Law Commons^™

Failure's Futures: Controlling The Market For Information In Corporate Reorganization, Jonathan C. Lipson

Jonathan C. Lipson

This Article identifies and explores an important gap in bankruptcy theory and policy, with significant implications for the coming wave of major business failures: How to manage information about financially distressed businesses?

The paper makes three claims. First, Chapter 11 of the United States Bankruptcy Code plays a unique informational role, as it creates mechanisms to explain a debtor’s failure and to promote reinvestment. Second, the information functions performed by this system face internal and external threats. Internally, bankruptcy reorganization increasingly resembles an unregulated securities market, dominated by sophisticated, wealthy investors whose motives and strategies are often highly opaque. Their …

Multiple Personalities Incorporated: Accepting The Multi-Dimensional Personhood Of The Modern Corporation, Susanna K. Ripken

Susanna K. Ripken

One of the most intriguing debates in corporate law is over the personhood of corporations. For years, corporate theorists have tried to construct a complete and coherent theory of the corporate person. Some have argued that the corporation is merely a fictional, artificial person that exists only as a concession of state law. Others have asserted that the corporation is a real, independent person that has an ontological existence and identity of its own. The popular theoretical paradigm today is that the corporation is neither an artificial nor a real person; it is merely a nexus of contracts among the …

Intellectual Property And Information Technology Due Diligence In Merger And Acquisition Transactions, Martin B. Robins

Martin B. Robins

this article addresses both the theoretical and practical elements of M&A due diligence regarding IP and IT, with an emphasis on recent developments.

An Overview Of Brazilian Corporate Governance, Bernard S. Black, Antonio Gledson De Carvalho, Érica Gorga

Cornell Law Faculty Publications

We provide the first detailed picture of firm-level corporate governance practices in an emerging market. We report on the corporate governance practices of Brazilian public companies, based primarily on an extensive 2005 survey of 116 companies. Most firms have a controlling shareholder or group. Board independence is an area of weakness. The boards of most Brazilian private firms are comprised entirely or almost entirely of insiders or representatives of the controlling family or group. Many firms have no independent directors. Financial disclosure is a second area of weakness. Only a minority of firms provide a statement of cash flows or …

Intellectual Property And Information Technology Due Diligence In Merger And Acquisition Transactions, Martin B. Robins

Martin B. Robins

No abstract provided.

Intellectual Property And Information Technology Due Diligence In Merger And Acquisition Transactions, Martin B. Robins

Martin B. Robins

This article is intended to address both the theoretical and practical elements of M&A due diligence associated with intellectual property and information technology issues.

The Direction Of Corporate Law: The Scholars' Perspective, John C. Coffee Jr., Richard A. Booth Marbury Research Professor Of Law, R. Franklin Balotti, David C. Mcbride, Edward P. Welch

Richard A Booth

Transcript of a panel on a scholar's approach to corporation law.

Why Arbitrate? The Questionable Quest For Efficiency In Hallstreet Street Associates, Llc V. Mattel, Inc., 550 U.S. __ (2008), David K. Kessler

David K Kessler

The Federal Arbitration Act (FAA) makes arbitration agreements between private parties legally enforceable. The policy favoring arbitration underlying the FAA has been justified as serving two ends: it protects freedom of contract, and it creates an efficient alternative dispute resolution system. Previous decisions by the Court have indicated a belief that, when those two goals come into conflict, the result that preserves freedom of contract should prevail. In Hallstreet Associates, L.L.C. v. Mattel, Inc., however, a recent case involving the Federal Arbitration Act, the Court's decision preserved perceived efficiency at the expense of freedom of contract. The Court held that …

Arbitration's Summer Soldiers: An Empirical Study Of Arbitration Clauses In Consumer And Nonconsumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin

