Law Commons^™

The Go-Shop “Lure”: Go-Shop V. No-Shop In Merger And Acquisition In Public Company, Yilei Zhou Dr.

Yilei Zhou Dr.

In March 2013, one of the world biggest PC retailers, Dell, announced its privatization plan, in which adopted the go-shop clause. Although used by many public companies in merger and acquisition, the go-shop clause in fact developed from Revlon duty, that board of director must act in good faith to maximize the shareholders’ interests in the deal. Generally speaking, since traditional no-shop clause without “fiduciary out” provision in merger agreement conflict with board’s Revlon duty, consequently, if running successfully, the go-shop clause is the best tool for shareholders to maximize their interests. However, court imputes many restrictions on the board …

The Commons, Capitalism, And The Constitution, George Skouras

George Skouras

Thesis Summary: the erosion of the Commons in the United States has contributed to the deterioration of community and uprooting of people in order to meet the dynamic demands of capitalism. This article suggests countervailing measures to help remedy the situation.

The Siren Call Of Equity Crowdfunding, Michael B. Dorff

Michael B Dorff

The JOBS Act opened a new frontier in start-up financing, for the first time allowing small companies to sell stock the way Kickstarter and RocketHub have raised donations: on the web, without registration. President Obama promised this novel form of crowdfunding would generate jobs from small businesses while simultaneously opening up exciting new investment opportunities to the middle class. While the new exemption has its critics, their concern has largely been confined to the limited amount of disclosure issuers must provide. They worry that investors will lack the information they need to separate out the Facebooks from the frauds. This …

Moving Money: International Financial Flows, Taxes, Money Laundering & Transparency, Richard Gordon, Andrew P. Morriss

Andrew P Morriss

Recent publicity over enormous estimates of “missing” wealth and the use of sophisticated tax strategies by companies like Apple, Google, and Starbucks have produced a demand that the wealthy pay a “fair” amount of tax regardless of their compliance with the letter of tax laws. In particular, the Tax Justice Network’s claim that $21-$32 trillion of “hidden” wealth remains untaxed has garnered considerable attention. In this paper we argue that these claims rest on poor data and analysis and mistakes about how financial transactions work. We further argue that the disputes are about fundamentally conflicting visions of how financial transactions …

Systemic Harms And Shareholder Value, Jeffrey N. Gordon

Jeffrey N Gordon

The financial crisis has demonstrated serious flaws in the corporate governance of systemically important financial firms. In particular, the Shareholder Value norm, which has guided corporate governance reform for a generation, proves to be a faulty guide for managerial action in systemically important firms. This is not only because the failure of such firms will have spillovers that defy the cost-internalization of the tort system but also because these spillovers will harm their own majoritarian shareholders. The interests of diversified shareholders fundamentally diverge from the interests of managers and other controllers because the failure of a systemically important financial firm …

The Underutilized Foreign Investor, Griffin Weaver

Griffin Weaver

For most states, if not all, the push for economic advancement is at the front of every administration’s agenda. This is especially true for developing countries in the Middle East whose standard of living and international power is largely tied to its economic condition. An important indicator, if not condition, of a state’s economic health is the level of foreign direct investment (FDI) received by the state. This inflow of money is essential for the growth and stability of a state’s economy. As one U.S. official once noted, the United States “need[s] a net inflow of capital of $3 billion …

The Problem Of Nonprofit Executive Pay?: Evidence From U.S. Colleges And Universities, Brian D. Galle, David I. Walker

Brian D. Galle

Nonprofit organizations suffer from agency problems that are similar to or perhaps even more severe than those observed at for-profit companies. As a result, one might expect the executive pay setting process in the two sectors to reflect similar deficiencies. This Article explains why the managerial power theory that was developed to help explain for-profit executive pay is plausibly applicable to nonprofits. More importantly, this Article offers new evidence based on data from a large panel of colleges and universities collected across a nine year period that supports the idea that potential stakeholder outrage plays a role in limiting nonprofit …

The Underutilized Foreign Investor, Griffin Weaver

Griffin Weaver

No abstract provided.

Consumers As Marketers: An Analysis Of The Facebook “Like” Feature As An Endorsement, Chang Zhou

Chang Zhou

No abstract provided.

