exists between holders of a company’s common stock and holders of its preferred stock, the standard of conduct for directors requires that they strive to maximize the value of the corporation for the benefit of its common stockholders rather than for its preferred stockholders. This article interrogates this view of directors’ fiduciary duties from the perspective of incomplete contracting theory. Building on the seminal work of Sanford Grossman and Oliver Hart, incomplete contracting theory examines the critical role of corporate control rights for addressing …

A Transactional Genealogy Of Scandal: From Michael Milken To Enron To Goldman Sachs, William W. Bratton, Adam J. Levitin

All Faculty Scholarship

Three scandals have reshaped business regulation over the past thirty years: the securities fraud prosecution of Michael Milken in 1988, the Enron implosion of 2001, and the Goldman Sachs “ABACUS” enforcement action of 2010. The scandals have always been seen as unrelated. This Article highlights a previously unnoticed transactional affinity tying these scandals together—a deal structure known as the synthetic collateralized debt obligation involving the use of a special purpose entity (“SPE”). The SPE is a new and widely used form of corporate alter ego designed to undertake transactions for its creator’s accounting and regulatory benefit.

The SPE remains mysterious …

Transparency And Accountability: Rethinking Corporate Fiduciary Law's Relevance To Disclosure, Faith Stevelman

Articles & Chapters

This article explores the duty of “disclosure/complete candor” (among directors, from boards to shareholders and from controllers to minority shareholders) within state corporate fiduciary law (especially Delaware’s, the most developed). It observes the odd minimization of the candor/disclosure duty within the core doctrines of fiduciary care, loyalty and good faith. It analyzes the evolution of the fiduciary disclosure duty and its “moment of truth” in the watershed litigation in Malone v. Brincat. The belated appearance of the fiduciary disclosure duty is partly the result of historical, customary and political understandings which have dwarfed logic and conceptual coherence in this area …

Actuarial Liability: Erisa, Malpractice And The Equity Funding Fraud, Robert Hershan

Fordham Urban Law Journal

Article discusses the potential effect of the Employee Retirement Income Security Act of 1974 (ERISA) on actuaries. Article discusses how actuaries may be held accountable for negligence and whether they can be considered fiduciaries.