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When Social Enterprises Fail, Jonathan Brown
When Social Enterprises Fail, Jonathan Brown
Elisabeth Haub School of Law Faculty Publications
This Article identifies the conflicts between social enterprise legislation and bankruptcy law and presents a normative argument for a legal regime that would harmonize the two. Focusing on benefit corporations, the most widely adopted social enterprise form, this Article observes that existing law leaves uncertainty as to the role of directors at a time of financial distress and will produce outcomes that are at odds with the core goals of social enterprise legislation. Then, drawing on academic proposals for contract-based systems of bankruptcy, this Article argues that just as a firm may opt out of a corporate governance norm of …
"Reasonable Expectations" Define Board Power To Liquidate A Solvent Close Corporation In Bankruptcy, Shelby D. Green
"Reasonable Expectations" Define Board Power To Liquidate A Solvent Close Corporation In Bankruptcy, Shelby D. Green
Elisabeth Haub School of Law Faculty Publications
This Article will argue that, in the absence of contrary provisions in the articles of incorporation, the power of the board of directors of a solvent close corporation to file a voluntary petition for liquidation in bankruptcy must be determined by the theory of “reasonable expectations.” This doctrine not only addresses wrongdoing by those in control, but also defines the power and rights of close corporation participants. Part II briefly considers the uses of bankruptcy in recent years and comments on the peculiar occasion of a solvent corporation deciding to liquidate in bankruptcy. Part III summarizes the facts and identifies …