Law Commons^™

Anticompetitive Corporate Spin-Offs, Alexa Rosen Grealis

University of Miami Business Law Review

Section 355 of the Internal Revenue Code allows corporations to “spin-off” parent-controlled businesses tax-free. Traditionally an important tool for divestitures and restructurings with U.S. tax consequences, recent trends suggest section 355 is also of interest to firms facing US antitrust consequences. Statements and maneuvering by some such companies indicate firms are considering spinning-off businesses to avert liability and ‘break up’ on their own terms. Despite widespread renewed interest in using antitrust laws to break up large corporations, the antitrust implications of corporate spin-offs have thus far escaped scholarly notice and scrutiny.

This Note posits that it is a mistake to …

Reforming Shareholder Claims In Isds, Julian Arato, Kathleen Claussen, Jaemin Lee, Giovanni Zarra

Articles

ISDS stands alone in empowering shareholders to bring claims for reflective loss (SRL) – meaning claims over harms allegedly inflicted upon the company, but which somehow affect share value. National systems of corporate law and public international law regimes generally bar SRL claims for strong policy reasons bearing on the efficiency and fairness of the corporate form. Though not necessitated by treaty text, nor beneficial in policy terms, ISDS tribunals nevertheless allow shareholders broad and regular access to seek relief for reflective loss. The availability of SRL claims in ISDS ultimately harms States and investors alike, imposing surprise ex post …

Corporate Innovation: One Path To More Sustainable Big Business, David Nows

University of Cincinnati Law Review

No abstract provided.

Ethnic Economies, Cultural Resources, And The African American Question, Lan Cao

University of Cincinnati Law Review

No abstract provided.

Beyond The Corporate Responsibility To Respect Human Rights In The Dawn Of A Metaverse, Kuzi Charamba

University of Miami International and Comparative Law Review

Technological advances in the 21st century pose new threats to human rights from business activities. In this new technological age, individuals and communities engage through an increasing myriad of digital means and platforms, all facilitated by a smaller, more powerful set of global BigTech companies, such as Microsoft, Apple, Google, and Meta (formerly known as Facebook). In so doing, however, our lives as workers, consumers, and citizens become subject to increasing corporate control through surveillance capitalism and algorithmic governance. With the dawn of metaverses—3D immersive digital environments in which you can interact with others via avatars and through virtual and …

The "Middle Ground" Of Products Liability Analysis, Patrick Shalvey

Undergraduate Theses and Capstone Projects

The area of products liability has been the subject of intense debate for the past half-century, perhaps never more strongly than the decades comprising the second half of the twentieth century. Specifically, the 1970s was the decade that introduced the judicial community to this debate. In the 1970s and a few decades prior, consumerism skyrocketed to levels never seen before in the United States and in the world. Logically, this drastic increase in consumerism came with a drastic increase in products liability lawsuits. Manufacturing companies and corporations were forced to pay damages to injured parties at levels they never came …

Corporations As Private Regulators, Wentong Zheng

UF Law Faculty Publications

The growing trend of corporations imposing restrictions on suppliers, contractors, and customers beyond the requirements of existing laws requires rethinking the nature and impact of corporations' private regulatory power. This trend, which this Article refers to as "Corporations as Private Regulators" (CPR), represents a paradigmatic shift in how corporations participate in the making of public policies. This Article conceptualizes the corporate CPR power as the exercise of a right of refusal to deal with counterparties. This right of refusal could be theorized as a new form of property right, whose allocation has important implications for both rights and wealth. The …

Business, Human Rights, And Transitional Justice: Overcoming The Regulatory Dysfunction Of International Law, Jelena Aparac

The Global Business Law Review

It is said that traditional international public law is state-centric and concerns mostly State obligations and responsibility. For this, it excluded corporate actors from any accountability mechanism, even when the corporations contribute to armed conflicts and international crimes. International law does not provide a clear definition of what amounts to “subjects” under this set of rules or criteria for how to determine legal personality. At the same time, some branches of international public law directly regulate corporate actions, namely international economic law and international humanitarian law. Conversely, international courts and tribunals have accepted the corporate jus standi, in some …

Empowering Diversity Ambition: Brummer And Strine’S Duty And Diversity Makes The Legal And Business Case For Doing More, Doing Good, And Doing Well, Lisa Fairfax

Faculty Scholarship at Penn Carey Law

No abstract provided.

