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Series

Corporations

2014

Articles 1 - 25 of 25

Full-Text Articles in Law

Reclassification Risks For Compensation Paid By S And C Corporations To Shareholder-Employees, Stephen R. Looney Nov 2014

Reclassification Risks For Compensation Paid By S And C Corporations To Shareholder-Employees, Stephen R. Looney

William & Mary Annual Tax Conference

No abstract provided.


Delaware Law As Lingua Franca: Theory And Evidence, Brian Broughman, Jesse M. Fried, Darian Ibrahim Nov 2014

Delaware Law As Lingua Franca: Theory And Evidence, Brian Broughman, Jesse M. Fried, Darian Ibrahim

Faculty Publications

Why would a firm incorporate in Delaware rather than in its home state? Prior explanations have focused on the inherent features of Delaware corporate law and on the positive network externalities created by so many other firms domiciling in Delaware. We offer an additional explanation: a firm may choose Delaware simply because its law is nationally known and thus can serve as a lingua franca for in-state and out-of-state investors. Analyzing the incorporation decisions of 1,850 venture-capitalist-backed start-ups, we find evidence consistent with this lingua franca explanation. Indeed, the lingua franca effect appears to be more important than other ...


Reverse Cross-Listings - The Coming Race To List In Emerging Markets And An Enhanced Understanding Of Classical Bonding, Nicholas C. Howson, Vikramaditya Khanna Oct 2014

Reverse Cross-Listings - The Coming Race To List In Emerging Markets And An Enhanced Understanding Of Classical Bonding, Nicholas C. Howson, Vikramaditya Khanna

Articles

Studies have found that when a U.S. issuer lists abroad on a foreign exchange, its shares exhibit negative abnormal returns. This negative movement may be because the market expects that the foreign listing will facilitate undetectable insider trading on the foreign exchange or other conduct impermissible in the United States.


Demystifying The Determination Of Foreign Law In U.S. Courts: Opening The Door To A Greater Global Understanding, Matthew J. Wilson Sep 2014

Demystifying The Determination Of Foreign Law In U.S. Courts: Opening The Door To A Greater Global Understanding, Matthew J. Wilson

Akron Law Publications

With globalization and the proliferation of international commercial interaction, U.S. courts commonly encounter issues governed by the laws of other sovereigns. These encounters arise by virtue of private agreements or choice-of-law rules covering contractual relationships, cross-border conduct, tortuous acts, employment matters, intellectual property rights, and various other legal foundations. Because the substantive law applied in an international lawsuit can be outcome-determinative, it is important to accurately ascertain and determine the relevant law. In fact, the proper functioning of private international law in a domestic system is based on the appropriate application of law.

U.S. federal and state courts ...


Federal Banks And Federal Jurisdiction In The Progressive Era, Larry Yackle Apr 2014

Federal Banks And Federal Jurisdiction In The Progressive Era, Larry Yackle

Faculty Scholarship

This is a case study of the Supreme Court’s classic decision in Smith v. K.C. Title & Trust Co. A stockholder challenged the constitutionality of the Farm Loan Act of 1916, which authorized federal banks to issue tax-exempt bonds to raise funds for loans to farmers. The case is best known for its holding that a federal court could entertain the suit because it arose “under the Constitution” and for Justice Holmes’ argument, in dissent, that federal jurisdiction was not established because state law created the “cause of action.”

This study is the first to go beyond the jurisdictional ...


Supreme Court Ruling Shields Corporations From Accountability, Lauren Carasik Feb 2014

Supreme Court Ruling Shields Corporations From Accountability, Lauren Carasik

Media Presence

No abstract provided.


Symbolic Corporate Governance Politics, Marcel Kahan, Edward B. Rock Jan 2014

Symbolic Corporate Governance Politics, Marcel Kahan, Edward B. Rock

Faculty Scholarship at Penn Law

How are we to understand the persistent gap between rhetoric and reality that characterizes so much of corporate governance politics? In this Article, we show that the rhetoric around a variety of high profile corporate governance controversies (including shareholder proposals asking boards to redeem poison pills, proxy access, majority voting in director elections, and shareholder proposals to remove supermajority voting requirements) cannot be justified by the material interests at stake. At the same time, shareholder activists are oddly reluctant to pursue issues that may have a more material impact, such as anti-pill charter provisions or mandatory bylaw amendments. We consider ...


