Law Commons^™

Bondholder Coercion: The Problem Of Constrained Choice In Debt Tender Offers And Recapitalizations, John C. Coffee Jr., William A. Klein

Faculty Scholarship

The past decade saw the flourishing of risky, high-yield corporate debt, often called "junk" bonds. Too many companies took on too much debt, and the chickens are now coming home to roost as these bonds have begun to default with increasing frequency.The magnitude of the problem is potentially enormous; by one estimate, $318 billion of debt has either defaulted already or trades at yields indicating the market's skepticism that it will be repaid on maturity.

Facing the prospect of default, corporate issuers are seeking to restructure or recapitalize their financial structures at a correspondingly increased pace. The market force driving …

Reinventing The Outside Director: An Agenda For Institutional Investors, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

Managerialist rhetoric puts the institutional investor between a rock and a hard place. The institutional investor is depicted as a paper colossus, alternatively greedy and mindless, but in all events a less important corporate constituency than that other kind of investor, the "real" shareholder. The unspoken corollary is that, regardless of the institution's investment strategy, its interests may appropriately be ignored.

An institution that trades stock frequently is considered a short-term shareholder without a stake in the future of the corporation. According to the familiar argument, the short-term shareholder has no more legitimate claim on management's attention than does a …

Renegotiating Transnational Investment Agreements: Lessons For Develping Countries From The Ghana-Valco Experience, Paul Kuruk

Michigan Journal of International Law

This article describes the use of the renegotiation process to resolve problems that arise in the relations between participants in transnational investment. It draws conclusions from the successful renegotiation of an agreement executed in 1962 under which the Ghanaian government guaranteed bauxite and hydroelectric power supplies to support the smelting operations of the Volta Aluminium Company, Limited (Valco) in return for revenues from taxes and from payments for electricity, water, and use of the country's port facilities. The agreement between Ghana and Valco was entered into as part of the Volta River Project (VRP). This project was an investment scheme …

Employer's Guide To The Americans With Disabilities Act: From Job Qualifications To Reasonable Accommodations, 24 J. Marshall L. Rev. 693 (1991), Lawrence Postol, David Kadue

UIC Law Review

No abstract provided.

Punitive Damages In Securities Arbitration: The Tower Of Babel Revisited, Constantine N. Katsoris

Fordham Urban Law Journal

This article explores when and how punitive damages should be applied in securities arbitration. It briefly outlines the nature of punitive damages and traces the background of securities arbitration. It then proceeds to explore whether punitive damages, in any form permitted in courtroom litigation, should be available for use as a remedy by non-judicial arbitrators sitting in consensual forums involving securities disputes.

In Re Kaiser Steel Corporation: Does Section 546(E) Of The Bankruptcy Code Apply To A Fraudulent Conveyance Made In The Form Of An Lbo Payment?, William C. Rand

Fordham Urban Law Journal

This Comment considers whether, in spite of the Kaiser Steel decision, a bankruptcy trustee should be able to recover a fraudulent conveyance made to a stockholder's brokerage account in the form of a Leveraged Buyout (LBO) Payment. The Comment summarizes the Kaiser Steel opinion and questions the court's interpretation of the prior case law. The Comment then explains why an LBO payment to a stockholder's brokerage account should not qualify as an exempt "settlement payment" under section 546 (e) and thus should be rcoverable as a fraudulent conveyance under section 548. The Comment assumes that such a payment is recoverable …

Corporations, Markets, And Courts, Jeffrey N. Gordon

Faculty Scholarship

The times they are a changin'. Vanguard firms of the 1980s takeover boom have announced associate layoffs and salary freezes because business is down. Bankruptcy and corporate reorganization are the hot new specialties as reflected in law school class size and law firm entrepreneurialism. Acquisition activity has fallen dramatically from the halcyon days of the 1980s. The gargantuan headline-grabbing hostile bid is now rare. In particular, the "boot-strap, bust-up" highly leveraged transaction that so engaged the passions of corporate managers and raiders now seems part of the history of corporate finance rather than its future.

Many forces have played a …

How The Proxy Rules Discourage Constructive Engagement: Regulatory Barriers To Electing A Minority Of Directors, Ronald J. Gilson, Lilli A. Gordon, John Pound

Faculty Scholarship

During the 1980s, both sides of the hostile takeover controversy viewed proxy contests in terms that bordered on the mythical. Those made uneasy by the takeover phenomenon, especially management, held out proxy contests as an alternative, almost utopian mechanism through which a civilized debate about corporate strategy and structure could be held. As the Delaware Supreme Court put it, "[if the stockholders are displeased with the actions of their elected representatives [in blocking a hostile takeover], the powers of corporate democracy are at their disposal to turn the board out.” In contrast, those who believed that takeovers were necessary to …

Unlimited Liability And Law Firm Organization: Tax Factors And The Direction Of Causation, Ronald J. Gilson

Faculty Scholarship

In a recent issue of this Journal, Carr and Mathewson (1988) test a model of the impact of limited and unlimited liability regimes on the nature of firms by comparing the performance of law firms operated as partnerships and sole proprietorships (and therefore subject to unlimited liability) with that of law firms operated as corporations (and therefore subject to limited liability).

