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Full-Text Articles in Law
Berle’S Conception Of Shareholder Primacy: A Forgotten Perspective For Reconsideration During The Rise Of Finance, Fenner Stewart
Berle’S Conception Of Shareholder Primacy: A Forgotten Perspective For Reconsideration During The Rise Of Finance, Fenner Stewart
Fenner L. Stewart Jr.
Adolf A. Berle is celebrated as the grandfather of modern shareholder primacy, but this glosses over his opposition to how Henry Manne used his argument. If Berle were alive today, he would certainly reject this praise. This is not always appreciated in commentaries of his shareholder primacy argument. For this reason, this article offers a nuanced understanding of Berle’s argument, providing a clear observation point for examining the shift from his shareholder primacy argument to the one of today. From this point of observation, the reader can see distinctions within, and potentials for, the shareholder primacy argument and thus the …
Legislative Intervention In Corporate Governance Is Not A Necessary Response To Citizens United Vs. Federal Election Commission, Stephen A. Yoder
Legislative Intervention In Corporate Governance Is Not A Necessary Response To Citizens United Vs. Federal Election Commission, Stephen A. Yoder
Stephen A Yoder
This article addresses the corporate governance implications of the recent decision of the United States Supreme Court in Citizens United vs. Federal Election Commission. It first reviews the Supreme Court's decisions over the past 35 years in election law including Citizens United. The article then summarizes the legislative proposals that have been made in response to the decision. The article argues that such proposals are not necessary or proper so long as boards of directors will fulfill their fiduciary duty to oversee political expenditures for the benefit of all stakeholders, with a long-term perspective.
Procuring "Justice"?: Citizens United, Caperton V. Massey, And Partisan Judicial Elections, André Douglas Pond Cummings
Procuring "Justice"?: Citizens United, Caperton V. Massey, And Partisan Judicial Elections, André Douglas Pond Cummings
andré douglas pond cummings
In recent years, two inextricably connected issues have received a great deal of attention in both United States political discourse and in the legal academic literature. One issue of intense legal debate and frustration has been that of judicial recusal, including an examination of the appropriate standards that should necessarily apply to judges that seem conflicted or biased in their role as neutral arbiter. A second issue that has spawned heated commentary and great dispute over the past decade is that of campaign finance law, including examination of the role that powerful and wealthy benefactors play in American electioneering. Both …
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Michelle M. Harner
Enterprise risk management (ERM) targets overall corporate strategy and, when implemented correctly, can manage a corporation’s risk appetite and exposure. When ignored or underutilized, it can contribute to a corporation’s demise. In fact, many commentators point to ERM failures as contributing to the severity of the 2008 economic crisis. This essay examines the different approaches to ERM adopted by financial institutions affected by the 2008 economic crisis and how ERM contributed to the survival or failure of those firms. It then considers ERM in the broader context of corporate governance generally. This discussion reflects on ERM techniques for corporate boards …
Trends In Distressed Debt Investing: An Empirical Study Of Investors' Objectives, Michelle M. Harner
Trends In Distressed Debt Investing: An Empirical Study Of Investors' Objectives, Michelle M. Harner
Michelle M. Harner
Increased creditor control in chapter 11 cases has generated considerable debate over the past several years. Proponents of creditor control argue that, among other things, it promotes efficiency in corporate reorganizations. Critics assert that it destroys corporate value and frequently forces otherwise viable entities to liquidate. The increasing involvement of professional distressed debt investors in chapter 11 cases has intensified this debate. In this article, I present and analyze empirical data regarding the investment practices and strategies of distressed debt investors. Based on this data and actual case reports, I reach two primary conclusions. First, although relatively few in number, …
The Corporate Governance And Public Policy Implications Of Activist Distressed Debt Investing, Michelle M. Harner
The Corporate Governance And Public Policy Implications Of Activist Distressed Debt Investing, Michelle M. Harner