The Aftermath Of Catastrophes: Valuing Business Interruption Insurance Losses, Chris French Jan 2014

The Aftermath Of Catastrophes: Valuing Business Interruption Insurance Losses, Chris French

Journal Articles

With the onslaught of tornadoes, hurricanes, and floods in recent years, business interruption losses have been staggering. Many businesses do not survive such catastrophes. Even business owners that purchased business interruption insurance, which is intended to ensure that a business’s revenue stream continues during an interruption in its operations, often find that their insurers have dramatically different views regarding the amount of the losses that should be reimbursed. The reason for this disparity in views is that the loss valuation provisions in business interruption insurance policies provide very little guidance regarding how business interruption losses should be calculated. Thus ...


The Development And Evolution Of The U.S. Law Of Corporate Criminal Liability, Sara Sun Beale Jan 2014

The Development And Evolution Of The U.S. Law Of Corporate Criminal Liability, Sara Sun Beale

Faculty Scholarship

In the United States, corporate criminal liability developed in response to the industrial revolution and the rise in the scope and importance of corporate activities. This article focuses principally on federal law, which bases corporate criminal liability on the respondeat superior doctrine developed in tort law. In the federal system, the formative period for the doctrine of corporate criminal liability was the early Twentieth Century, when Congress dramatically expanded the reach of federal law, responding to the unprecedented concentration of economic power in corporations and combinations of business concerns as well as new hazards to public health and safety. Both ...


Creating A Culture Of Compliance: Why Departmentalization May Not Be The Answer, Michele M. Destefano Jan 2014

Creating A Culture Of Compliance: Why Departmentalization May Not Be The Answer, Michele M. Destefano

Articles

Over the past few decades, as corporate criminal liability rules, sentencing guidelines, and settlement incentives have changed, therehas been increased emphasis on and resources devoted to thecompliance function at large publicly held companies. In this article, Professor DeStefano traces the development of the compliance function at large corporations and questions the recent mandate by certain governmental entities that malfeasant corporations designate a chief compliance officer and separate the compliance gatekeeping function from the legal department so that this chief compliance officer does not report to the general counsel. She categorizes the types of arguments made for and against departmentalization and ...


Compliance And Claim Funding: Testing The Borders Of Lawyers' Monopoly And The Unauthorized Practice Of Law, Michele M. Destefano Jan 2014

Compliance And Claim Funding: Testing The Borders Of Lawyers' Monopoly And The Unauthorized Practice Of Law, Michele M. Destefano

Articles

No abstract provided.


The Icc's Exit Problem, Rebecca Hamilton Jan 2014

The Icc's Exit Problem, Rebecca Hamilton

Articles in Law Reviews & Other Academic Journals

The International Criminal Court (ICC) was never meant to supplant the domestic prosecution of international crimes. And yet the Court is now entering its second decade of operations in four African nations, with no plan for exit in sight. This Article identifies the looming need for the ICC to consider when and how to exit situations in which it is currently active. In addition to the normative concern that a failure to start planning for exit undercuts the Court’s placement within a system of complementarity, the need to consider exit is also driven by a financial imperative. The Court ...


When Subchapter S Meets Subchapter C, Martin J. Mcmahon Jr., Daniel L. Simmons Jan 2014

When Subchapter S Meets Subchapter C, Martin J. Mcmahon Jr., Daniel L. Simmons

UF Law Faculty Publications

It is often said that “an S corporation is a corporation that is taxed like a partnership.” This statement is incorrect. An S corporation resembles a partnership only in that it generally does not pay income taxes and its income and losses pass through to the shareholders and retain their character as they pass through. Also, like a partnership, basis adjustments to an S corporation shareholder's stock reflect allocations of income, expense, loss, and distributions. However, no other rules of subchapter K governing partnership taxation apply to S corporations. Most of the rules governing the relationship between an S ...


The Puzzling Lack Of Cooperatives, Peter Molk Jan 2014

The Puzzling Lack Of Cooperatives, Peter Molk

UF Law Faculty Publications

Some of the most recognizable companies, including Land O'Lakes, REI, the Associated Press, Ace Hardware, and State Farm Insurance, are organized as cooperatives--firms owned by their suppliers, workers, or customers. Yet aside from isolated areas of the economy, cooperatives constitute only a small portion of American enterprise, which is otherwise dominated by investor-owned firms. Conventional wisdom assumes that firms either start as cooperatives or convert to cooperatives when cooperatives offer the highest ongoing benefits to owners, and it explains the lack of cooperatives by suggesting that cooperatives usually do not maximize ongoing benefits. This Article looks at entrepreneurs' and ...


