Law Commons^™

The Economics Of Limited Liability: An Empirical Study Of New York Law Firms, Scott Baker, Kimberly D. Krawiec

ExpressO

Since the rapid rise in organizational forms for business associations, academics and practitioners have sought to explain the choice of form rationale. Each form contains its own set of default rules that inevitably get factored into this decision, including the extent to which each individual firm owner will be held personally liable for the collective debts and obligations of the firm. The significance of the differences in these default rules continues to be debated. Many commentators have advanced theories, most notably those based on unlimited liability, profit-sharing, and illiquidity, asserting that the partnership form provides efficiency benefits that outweigh any …

No Good Deed Goes Unpunished? Establishing A Self-Evaluating Privilege For Corporate Internal Investigations, Theodore R. Lotchin

William & Mary Law Review

No abstract provided.

Icarus In The Boardroom, Introduction, David A. Skeel Jr.

All Faculty Scholarship

Americans have always loved risk takers. Like the Icarus of ancient Greek lore, however, even the most talented entrepreneurs can overstep their bounds. All too often, the very qualities that make Icaran executives special - self-confidence, visionary insight, and extreme competitiveness - spur them to take misguided and even illegal chances. The Icaran failure of an ordinary entrepreneur isn't headline news. But put Icarus in the corporate boardroom and - as this book vividly demonstrates - the ripple effects can be profound. Ever since the first large-scale corporations emerged in the nineteenth century, their ability to tap huge amounts of …

Business Associations, Paul A. Quirós, Lynn S. Scott, William B. Shearer Iii, James F. Brumsey

Mercer Law Review

This Article surveys noteworthy cases in the areas of corporate, securities, partnership, and banking law decided during the survey period by the Georgia Supreme Court, the Georgia Court of Appeals, the United States Court of Appeals for the Eleventh Circuit, and the United States district courts located in Georgia. The Article also summarizes recent enactments of the Georgia General Assembly with respect to the foregoing subject matters.

Family Limited Partnership Update, Farhad Aghdami

William & Mary Annual Tax Conference

No abstract provided.

Non-Traditional Sources Of Capital For The Maturing Business

William & Mary Annual Tax Conference

No abstract provided.

Exit Strategies And Techniques For The Business Owner, Stephen L. Owen

William & Mary Annual Tax Conference

No abstract provided.

Capital Market Exits: Planning For Restricted And Control Securities, George F. Albright

William & Mary Annual Tax Conference

No abstract provided.

Executive Compensation Planning For Privately-Held Businesses, Jeffrey R. Capwell

William & Mary Annual Tax Conference

No abstract provided.

Business & Finance Issues With Traditional Finance And Capitalization

William & Mary Annual Tax Conference

No abstract provided.

Business, Benefits And Tax Issues Involved In The Formation And Structure Of The Closely Held Business Selection Of Entity Considerations, C. Wells Hall Iii

William & Mary Annual Tax Conference

No abstract provided.

A Culturally Correct Proposal To Privatize The British Columbia Salmon Fishery, D. Bruce Johnsen

George Mason University School of Law Working Papers Series

Canada now faces two looming policy crises that have come to a head in British Columbia. The first is long-term depletion of the Pacific salmon fishery by mobile commercial ocean fishermen racing to intercept salmon under the rule of capture. The second results from Canadian Supreme Court case law recognizing and affirming “the existing aboriginal and treaty rights of the aboriginal peoples of Canada” under Section 35(1) of the Constitution Act, 1982. This essay shows that the economics of property rights provides a joint solution to these crises that would promote the Canadian commonwealth by way of a privatization auction …

Medical Research Oversight From The Corporate Governance Perspective: Comparing Institutional Review Boards And Corporate Boards, Richard S. Saver

William & Mary Law Review

No abstract provided.

