Law Commons^™

Leaving Money On The Table And Providing An Incentive Not To Pay - The Story Of A Flawed Collection Device, T. Keith Fogg

UC Law Business Journal

The "tax gap" represents the difference between the amount of tax owed by taxpayers and the amount that is actually voluntarily and timely paid. As of September 30, 2007, the IRS had $282 billion of unpaid assessments on its books of which 20 percent represented the unpaid payroll taxes due from employers. IRC Section 6672 gives the government a powerful tool to mitigate the tax gap, as it gives it the right to pierce the corporate veil in pursuit of the collection of unpaid payroll taxes. However, 6672 suffers from a near fatal flaw which results in failure to incentivize …

Innovative Destruction - Structured Finance And Credit Market Reform In The Bubble Era, Aaron Unterman

UC Law Business Journal

The combination of unregulated financial innovation and rampant greed had, and continues to have, dire effects on the global economy. The financial crisis, which began in the U.S. subprime housing market, has spread across the globe, decimating the structured finance industry and brought about an unprecedented collapse in the world financial markets. This paper explores the role that structured finance played in the credit crisis, by dissecting the complex instruments which drove the industry and allowed the U.S. subprime housing market meltdown to infect the entire global economy. The author argues that the finance industry is in need of thorough …

Money As Simulacrum: The Legal Nature And Reality Of Money, John J. Chung

UC Law Business Journal

The title of this paper is a nod to Simulacra and Simulation by post-modernist philosopher Jean Baudrillard. This paper explores the meaning and nature of money, and the form in which money exists today. The author begins by asking such basic questions as "what is money" and explores the history and development of money. We live in a world of increasingly transient and stunning wealth, a world where billionaires are as common as millionaires once were, where fortunes are gained and lost overnight, and of inexplicable wealth inequality. The author contends that the current state exists because money is a …

Will China Prevail Over The Current Wto, Angela Wang

UC Law Business Journal

Since its admission to the WTO in 2001, China has been in the process of complying with the commitments required by its accession agreement. This article addresses the following question: "As China and other developing countries come to play a more prominent role in today's global economy, will western industrialized countries adapt to this change or will they use the WTO to suppress China's ascension to power?" This article makes three different claims regarding the existing tension in the WTO between China and developed democratic countries like the United States. The arguments are as follow: 1) China's legal system is …

The Financial Sector Upheaval Of 2008: Sociological Antecedents And Their Implications For Investment Company Regulation, Larry D. Barnett

UC Law Business Journal

In 2008, the United States experienced a severe contraction in the availability of credit, a marked reduction in the price of common stocks, and an appreciable increase in interest rates on debt instruments issued by business entities and by state and local governments. The premise of this Article is that, although this upheaval was economic in form and sudden in occurrence, it stemmed from change that was sociological in character and that started in prior decades. Specifically, the 2008 upheaval in finance is traced to a shift in social values among Americans-namely, an increased prevalence of hedonism and materialism in …

Beware Of Risk Everywhere: An Important Lesson From The Current Credit Crisis, Michael C. Macchiarola

UC Law Business Journal

Our current credit crisis is a result of the misunderstanding and mismanagement of risk. Exploring the tradeoff between risk and reward has been at the heart of the modem financial theories that have come to dominate our markets. As the capital markets introduced more and more complexity and innovation, most expected that the study of risk management and risk allocation was keeping pace, ensuring our ability to control and limit risk while maximizing reward.

In this Article, the author addresses some of the fundamental misunderstandings of risk that have become deeply ingrained in our markets and have brought about the …

The Political Economy Of The Rule Of Law In China, George Steven Swan

UC Law Business Journal

The following Article studies China as a possible test case for a country that has attempted to win economically developed nation status without an advanced rule of law. While China has managed to grow rapidly over the past thirty years, the author warns of the risk to an economy that rests on an unstable rule of law. In Part I, the author presents an introduction and then proceeds in Part II to explain the concept of "political economy" as a field informing the study of institutions, and of norms, which constitute the background to economic development. Part III chronicles the …