University of Michigan Journal of Law Reform

We provide the first study of varying use of arbitration clauses across contracts within the same firms. Using a sample of 26 consumer contracts and 164 nonconsumer contracts from large public corporations, we compared the use of arbitration clauses in firms' consumer and nonconsumer contracts. Over three-quarters of the consumer agreements provided for mandatory arbitration but less than 10% of the firms' material nonconsumer, nonemployment contracts included arbitration clauses. The absence of arbitration provisions in the vast majority of material contracts suggests that, ex ante, many firms value, even prefer, litigation over arbitration to resolve disputes with peers. Our data …

At The Intersection Of Property And Insolvency: The Insolvent Company's Encumbered Assets, Riz Mokal

Riz Mokal

This is the working paper for an invited article published in (2008) 20(2) Singapore Academy of Law Journal 495.

When a company becomes subject to winding-up proceedings, it is widely thought to lose beneficial ownership of its property. The property is held, instead, on a ‘statutory trust’ to discharge the company’s liabilities. The attribution of this ‘proprietary’ effect to the commencement of winding-up has, however, created significant confusion. Faring particularly poorly is our understanding of the status of those of the company’s assets in which others held proprietary rights prior to this point, notably, assets the company’s title to which …

Corporate Corruption And Reform Undertakings: A New Approach To An Old Problem, David Hess, Cristie L. Ford

Cornell International Law Journal

No abstract provided.

The Limits Of Offshoring-Why The United States Should Keep Enforcement Of Human Rights Standards "In-House", John Mckenzie

Indiana Law Journal

No abstract provided.

Going From The Frying Pan Into The Fire? A Critique Of The U.S. Treasury’S Newly Proposed Section 987 Currency Regulations, Joseph L. Tobin

Joseph L Tobin

In September 2006, the IRS proposed new regulations for taxation of currency gains and losses for U.S. corporations' foreign branches. The IRS has announced that it would like to finalize them as soon as possible, perhaps as early as the summer of 2008. The new regulations withdraw the old section 987 regulations of 1991. The IRS believes these new regulations are necessary in order to prevent taxpayers from taking "artificial" currency losses on assets such as land and machinery -- assets which do not vary with the exchange rate, according to the IRS. The new regulations propose to stop these …

International Strategic Alliance, Mohd Arif

Mohd Arif

A Strategic Alliance is a relationship between firms to creat more value than they can on their own

Ceo Postings: Leveraging The Internet’S Communications Potential While Managing The Message To Maintain Corporate Governance Interests In Information Security, Reputation And Compliance, Margo E. K. Reder

Margo E. K. Reder

CEO POSTINGS –

LEVERAGING THE INTERNET’S COMMUNICATIONS POTENTIAL WHILE MANAGING THE MESSAGE TO MAINTAIN CORPORATE GOVERNANCE INTERESTS IN INFORMATION SECURITY, REPUTATION AND COMPLIANCE

By Margo E. K. Reder

For approximately eight years, Whole Foods Market, Inc. [Whole Foods] CEO John Mackey posted messages to Yahoo! Financial’s online message board for Whole Foods. Rather than using his real name, Mr. Mackey like many posters to chat rooms, created an online alter ego and posted his comments under a pseudonym. As “Rahodeb” Mr. Mackey promoted his Whole Foods chain, boasted about personal stock gains in Whole Foods stock, company plans and performance …

Reaffirming The Rights Of Foreign Investors To The Protection Of Icsid Arbitration: Sempra Energy International V. The Argentine Republic, Daniel Krawiec

Daniel A Krawiec II

Earlier this decade, the Argentine government responded to a substantial domestic economic crises by passing several emergency laws and unilaterally changing the terms of its investment agreements with foreign investors. Sempra v. Argentine Republic is an important case because the tribunal decisively reaffirmed the right to ICSID arbitration for American investors harmed by Argentina’s actions. Furthermore, the tribunal held that the U.S.-Argentina bilateral investment treaty provided substantial substantive investment protection.