Michelle M. Harner
Activist institutional investors traditionally have invested in a company's equity to try to influence change at the company. Some of these investors, however, are now purchasing a company's debt for this same purpose. They may seek to change a company's management and board personnel, operational strategies, asset holdings or capital structure. The chapter 11 bankruptcy cases of Allied Holdings, Inc. and its affiliates exemplify the strategies of activist distressed debt investors. In the Allied cases, Yucaipa Companies, a distressed debt investor, purchased approximately 66% of Allied's outstanding general unsecured bond debt. Yucaipa used this debt position to exert significant influence …
The Search For An Unbiased Fiduciary In Corporate Reorganizations, Michelle M. Harner
The Search For An Unbiased Fiduciary In Corporate Reorganizations, Michelle M. Harner
Michelle M. Harner
When a company experiences financial distress, a control contest often follows. Management fights to remain in control of the company, and shareholders, creditors and others try to influence management’s exercise of that control—or wrest it away. This is not a new phenomenon. The degree of influence now exerted by corporate stakeholders in the distressed context, however, is strikingly different than in the past. Recent headlines highlight that stakeholder control issues are at the forefront of financially-distressed situations large and small. The U.S. government, as creditor, dictated the terms of Chrysler’s and General Motors’ bankruptcies. It also demanded and received preferred …
Choice, Progressive Values, And Corporate Law: A Reply To Greenfield, Harry G. Hutchison
Choice, Progressive Values, And Corporate Law: A Reply To Greenfield, Harry G. Hutchison
Harry G. Hutchison
In his recent book chapter, CORPORATE LAW AND THE RHETORIC OF CHOICE, Professor Kent Greenfield rejects contractarian justifications for existing corporate governance arrangements. Greenfield advances this critique on two grounds. First, relying on behavioralist scholars, he accepts the demise of the rational actor model and, accordingly, opposes the contemporary use of choice as a construct that legitimates current corporate governance approaches. Second, Greenfield refracts his analysis through the prism of Progressive thought and values.
Greenfield’s approach is disturbing for two reasons. First, he fails to notice that behavioralist scholars often rely on experimental data, while law and economics scholars rely …
Corporate Governance And The Impact Of Controlling Shareholders, Bernard S. Sharfman
Corporate Governance And The Impact Of Controlling Shareholders, Bernard S. Sharfman
Bernard S Sharfman
Good corporate governance practices at a publicly held firm will not necessarily be good practices at a publicly traded firm in which there is a controlling shareholder. This is because board independence, a key concept in structuring appropriate corporate governance practices, has a different meaning when a controlling shareholder is present.
However, identifying whether or not a board is truly independent is just the first step in evaluating the quality of corporate governance at a controlled corporation. After all, a controlling shareholder still has the power to dominate an independent board through his direct voting power and by threats of …
Oregon's Experiment With Sustainable Corporate Governance: A Friendly Critique, Robert C. Illig
Oregon's Experiment With Sustainable Corporate Governance: A Friendly Critique, Robert C. Illig
Robert C Illig
No abstract provided.
The Credence Characteristics Of Corporate Reform, Omari S. Simmons
The Credence Characteristics Of Corporate Reform, Omari S. Simmons
Omari Scott Simmons
No abstract provided.
Shareholder Primacy And The Business Judgment Rule: Arguments For Expanded Corporate Democracy, Robert Sprague, Aaron Lyttle
Shareholder Primacy And The Business Judgment Rule: Arguments For Expanded Corporate Democracy, Robert Sprague, Aaron Lyttle
Robert Sprague
There is a fundamental flaw in the law’s approach to corporate governance. While shareholder primacy is a well-established norm within U.S. corporate law, the business judgment rule essentially holds directors blameless when they fail to maximize shareholder wealth. During the past century, control of the corporation has passed from shareholders to managers. As a result, shareholders have little practical say in who runs the corporation, even though they cannot usually hold managers legally liable when those managers destroy shareholder wealth through incompetence. Despite a number of arguments asserting that shareholders do not deserve any additional management powers, this article concludes …