Does Delaware's Section 102(B)(7) Protect Reckless Directors From Personal Liability? Only If Delaware Courts Act In Good Faith, Matthew R. Berry

Washington Law Review

Section 102(b)(7) of the Delaware Corporate Code allows a corporation to amend its certificate of incorporation to exculpate directors from all duty of due care violations. The Delaware General Assembly enacted this law in response to the shrinking pool of qualified directors, which was caused by the Delaware State Supreme Court's decision in Smith v. Van Gorkom that imposed personal liability on directors for gross negligence. Delaware courts have unequivocally stated that section 102(b)(7) protects directors against personal liability arising from gross negligence, but not against liability arising from a lack of good faith. However, Delaware courts have not provided …

Should A Duty To The Corporation Be Imposed On Institutional Shareholders?, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Bankruptcy Law And Inefficient Entitlements, Irit Haviv-Segal

ExpressO

The question as to the justification of bankruptcy law remains unanswered. The literature tends to emphasize the conflict and inability to compromise between the different normative outlooks of the insolvency law system. A deeper reflection on the existing theories of bankruptcy law reveals, however, that all theories share the same starting point: All theories share the understanding that efficiency considerations justify the enforcement of contractual bankruptcy arrangements. When the social theories call for increased levels of coercion and redistribution, these theories rely on normative considerations of distributive justice and rehabilitation values. They by no means rely on efficiency grounds. This …

Strict Liability For Gatekeepers: A Reply To Professor Coffee, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

This article responds to a proposal by Professor John C. Coffee, Jr. for a modified form of strict liability for gatekeepers. Professor Coffee’s proposal would convert gatekeepers into insurers, but cap their insurance obligations based on a multiple of the highest annual revenues the gatekeepers recently had received from their wrongdoing clients. My proposal, advanced in 2001, would allow gatekeepers to contract for a percentage of issuer damages, after settlement or judgment, subject to a legislatively-imposed floor. This article compares the proposals and concludes that a contractual system based on a percentage of the issuer’s liability would be preferable to …

Encumbered Shares, Shaun Martin, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

The fundamental assumptions in the law and economics literature about shareholder voting and the one-share/one-vote rule are flawed. The classic view is that share ownership is necessary and sufficient to create voting rights and that such rights should be directly proportional to share ownership. We demonstrate that this assumption is unfounded, both for shares that are “economically encumbered” (held by shareholders who are not pure residual claimants; e.g., a shareholder who owns one share and is also short one or more shares) as well as shares that are “legally encumbered” (held or associated with more than one shareholder; e.g., shares …

Does The Tax Law Discriminate Against The Majority Of American Children: The Downside Of Our Progressive Rate Structure And Unbalanced Incentives For Higher Education?, Lester B. Snyder

University of San Diego Law and Economics Research Paper Series

Our graduate income tax structure provides an incentive to shift income to lower-bracket family members. However, some parents have much more latitude to shift income to their children than do others. Income derived from services and private business-by far the majority of American income-is less favored than income derived from publicly traded securities. The rationale given for this discrimination is that parents in services or private business, as opposed to those in securities, do not actually part with control of their property. This article explores these tax broader (yet subtle) tax benefits and their impact on the majority of children …

A Survival Guide For Small Businesses: Avoiding The Pitfalls In International Dispute Resolution, Susan Franck

Articles in Law Reviews & Other Academic Journals

In the past decade, the number of small, entrepreneurial businesses participating in the global economy has tripled. With this increase comes a rise in the number of cross-border commercial disputes. The unwary small business, not familiar with international transactions, may commit errors that adversely affect their ability to do and stay in business. This article focuses on analyzing which methods small businesses should use in constructing their dispute resolution provisions and how to avoid errors in drafting and negotiation.

Preemption Under The Securities Litigation Uniform Standards Act: If It Looks Like A Securities Fraud Claim And Acts Like A Securities Fraud Claim, Is It A Securities Fraud Claim?, Jennifer O'Hare

Working Paper Series

This Article addresses the removal and preemption provisions of the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”). In SLUSA, Congress preempted class actions alleging “an untrue statement or omission of a material fact in connection with the purchase or sale of a covered security.” SLUSA clearly applies to preempt the typical state securities fraud action, forcing plaintiffs into federal court where they will be subject to the rigorous procedural requirements of the Private Securities Litigation Reform Act of 1995. Preemption of false corporate publicity cases was expected and, in fact, intended by SLUSA. However, many courts have also extended …

Rejecting The Marie Antoinette Paradigm Of Prejudgment Interest, Royce De R. Barondes

Faculty Publications

This paper examines principles for properly computing prejudgment interest by examining the impact on different corporate constituencies. This paper concludes that prejudgment interest at a promisor's cost of funds can undercompensate promisees, by shifting value from the promisee's equityholders to its creditors through a forced investment that decreases the risk of the promisee's portfolio of assets.