Wasting The Corporate Waste Doctrine: Why Waste Claims Are Obsolete In Delaware Corporate Law And Why The Waste Doctrine Is The Wrong Solution To The Problem Of Executive Compensation, Kris S. Swift

Kris S. Swift

Abstract

Kristen S. Swift

This Note makes several points, drawn from Delaware litigation history, on the futility of pleading corporate waste in Delaware. At inception, the waste doctrine was a tool for shareholder protection and empowerment; however, as calculated business risk became encouraged and later formally protected by the business judgment rule, the waste doctrine evolved to protect officers and boards and now sets a nearly impossible benchmark for misconduct that would allow shareholders to recover on a waste claim. The waste doctrine is inextricably tied to how business risk-taking is perceived by Delaware courts and shifting attitudes toward risk …

Transaction Cost-Benefit Analysis, With Applications To Financial Regulation, D. Bruce Johnsen

D. Bruce Johnsen

As Coase convincingly showed, transaction costs inhibit the ability of market participants to achieve first-best outcomes. This paper proposes a novel and relatively simple alternative to traditional cost-benefit analysis when regulated parties face sufficiently low transaction costs that they can bargain directly or rely on competitive markets to set efficient terms of trade. In these settings, the only informational burdens financial market regulators need bear to assess corrective rules is to identify the relevant parties, the “good” they hope to exchange, and the transaction costs that inhibit them from maximizing joint gains from trade. A rule is justified only if …

The Stock Market Reaction To Class Action Filings Post Pslra, Mark S. Klock

Mark S Klock

Using a substantially larger sample than has been used before, and a sample that includes the Great Financial Crisis and its ensuing recession, I investigate the stock market reaction to securities class action filings following the enactment of the Private Securities Litigation Reform Act through the first quarter of 2012. I find that on average, even after adjusting for market downturns, there is a statistically significant negative abnormal return at the time of filing. There is also a statistically significant negative abnormal return during the weeks preceding the filing indicating that the market partially, but not fully, anticipates these filings. …

Sovereign Investing And Corporate Governance: Evidence And Policy, Paul Rose

Paul Rose

Discussions of corporate governance often focus solely on the attractiveness of firms to investors, but it is also true that firms seek out preferred investors. What, then, are the characteristics of an attractive investor? With nearly $6 trillion in assets, sovereign wealth funds (SWFs) are increasingly important players in equity markets in the United States and abroad, and possess characteristics that firms prize: deep pockets, long-term (and for some, theoretically infinite) investment horizons, and potential network benefits that many other shareholders cannot offer. However, despite their economic power, their reach, and their general desirability as investors, SWFs are almost entirely …

The Management Of Public Natural Resource Wealth, Paul Rose

Paul Rose

As improved but often more environmentally-obtrusive technologies such as hydraulic fracturing facilitate the extraction of billions of dollars in natural resource wealth, more states are now faced with a welcome but exceedingly complex set of problems: Who should benefit from natural resources extracted from public lands? If the state retains much of this wealth in the form of tax receipts, how should these funds be spent? What do states owe to the communities from which these resources were extracted? What do states owe to future generations? While these are questions of first impression for a few, fortunate states, a number …

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Investment Dispute Resolution Under The Transpacific Partnership Agreement: Prelude To A Slippery Slope?, Leon E. Trakman Professor

Leon E Trakman Dean

Intense debate is currently brewing over the multistate negotiation of the Transpacific Partnership Agreement [TPPA], led by the United States. The TPPA will be the largest trade and investment agreement after the European Union, with trillions of investment dollars at stake. However, there is little understanding of the complex issues involved in regulating inbound and outbound investment. The negotiating of the TPPA is shrouded in both mystery and dissension among negotiating countries. NGOs, investor and legal interest groups heatedly debate how the TPPA ought to regulate international investment. However this dissension is resolved, it will have enormous economic, political and …

The Effects Of Dodd-Frank On Executive Compensation, Fitzgerald Angrand

Fitzgerald Angrand

In the wake of the market collapse, and amidst public outrage over irresponsible executive pay despite company failures, the U.S. government passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).[1] The main purpose of Dodd-Frank was to heighten shareholder protection in the capital markets.[2] More specifically, the executive compensation provisions were drafted with the aim of recapturing the accountability lost as a result of the lack of arm’s length bargaining. Commentators have stated, that taken together, the several provisions in Dodd-Frank that affect the executive pay process, quite arguably, will have the broadest and most significant …

The Naked Private Square, Ronald J. Colombo

Ronald J Colombo

In the latter half of the twentieth century, America witnessed the construction of a “wall of separation” between religion and the public square. What had once been commonplace (such as prayer in public schools, and religious symbols on public property) had suddenly become verboten. This phenomenon is well known and has been well studied.

Less well known (and less well studied) has been the parallel phenomenon of religion’s expulsion from the private square. Employment law, corporate law, and constitutional law have worked to impede the ability of business enterprises to adopt, pursue, and maintain distinctively religious personae. This is undesirable …