Law Commons^™

Emergency Bylaws: An Underutilized Tool For Corporate Operation During An Emergency, Grace Myers

William & Mary Business Law Review

Emergency bylaws are an underutilized tool for corporate governance whose importance has been highlighted by COVID-19. Emergency bylaws can be included within corporations’ bylaws and only operate during an “emergency” as defined by state statutes. These provisions usually give boards more agency to act during an emergency through mechanisms such as looser quorum and notice requirements. These provisions will be increasingly important during future pandemics, wars, and global warming. However, few corporations have these bylaws, and the current hodgepodge of state statutes hinders their adoption. The current state of emergency bylaws regulation and implementation raises some questions about shareholder rights …

A New Urban Front For Shareholder Primacy, Anne Choike

Michigan Business & Entrepreneurial Law Review

The hundredth anniversary of Dodge v. Ford marks an occasion to reflect upon what, if anything, has changed about shareholder primacy in a century. Seizing this opportunity, in this Article I analyze new local laws and ordinances that promote stakeholder governance and engagement, which seek to protect the interests of non-shareholder constituencies such as workers, the environment, and the communities in which corporations operate, among others. In doing so, I argue that such local laws meaningfully differ from traditional stakeholder protections, most significantly in the way that they weaken managerial accountability to shareholders. The emergence of these city laws challenges …

Regulatory Competition And The Market For Corporate Law, Ofer Eldar, Lorenzo Magnolfi

Faculty Scholarship

This article develops an empirical model of firms’ choice of corporate laws under inertia. Delaware dominates the incorporation market, though recently Nevada, a state whose laws are highly protective of managers, has acquired a sizable market share. Using a novel database of incorporation decisions from 1995- 2013, we show that most firms dislike protectionist laws, such as anti-takeover statutes and liability protections for officers, and that Nevada’s rise is due to the preferences of small firms.Our estimates indicate that despite inertia, Delaware would lose significant market share and revenues if it adopted protectionist laws. Our findings support the hypothesis that …

Lessons From Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, Tammi S. Etheridge

Michigan Business & Entrepreneurial Law Review

Almost one hundred years ago, Henry Ford, as CEO of the Ford Motor Company, announced a plan to cease payment of special dividends to shareholders. Instead, the company would reinvest its profits to employ more workers and build more factories. Investing in new workers and factories would cut the cost of cars and make them affordable to more people. Ford publicly declared that his “ambition [was] to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting …

The Proxy Advisory & Corporate Governance Industry: The Case For Increased Oversight And Control, Tamara C. Belinfanti

Articles & Chapters

The proxy advisory and corporate governance industry plays a significant role in shareholder voting and in the formulation of corporate governance policy. The industry operates with relatively little accountability and virtually free from regulatory oversight. Understanding the relationship between this industry and mutual funds, who in the aggregate are the largest owners of publicly traded shares in the United States, is critical to understanding issues of shareholder rights, the meaning of the right to vote in corporate elections, and the role that institutional investors, like mutual funds, play in the corporate landscape.

Mutual funds exercise their substantial voting power by …

The Quiet Transformation Of Corporate Law, Mark J. Loewenstein

Publications

No abstract provided.

Tender Offers By Controlling Shareholders: The Specter Of Coercion And Fair Price, Adam C. Pritchard

Articles

Taking your company private has never been so appealing. The collapse of the tech bubble has left many companies whose stock prices bordered on the stratospheric now trading at small fractions of their historical highs. The spate of accounting scandals that followed the bursting of the bubble has taken some of the shine off the aura of being a public company-the glare of the spotlight from stock analysts and the business press looks much less inviting, notwithstanding the monitoring benefits that the spotlight purports to confer. Moreover, the regulatory backlash against those accounting scandals has made the costs of being …

Unocal Revisited: No Tiger In The Tank, Mark J. Loewenstein

Publications

No abstract provided.

Modern Mail Fraud: The Restoration Of The Public/Private Distinction, John C. Coffee Jr.

Faculty Scholarship

Over their long history, the mail and wire fraud statutes have gone through repeated periods of rapid expansion and contraction. The 1970s saw the flowering of the "intangible rights doctrine," an exotic flower that quickly overgrew the legal landscape in the manner of the kudzu vine until by the mid- 1980s few ethical or fiduciary breaches seemed beyond its potential reach. That doctrine was radically pruned by the Supreme Court in 1987 in the McNally decision, which held that the federal mail and wire fraud statutes reached only those schemes that intentionally sought to deprive their victims of money or …

A New Direction For State Corporate Codes, Mark J. Loewenstein

Publications

No abstract provided.

Reflections On Executive Compensation And A Modest Proposal For (Further) Reform, Mark J. Loewenstein

Publications

No abstract provided.

The Sec And The Future Of Corporate Governance, Mark J. Loewenstein

Publications

No abstract provided.

Protecting Nonshareholder Interests In The Market For Corporate Control: A Role For State Takeover Statutes, Frank J. Garcia

University of Michigan Journal of Law Reform

Part I of this Note describes a phenomenon of modern corporate activity first identified over fifty years ago as the "separation of ownership and control." This separation gives rise to the need for a governing corporate norm; recognizing the normative aspect of this phenomenon has direct implications for the takeover debate.

Part II analyzes the problem of a target board's fiduciary duty as the modern version of the fundamental normative issue of corporate law. It argues that the norm of shareholder wealth maximization, assumed as the starting point by those most in favor of an active and minimally regulated control …

Federal Chartering Revisited, Donald E. Schwartz

University of Michigan Journal of Law Reform

The protections that corporation law provided to shareholders and to our economic community against the excesses and complacency of corporate directors and managers have undergone a general weakening. Although it is uncertain whether the ALI can accomplish effective and meaningful reforms, this effort may be the most important attempt by the corporate community to reform itself.

Recent Developments Concerning The Duty Of Care, The Duty Of Loyalty, And The Business Judgment Rule, Patricia A. Daniel

Vanderbilt Law Review

The judiciary faces a difficult task in attempting to define the proper standards of conduct for corporate directors and officers. Although courts have enunciated various standards, the prevailing theme has been that corporate directors and officers are fiduciaries who have a "distinct legal relationship" with the corporation and its shareholders. As fiduciaries, directors and officers must con-form to the duty of care and the duty of loyalty. The business judgment rule, which creates a presumption of propriety for directors' and officers' substantive business decisions, developed concurrently with these duties. Several recent court decisions concerning corporate director and officer liability appear …

Controlling The Controllers In Parent-Subsidiary Relations, James C. Bruno

University of Michigan Journal of Law Reform

This article will examine the rights and responsibilities of a party in control of a corporation. The discussion of these rights and responsibilities focuses principally on the law of Michigan. However, passages on policy, discussion of the development of relevant Michigan law, and recommendations for changes in the law are pertinent to the general problem-area of parent-subsidiary relations encountered in all jurisdictions.

Right Of Joint Adventurers Holding All The Stock Of A Corporation To A Dissolution And Accounting In Equity, Horace Lafayette Wilgus

Articles

The case of Jackson v. Hooper, in the New Jersey Court of Errors and Appeals, decided February 28, 1910, by Judge DILL, (42 N. Y. Law Journal, March 8, 1910), overruling Vice Chancellor HOWELL, of the Court of Chancery (74 AtL. 130) presents interesting and unusual points in corporation and partnership law, and the jurisdiction of courts of equity over corporate affairs.