Law Commons^™

The Dystopian Potential Of Corporate Law, D. Gordon Smith

Faculty Scholarship

The community of corporate law scholars in the United States is fragmented. One group, heavily influenced by economic analysis of corporations, is exploring the merits of increasing shareholder power vis-a-vis directors. Another group, animated by concern for social justice, is challenging the traditional, shareholder-centric view of corporate law, arguing instead for a model of stakeholder governance. The current disagreement within corporate law is as fundamental as in any area of law, and the debate is more heated than at any time since the New Deal. This paper is part of a debate on the audacious question, Can Corporate Law Save …

The Undercivilization Of Corporate Law, A. Christine Hurt

Faculty Scholarship

No abstract provided.

Allocating Business Profits For Tax Purposes: A Proposal To Adopt A Formulary Profit Split, Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst

Law & Economics Working Papers Archive: 2003-2009

The current system of taxing the income of multinational firms in the United States is flawed across multiple dimensions. The system provides an artificial tax incentive to earn income in low-tax countries, rewards aggressive tax planning, and is not compatible with any common metrics of efficiency. The U.S. system is also notoriously complex; observers are nearly unanimous in lamenting the heavy compliance burdens and the impracticality of coherent enforcement. Further, despite a corporate tax rate one standard deviation above that of other OECD countries, the U.S. corporate tax system raises relatively little revenue, due in part to the shifting of …

Troubled Projects, Workouts And Debt Restructurings, Richard Blumenreich

William & Mary Annual Tax Conference

No abstract provided.

Partnership Allocations: What You Don't Know Can Hurt You, Steven M. Friedman

William & Mary Annual Tax Conference

No abstract provided.

The Taxation Of Private Equity Carried Interests: Estimating The Revenue Effects Of Taxing Profit Interests As Ordinary Income, Michael S. Knoll

All Faculty Scholarship

In this Article, I estimate the tax revenue effects of taxing private equity carried interests as ordinary income rather than as long-term capital gain as under current law. Under reasonable assumptions, I conclude that the expected present value of additional tax collections would be between 1 percent and 1.5 percent of capital invested in private equity funds, or between $2 billion and $3 billion a year. That estimate, however, makes no allowance for changes in the structure of such funds or the composition of the partnerships, which might substantially reduce tax revenues below those estimates.

Piercing The Corporate Veil In Regulated Industries, Douglas G. Smith

BYU Law Review

No abstract provided.

Electronic Tax Fraud - Are There 'Sales Zappers' In Japan?, Richard Thompson Ainsworth

Faculty Scholarship

Although there is no public acknowledgement - in the press, in a court case, though any announcement by the Japanese National Tax Administration, or in any academic studies or papers - that Zappers and Phantom-ware are a fraud problem in Japan, a number of factors suggest that Japan may be very fertile ground for technology-assisted cash skimming fraud. Those factors include: (1) a high concentration of small to medium sized businesses; (2) the fact that the retail economy is highly cash-based; and (3) the high level of technology acceptance in the Japanese retail sector - electronic cash registers (ECRs) and …

Dysfunctional Deference And Board Composition: Lessons From Enron, Bernard S. Sharfman, Steven J. Toll

NULR Online

No abstract provided.

Embattled Ceos, Marcel Kahan, Edward B. Rock

All Faculty Scholarship

In this paper, we argue that chief executive officers of publicly-held corporations in the United States are losing power to their boards of directors and to their shareholders. This loss of power is recent (say, since 2000) and gradual, but nevertheless represents a significant move away from the imperial CEO who was surrounded by a hand-picked board and lethargic shareholders. After discussing the concept of power and its dimensions, we document the causes and symptoms of the decline in CEO power in several areas: share ownership composition and shareholder activism; governance rules and the board response to shareholder activism; regulatory …

Linkage And The Deterrence Of Corporate Fraud, Miriam Baer

Faculty Scholarship

No abstract provided.

The (Not So) Puzzling Behavior Of Angel Investors, Darian M. Ibrahim

Faculty Publications

No abstract provided.

Insource The Shareholding Of Outsourced Employees: A Global Stock Ownership Plan, Robert C. Hockett

Cornell Law Faculty Publications

With the American economy stalled and another federal election campaign season well underway, the “outsourcing” of American jobs is again on the public agenda. Latest figures indicate not only that claims for joblessness benefits are up, but also that the rate of American job-exportation has more than doubled since the last electoral cycle. This year’s political candidates have been quick to take note. In consequence, more than at any time since the early 1990s, continued American participation in the World Trade Organization, in the North American Free Trade Agreement, and in the processes of global economic integration more generally appear …

Obedience As The Foundation Of Fiduciary Duty, Rob Atkinson

Scholarly Publications

No abstract provided.

Securities Class Actions As Pragmatic Ex Post Regulation, Elizabeth Chamblee Burch

Scholarly Works

Securities class actions are on the chopping block-again. Traditional commentators continue to view class actions with suspicion; they see class suits as nonmeritorious byproducts of self-interest and the attorneys who bring them as rent-seekers. Their conventional approach has popularized securities class actions' negative effects. High-profile commissions capitalizing on this rhetoric, such as the Committee on Capital Markets Regulation, have recently recommended eliminating or severely curtailing securities class actions. But this approach misses the point: in the ongoing push and pull of securities regulation, corporations are winning the battle.

