Law Commons^™

Kayser-Roth, Joslyn, And The Problem Of Parent Corporation Liability Under Cercla, James A. King

Akron Law Review

This article examines these issues by focusing on the responsibility of parent corporations as "owners" and as "operators" under section 107 of CERCLA. The scope of the analysis is limited to corporations that participate in the management of other corporations. Moreover, for the sake of simplicity, the reach of the analysis is limited to the situation in which a corporation owns one hundred percent of the stock of the subsidiary.

Part I provides a general overview of the principle of limited shareholder liability as it applies to parent corporations and of its economic underpinnings. Part II reviews judicial applications of …

Beyond Crosby V. Beam: Ohio Courts Extend Protection Of Minority Stockholders Of Close Corporations, Kathleen L. Kuhlman

Akron Law Review

This Comment explores the possible ramifications of viewing working minority shareholders as term employees on both close corporation law and at-will-employment law in Ohio. Part I discusses the background and emergence of the heightened fiduciary duty owed by the majority stockholders to the minority stockholders in closely held corporations and the resultant protection of the minority. Part II discusses the current standing of the employment at-will doctrine and what protections exist for at-will employees in Ohio. Part III examines recent Ohio case law that compares close corporation employment with at-will-employment and analyzes the courts' reasoning behind creating a new exception …

Law Firm Ownership Of Ancillary Businesses In Ohio - A New Era?, Stephen R. Ripps

Akron Law Review

The seeds of controversy about ancillary businesses were planted in 1983 when the American Bar Association's House of Delegates approved Model Rule 5.4 prohibiting non-lawyer participation in law firm businesses. Ohio has adopted the ABA Code of Professional Responsibility, not the Model Rules, but the Model Rules may nevertheless have an impact on the interpretation and development of ethical guidelines in Ohio and other Code states. In order to determine the status of ancillary businesses in Ohio today, analysis must proceed in this dual context.

Ohio Upholds Traditional Exception To General Rule Of Corporate Successor Nonliability, David R. Langdon

Akron Law Review

The purpose of this Note is to carefully analyze the Ohio Supreme Court's reasoning in Welco and its implications. Part II discusses corporate successor liability in general, and then focuses narrowly on the mere continuation exception to successor nonliability. Part III breaks down the case itself, presenting the facts, procedure, and reasoning of the majority and dissent. Finally, Part IV analyzes the court's refusal to expand the mere continuation exception, suggesting that had the court chosen to expand the the exception, the advantages of a cash-for-assets acquisition in Ohio would have been lost.

Attorney General's Warning: Legislation May Now Be Hazardous To Tobacco Companies' Health, Scott Richardson

Akron Law Review

Part I examines the significant aspects of the revised Florida statute and the proposed federal Senate bill. Part II reviews the development and current status of the laws in Florida, Ohio, and federal courts in regards to the toxic tort theories included in the legislation. Part III of this Comment provides a review of the judicial treatment of tobacco cases and past legislative actions toward tobacco. Part IV discusses the due process challenge that could be advanced by the tobacco industry. Finally, Part V concludes with predictions as to the likely success the Medicaid Third-Party Act will have in achieving …

United States V. O'Hagan: Rule 10b-5, The "Judicial Oak Which Has Grown From Little More Than A Legislative Acorn," And The Antifraud Legislation Of The Securities And Exchange Act Of 1934., Joseph J. Urgese

Akron Law Review

The Supreme Court has addressed the perplexing labyrinth of securities fraud since the enactment of the Securities and Exchange Acts of 1933 and 1934 ("Exchange Act"). In 1976, the president of a small brokerage firm induced customers to invest in fictitious escrow accounts, promising high yields to shareholders. The following year, majority shareholders of a Delaware lumber company instituted a merger based on what the minority shareholders deemed a fraudulent appraisal of the company's assets. In 1980, a financial printer profited from his purchase and subsequent sale of shares in companies targeted for corporate takeovers.