The Love Song Of The Delaware Court Of Chancery, David K. Kessler

David K Kessler

Though corporate law can often seem dry and uninteresting, it is full of wonderful stories, complex characters, and powerful language. As such, the field of corporate law lends itself to the medium that has long best captured those elements: poetry. The attached document is an adaptation of T.S. Eliot’s The Love Song of J. Alfred Prufrock to the theme of corporate law. It has been enthusiastically received on the Harvard campus by former Law School Dean (and Corporations guru) Robert Clark and the Vice-Chancellor of the Delaware Court of Chancery, Leo Strine. I understand that this submission is far more …

The Failing Company Defense After The Commentary: Let It Go, Oliver Zhong

University of Michigan Journal of Law Reform

This Note proposes the abolishment of the failing company defense in merger control law. This call for reform is based on a comprehensive critique, which consists of a revisit of the doctrinal history, a survey of problems in current practice, and an inquiry into the normative merits of both the status quo and alternative plans. The reform advocated will purify the doctrine and improve the practice with minimum adjustments, in line with the ongoing movement to modernize merger review with the publication of the Commentary to the Merger Guidelines.

Corporate Taxation And International Charter Competition, Mitchell A. Kane, Edward B. Rock

Michigan Law Review

Corporate charter competition has become an increasingly international phenomenon. The thesis of this Article is that this development in corporate law requires a greater focus on corporate tax law. We first demonstrate how a tax system's capacity to distort the international charter market depends both upon its approach to determining corporate location and upon the extent to which it taxes foreign source corporate profits. We also show, however, that it is not possible to remove all distortions through modifications to the tax system alone. We present instead two alternative methods for preserving an international charter market. The first-best solution involves …

Agency Costs, Charitable Trusts, And Corporate Control: Evidence From Hershey's Kiss-Off, Jonathan Klick, Robert H. Sitkoff

All Faculty Scholarship

In July 2002 the trustees of the Milton Hershey School Trust announced a plan to diversify the Trust’s investment portfolio by selling the Trust’s controlling interest in the Hershey Company. The Company’s stock jumped from $62.50 to $78.30 on news of the proposed sale. But the Pennsylvania Attorney General, who was then running for governor, opposed the sale on the ground that it would harm the local community. Shortly after the Attorney General obtained a preliminary injunction, the trustees abandoned the sale and the Company’s stock dropped to $65.00. Using standard event study methodology, we find that the sale announcement …

Stoneridge V. Scientific-Atlanta: Do Section 10(B) And Rule 10b-5 Require A Misstatement Or Omission?, Rodney D. Chrisman

Faculty Publications and Presentations

Stoneridge v. Scientific-Atlanta promises to be the most important securities litigation case to reach the Supreme Court since Central Bank of Denver. In this important case, Stoneridge presents the Supreme Court with the opportunity to clarify the application of its ruling in Central Bank to liability for secondary actors under section 10(b) and rule 10b-5. This Article points out that the fundamental question plaguing the lower courts since Central Bank and resulting in two circuit splits is whether section 10(b) requires that a secondary actor actually make a misstatement or omission in order to be held liable under the rule …

Shareholder Democracy On Trial: International Perspective On The Effectiveness Of Increased Shareholder Power, Lisa Fairfax

All Faculty Scholarship

Shareholder democracy - efforts to increase shareholder power within the corporation - appears to have come of age, both within the United States and abroad. In the past few years, U.S. shareholders have worked to strengthen their voice within the corporation by seeking to remove perceived impediments to their voting authority. These impediments include classified boards, the plurality standard for board elections, and the inability to nominate directors on the corporation's ballot. Shareholders' efforts have also extended to seeking a voice on the compensation of corporate officers and directors. Advocates of shareholder democracy believe that such efforts are critical to …

The Reform Of Corporate Taxation In The European Union, Nina Winkler

Cornell Law School Inter-University Graduate Student Conference Papers

The Commission of the European Communities is currently drafting a proposal for an EU Directive to implement the first comprehensive corporate tax strategy for the Internal Market. The adoption of a common consolidated corporate tax base for EU multinational enterprises is one of today’s most highly debated issues on Brussels’ political agenda. Since the reform would affect all international companies conducting business in the Internal Market, it should also be of great interest for non-EU corporate and tax law scholars and lawyers. The paper critically evaluates the key advantages and disadvantages of the concept of an EU consolidated tax base …

Are You In Good Hands: Is The Use Of In-House Counsel Right For South Carolina Insurance Defense, Eric Montalvo

South Carolina Law Review

No abstract provided.