'Quack Corporate Governance' As Traditional Chinese Medicine – The Securities Regulation Cannibalization Of China's Corporate Law And A State Regulator's Battle Against Party State Political Economic Power, Nicholas C. Howson Jan 2014

'Quack Corporate Governance' As Traditional Chinese Medicine – The Securities Regulation Cannibalization Of China's Corporate Law And A State Regulator's Battle Against Party State Political Economic Power, Nicholas C. Howson

Articles

From the start of the People’s Republic of China’s (PRC) “corporatization ” project in the late 1980s, a Chinese corporate governance regime subject to increasingly enabling legal norms has been determined by mandatory regulations imposed by the PRC securities regulator, the China Securities Regulatory Commission (CSRC). Indeed, the Chinese corporate law system has been cannibalized by all - encompassing securities regulation directed at corporate governance, at least for companies with listed stock. This Article traces the path of that sustained intervention and makes a case — wholly contrary to the “quack corporate governance” critique much aired in the United States — that ...


Hobby Lobby And The Pathology Of Citizens United, Ellen D. Katz Jan 2014

Hobby Lobby And The Pathology Of Citizens United, Ellen D. Katz

Articles

Four years ago, Citizens United v. Federal Election Commission held that for-profit corporations possess a First Amendment right to make independent campaign expenditures. In so doing, the United States Supreme Court invited speculation that such corporations might possess other First Amendment rights as well. The petitioners in Conestoga Wood Specialties Corp. v. Sebelius are now arguing that for-profit corporations are among the intended beneficiaries of the Free Exercise Clause and, along with the respondents in Sebelius v. Hobby Lobby Stores, that they also qualify as “persons” under the Religious Freedom Restoration Act (RFRA). Neither suggestion follows inexorably from Citizens United ...


Contemporary Practice Of The United States Relating To International Law, Kristina Daugirdas, Julian Davis Mortenson Jan 2014

Contemporary Practice Of The United States Relating To International Law, Kristina Daugirdas, Julian Davis Mortenson

Articles

In this section: • United States Condemns Russia’s Use of Force in Ukraine and Attempted Annexation of Crimea • In Wake of Espionage Revelations, United States Declines to Reach Comprehensive Intelligence Agreement with Germany • United States Defends United Nations’ Immunity in Haitian Cholera Case • French Bank Pleads Guilty to Criminal Violations of U.S. Sanctions Laws • D.C. Circuit Strikes down Administrative Order Requiring Divestment by Foreign-Owned Corporation • United States Adopts New Land Mine Policy • United States Claims That Russia Has Violated the INF Treaty


Bypassing Congress On Federal Debt: Executive Branch Options To Avoid Default, Steven L. Schwarcz Jan 2014

Bypassing Congress On Federal Debt: Executive Branch Options To Avoid Default, Steven L. Schwarcz

Faculty Scholarship

Even a “technical” default by the United States on its debt, such as a delay in paying principal or interest due to Congress’s failure to raise the federal debt ceiling, could have serious systemic consequences, destroying financial markets and undermining job creation, consumer spending, and economic growth. The ongoing political gamesmanship between Congress and the Executive Branch has been threatening — and even if temporarily resolved, almost certainly will continue to threaten — such a default. The various options discussed in the media for averting a default have not been legally and pragmatically viable. This article proposes new options for avoiding ...


A Difficult Conversation: Corporate Directors On Race And Gender, Kimberly D. Krawiec, John M. Conley, Lissa L. Broome Jan 2014

A Difficult Conversation: Corporate Directors On Race And Gender, Kimberly D. Krawiec, John M. Conley, Lissa L. Broome

Faculty Scholarship

This symposium essay summarizes our ongoing ethnographic research on corporate board diversity, discussing the central tension in our respondents’ views – their overwhelmingly enthusiastic support of board diversity coupled with an inability to articulate coherent accounts of board diversity benefits that might rationalize that enthusiasm. As their reactions make clear, frank dialogue about race and gender – even a seemingly benign discussion of diversity’s benefits – can be a difficult conversation.


Toward A Theory Of Shareholder Leverage, Lisa Fairfax Jan 2014

Toward A Theory Of Shareholder Leverage, Lisa Fairfax

Faculty Scholarship at Penn Law

On Friday, April 11, and Saturday, April 12, 2014, the UCLA School of Law Lowell Milken Institute for Business Law and Policy sponsored a conference on competing theories of corporate governance.