The Public And Private Faces Of Derivative Lawsuits, Robert B. Thompson, Randall S. Thomas

Vanderbilt Law Review

Are shareholder derivative suits at death's door? Once described as "the most important procedure the law has yet developed to police the internal affairs of corporations,"' derivative suits are today regularly portrayed as nuisance suits whose "principal beneficiaries ... are attorneys." Even if these critics are wrong, there may now be less need for derivative suits, as other forms of representative suits have grown up that do much of their work. Federal securities fraud class actions increasingly address legal claims that raise issues about management care, and fiduciary duty class actions under state law are the principal litigation vehicle to …

File Early, Then Free Ride: How Delaware Law (Mis)Shapes Shareholder Class Actions, Elliott J. Weiss, Lawrence J. White

Vanderbilt Law Review

Delaware courts have largely privatized enforcement of fiduciary duties in public corporations. In In re Fuqua Industries, Inc. Shareholder Litigation, Chancellor Chandler expressly acknowledged this judicial policy. He noted that Delaware courts implement it partly by allowing private attorneys, working on a contingent fee basis, to initiate and maintain derivative and class actions in the names of "nominal shareholder plaintiffs." Attorneys are subject only to the relatively weak constraints that they must inform their "clients" and receive their consent before they file shareholder suits. Further, Delaware courts use cost and fee shifting mechanisms to "economically incentivize" those attorneys to initiate …

Whose Public? Parochialism And Paternalism In State Charity Law Enforcement, Evelyn Brody

Indiana Law Journal

No abstract provided.

Solving The Everyday Problem Of Client Identity In The Context Of Closely Held Businesses, Darian M. Ibrahim

Faculty Publications

No abstract provided.

Drifting Down The Dnieper With Prince Potemkin: Some Skeptical Reflections About The Place Of Compliance Programs In Federal Criminal Sentencing (Symposium), Frank O. Bowman Iii

Faculty Publications

This Article explains how the federal organizational sentencing guidelines work and how they have created incentives for businesses to set up compliance programs. It then considers the paucity of evidence that compliance programs actually prevent the occurrence of corporate crime. It also questions whether investments in compliance programs make sense even for companies caught in a federal criminal investigation. There is little evidence that compliance programs have any significant effect on the likelihood that federal prosecutors will file criminal charges in the first instance. Even more surprisingly, examination of U.S. Sentencing Commission statistics reveals that the compliance program movement seems …

Ancillary Joint Ventures And The Unanswered Questions After Revenue Ruling 2004-51, Gabriel O. Aitsebaomo

ExpressO

Ever since the Internal Revenue Service (the "Service") issued Revenue Ruling 98-15… in which it emphasized "control" as a critical factor in determining whether a tax-exempt hospital that enters into a whole-hospital joint venture with a for-profit entity would continue to maintain its tax-exemption, practitioners and scholars alike have sought guidance from the Service regarding whether such "control" would also be required of an exempt organization that enters into an "ancillary joint venture" with a for-profit entity. In response, the Service issued Revenue Ruling 2004-51 on May 6, 2004.

… In Revenue Ruling 2004-51, the Service enunciated that a tax-exempt …

Corporate Defendants And The Protections Of Criminal Procedure: An Economic Analysis, Vikramaditya S. Khanna

Law & Economics Working Papers Archive: 2003-2009

Corporations are frequently treated as “persons” under the law. One of the fundamental questions associated with this treatment is whether corporations should receive the same Constitutional protections and guarantees as natural persons. In particular, should corporations receive the Constitutional protections of Criminal Procedure? After all, corporations cannot be sent to jail so the sanctions they face are essentially the same as in civil proceedings. If so, then why not have the same procedural protections for corporate defendants in civil and criminal cases? Little scholarly analysis has focused on this issue from an economic perspective and this article aims to fill …

The Silent Llc Revolution-- The Social Cost Of Academic Neglect, Howard M. Friedman

ExpressO

The law of Business Associations usually develops slowly. The business forms that were dominant until the end of the 20th century have been in existence for centuries. However, as the new data set examined in detail in this article demonstrates, in the last decade a revolution has taken place. Contrary to conclusions reached in leading articles published as recently as 2000, limited liability companies have now become the business form of choice for small firms in a majority of the states. This article details the ways in which teaching materials and legal scholarship have largely neglected the recent sea change …