Why Corporate Purpose Will Always Matter, Lyman Johnson

University of St. Thomas Law Journal

No abstract provided.

Misreading Menetti: The Case Does Not Help You Avoid Liability For Your Own Fraud, Val D. Ricks

St. Mary's Law Journal

Several decades ago, an incorrect legal idea surfaced in Texas jurisprudence: that business entity actors are immune from liability for fraud that they themselves commit, as if the entity is solely responsible. Though the Supreme Court of Texas has rejected that result several times, it keeps coming back. The most recent manifestation is as a construction of Texas’s unique veil-piercing statute. Many lawyers have suggested that this view of the veil-piercing statute originated in Menetti v. Chavers, a San Antonio Court of Appeals case decided in 1998. Menetti has in fact played a prominent role in the movement to …

Canada's Integrity Regime: The Corporate Grim Reaper, Jessica Tillipman, Samantha Block

GW Law Faculty Publications & Other Works

In 2019, SNC-Lavalin made global headlines after it was revealed that the Canadian Prime Minister, Justin Trudeau, had interfered in the prosecution of the company for the bribery of Libyan officials. Although the scandal was primarily viewed as political, it also highlighted flaws in Canada’s Integrity Regime; specifically, the regime’s unworkable and draconian approach to debarment. This Article will address the pressing need in Canada to modify its debarment remedy and enact a system that more effectively protects the government’s interests. To illuminate the current issues facing Canada’s Integrity Regime, this Article will begin by examining Canada’s debarment system, outlining …

Corporate Criminal Liability In India: A Pressing Issue, Pranavi Agrawal

Summer Program for Undergraduate Research (SPUR)

A company is regarded as a distinct legal body from its owners. It may be characterized as a group of people working towards a single purpose, typically commercial. The degree to which a firm, as a distinct organization, is accountable for the actions of its workers is defined by Corporate Criminal Liability under Indian criminal law. The two main questions raised about corporate liability are whether a company can commit a crime, and whether it is legally accountable for the alleged criminal conduct.

This paper analyzes the history of the concept of Corporate Criminal Liability around the world, its background …

Stealth Governance: Shareholder Agreements And Private Ordering, Jill E. Fisch

Faculty Scholarship at Penn Carey Law

Corporate law has embraced private ordering -- tailoring a firm’s corporate governance to meet its individual needs. Firms are increasingly adopting firm-specific governance through dual-class voting structures, forum selection provisions and tailored limitations on the duty of loyalty. Courts have accepted these provisions as consistent with the contractual theory of the firm, and statutes, in many cases, explicitly endorse their use. Commentators too support private ordering for its capacity to facilitate innovation and enhance efficiency.

Private ordering typically occurs through firm-specific charter and bylaw provisions. VC-funded startups, however, frequently use an alternative tool – shareholder agreements. These agreements, which have …

The Direct-Derivative Distinction, The Special Litigation Committee, And The Uniform Act: A Response To Professor Weidner, Daniel S. Kleinberger

Faculty Scholarship

The Unfortunate Role of Special Litigation Committees in LLCs has a deeply pejorative view of the Uniform Law Commission “second generation” limited liability company act, and that view extends far deeper than the target suggested by the article’s title. The article’s fundamental attack is on the distinction between direct and derivative claims; the criticisms of ULLCA’s provisions on special litigation committees depend on that attack. In support of its wide-ranging attack, The Unfortunate Role seeks to marshal history, policy, logic, and a research study pertaining to the outcome of derivative claims. Unfortunately, however, the article (i) misapprehends the drafting history …

The Elastic Corporate Form In International Law, Julian Arato

Articles

The corporate form is being distorted by international law. Surprisingly, this is occurring in the law of foreign investment, where one would expect the stability and efficiency of corporate formalities to matter most. The main driver is a highly enforceable mode of treaty-based arbitration known as investor-state dispute settlement (ISDS), which affords foreign investors a private right of action to sue sovereign states. Questions of corporate law come up regularly in ISDS. But when addressing them, tribunals have varied widely in their respect for core formalities. This is undermining the basic relationships among all corporate stakeholders—including shareholders, management, creditors, governments, …

Judicial Activism In Transnational Business And Human Rights Litigation, Hassan M. Ahmad

All Faculty Publications

This article explores a more expansive adjudicative role for domestic judiciaries in the U.S., U.K., and Canada in private law disputes that concern personal and environmental harm by multinational corporations that operate in the Global South. This expansive role may confront—although not necessarily upend—existing understandings around the separation of powers in common law jurisdictions. I canvass existing literature on judicial activism. Then, I detail legality gaps in the selected common law home states, which can be broken down into four categories: i) failed legislation; ii) deficient legislation; iii) judicial restraint; and iv) judicial deference.

