Law Commons^™

Misreading Menetti: The Case Does Not Help You Avoid Liability For Your Own Fraud, Val D. Ricks

St. Mary's Law Journal

Several decades ago, an incorrect legal idea surfaced in Texas jurisprudence: that business entity actors are immune from liability for fraud that they themselves commit, as if the entity is solely responsible. Though the Supreme Court of Texas has rejected that result several times, it keeps coming back. The most recent manifestation is as a construction of Texas’s unique veil-piercing statute. Many lawyers have suggested that this view of the veil-piercing statute originated in Menetti v. Chavers, a San Antonio Court of Appeals case decided in 1998. Menetti has in fact played a prominent role in the movement to …

Anonymous Companies, William J. Moon

Faculty Scholarship

Hardly a day goes by without hearing about nefarious activities facilitated by anonymous “shell” companies. Often described as menaces to the financial system, the creation of business entities with no real operations in sun-drenched offshore jurisdictions offering “zero percent” tax rates remains in vogue among business titans, pop stars, multimillionaires, and royals. The trending headlines and academic accounts, however, have paid insufficient attention to the legal uses of anonymous companies that are both ubiquitous and almost infinite in their variations.

This Article identifies privacy as a functional feature of modern business entities by documenting the hidden virtues of anonymous companies—business …

Moby-Dick As Corporate Catastrophe: Law, Ethics, And Redemption, David Yosifon

University of Cincinnati Law Review

Herman Melville’s Moby-Dick serves here as a vehicle through which to interrogate core features of American corporate law and excavate some of the deeper lessons about the human soul that lurk behind the pasteboard mask of the law’s black letter. The inquiry yields an illuminating vantage on the ethical consequences of corporate capital structure, the law of corporate purpose, the meaning of voluntarism, the ethical stakes of corporate fiduciary obligations, and the role of lawyers in preventing or facilitating corporate catastrophe. No prior familiarity with the novel or corporate law is required.

Autonomous Corporate Personhood, Carla L. Reyes

Washington Law Review

Several states have recently changed their business organization law to accommodate autonomous businesses—businesses operated entirely through computer code. A variety of international civil society groups are also actively developing new frameworks— and a model law—for enabling decentralized, autonomous businesses to achieve a corporate or corporate-like status that bestows legal personhood. Meanwhile, various jurisdictions, including the European Union, have considered whether and to what extent artificial intelligence (AI) more broadly should be endowed with personhood to respond to AI’s increasing presence in society. Despite the fairly obvious overlap between the two sets of inquiries, the legal and policy discussions between the …

The “Value” Of A Public Benefit Corporation, Jill E. Fisch, Steven Davidoff Solomon

All Faculty Scholarship

We examine the “value” a PBC form provides for publicly-traded corporations. We analyze the structure of the PBC form and find that other than requiring a designated social purpose it does not differ significantly in siting control and direction with shareholders. We also examine the purpose statements in the charters of the most economically significant PBCs. We find that, independent of structural limitations on accountability, these purpose statements are, in most cases, too vague and aspirational to be legally significant, or even to serve as a reliable checks on PBC behavior. We theorize, and provide evidence, that without a legal …

Delaware's New Competition, William J. Moon

Faculty Scholarship

According to the standard account in American corporate law, states compete to supply corporate law to American corporations, with Delaware dominating the market. This “competition” metaphor in turn informs some of the most important policy debates in American corporate law.

This Article complicates the standard account, introducing foreign nations as emerging lawmakers that compete with American states in the increasingly globalized market for corporate law. In recent decades, entrepreneurial foreign nations in offshore islands have used permissive corporate governance rules and specialized business courts to attract publicly traded American corporations. Aided in part by a select group of private sector …

Regulating Offshore Finance, William J. Moon

Faculty Scholarship

From the Panama Papers to the Paradise Papers, massive document leaks in recent years have exposed trillions of dollars hidden in small offshore jurisdictions. Attracting foreign capital with low tax rates and environments of secrecy, a growing number of offshore jurisdictions have emerged as major financial havens hosting thousands of hedge funds, trusts, banks, and insurance companies.

