Law Commons^™

Reimagining A U.S. Corporate Tax Increase As A Supplemental Subtraction Vat, Daniel S. Goldberg

Faculty Scholarship

The U.S. federal government raises tax revenue almost exclusively through income taxes, both corporate and individual, whereas its trading partners and competitors rely for their national revenue on both income taxes and “destination-based” value added taxes (VATs), which are not imposed on exports but are imposed on imports. As a result, U.S. corporations, which are subject to U.S. corporate income tax, may be at a serious trade disadvantage to competitor non-U.S. corporations with respect to both U.S. domestic sales and foreign sales, if the U.S. corporate income tax exceeds the foreign country’s income tax imposed on those competitors.

The Biden …

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 …

Business Law Bulletin, Spring 2018

Business Law Bulletin

No abstract provided.

Incentivizing Credit Rating Agencies Under The Issuer Pay Model Through A Mandatory Compensation Competition, Robert J. Rhee

Faculty Scholarship

Credit rating agencies are important institutions of the global capital markets. If they had performed properly, the financial crisis of 2008-2009 would not have occurred. This article offers the simplest fix proposed thus far, and it is contrarian. This Article accepts the central role of rating agencies in the regulation of bond investments, the realities of a duopoly, and the issuer-pay model of compensation. The status quo is the baseline. The role of regulation should be to create the conditions necessary to induce competition. This article proposes that a small, recurring portion of revenue earned by the largest rating agencies …

Deal Deconstructions, Case Studies, And Case Simulations: Toward Practice Readiness With New Pedagogies In Teaching Business And Transactional Law, Michelle M. Harner, Robert J. Rhee

Faculty Scholarship

In this short commentary, we explore the use of two interrelated pedagogical methods for teaching transactional and business law. The first method is deal deconstruction, which analyzes the set of final deal documents and outcomes. This method is backward-looking, conducting a post-mortem on business transactions and analyzing the parties’ choices memorialized in the agreement against the legal and financial alternatives. The second method involves case studies and simulations, which are commonly seen in business schools. This method is forward-looking, exposing students to the uncertainties and situational contexts of doing deals and deal-related litigation. Together, these complementary methods help students understand …

Corporate Culture And Erm, Michelle M. Harner

Faculty Scholarship

The attitudes and actions of those viewed as leaders within a company (commonly referred to as “tone at the top”) help to define corporate culture and are critical to implementing a successful enterprise risk management (ERM) program. This paper explores the challenges and benefits of creating a risk-aware corporate culture, including the potential legal implications for boards of directors.

The Potential Cost And Value Of Erm, Michelle M. Harner

Faculty Scholarship

The concept of enterprise risk managment (ERM) as a holistic approach to managing a company's risk profile has tremendous appeal. However, companies are frequently skeptical about its value and whether the results will justify the cost, effort, and challenges of implementing a meaningful ERM process. This report considers some of those concerns and highlights the governance, compliance, and cultural value of ERM.

Specialization In Law And Business: A Proposal For A J.D./"Mbl" Curriculum, Robert J. Rhee

Faculty Scholarship

This paper provides the specific details of how an interdisciplinary program of law and business can be structured in a three-year J.D. program. The program envisioned is a J.D./”M.B.L.”, which is distinguished from the better known J.D./M.B.A. The “M.B.L.” stands for “masters of business law,” which is simply an idea tag. The moniker can represent a program conferring a supplemental degree in law and business, or simply a specialized course of study to complete a J.D. Either way, the program is an interdisciplinary program of concentrated study in core transaction-oriented law courses and core business courses. The most effective education …

The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee

Faculty Scholarship

This Article corrects a misconception in corporation law – the belief that principles of tort law do not apply to the liability scheme of fiduciary duty. A board’s duty of care implies exposure to liability, but the business judgment rule precludes it. Tort law finds fault; corporation law excuses it. The conventional wisdom says that the tort analogy fails. This dismissal of tort prinicples is wrong. Although shareholder derivative suits and ordinary tort cases properly yield systemically antipodal outcomes, they are bound by a common analytical framework. The principles of board liability are rooted in tort doctrines governing duty, customs, …

Tackling "Arithmophobia": Teaching How To Read, Understand, And Analyze Financial Statements, Paula J. Williams, Kris Anne Tobin, Eric Franklin, Robert J. Rhee

Faculty Scholarship

This discussion presents different ideas on how to teach accounting and practical finance to law students.

A More Realistic Approach To Directors' Duties, Michelle M. Harner

Faculty Scholarship

Expectations for what fiduciary duties can achieve in the corporate context are unrealistic. This segment of the law—and the alleged deficiencies therein—are blamed for corporate scandals, securities fraud, failed business plans, and even a company's insolvency. Risk is, however, inherent in business, and human beings are flawed. Fiduciary duty law cannot change these basic facts. To the extent we think it can, we will continue to be disappointed and frustrated. This essay considers recasting (and to a greater extent codifying) directors’ duties in a positive frame to help foster better director oversight. It does not suggest that codifying greater clarity …

Ethical Issues In Business And The Lawyer's Role, Robert J. Rhee, Carol Morgan, Tamar Frankel, Mark Fagan

Faculty Scholarship

No abstract provided.

Restoring Transparency To Automated Authority, Frank Pasquale

Faculty Scholarship

Leading finance, health care, and internet firms shroud key operations in secrecy. Our markets, research, and life online are increasingly mediated by institutions that suffer serious transparency deficits. When a private entity grows important enough, it should be subject to transparency requirements that reflect its centrality. The increasing intertwining of governmental, business, and academic entities should provide some leverage for public-spirited appropriators and policymakers to insist on more general openness.

However well an "invisible hand" coordinates economic activity generally, markets depend on reliable information about the practices of core firms that finance, rank, and rate entities in the rest of …

Negotiating Executive Compensation In Lieu Of Regulation, Urska Velikonja

Faculty Scholarship

No abstract provided.

Spare The Rod, Spoil The Director? Revitalizing Directors' Fiduciary Duty Through Legal Liability, Lisa M. Fairfax

Faculty Scholarship

It appears that our society has tacitly agreed to spare corporate directors any significant legal liability—which includes both financial and incarceration—for failing to perform their duties as board members. Thus, over the last twenty years, there has been a virtual elimination of legal liability—particularly in the form of financial penalties—for directors who breach their fiduciary duty of care. This is true despite the fact that we entrust directors with the awesome responsibility of monitoring all of America's corporations as well as the officers and agents within those corporations. More surprisingly, this tacit agreement against legal liability for directors has persisted …

E-Tax: Fundamental Tax Reform And The Transition To A Currency-Free Economy, Daniel S. Goldberg

Faculty Scholarship

No abstract provided.

Racial Discrimination In Business Transactions, Robert E. Suggs

Faculty Scholarship

When the Supreme Court invalidated a municipal minority business set-aside in City of Richmond v. J.A. Croson Co., it failed to recognize the special circumstances confronting the minority entrepreneur. Contrary to the Court’s own erroneous assertion that “[s]tates and their local subdivisions have many legislative weapons at their disposal both to punish and prevent present [business] discrimination ….” – they do not. Nor can they create effective antidiscrimination remedies as a practical matter. As a result that decision leaves minority business owners vulnerable to discrimination from other business firms but without a remedy. Part I identifies the glaring failure …