Bringing It All Back Home: Boulware And The Unfortunate Demise Of The Miller Rule, Gurpreet Bal

UC Law Business Journal

In this Note, the author addresses the underlying tension between criminal intent and the complexity of the tax code in criminal tax prosecution in light of the recent Supreme Court opinion in U.S. v. Boulware. The author takes a look at the facts and circumstances of Boulware, the body of precedent supporting the Ninth Circuit's opinion, and the reasoning of the Supreme Court in its subsequent reversal of that opinion. He revisits the oft cited opinion of Judge Learned Hand in Helvering v Gregory, and asks whether the courts have taken Judge Hand's famous approval of tax planning so far …

Working Through A Workout: A Practitioner's Guide From The Perspective Of Private Equity Sponsors, Venture Capital Funds And Other Significant Equity Investors, Christopher W. Kirkham, Jennifer M. Taylor

UC Law Business Journal

These troubled economic times present numerous concerns to the ongoing business. However, the dreaded "workout" scenario that arises when a corporation breaches its debt covenants should not be so feared. This Practitioner's Guide will address the workout scenario and provide insight on how to negotiate with a lender and how to address the most common negotiating points in a workout with particular focus on the perspective of sponsors and other significant investors. Part I will discuss how a workout scenario arises and the positions and goals of the respective parties involved-the borrower, the lender and the sponsor. Part II lays …

Pirating The Runway: The Potential Impact Of The Design Piracy Prohibition Act On Fashion Retail, H. Shayne Adler

UC Law Business Journal

Historically, the fashion industry has followed a clear trickle-down business model, relying on the free flow of creative ideas from high fashion and couture houses to more affordable, mass-produced clothing lines that interpret these concepts. However, recent technological developments have altered the structure and modus operandi of this multi-billion dollar sector of the economy, resulting in a rise in production imitation and knockoff items. This Note analyzes the effects of such a shift in the industry paradigm, both positive and negative, for both designers and consumers. In addition, this Note examines the potential impact of the proposed legislation known as …

Should Courts Hang On Every Word Of Congress's Hanging Paragraph - A Solution To Judicial Controversy Over Chapter 13 Surrendered Vehicles, Netta Grutman

UC Law Business Journal

As part of the Bankruptcy Abuse Prevention Consumer Protection Act of 2005, Congress added a paragraph to the Bankruptcy Code governing the confirmation of Chapter 13 plans. The paragraph was added in an effort to eliminate "cram down." Prior to 2005, cram down allowed the debtor to retain his/her vehicle as part of a bankruptcy plan and only repay the secured debt on the vehicle. After Congress's amendment, a debt on a vehicle retained as part of a Chapter 13 plan can no longer be bifurcated. Thus, a debtor must repay both the secured and unsecured debt in order to …

How Far Should The Pto Regulate Business Relationships Of Patent Practitioners, Kenneth R. Shurtz

UC Law Business Journal

The PTO Code of Professional Responsibility regulates the conduct of patent practitioners to ensure the integrity of the practice and protect client's interests. While patent agents and patent attorneys must both abide by the PTO Code, patent attorneys must also adhere to the Rules of Professional Conduct of the state in which they practice. Periodically, conflicts between the PTO Code and state ethics rules or uncertainties within the PTO Code have an adverse affect on the business practices of patent attorneys. These business practices include client engagement, disclosures to the client, partnerships and fee arrangements. This article examines the practical …

Hiding Behind The Corporate Veil: A Guide For Non-Profit Corporations With For-Profit Subsidiaries, Seong J. Kim

UC Law Business Journal

The non-profit sector is ripe for abuse due to non-profit organizations' unique regulatory positions, favorable tax treatment, and potential to earn large profits. For example, private foundations have become large repositories of untaxed wealth that accumulate great economic power. Additionally, dozens of non-profit directors and executives are also officers of outside companies that engage in business activities with non-profit organizations. This article addresses an emerging and complex problem surrounding non-profit corporations: whether or not a party should be able to pierce the corporate veil of a non-profit corporation for actions of their for-profit subsidiary. It also looks at the underlying …