I suggest three ways to actualize …

Organizational Conflicts Of Interest: Cautionary Tales, Jessica Tillipman

GW Law Faculty Publications & Other Works

A recent, high-profile investigation involving McKinsey & Company (McKinsey) and its contracts with the Food and Drug Administration (FDA) has reminded us that organizational conflicts of interest (OCIs) are an integrity issue that never should be written off as a check-the-box exercise during the procurement process. This incident highlighted the need to address critical gaps in this area of the law. This article appeared in the August 2022 issue of Contract Management magazine published by the National Contract Management Association. Used with permission.

Why The Corporation Locks In Financial Capital But The Partnership Does Not, Richard Squire

Faculty Scholarship

Each partner in an at-will partnership can obtain a cash payout of his interest at any time. The corporation, by contrast, locks in shareholder capital, denying general payout rights to shareholders unless the charter states otherwise. What explains this difference? This Article argues that partner payout rights reduce the costs of two other characteristics of the partnership: the non-transferability of partner control rights, and the possibility for partnerships to be formed inadvertently. While these characteristics serve valuable functions, they can introduce a bilateral-monopoly problem and a special freezeout hazard unless each partner can force the firm to cash out his …

Cancelling Capitalism?, Christina P. Skinner

Notre Dame Law Review

Grow the Pie’s defense of capitalism is a tremendous contribution, albeit one which Edmans himself downplays. While the author largely bills his work as one aiming to correct the factual record about profitmaximization— while providing pointers for managers and policymakers—Edmans reaffirms the validity and viability of corporate capitalism as an ideology that, in practice, advances human welfare.

Injecting this viewpoint into the academic debate is critically important at a time when voices of stakeholderists seem the loudest. Sociological research long ago confirmed that societal expectations (as often shaped by academic discourse) have real impact on our social systems and …

The Supreme Court And The Pro-Business Paradox, Elizabeth Pollman

Faculty Scholarship at Penn Carey Law

One of the most notable trends of the Roberts Court is expanding corporate rights and narrowing liability or access to justice against corporate defendants. This Comment examines recent Supreme Court cases to highlight this “pro-business” pattern as well as its contradictory relationship with counter trends in corporate law and governance. From Citizens United to Americans for Prosperity, the Roberts Court’s jurisprudence could ironically lead to a situation in which it has protected corporate political spending based on a view of the corporation as an “association of citizens,” but allows constitutional scrutiny to block actual participants from getting information about …

The Case For The Inclusion Of Employee Relations Matters In Mandatory Disclosure And Reporting Requirements For Public Corporations, Derek J. Illar

Northern Illinois University Law Review

Public companies have no obligation to disclose and to report matters that pertain to equality in the workplace, the payment of wages and benefits, and health and safety issues—“employee relations matters”—under the current statutory and regulatory framework for the capital markets. The absence of this obligation significantly and glaringly handicaps shareholders and other market participants insofar as they are investing in public companies with a limited and distorted understanding of their operations that belies the historical and analytical justifications for mandatory disclosures and reporting. This Article posits that public corporations should publish information about employee relations matters because certain disclosure …

The Use And Misuse Of Fiduciary Duties: Corporate Social Responsibility And The Standard Of Review, Jonathan R. Povilonis

William & Mary Business Law Review

This Article provides a crucial corrective to the “corporate social responsibility” debate, which concerns whether corporations have the obligation to protect or serve the interests of groups other than their shareholders, like employees or customers (often called “stakeholders”). Scholars on one side of the debate have repeatedly presumed that corporate directors’ fiduciary duties to shareholders play an important role in protecting shareholders from decisions that favor stakeholders at their expense. Scholars on the other side agree that fiduciary duties provide meaningful protection against unfavorable conduct but argue that directors should also owe fiduciary duties to stakeholders so they may be …

Corporate Governance Gaming: The Collective Power Of Retail Investors, Christina M. Sautter, Sergio Alberto Gramitto Ricci

