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Full-Text Articles in Law

When Social Enterprises Fail, Jonathan Brown Jan 2017

When Social Enterprises Fail, Jonathan Brown

Elisabeth Haub School of Law Faculty Publications

This Article identifies the conflicts between social enterprise legislation and bankruptcy law and presents a normative argument for a legal regime that would harmonize the two. Focusing on benefit corporations, the most widely adopted social enterprise form, this Article observes that existing law leaves uncertainty as to the role of directors at a time of financial distress and will produce outcomes that are at odds with the core goals of social enterprise legislation. Then, drawing on academic proposals for contract-based systems of bankruptcy, this Article argues that just as a firm may opt out of a corporate governance norm of …


Financing The Benefit Corporation, Dana Brakman Reiser, Steven Dean Jan 2017

Financing The Benefit Corporation, Dana Brakman Reiser, Steven Dean

Faculty Scholarship

The hybrid organizational forms designed with social enterprises in mind have proven to be hothouse flowers. Flourishing in state legislatures, even those with the most distinguished pedigrees-such as Delaware's public benefit corporation'-have so far failed to thrive in the marketplace. Fortunately, hybrid financial instruments offer a source of strength and stability that can help social enterprise to take root.

This Article examines the valuable role that financial instruments can play in providing social enterprises with the capital they need to grow. Debt with equity features and equity with debt characteristics constitute the lion's share of such financial tools. More exotic …