Five Decades Of Corporation Law - From Conglomeration To Equity Compensation, Richard A. Booth

Working Paper Series

This brief essay recounts developments in corporation law over the last fifty years. It begins with the rise of finance capitalism and the conglomerate corporation which was followed by the emergence of hostile takeovers in the late 1970s and 1980s. One of the key events in this saga was the February 1, 1983 decision by the Delaware Supreme Court in Weinberger v. UOP, Inc. that effectively permitted the at-will elimination of minority stockholders through cashout mergers. Takeovers were also facilitated by two major financial developments: (1) the growth of institutional investors coupled with the growing taste of diversified investors for …

The Pirates Will Party On!, William A. Drennan

William A Drennan

The government went off course when it attempted to stop outrageous CEO compensation schemes with new income tax rules on nonqualified deferred compensation. IRC Section 409A should be scuttled.

Federalizm Vs. State Law In The Regulation Of Corporations: A Conflicting Or Complimentary Shift In Corporate Jurisprudence? How Delaware Has Responded, Christine G. Ondimu

Christine G Ondimu Ms.

The essence of this paper is to analyze how federal corporate law has shaped Delaware State’s corporate law jurisprudence. I argue that recent federal engagement in corporate law should be welcomed and sustained by congress when state corporate law rules fall short in providing adequate protection for investors. Using a small number of case law, it will be acknowledged as we develop this paper that Delaware’s corporate law has had a fundamental shift in the wake of Enron and WorldCom and the advent of the Sarbanes- Oxley Act, 2002. At the same time we will also show how Delaware has …

Lender Control Liability Functional Examination: The Firm And Heuristics, Sergio A. Muro

Cornell Law School J.S.D. Student Research Papers

Lender control is criticized due to problems arising out of conflict of interests among different priority claimholders. Recently, it has been defended as a way to make the reorganization process more efficient. This paper builds on previous research on the theory of the firm to show that lender control generates inefficiencies even in situations where there is only one layer of legal claimants. Specifically, the paper demonstrates that departing from the nexus of explicit contracts paradigm, used by both previous critics and supporters of lender control, allows to understand other sources of lender control inefficiencies based on its inability to …

The Effect Of Enhanced Disclosure On Open Market Stock Repurchases, Michael N. Simkovic

Michael N Simkovic

Publicly traded companies distribute cash to shareholders either through dividends or through anonymous repurchases of the companies’ own stock on the open market. Companies must announce a repurchase authorization, but do not actually have to repurchase any stock, and until recently did not have to disclose whether or not they were in fact repurchasing any stock. Scholars and regulators noticed that companies frequently announced repurchases but then appeared not to complete them. They feared that such announcements might be used by insiders to exploit public investors. To reduce opportunities for exploitive behavior, the SEC required that companies disclose their repurchase …

Should Securities Industry Self-Regulatory Organizations Be Considered Government Agencies?, Roberta S. Karmel

Roberta S. Karmel

Abstract for

“Should Securities Industry Self-Regulatory Organizations Be Considered Government Agencies?”

by Roberta S. Karmel, Centennial Professor, Brooklyn Law School

Securities industry self-regulatory organizations (“SROs”) began as private sector membership organizations of securities industry professionals. This article addresses the questions of whether, and to what extent, securities industry SROs have become government agencies, and whether, and to what extent, they should be subject to constitutional and statutory controls on government agencies. It focuses principally on the Financial Industry Regulatory Agency (“FINRA”), a new entity which combined the National Association of Securities Dealers, Inc. (“NASD”) and the member regulation functions of …