While the prevailing account has examined offshore financial havens as “tax havens” that facilitate the evasion or avoidance of domestic tax, this Article uncovers how offshore jurisdictions enable corporations to evade domestic regulatory law. Specifically, recent U.S. Supreme Court cases restricting the geographic …

Corporate Governance Beyond Economics, Elizabeth Pollman

All Faculty Scholarship

In recent years, changes to state and federal law have increased pressure on corporate law to serve as an ordering mechanism for interests and values beyond economics. On the federal front, two U.S. Supreme Court cases have put existing corporate law in a new quasi-constitutional light. In the landmark decisions of Citizens United v. FEC and Burwell v. Hobby Lobby Stores, Inc., the Supreme Court has pointed to state corporate law as the mechanism for ordering political and religious activity. In addition, Congress, the SEC, and federal courts have been embroiled in battles about the scope and appropriateness of regulating …

Economic Democracy And Enterprise Form In Finance, William H. Simon

Faculty Scholarship

This article considers the relative advantages of alternative enterprise forms in finance from the point of view of public accountability. The business corporation is compared to the state agency or authority, the cooperative, the state corporation, and the charitable nonprofit. These forms can be distinguished according to whether they aspire to enhance general electoral democracy or stakeholder democracy and whether their democratic controls operate directly or indirectly. The article suggests that the indirect democratic forms may be more promising than the direct ones. It also argues that the project of democratizing finance depends on the development of practices of multifactor …

Corporate Conflict Management 4.0: Reflections On How To Get There From Here, Peter W. Benner

Pepperdine Dispute Resolution Law Journal

No abstract provided.

Hedge Fund Activism, Poison Pills, And The Jurisprudence Of Threat, William W. Bratton

All Faculty Scholarship

This chapter reviews the single high profile case in which twentieth century antitakeover law has come to bear on management defense against a twenty-first century activist challenge—the Delaware Court of Chancery’s decision to sustain a low-threshold poison pill deployed against an activist in Third Point LLC v. Ruprecht. The decision implicated an important policy question: whether a twentieth century doctrine keyed to hostile takeovers and control transfers appropriately can be brought to bear in a twenty-first century governance context in which the challenger eschews control transfer and instead makes aggressive use of the shareholder franchise. Resolution of the question …

Achieving The Purpose Of Federal Diversity Jurisdiction: Why Courts Should Abandon The Current Treatment Of Llcs Under Section 1332, Kristen Curley

Touro Law Review

No abstract provided.

Enduring Design For Business Entities, William E. Foster

William E Foster

The success or failure of an institution may hinge on some of the earliest decisions of its founders. In constitutional design literature, endurance is a widely accepted drafting objective. Indeed, constitutional endurance is positively associated with prosperous and stable societies. Like drafters of constitutions, business organizers have almost innumerable objectives for their enterprises, and attorneys drafting organizational documents must take into account these myriad goals. Oftentimes the drafting process fails to fully address some of the most important of these aims and results in suboptimal structures that lack predictability and reliability. This article looks specifically at small business organizations and …

Incorporating Legal Claims, Maya Steinitz

Faculty Scholarship

Recent years have seen an explosion of interest in commercial litigation funding. Whereas the judicial, legislative, and scholarly treatment of litigation finance has regarded litigation finance first and foremost as a form of champerty and sought to regulate it through rules of legal professional responsibility (hereinafter, the "legal ethics paradigm"), this Article suggests that the problems created by litigation finance are all facets of the classic problems created by "the separation of ownership and control" that have been a focus of business law since the advent of the corporate form. Therefore, an "incorporation paradigm," offered here, is more appropriate. "Incorporating …

Enduring Design For Business Entities, William E. Foster

Utah Law Review

The success or failure of an institution may hinge on some of the earliest decisions of its founders. In constitutional design literature, endurance is a widely accepted drafting objective. Indeed, constitutional endurance is positively associated with prosperous and stable societies. Like drafters of constitutions, business organizers have almost innumerable objectives for their enterprises, and attorneys drafting organizational documents must take into account these myriad goals. Oftentimes the drafting process fails to fully address some of the most important of these aims and results in suboptimal structures that lack predictability and reliability.

This article looks specifically at small business organizations and …

Book Review: "Bishop & Zucker On Nevada Corporations And Llcs", Rachel J. Anderson

Scholarly Works

In this piece written for The Writ, the official publication of the Washoe County Bar Association, Prof. Rachel Anderson reviews Bishop and Zucker on Nevada Corporations & LLCs.

Teaching Business Associations Law In The Evolving New Market Economy, Joan Macleod Heminway

Journal of Business & Technology Law

No abstract provided.

Teaching Gender As A Core Value In Business Organizations Class, Cheryl L. Wade

Faculty Publications

(Excerpt)

I teach a business organizations course that is typically a large class with up to ninety students. At some point in the first week of each semester, I talk about public companies and the men who lead them. I point out to my students that while it is appropriate in most contexts to use gender-neutral language, it would be inaccurate to do so when talking about big business. Only fifteen percent of the board seats at Fortune 500 companies are held by women, and only sixteen percent of Fortune 500 corporate officers are women. I let my students know …

Weber V. U.S. Sterling Securities, Inc.: Contracting The Liability Shield For Members Of Delaware Limited Liability Companies, Marios J. Monopolis

Journal of Business & Technology Law

No abstract provided.