Journal Articles

The GameStop saga and meme stock frenzy have shown the pathway to the most disruptive revolution in corporate governance of the millennium. New generations of retail investors use technologies, online forums, and gaming dynamics to coordinate their actions and obtain unprecedented results. Signals indicate that these investors, whom we can dub wireless investors, are currently expanding their actions to corporate governance. Wireless investors' generational characteristics suggest that they will use corporate governance to pursue social and environmental causes. In fact, wireless investors can set in motion asocial movement able to bring business corporations to serve their original partly-private-partly-public purpose. This …

The Federal Option: Delaware As A De Facto Agency, Omari Scott Simmons

Washington Law Review

Despite over 200 years of deliberation and debate, the United States has not adopted a federal corporate chartering law. Instead, Delaware is the “Federal Option” for corporate law and adjudication. The contemporary federal corporate chartering debate is, in part, a referendum on its role. Although the federal government has regulated other aspects of interstate commerce and has the power to charter corporations and preempt Delaware pursuant to its Commerce Clause power, it has not done so. Despite the rich and robust scholarly discussion of Delaware’s jurisdictional dominance, its role as a de facto national regulator remains underdeveloped. This Article addresses …

Corporate Venture Capital, Darian M. Ibrahim

Faculty Publications

This Article makes the case for corporate venture capital as a potentially game-changing entrant into entrepreneurial finance. Part II begins by retracing the ancillary players in entrepreneurial finance and their roles in the startup ecosystem. After finding each of them incapable of denting the venture capitalist’s current dominance, Part III introduces the large corporation as venture capitalist. Part III discusses the growing scale of corporate venture capital and why it may be desirable for startups, innovation, and society as a whole. Part IV looks at legal differences that may become important for corporate venture capitalists to consider, including securities, antitrust, …

Long Overdue: Fifth Amendment Protection For Corporate Officers, Tracey Maclin

Faculty Scholarship

The Supreme Court has extended to corporations many of the same constitutional rights that were originally intended to protect people.One notable exception, however, is the Fifth Amendment’s prohibition on compulsory self-incrimination.

“Corporations may not take the Fifth.” There is a long line of cases dating back to the start of the twentieth century stating—but never directly holding— that corporations are not protected by the Self-Incrimination Clause.

But the fact that a corporation cannot invoke the Fifth Amendment does not explain why a person who works for a corporation cannot. As a matter of text, the Fifth Amendment draws no distinction …

United States Food Law Update: Initial Food Safety Restructuring Efforts, Poultry Production Contract Reforms And Genetically Engineered Rice Litigation, A. Bryan Endres, Michaela N. Tarr

Journal of Food Law & Policy

This edition of the food law update will address recent events that may serve as bellwether signs that significant, long sought changes to the food and agricultural production system may be on the horizon. The first section of the update focuses on several general food safety initiatives. These efforts may, in the near term, coalesce into comprehensive food safety legislation. The second section analyzes two food safety actions relating to specific product categories: oysters and eggs. Section three provides a brief overview of poultry production contracts that may signal a broader restructuring of the legal relationships between farmers and the …

"There Is No Planet 'B'": How U.S. Music Festival Production Companies Can Reduce Their Negative Environmental Impact By Incorporating As A Benefit Corporation, Bryce Ballard

William & Mary Environmental Law and Policy Review

The music festival industry in the United States is growing exponentially each year, both in terms of fan attendance and the money being produced by concession, merchandise, and ticket sales. However, there is also a growing realization that there are several negative externalities associated with the growth of the music festival industry, not the least of which is the environmental damage that follows in the wake of music festivals.

The scene at most music festivals in the United States today is the same: a caravan of vehicles lined up single-file waiting to enter the campgrounds, camping tents of various sizes …

The Separation Of Voting And Control: The Role Of Contract In Corporate Governance, Gabriel V. Rauterberg

Articles

The default rules of corporate law make shareholders’ control rights a function of their voting power. Whether a director is elected or a merger is approved depends on how shareholders vote. Yet, in private corporations shareholders routinely alter their rights by contract. This phenomenon of shareholder agreements—contracts among the owners of a firm— has received far less attention than it deserves, mainly because detailed data about the actual contents of shareholder agreements has been lacking. Private companies disclose little, and shareholder agreements are thought to play a trivial or nonexistent role in public companies. I show that this is false—fifteen …