Shareholder Initiative: A Social Choice And Game Theoretic Approach To Corporate Law, Jeffrey N. Gordon

Faculty Scholarship

When it comes to specific business matters, it seems that an objecting shareholder can do no more than offer a "precatory" resolution that provides shareholder advice on the issue. Adoption of such a resolution obviously sends a strong signal to management, as do informal contacts by important shareholders, that a management seeking to avoid a control contest may be well-advised to heed. Nevertheless, management can ignore such expressions of shareholder. preference and, indeed, can pursue policies and extraordinary transactions that it knows shareholders would reject. Thus for the large public corporation the pattern of delegation gives management virtually unbounded decisionmaking …

Institutional Investors And The New Corporate Governance, Jayne W. Barnard

Faculty Publications

During the last decade, American capital markets have experienced a marked shift from a constituency made up primarily of household investors to one made up primarily of institutional investors. Institutional investors are fiduciary bodies such as pension funds, mutual funds, and employee stock ownership plans, representing large numbers of beneficiaries. As collective entitites, institutional investors often amass billions of dollars in assets, thus giving them the potential for substantial influence on the companies in which they invest. In recent years, some institutional investors have sought to use this influence to challenge traditional patterns of corporate governance, claiming that new patterns …

An Economic Justification For Corporate Reorganizations, Charles Adams

Articles, Chapters in Books and Other Contributions to Scholarly Works

No abstract provided.

Defending The "Time Culture": The Public And Private Interests Of Media Corporations, Shelby D. Green

Elisabeth Haub School of Law Faculty Publications

Part I of this essay discusses the “public interest” standard under the Federal Communications Act and describes parallels in corporation doctrine. Part II considers whether broadcasters satisfy their public interest obligations by addressing audience interest. Part III discusses the prerogatives of the management of the corporate broadcaster to consider non-financial factors in selecting programming. Part IV describes the non-traditional philosophy of the corporation's legitimate object, which led to the subject case. Part V discusses the central legal issues of the cognizable business interests of corporations. Finally, the Conclusion offers a view on desirable public interest objectives of media corporations.

Is It Time For A Federal Corporation Law, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Who Owns Christmas Trees? The Disposition Of Property Used By A Partnership, Daniel S. Kleinberger, Barbara A. Wrigley

Faculty Scholarship

Two partners form an enterprise. One (the K partner) supplies the assets used by the enterprise. The other partner (the L partner) supplies only labor. When the enterprise ends, the partners disagree about how to divide the property used in the partnership business. The K partner wants his or her property returned. The L partner wants his or her share of the business assets. If some of the property has appreciated while in partnership use, the dispute will be especially complicated. How do the partners divide the value of the property as originally brought into the business? Who benefits from …

Corporate Successors Under Strict Liability: A General Economic Theory And The Case Of Cercla, Merritt B. Fox

Faculty Scholarship

P undertakes an activity subject to strict liability that creates a risk of harm to others. The activity harms V. Before the harm becomes apparent, however, P sells its assets to S for cash and dissolves. Should V be entitled to compensation from S in P's stead? If the talk of corporate lawyers is to be believed, concern over this seemingly technical question is having a substantial impact on the salability of billions of dollars of productive assets.

With the growth of products liability litigation, state courts have given the issue of successor liability increasing attention over the last decade. …

Time Changes: A Review Of To The End Of Time: The Seduction And Conquest Of A Media Empire, Jayne W. Barnard

Faculty Publications

No abstract provided.

University Of Richmond Law Review

University of Richmond Law Review

No abstract provided.

Assessing The Limited Liability Company, Wayne M. Gazur, Neil M. Goff

Publications

The limited liability company is one of the newest forms of business organization. This form combines the limited liability of a corporation with the tax benefits normally associated with a partnership. The authors examine various implications and ramifications of this organizational form.