The Political Dynamics Of Corporate Legislation: Lessons From Israel, Yael T. Ben-Zion

Fordham Journal of Corporate & Financial Law

No abstract provided.

Sorting Through The Soup: How Do Llcs, Llps And Lllps Fit Withing The Regulations And Legal Doctrines?, Daniel S. Kleinberger

Faculty Scholarship

In a children' book published in 1946, Ben Ross Berenberg described an imaginary amalgam called the churkendoose - "part chicken, turkey, duck and goose." In 1977, Wyoming invented a business law churkendoose: the limited liability company - part corporation, part general partnership, part limited partnership. That churkendoose has revolutionized the law of business organizations, becoming the vehicle of choice for tens of thousands of ventures every month and causing the IRS to radically overhaul its approach to taxing business entities. This article explores how preexisting regulatory and common law apply to LLCs and the related organizations known as limited liability …

When Good Mergers Go Bad: Controlling Corporate Managers Who Suffer A Change Of Heart, Celia R. Taylor

University of Richmond Law Review

No abstract provided.

Form And Function In Business Organizations, Richard A. Booth Marbury Research Professor Of Law

Faculty Scholarship

In this piece, I argue that the recent proliferation of forms of business organizations in addition to the traditional partnership and corporation may have arisen from the implicit recognition that various organizations may serve needs of business people in different types of businesses, and that traditional theory of the firm explanations are too narrowly focused on market failure explanations for firm formation. I identify at least five different factors that may motivate people to form a business organization and discuss how these different factors may militate in favor of one business form rather than another. I conclude that the collections …

The Revised Uniform Partnership Act: Some Comments On The Latest Draft Of Rupa, J. Dennis Hynes

Publications

No abstract provided.

Company Law In The European Community: Toward Supranational Incorporation, David C. Donald

Penn State International Law Review

This article attempts to present each piece of legislation completely and individually in answer to the practical need to know what the law is, and what it requires. Yet, these measures also constitute significant elements in a monumental project, and thus the article will also indicate how each piece fits into the whole developing framework of a European law of business organizations. The first section will discuss the Community's ongoing efforts to harmonize the company law of the Member States, using the recently adopted Twelfth Council Company Law Directive as an example. This first section will distinguish the project of …

Lender Liability: The Dilemma Of The Controlling Creditor, J. Dennis Hynes

Publications

No abstract provided.

Piercing The Corporate Veil—The Undercapitalization Factor, Harvey Gelb

Chicago-Kent Law Review

No abstract provided.

Accounting For Mergers, Acquisitions And Investments, In A Nutshell: The Interrelationships Of, And Criteria For, Purchase Or Pooling, The Equity Method, And Parent-Company-Only And Consolidated Statements, Ted J. Fiflis

Publications

No abstract provided.

Book Reviews, Estes Kefauver, Senator, Stanley D. Rose, W. Edward Sell, Harold G. Wren, Robert N. Covington

Vanderbilt Law Review

Congress and the Court By Walter F. Murphy. Chicago: The University of Chicago Press, 1962. Pp. xi, 308. $6.95. (judicial power)

reviewer: Senator Estes Kefauver

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Interstate Apportionment of Business Income for State Income Tax Purposes By Charles E. Ratliff, Jr. Chapel Hill: The University of North Carolina Press, 1962. Pp. xi, 132. $4.00. (tax law)

reviewer: Stanley D. Rose

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Expulsion or Oppression of Business Associates By F. Hodge O'Neal and Jordan Derwin. Durham, N.C.: Duke University Press,1961. Pp. vii, 263. $10.00. (business organizations)

reviewer: W. EDWARD SELL

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The Ideologies of Taxation By Louis Eisenstein. New York: The …

The Conflict Of Laws: A Comparative Study, Second Edition. Volume Two. Foreign Corporations: Torts: Contracts In General, Ernst Rabel

Michigan Legal Studies Series

The second volume of Ernst Rabel's comparative treatise on the conflict of laws was originally published in 1947. This new edition completes the plan to revise the first two volumes, as arranged with the approval of the author before his death on September 7, 1955. Pursuant to this plan, the present edition has been made possible through the continued support of the work by the University of Michigan Law School and the generous cooperation of the Max Planck-Institut für aüslindisches und internationales Privatrecht in Hamburg, in making available the competent services of a member of the staff of the Institut, …