Part II of this Note …

A.E. Staley Maunufacturing Co. V. Commissioner: Life After Indopco: Tax Treatment Of A Target Corporation's Unsuccessful Hostile Tender Offer Defense Fees, Corinne E. Anderson

Akron Law Review

One specific concern was whether the INDOPCO decision represented a per se rule that takeover-related expenses must always be capitalized. The recent Seventh Circuit decision of A.E. Staley Manufacturing Co. v. Commissioner appears to have answered this question in the negative. In Staley, the Court of Appeals held that the majority of investment banker fees paid in an unsuccessful attempt to defeat a hostile tender offer were deductible as "ordinary and necessary" business expenses. Alternatively, those expenses allocable to the company's unsuccessful efforts to engage in alternate transactions were deductible as "abandoned transactions. ' However, fees paid by Staley to …

Taxation Of Prepaid Tuition Plans And The 1997 Tax Provisions - Middle Class Panacea Or Placebo? Continuing Problems And Variations On A Theme, Eric A. Lustig

Akron Law Review

This article addresses the continuing tax issues and policies attendant to one form of financing the costs of higher education -- prepaid tuition plans. These plans generally allow one to purchase tuition in advance for future use. One attraction of such a plan is that the purchaser can lock in tuition at present rates, thus protecting against inflation and other tuition hikes. Moreover, favorable tax treatment exists as the build up of benefits is generally tax-free to the purchaser, which provides a significant advantage over other savings programs. Although prepaid tuition plans have been in existence for a number of …

Does Corporate Law Matter? Legal Capital Restrictions On Stock Distributions, Craig A. Peterson, Norman W. Hawker

Akron Law Review

This paper consists of five sections, including this introduction. The background section of this article consists of several parts. First, we provide an historical overview of the legal capital doctrines restricting dividends. Second, we briefly summarize and illustrate six basic types of state statutory restrictions on dividends and other distributions to shareholders. Third, we examine the criticisms of legal capital that has led many states to abandon the use of concepts like stated capital and surplus to restrict financial distributions to shareholders. Fourth, a discussion of the generally accepted accounting principles ("GAAP") and mechanics of legal capital and stock distributions …

Unintended Consequences Of The Fourteenth Amendment And What They Tell Us About Its Interpretation, Richard L. Aynes

Akron Law Review

Much of the literature, understandably, seeks to find out what the framers of the amendment or the ratifiers of the amendment “intended.”...This article treats that issue as well, but begins with a different question: Does the amendment have consequences which were unintended by the framers? Over one and a quarter centuries ago, Justice Joseph Bradley answered that question in the affirmative: “It is possible that those who framed the article were not themselves aware of the far ranging character of its terms.” I suggest those unintended consequences include the effect of the Citizenship Clause on the force of the Fourteenth …

Partner Capture In Public International Organizations, Christopher G. Bradley

Akron Law Review

The Article unfolds in four parts.

Part I discusses the changes that public-private partnerships have wrought on the landscape of international organization funding and describes, as an example, the expanding partnership activities of the United Nations. The U.N. recently established an Office for Partnerships, which grew out of a decade of extensive contact with Ted Turner’s U.N. Foundation. The U.N.’s experience illustrates the importance partners can have, not simply on specific projects but also in bringing large-scale structural change to organizations.

Part II unpacks the concept at the heart of this Article: partner capture. Drawing on principles of bureaucratic behavior …

Competing With Delaware: Recent Amendments To Ohio's Corporate Statutes, David Porter

Akron Law Review

House Bill 301 is evolutionary, not revolutionary, in its content, but its changes are nonetheless significant for Ohio corporations and their lawyers. To place these changes in context, this article summarizes corporate statutory developments since 1997 that highlight Ohio’s previous initiatives to keep up with Delaware, America’s dominant state of incorporation, and then discusses at greater length the recent amendments contained in House Bill 301, concluding with a look ahead at some additional changes that may occur as early as this year.

A Study On Rule 145 Of The Securities Act Of 1933: How To Provide Clarity And Predictability In Rule 145 Transactions, Kab Lae Kim

Akron Law Review

Rule 145 is complex and incongruous with the general congressional intention of the 1933 Act. Thus, it involves the following theoretical and practical problems. First, Rule 145(a) fails to provide a clear standard for determining whether a certain recapitalization or reorganization involves a sale to trigger registration requirements...Second, Rule 145(c) and (d), as special resale provisions for “securities acquired in a Rule 145 transactions” (hereinafter Rule 145 securities), are inconsistent with general resale provisions under the 1933 Act. The SEC’s authority to establish Rule 145 was mandated by provisions of the 1933 Act. Accordingly, the resale provisions of Rule 145 …

Back To Basics: Harmonizing Delaware's Law Governing Going Private Transactions©, Clark W. Furlow

Akron Law Review

This Article agrees with the objectives of the hybrid approach, but argues that a more doctrinally consistent way to achieve that result would be to shift the analytical focus from the duties of the controlling stockholder to the duties of the corporation’s board. The Article will show that the Delaware Supreme Court’s focus on the duties of controlling stockholders in going-private transactions and its resistance to applying traditional modes of analysis to decisions by independent, disinterested directors has led to the current “incoherence” of Delaware’s going-private jurisprudence. Moreover, under the approach urged by the Court of Chancery in the Pure …

Why Martha Stewart Did Not Violate Rule 10b-5: On Tipping, Piggybacking, Front-Running And The Fiduciary Duties Of Securities Brokers©, Ray J. Grzebielski

Akron Law Review

This article will set out to show that Martha Stewart did not engage in insider trading. First, the article will present the legal standards for insider trading. Then, the article will examine whether Martha Stewart received an improper tip from Sam Waksal, the president of ImClone and a personal friend of Martha Stewart. The article will then proceed to look at whether Martha Stewart’s knowledge of Waksal’s attempted trading constituted material nonpublic information on which she improperly traded. Lastly, the article will examine whether Peter Bacanovic’s breach of Merrill Lynch’s confidentiality policy in telling Martha Stewart of another customer’s trading …

Looking Back And Looking Forward: Sarbanes-Oxley And The Future Of Corporate Governance, Scott Harshbarger, Goutam U. Jois

Akron Law Review

In this Article, we argue that all groups: business leaders, regulators and shareholders, should recognize the steps that must be taken to create a competitive, fair and ethical corporate climate. We are not calling merely for “voluntary cooperation” from businesses to improve the current situation. Indeed, SOX exists and is appropriate for this situation precisely because it imposes baseline obligations with which corporations are required to comply. Moreover, other regulations regarding independent directors, expensing of stock options, etc. are needed and are vital to keeping business interests in line with society’s. However, business leaders and regulators will have an easier …

The Myth Of The Unbiased Director, Regina F. Burch

Akron Law Review

This Article seeks to use social science research to better understand why these and other corporate governance problems persist. One reason may be that boards are biased as to how they respond to these issues. Social science research on risk perception informs us that individuals’ “preferences among different types of risk taking (or avoiding), correspond to cultural biases—that is, to worldviews or ideologies entailing deeply held values and beliefs defending different patterns of social relations.” Cultural theorists have identified four competing worldviews: communitarian, individualistic, hierarchical, and egalitarian. The communitarian and individualistic worldviews are at opposite ends of a spectrum measuring …

Corporate Social Responsibility And The New Governance: In Search Of Epstein's Good Company In The Employment Context, Michael B. Runnels, Elizabeth J. Kennedy, Rev. Timothy B. Brown S.J.

Akron Law Review

The purpose of this Article is to apply Epstein’s Good Company framework to corporate behavior that falls under three distinct employment law issues31 that continually challenge TNCs as they conduct business. Part I summarizes Epstein’s Good Company framework and his insights about the Good Company. Part II integrates Epstein’s Good Company framework with TNCs’ ability to curb the use of abusive forms of child labor (enact responsible child labor policies), foster open, democratic, and collaborative workplaces (improved employer-employee bargaining), and to create an ethic of care for employees (ethic of care). Part III briefly analyzes our findings, suggests modifications to …

Is The Quest For Corporate Responsibility A Wild Goose Chase? The Story Of Lovenheim V. Iroquois Brands, Ltd., D.A. Jeremy Telman

Akron Law Review

This Article is a Law Story. Law Stories have many purposes, but their main goal is to supplement and demystify the case method of legal pedagogy. The case method has been criticized for presenting students with the law more or less as a fait accompli. The case method assumes a pre-existing body of law that students passively learn rather than learning to think of the law as something that they will have a hand in shaping...In Part II, this Article explores the law of shareholder proposals and the reasons why the SEC and the courts permit proposals relating to social …

How "Bad Law, Bad Economics And Bad Policy" Positively Shaped Corporate Behavior, Megan Wischmeier Shaner

Akron Law Review

This article begins by briefly discussing the factual background of the Omnicare decision and the majority’s opinion. Second, this article analyzes the criticism that followed, which generally falls into two broad categories: the doctrinal shortcomings in the majority’s reasoning and the negative practical implications of banning precommitment strategies. Third, this article briefly explores whether the concerns about Omnicare’s impact on merger and acquisition activity came to fruition in the ten years since the decision was issued, concluding that many did not. This article also reviews post-Omnicare case law noting that subsequent decisions of the Delaware Court of Chancery addressing Omnicare-based …