Thus, understanding the full picture and texture of securities class actions necessitates …

The (Not So) Puzzling Behavior Of Angel Investors, Darian M. Ibrahim

Vanderbilt Law Review

Where do entrepreneurs turn for funding once their credit cards are maxed out, friends and family are no longer taking their calls, but it is still too early for venture capitalists to invest? They turn to "angel" investors. Angel investors are wealthy individuals who personally finance the same high-risk, high-growth start-ups as venture capitalists but at an earlier stage. Well-known angels include Microsoft co-founder Paul Allen, EDS founder H. Ross Perot, and Dallas Mavericks' owner Mark Cuban. But the prototypical angel may still be rich old Uncle Joe, the wealthy, distant relative or family acquaintance. Angels come in many forms, …

Parity Lost: The Price Of A Corporate Tax In A Progressive Tax World, Richard Winchester

Nevada Law Journal

No abstract provided.

Casos De “Control Casi Total”. La Fragilidad Del Plazo De Seis Meses Para Que El Controlante Emita Una Declaración Unilateral De Adquisición, Gaston Mirkin

Gaston Mirkin

No abstract provided.

Changing The Paradigm Of Stock Ownership From Concentrated Towards Dispersed Ownership? Evidence From Brazil And Consequences For Emerging Countries, Erica Gorga

Cornell Law Faculty Working Papers

This paper analyzes micro-level dynamics of changes in ownership structures. It investigates a unique event: changes in ownership patterns currently taking place in Brazil. It builds upon empirical evidence to advance theoretical understanding of how and why concentrated ownership structures can change towards dispersed ownership.

Commentators argue that the Brazilian capital markets are finally taking off. The number of listed companies and IPOs in the Sao Paulo Stock Exchange (Bovespa) has greatly increased. Firms are migrating to Bovespa’s special listing segments, which require higher standards of corporate governance. Companies have sold control in the market, and the stock market has …

Women And The "New" Corporate Governance, Lisa M. Fairfax, Paula A. Monopoli

Paula A Monopoli

No abstract provided.

Tales Of Two Regimes For Regulating Limited Liability Law Firms In The Us And Australia: Client Protection And Risk Management Lessons, Susan Saab Fortney

Faculty Scholarship

This essay contrasts the regimes that allow limited liability partnerships in the US and fully incorporated legal practices in Australia. The essay argues that Australia has taken advantage of an opportunity to develop innovative and necessary regulation of law firm ethical infrastructure with the introduction of incorporated legal practices, but the United States has not yet adequately addressed the consumer and ethical risks of limited liability partnerships. This essay raises the issue of whether Australia’s requirement that incorporated law firms should implement “appropriate management systems” to ensure ethical conduct is a model that could fruitfully be applied to all law …

Colocación Por "Oferta Pública" De Obligaciones Negociables. Dudas Interpretativas En Torno Al Concepto, Gaston Mirkin

Gaston Mirkin

No abstract provided.

Sovereign Debt Restructuring: Search For An Optimum Voting Threshold, Joy Dey

Joy Dey

Sovereigns have been defaulting on their debts over decades now. A sovereign debt default necessitates a restructuring of the debt instrument in order to reduce the size of the debt or lengthen the maturity period. One of the methods of debt restructuring is an ‘exchange offer’ where the old debt instrument, for example the bond, is exchanged for new debt instruments with altered terms and conditions, particularly the payment terms. Whereas some investors may agree to such restructuring and accept the exchange offer, others might have different aspirations for their investments. A successful sovereign debt restructuring takes place when the …

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 …

Zappers And Phantom-Ware At The Fta: Are They Listening Now?, Richard Thompson Ainsworth

Faculty Scholarship

When the Federation of Tax Administrators (FTA) held a national Compliance and Education Workshop in Louisville, Kentucky (February 25-27, 2001) one of the invited speakers was Kevin Pratt, Manager, Underground Economy, Canadian Customs and Revenue Authority (CCRA). He spoke on Zappers.

To the best of anyone's present recollection, this was the first time zappers had been discussed with a large group of state-level US tax compliance professionals. However, most of the information that the CCRA presented to the FTA in 2001 was not its own - it was derivative. Zapper investigations were not an in-house specialty of the CCRA (although …

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 …

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.

Minority Discounts And Control Premiums In Appraisal Proceedings, Richard A. Booth Marbury Research Professor Of Law

Richard A Booth

In a merger, a stockholder often has a statutory right of dissent and appraisal under which the stockholder may demand to be paid fair value exclusive of any gain or loss that may arise from the merger itself. Most courts and commentators agree that a dissenting stockholder should ordinarily receive a pro rata share of the fair value of the corporation without any discount simply because minority shares lack control. In several recent cases, the courts have indicated that a minority stockholder is thus entitled to a share of the control value of the corporation even though the merger does …

Mergers, Taxes, And Historical Materialism, Ajay K. Mehrotra

Indiana Law Journal

In the last few years, corporate mergers and acquisitions witnessed explosive growth. Although more recent market conditions have halted the latest merger movement, scholars and commentators have used the earlier rise in merger activity to reevaluate the preferential tax treatment granted to those mergers and acquisitions that fall under the U.S. tax law's definition of a corporate "reorganization. " Under the current Internal Revenue Code, neither shareholders nor corporations recognize gain or loss on the exchange of stock or securities in transactions that qualify as a "corporate reorganization." The significance of this tax rule raises a central question: why does …

Insuring Corporate Crime, Miriam Hechler Baer

Indiana Law Journal

Corporate criminal liability has become an important and much-talked about topic. This Article argues that entity-based liability-particularly the manner in which it is currently applied by the federal government---creates social costs in excess of its benefits. To help companies better deter employee crime, the Article suggests the abolition of entity-wide criminal liability, and in its place, the adoption of an insurance system, whereby carriers would examine corporate compliance programs, estimate the risk that a corporation's employees would commit crimes, and then charge companies for insuring those risks. The insurance would cover civil penalties associated with the entity's employee-related criminal conduct. …