Parental Leaves And Poor Women: Paying The Price For Time Off, Maria O'Brien

Faculty Scholarship

This Article presents a critique of unpaid "parental" leaves and the parental leave legislation recently passed by Congress.1 Eight states have already enacted parental leave statutes of various kinds.' For the sake of simplicity and uniformity, however, this Article focuses on the proposed federal legislation3 and its anticipated effects on unemployed and underemployed women.4 Specifically, this Article argues that the debate about parental leave 5 has ignored the possibility that the cost of this mandated benefit is likely to be borne by poor, low-skill working women6 who will find that their job opportunities narrow as employers try to shift some …

Annual Survey Of Virginia Law: The Virginia Limited Liability Company Act, S. Brian Farmer, Louis A. Mezzullo

University of Richmond Law Review

Since the passage of the sixteenth amendment' in 1913 and the income tax legislation adopted thereunder, the development of new forms of business entities has been driven largely by the desire to harmonize two goals: limited liability for the owners of the entity and pass-through treatment of the entity for income tax purposes.

Privatization In Eastern Europe: Impractical, But Not Impossible, Andrzej Rapaczynski

Faculty Scholarship

The most important thing that must be understood by anyone thinking about Eastern European privatization is that the word "privatization," although correct, is somewhat misleading. It is misleading because it brings to mind the operations performed in many other countries where state-owned companies have been sold to private individuals. It is very important to understand that the significance of privatization and the practicality of privatization in Eastern Europe are quite different. The most important thing is that the main task of privatization is not to transfer ownership from one party to another-like that successfully done in England-but rather to create …

Liquidity Versus Control: The Institutional Investor As Corporate Monitor, John C. Coffee Jr.

Faculty Scholarship

Within academia, paradigm shifts occur regularly, some more important than others. As the takeover wave of the 1980s ebbs, a significant shift now appears to be in progress in the way the public corporation is understood. Above all, the new thinking emphasizes that political forces shaped the modern corporation. While the old paradigm saw the structure of the corporation as the product of a Darwinian competition in which the most efficient design emerged victorious, this new perspective sees political forces as constraining that evolutionary process and possibly foreclosing the adoption of a superior organizational form. Thus, my colleague Professor Mark …

Book Review, Richard Gruner

Vanderbilt Journal of Transnational Law

Large corporations are important, yet enigmatic, participants in world commerce. International corporate behavior is morally and legally significant because of its immense scope and societal impact. That behavior, however, is often so complex as to defy characterization under the simple moral or legal standards applicable to individuals. Furthermore, the ability of traditional moral or legal systems to shape multinational corporate conduct is also unclear given that large corporate bureaucracies lack the motivations and fears normally used to enforce moral or legal accountability. As one frustrated court noted, the problem is that corporations have "no soul to damn, and no body …

Annual Survey Of Virginia Law: Business And Corporate Law, Rosalie Wacker O'Brien

University of Richmond Law Review

This article reviews recent developments in the law affecting Virginia businesses and corporations. Part II discusses judicial decisions, including: a United States Supreme Court decision concerning private rights of action under section 14(a) of the Securities Exchange Act of 1934; a Fourth Circuit Court of Appeals opinion denying absolute priority to the FDIC as liquidator; two decisions interpreting the Virginia Stock Corporation Act, one by the Fourth Circuit denying the protection of the good faith standard to directors and one by the United States District Court for the Western District of Virginia refusing to characterize a failed LBO/cash merger as …

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

Publications

No abstract provided.

Business Associations, Paul A. Quirós, Lynn Scott Magruder

Mercer Law Review

This Article surveys noteworthy cases that Georgia appellate courts and the United States district courts in Georgia decided during the survey period. It also reviews important acts of the Georgia General Assembly concerning corporation, partnership, securities, and banking law. Additionally, we have broadened our review to include cases decided by the Eleventh Circuit Court of Appeals as they relate to Georgia corporate, partnership, and banking law. Although this Article traditionally has reviewed agency law, the authors have elected to eliminate it from the scope of review this year.

Using Partnerships As Acquisition Vehicles, Mark J. Silverman

William & Mary Annual Tax Conference

No abstract provided.

Shareholder Passivity Reexamined, Bernard S. Black

Michigan Law Review

This article argues that shareholder monitoring is possible: It's an idea that hasn't been tried, rather than an idea that has failed. I defer to a second article currently in draft the question of whether more monitoring by institutional shareholders is desirable. Will direct shareholder oversight, or indirect oversight through shareholder-nominated directors, improve corporate performance, prove counterproductive, or, perhaps, not matter much one way or the other? What are the benefits and risks in giving money managers - themselves imperfectly monitored agents - more power over corporate managers? If more shareholder voice is desirable, how much more and …

Section 382: Net Operating Loss Carryovers In Corporate Acquisitions, Peter L. Faber

William & Mary Annual Tax Conference

No abstract provided.