Corporate law and economics scholarship initially relied mainly on agency cost and nexus of contracts models. In recent years, however, various scholars have built on those foundations to construct three competing models of corporate governance: director primacy, shareholder primacy, and team production.

The shareholder primacy model treats the board of directors as agents of the shareholders charged with maximizing shareholder wealth. Scholars such as Lucian Bebchuk working with this ...


Separation Anxiety: A Cautious Endorsement Of The Independent Board Chair, Lisa Fairfax Jan 2014

Separation Anxiety: A Cautious Endorsement Of The Independent Board Chair, Lisa Fairfax

Faculty Scholarship at Penn Law

This Article critically examines the competing arguments related to splitting the roles of CEO and board chair. Although the campaign for independent board chairs has received increased attention from shareholders and regulators, there has been very little academic analysis of such campaign. This Article seeks to fill this void not only by examining the campaign, but also by assessing its implications in light of the available empirical evidence and normative claims. Based on this assessment, this Article offers two conclusions. First, while there appear to be costs associated with splitting the roles of CEO and board chair, those costs likely ...


Corporate Governance And Social Welfare In The Common Law World, David A. Skeel Jr. Jan 2014

Corporate Governance And Social Welfare In The Common Law World, David A. Skeel Jr.

Faculty Scholarship at Penn Law

The newest addition to the spate of recent theories of comparative corporate governance is Corporate Governance in the Common-Law World: The Political Foundations of Shareholder Power, an important new book by Christopher Bruner. Focusing on the U.S., the U.K., Canada and Australia, Bruner argues that the robustness of the country’s social welfare system is the key determinant of the extent to which its corporate governance is shareholder-centered. This explains why corporate governance is so shareholder-oriented in the United Kingdom, which has universal healthcare and generous unemployment benefits, while shareholders’ powers are more attenuated in the United States ...


The Uncertain Future Of The Corporate Contribution Ban, Richard Briffault Jan 2014

The Uncertain Future Of The Corporate Contribution Ban, Richard Briffault

Faculty Scholarship

Concern about the role of corporate money has been a longstanding theme in American politics. The first permanent federal campaign finance law – the Tillman Act of 1907 – prohibited federally-chartered corporations from making contributions in any election and prohibited all corporations from making contributions in federal elections. Subsequently amended, continued, and strengthened over a century the federal corporate contribution ban is still on the books. Twenty-one states also prohibit corporate contributions to candidates in state elections.

The Supreme Court sustained the federal corporate contribution ban as recently as 2003 in FEC v. Beaumont, but that decision and the corporate contribution ban ...


Comment On The Definition Of "Eligible Organization" For Purposes Of Coverage Of Certain Preventive Services Under The Affordable Care Act, Robert P. Bartlett, Richard M. Buxbaum, Stavros Gadinis, Justin Mccrary, Stephen Davidoff Solomon, Eric L. Talley Jan 2014

Comment On The Definition Of "Eligible Organization" For Purposes Of Coverage Of Certain Preventive Services Under The Affordable Care Act, Robert P. Bartlett, Richard M. Buxbaum, Stavros Gadinis, Justin Mccrary, Stephen Davidoff Solomon, Eric L. Talley

Faculty Scholarship

This comment letter was submitted by U.C. Berkeley corporate law professors in response to a request for comment by the Health and Human Services Department on the definition of "eligible organization" under the Affordable Care Act in light of the Supreme Court's decision in Burwell v. Hobby Lobby. "Eligible organizations" will be permitted under the Hobby Lobby decision to assert the religious principles of their shareholders to exempt themselves from the Affordable Care Act's contraceptive mandate for employees.

In Hobby Lobby, the Supreme Court held that the nexus of identity between several closely-held, for-profit corporations and their ...


Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah Jan 2014

Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah

Articles

This Article will address the question of whether publicly traded U.S. corporations owe a duty to their shareholders to minimize their corporate tax burden through any legal means, or if instead, strategic behaviors like aggressive tax-motivated transactions are inconsistent with corporate social responsibility (“CSR”). I believe the latter holds true, regardless of one’s view of the corporation. Under the “artificial entity” view, such behavior undermines the constitutive relationship between the corporation and the state. Under the “real view,” such behavior runs contrary to the normal obligation of citizens to comply with the law (even absent effective enforcement). And ...