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Full-Text Articles in Law
Corporations As Private Regulators, Wentong Zheng
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 …
Corporate Charter Competition, Lynn M. Lopucki
Corporate Charter Competition, Lynn M. Lopucki
UF Law Faculty Publications
The corporate charter competition has dominated the corporate law literature for four decades. This Article draws on the theoretical and empirical insights from that vast literature to present a systems analysis of the competition. The analysis shows the competition to be a system composed of three subsystems, joined by the internal affairs doctrine. The subsystems are those by which (1) corporations choose incorporation states, (2) states decide what packages to offer, and (3) states and stakeholders choose the courts that interpret and enforce corporate law. The analysis suggests that the standard account of charter competition should be revised in five …
Sunrise, Sunset: An Empirical And Theoretical Assessment Of Dual-Class Stock Structures, Andrew William Winden
Sunrise, Sunset: An Empirical And Theoretical Assessment Of Dual-Class Stock Structures, Andrew William Winden
UF Law Faculty Publications
A battle is brewing for control of America’s most dynamic companies. Entrepreneurs are increasingly seeking protection from interference or dismissal by public investors through the adoption of dual-class stock structures in initial public offerings. Institutional investors are pushing back, demanding that sucks structures be abandoned or strictly limited through subset provisions. The actual terms of dual-class stock structures, however, have been remarkably understudied, so the debate between proponents of prohibition and private ordering is ill-informed. This paper presents the first empirical analysis of the initial, or sunrise, and terminal, or sunset, provisions found in the charters of dual-class companies, with …
A Legal Theory Of Shareholder Primacy, Robert J. Rhee
A Legal Theory Of Shareholder Primacy, Robert J. Rhee
Working Papers
Shareholder primacy is the most fundamental concept in corporate law and corporate governance. It is widely embraced in the business, legal, and academic communities. Economic analysis and policy arguments advance a normative theory that corporate managers should maximize shareholder wealth. Academic literature invariably describes shareholder primacy as a “norm.” But whether the concept is “law” is contested because, remarkably, we still do not have a coherent legal theory. Our understanding of a fundamental tenet of the field is flawed and incomplete. This article presents a positive legal theory of shareholder primacy. It answers the questions: Is shareholder primacy law? What …
How Do Llc Owners Contract Around Default Statutory Protections?, Peter Molk
How Do Llc Owners Contract Around Default Statutory Protections?, Peter Molk
UF Law Faculty Publications
Limited liability companies are built on the idea of contractual freedom. Unlike other business organization forms, most owner protections apply only by default to LLCs, which are free to waive or modify them as desired. This freedom promises economic efficiency if parties are sophisticated but raises the potential for opportunism by relatively more sophisticated managers and majority owners. While companies ranging from small landscape firms to Chrysler and Fidelity organize as LLCs, remarkably little is known about whether or how LLCs use this contractual flexibility. I analyze the operating agreements of 283 privately owned LLCs organized under Delaware and New …
The Puzzling Lack Of Cooperatives, Peter Molk
The Puzzling Lack Of Cooperatives, Peter Molk
UF Law Faculty Publications
Some of the most recognizable companies, including Land O'Lakes, REI, the Associated Press, Ace Hardware, and State Farm Insurance, are organized as cooperatives--firms owned by their suppliers, workers, or customers. Yet aside from isolated areas of the economy, cooperatives constitute only a small portion of American enterprise, which is otherwise dominated by investor-owned firms. Conventional wisdom assumes that firms either start as cooperatives or convert to cooperatives when cooperatives offer the highest ongoing benefits to owners, and it explains the lack of cooperatives by suggesting that cooperatives usually do not maximize ongoing benefits. This Article looks at entrepreneurs' and brokers' …
When Subchapter S Meets Subchapter C, Martin J. Mcmahon Jr., Daniel L. Simmons
When Subchapter S Meets Subchapter C, Martin J. Mcmahon Jr., Daniel L. Simmons
UF Law Faculty Publications
