Law Commons^™

Unintentional Irony In Landmark Decisions Of The Delaware Supreme Court Regarding Corporate Law, Steven J. Cleveland

Michigan Business & Entrepreneurial Law Review

Three landmark decisions of the Delaware Supreme Court exhibit unintentional irony: Beam v. Stewart, Smith v. Van Gorkom, and Paramount Communications Inc. v. Time Inc. In Beam, the court concluded that, regarding the decision of whether to seek remedy against Martha Stewart, her fellow directors would not have jeopardized their reputations for the minimal gain of continuing their business and personal relationships with her. Ironically, the court failed to acknowledge that Martha Stewart—in trading on material nonpublic information, which gave rise to the corporate claim against her—jeopardized her reputation (ultimately losing hundreds of millions of dollars and her freedom) for …

Should Shareholders Be Rewarded For Loyalty? European Experiments On The Wedge Between Tenured Voting And Takeover Law, Chiara Mosca

Michigan Business & Entrepreneurial Law Review

Corporate law reveals its democratic background when it comes to the general meetings of shareholders, finding, on both sides of the Atlantic, its most tangible expression in the “one share, one vote” principle. While, in the political landscape, the “one person, one vote” standard is absolute dogma and weighting votes according to people’s preferences and interests has never proved feasible, in the corporate scenario the one share, one vote principle is constantly challenged by the incentives of companies and their shareholders to shape corporate rights according to specific needs. In this respect, some legislators (specifically in France and Italy) have …

Fcpa Enforcement Against U.S. And Non-U.S. Companies, Michael S. Diamant, Christopher W.H. Sullivan, Jason H. Smith

Michigan Business & Entrepreneurial Law Review

This Article explores how U.S. authorities have enforced the FCPA against non-U.S. companies and tests the perception that the FCPA disproportionately impacts U.S. businesses. After briefly discussing the FCPA, its enforcement, and its reach, this Article examines corporate FCPA enforcement activity since the statute’s enactment in 1977. It finds that foreign firms have actually fared worse under the FCPA despite the fact that DOJ and the SEC have brought more enforcement actions against domestic companies in absolute terms. The average cost of resolving an FCPA enforcement action to non-U.S. corporations of resolving an FCPA enforcement action has been more than …

Crafting A Corporate Analogue To Criminal Disenfranchisement, B. Graves Lee Jr.

Michigan Business & Entrepreneurial Law Review

The Supreme Court’s 2010 decision in Citizens United v. FEC represented a sea change in the world of corporate citizenship. Although the decision dealt with campaign finance law, it has sparked significant discussion of the concept of corporate personhood more broadly. Corporations have increasingly taken advantage of legal rights previously reserved for individuals. This Note argues that where corporations reap the benefits of constitutional entitlements intended for individuals, they should suffer consequences for malfeasance similar to those imposed on individuals who engage in criminal conduct. Specifically, this Note advocates for limitations on corporate electioneering as a collateral consequence of a …

In Whose Interests Should A Company Be Run? Fiduciary Duties Of Directors During Corporate Failure In India: Looking To The West For Answers, Gautam Sundaresh

Michigan Business & Entrepreneurial Law Review

This Comment looks at the debate as it has played out in the legal jurisprudence of the U.S. and the U.K. The analysis of each considers the three financial stages of a corporation’s existence that are specifically addressed in the debate today, i.e.: (i) solvency; (ii) insolvency; and (iii) the zone of insolvency. After setting out the current position, this Comment specifically addresses the various shortcomings and criticisms of the models adopted by each jurisdiction and offers observations on the status quo and the implementation of these models. On this basis, this Comment goes on to propose a model to …

Digital Colonialism: The 21st Century Scramble For Africa Through The Extraction And Control Of User Data And The Limitations Of Data Protection Laws, Danielle Coleman

Michigan Journal of Race and Law

As Western technology companies increasingly rely on user data globally, extensive data protection laws and regulations emerged to ensure ethical use of that data. These same protections, however, do not exist uniformly in the resource-rich, infrastructure-poor African countries, where Western tech seeks to establish its presence. These conditions provide an ideal landscape for digital colonialism.

Digital colonialism refers to a modern-day “Scramble for Africa” where largescale tech companies extract, analyze, and own user data for profit and market influence with nominal benefit to the data source. Under the guise of altruism, large scale tech companies can use their power and …

Promoting Predictability In Business: Solutions For Overlapping Liability In International Anti-Corruption Enforcement, Andrew T. Bulovsky

Michigan Journal of International Law

This Note evaluates solutions to the problems of overlapping liability in general and multi-jurisdictional disgorgement in particular. Part I traces the origins of international anti-corruption efforts and provides an overview of the Foreign Corrupt Practices Act (the “FCPA”). It then discusses the two most significant international anti-corruption conventions: the OECD’s Convention on Combatting Bribery of Foreign Officials in International Business Transactions (the “OECD Convention”) and the United Nations Convention Against Corruption (“UNCAC”). Part II lays out the problems created by the lack of a formal mechanism to prevent overlapping liability— a phenomenon that violates the common law concept known as …

Inter Vivos Transfers Of Ownership In Family Firms, James R. Hines Jr., Niklas Potrafke, Marina Riem, Christoph Schinke

Articles

This paper examines the determinants of inter vivos (lifetime) transfers of ownership in German family firms between 2000 and 2013. Survey evidence indicates that owners of firms with strong current business conditions transfer ownership at higher rates than others. When a firm’s self-described business condition improves from “normal” to “good,” the relative likelihood of an inter vivos transfer increases by 46 percent. Inter vivos transfer rates also rose following a 2009 reform that reduced transfer taxes. These patterns suggest that transfer taxes significantly influence rates and timing of inter vivos ownership transfers.

The Games They Will Play: Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation, David Kamin, David Gamage, Ari Glogower, Rebecca Kysar, Darien Shanske, Reuven S. Avi-Yonah, Lily Batchelder, J. Clifton Fleming, Daniel Hemel, Mitchell Kane, David Miller, Daniel Shaviro, Manoj Viswanathan

Articles

The 2017 tax legislation brought sweeping changes to the rules for taxing individuals and business, the deductibility of state and local taxes, and the international tax regime. The complex legislation was drafted and passed through a rushed and secretive process intended to limit public comment on one of the most consequential pieces of domestic policy enacted in recent history. This Article is an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage, and describes key problem areas in the new legislation. Many of the new changes fundamentally undermine the integrity of the tax …

Moral Diversity And Efficient Breach, Matthew A. Seligman

Michigan Law Review

Most people think it is morally wrong to breach a contract. But sophisticated commercial parties, like large corporations, have no objection to breaching contracts and paying the price in damages when doing so is in their self-interest. The literature has ignored the profound legal, economic, and normative implications of that asymmetry between individuals’ and firms’ approaches to breach. To individuals, a contract is a promise that cannot be broken regardless of the financial stakes. For example, millions of homeowners refused to breach their mortgage contracts in the aftermath of the housing crisis even though doing so could have saved them …

Books And Olive Oil: Why Antitrust Must Deal With Consolidated Corporate Power, Carl T. