Law Commons^™

Do Antitakeover Defenses Decrease Shareholder Wealth? The Ex Post/Ex Ante Valuation Problem, Lynn A. Stout

Cornell Law Faculty Publications

Over the past two decades, academics have generated a large empirical literature examining whether antitakeover defenses like poison pills or staggered board provisions decrease the wealth of shareholders in target corporations. Many studies, however, rely primarily on ex post analysis-they consider only how antitakeover defenses (ATDs) influence shareholder wealth after the corporation has been formed and, in some cases, long after the ATD was adopted. This Response argues that it may be impossible to fully understand the purpose or effects of ATDs without also considering their ex ante effects. In particular, ATDs may increase net target shareholder wealth ex ante …

Buy-Sell Agreements And Nontax Issues In Planning For Business Succession, Farhad Aghdami

William & Mary Annual Tax Conference

No abstract provided.

Exit Strategies For Owners Of Privately Held Businesses, R. Marshall Merriman Jr., Arthur E. Cirulnick, Paul H. Wilner

William & Mary Annual Tax Conference

No abstract provided.

Choosing A Business Entity For The 21st Century, Samuel P. Starr, Thomas P. Rohman, L. Michael Gracik Jr.

William & Mary Annual Tax Conference

No abstract provided.

Uses Of Life Insurance For The Closely-Held Business, Mary Anne Mancini

William & Mary Annual Tax Conference

No abstract provided.

Employee Benefits Issues In Purchase And Sale Of Privately Held Business, Andrea L. O'Brien

William & Mary Annual Tax Conference

No abstract provided.

Enron And The Corporate Lawyer: A Primer On Legal And Ethical Issues, Roger C. Cramton

Cornell Law Faculty Publications

The stunning collapse of Enron, coupled with the large number of accounting irregularities and apparent corporate fraud, have created a climate in which reform and improvement of the law governing corporate lawyers is underway. The ABA Task Force on Corporate Responsibility has issued a preliminary report that recommends promising changes in the rules of professional conduct. And, the Corporate Reform Act of 2002 has changed the landscape by authorizing the SEC to promulgate rules of professional conduct for securities lawyers and directing the SEC to issue a rule requiring securities lawyers to climb the corporate ladder to prevent or rectify …

Corporate And Business Law, C. Porter Vaughan Iii, David I. Meyers, W. Lake Taylor Jr.

University of Richmond Law Review

No abstract provided.

Managers' Fiduciary Duty Upon The Firm's Insolvency: Accounting For Performance Creditors, Alon Chaver, Jesse M. Fried

Vanderbilt Law Review

A corporation's managers generally owe a fiduciary duty to the corporation and its shareholders. Legal scholars interpret this duty as requiring the managers to maximize shareholder value. When a firm is solvent, the obligation to maximize shareholder value tends to give managers an incentive to deploy firm assets efficiently-that is, in a way that maximizes total value.

When a firm is insolvent, however, the duty to maximize shareholder value could lead managers to take actions that reduce the value of debt more than they increase the value of equity and therefore reduce total value. Accordingly, a number of courts have …

Corporate Managers, Agency Costs, And The Rise Of Double Taxation, Steven A. Bank

William & Mary Law Review

No abstract provided.

One For A, Two For B, And Four Hundred For C: The Widening Gap In Pay Between Executives And Rank And File Employees, Susan J. Stabile

University of Michigan Journal of Law Reform

This Article, focuses on executive pay in relation to that of rank and file workers. It examines the standard justifications for the vast and increasing pay gap between executives (particularly CEOs) and rank and file workers and finds that such arguments do little more than attempt to justify in economic terms a situation that exists for a very different reason. Instead, the author argues, the real reason such a huge and widening gap in pay between executive and rank and file workers exists is market failure in the mechanisms of setting executive pay, aggravated by the shareholder primacy norm, which …

U.S. Corporate Taxation Reform From An International Perspective, Hugh Ault

Hugh J. Ault

No abstract provided.

Administrative-Law-Like Obligations On Private[Ized] Entities, Jack M. Beermann

Faculty Scholarship

Privatization is often promoted as a cure for many of the problems of government. In this Article, Professor Beermann argues that the effect of privatization is likely to be muted by the fact that several related phenomena have, in recent years, reduced the differences between government and the private sector, especially when privatization is involved. First, private entities are often compelled to make public or provide to government a great deal of information about themselves, much as the Freedom of Information Act and related statutes require transparency in government. Second, discovery in litigation subjects a great deal of private information …

Bad And Not-So-Bad Arguments For Shareholder Primacy, Lynn A. Stout

Cornell Law Faculty Publications

In 1932, the Harvard Law Review published a debate between two preeminent corporate scholars on the subject of the proper purpose of the public corporation. On one side stood the renowned Adolph A. Berle, coauthor of the classic The Modern Corporation and Private Property. Berle argued for what is now called "shareholder primacy"—the view that the corporation exists only to make money for its shareholders. According to Berle, "all powers granted to a corporation or to the management of a corporation, or to any group within the corporation. . . [are] at all times exercisable only for the ratable …

It's Time To Federalize Corporate Charters, Kent Greenfield

Kent Greenfield

No abstract provided.

Business Law, Robin Jean Davis, Louis J. Palmer Jr.

West Virginia Law Review

No abstract provided.

For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah

Articles

This article discusses “inversion” transactions, in which a publicly traded U.S. corporation becomes a subsidiary of a newly established tax haven parent corporation. In the last three years, an increasing number of these transactions have been taking place, undeterred by the shareholderlevel tax imposed by the IRS on them in 1994. The article first discusses the reasons for the increasing popularity of the transactions and the tax goals they aim at achieving (primarily avoiding subpart F and U.S. earnings stripping). The article then discusses the tax policy implications of these transactions. In the short run, the article suggests that the …

Key Disclosure Issues For Life Sciences Companies: Fda Product Approval, Clinical Test Results, And Government Inspections, William O. Fisher

Michigan Telecommunications & Technology Law Review

The government, particularly the Food and Drug Administration ("FDA"), heavily regulates the life sciences industry. FDA actions can have an extraordinary influence on the fortunes of biotechnology companies. Timely FDA approval of a drug or medical device can permit a company to exploit an inviting market window. FDA product approval is, in turn, tied to clinical test results which demonstrate "efficacy" and safety. Delayed approval, unfavorable test results, or the denial of an FDA application may ruin a company. Beyond the FDA product approval process and related testing lie FDA inspections and the possibility that the government will investigate charges …

Behavioral Finance And Investor Governance, Lawrence A. Cunningham

Washington and Lee Law Review

No abstract provided.

September 11 And The End Of History For Corporate Law, Kent Greenfield

Kent Greenfield

Using the tragic events of September 11th as case study; this Essay critiques a prominent, recent article that suggests the ideology of shareholder primacy has become so dominant that the "end of history" is at hand for corporate law. The author suggests that a dedication to shareholder primacy helped create the context in which the events of September 11th could occur, by making the airlines less attentive to security concerns that did not affect the airline companies' stock prices. Shareholder primacy makes corporations more likely to externalize the costs of the firms' decisions onto constituencies other than shareholders, and such …

Secured Debt And The Likelihood Of Reorganization, Clas Bergström, Theodore Eisenberg, Stefan Sundgren

Cornell Law Faculty Publications

Theory suggests that secured creditors may increasingly oppose a debtor’s reorganization as the value of their collateral approaches the amount of their claims. If reorganization occurs and the value of the firm appreciates, the secured creditor receives only part of the gain. But if the firm’s value depreciates, the secured creditor bears all of the cost. Secured claimants, thus, often have more to lose than to gain in reorganizations. This study of Finnish reorganizations filed in districts that account for most of the country’s reorganizations finds that creditor groups most likely to be well-secured are most likely to oppose reorganization. …

Encouraging Race-Based Advocacy In Legal Services Practice, Jonel Newman

Articles

Every legal services program has a waiting room, some newly furnished, others with old sofas and tattered chairs. The families, children, and elderly sitting in these waiting rooms consistently are disproportionately racial and ethnic minorities. Despite this constant reminder that those seeking legal assistance for their perceived wrongs are disproportionately racial and ethnic minorities, legal services programs are bringing fewer and fewer affirmative challenges that incorporate race-based antidiscrimination claims.
In this article we explore possible reasons for this lack of affirmative race- and national-origin-based discrimination claims and suggest some ideas for preserving or restarting this type of advocacy, ideas that …

The Team Production Theory Of Corporate Law: A Critical Assessment, Alan J. Meese

William & Mary Law Review

No abstract provided.

Doing Well While Doing Good: Reassessing The Scope Of Directors' Fiduciary Obligations In For-Profit Corporations With Non-Shareholder Beneficiaries, Lisa M. Fairfax

Washington and Lee Law Review

No abstract provided.

Aurora Credit Services, Inc. V. Liberty West Development, Inc.: An Analysis Of Shareholder Derivative Suits In Closely Held Corporations, Robbie G. Yates

BYU Law Review

No abstract provided.

Using Behavioral Economics To Show The Power And Efficiency Of Corporate Law As Regulatory Tool, Kent Greenfield

Kent Greenfield

Prepared for the Daniel J. Dykstra Corporate Governance Symposium at University of California, Davis, in February 2001, this article argues that changes in corporate governance in the United States - specifically the relaxation of the profit maximization norm, the broadening of management's fiduciary duties to include workers, and the inclusion of worker representatives on boards of directors - are likely to be efficient means of reaching certain preferred policy outcomes, such as an increase in the wages of working people and a decrease in income inequality. Instead of being seen as "private law," corporate law should be regarded as a …

The Sec's Suspension And Bar Powers In Perspective, Jayne W. Barnard

Faculty Publications

Enron has brought about demands from many quarters to grant the Securities and Exchange Commission (SEC) new powers. Among the powers the SEC now seeks is the power to bar or suspend securities law violators from serving as an oflicer or director of any public company. Currently, the law assigns this power only to federal district courts. In this Essay, Professor Barnard traces the history of the current law; examining why Congress has expressly withheld suspension and bar powers from the SEC. She then argues that the courts have exercised their suspension and bar powers wisely, and that recent developments …

The Globalization Of Corporate And Securities Law: An Introduction To A Symposium, And An Essay On The Need For A Little Humility When Exporting One's Corporate Law, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

No abstract provided.

Getting Real About Corporate Social Responsibility: A Reply To Professor Greenfield, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

No abstract provided.

Foreign Direct Investment In Latin America Overview And Current Status, Reuven S. Avi-Yonah, Martin B. Tittle

Other Publications

More firms than ever, and in more industries and countries, are expanding abroad through [foreign] direct investment [FDI]. Although FDI in 1980 was equivalent to only 5% of world GDP, by the end of the 1990's, that percentage had more than tripled to 17%. In 1993, the total US dollar value of world FDI was only US$ 200 billion, but by the year 2000, it had risen to US$ 1.3 thousand billion. Developing countries received around 25% of these inflows, mostly in the form of "greenfield" investments, where a new enterprise is essentially created from scratch.