It is often said that “an S corporation is a corporation that is taxed like a partnership.” This statement is incorrect. An S corporation resembles a partnership only in that it generally does not pay income taxes and its income and losses pass through to the shareholders and retain their character as they pass through. Also, like a partnership, basis adjustments to an S corporation shareholder's stock reflect allocations of income, expense, loss, and distributions. However, no other rules of subchapter K governing partnership taxation apply to S corporations. Most of the rules governing the relationship between an S corporation …
Standard Oil And U.S. Steel: Predation And Collusion In The Law Of Monopolization And Mergers, William H. Page
Standard Oil And U.S. Steel: Predation And Collusion In The Law Of Monopolization And Mergers, William H. Page
UF Law Faculty Publications
The Supreme Court’s 1911 decision in Standard Oil gave us embryonic versions of two foundational standards of liability under the Sherman Act: the rule of reason under Section 1 and the monopoly power/exclusionary conduct test under Section 2. But a case filed later in 1911, United States v. United States Steel Corporation, shaped the understanding of Standard Oil’s standards of liability for decades. U.S. Steel, eventually decided by the Supreme Court in 1920, upheld the 1901 merger that created "the Corporation," as U.S. Steel was known. The majority found that the efforts of the Corporation and its …
Executive Trade Secrets, Tom C.W. Lin
Executive Trade Secrets, Tom C.W. Lin
UF Law Faculty Publications
The law discriminates among a corporation’s secrets. In the eyes of the law, commercial secrets of corporations are legitimate secrets that deserve legal protection and nondisclosure, but personal secrets of executives are not as deserving of legal protection and nondisclosure. This divergent treatment of secrets has resulted in a legal landscape of perplexing, paradoxical paths for corporations and executives concerning executive disclosures — a precarious landscape that has left corporations and investors dangerously susceptible to revelations of private facts that shock market valuation and institutional stability.
This Article explores this divergent treatment of secrets in the context of public corporations …
The Corporate Governance Of Iconic Executives, Tom C.W. Lin
The Corporate Governance Of Iconic Executives, Tom C.W. Lin
UF Law Faculty Publications
This Essay explores the special corporate governance challenges posed by iconic executives. Iconic executives are complex, bittersweet figures in corporate governance narratives. They are alluring, larger-than-life corporate figures who often govern freely. Iconic executives frequently rule like monarchs over their firms, offering lofty promises to shareholders, directors, and managers under their reign. But like many stories of powerful and influential figures, the narratives of iconic executives also contain adversity and danger. Part of the acquiescence and enchantment with such figures is rooted in the virtuous promises embodied by their presence, promises of unity, accountability, and effectiveness in corporate governance. Unfortunately, …
Coolhunting The Law, Mark Fenster
Coolhunting The Law, Mark Fenster
UF Law Faculty Publications
In this essay, I want to use the image of the "coolhunter" to consider what Victor Fleischer has called the "branding moments" in a corporation's legal life -- specifically, those events, most notably in initial public offerings, in which a company, with the assistance of counsel, uses its legal infrastructure and corporate transactions to further its brand. This essay is a small effort to use Fleischer's work to think through these issues by focusing, in turn, on branding, on the various audiences for these branding moments, on the relationship between the brand and transparency norms, and, finally, on the role …
Patterns In The Bankruptcy Reorganization Of Large Publicly Held Companies, Lynn M. Lopucki, William C. Whitford
Patterns In The Bankruptcy Reorganization Of Large Publicly Held Companies, Lynn M. Lopucki, William C. Whitford
UF Law Faculty Publications
Several recent articles contend that Chapter of the Bankruptcy Code does not provide efficient procedures for redressing the financial distress of large firms. The authors of these articles argue that the creditors of a financially distressed firm would fare better if the corporation's problems were resolved in some other way. The argument has proceeded principally on a theoretical level, since it is virtually impossible to know for certain how firms that have been in Chapter 11 would have fared under a different procedure. We recently completed an extensive empirical study of forty-three Chapter 11 cases involving large, publicly held firms. …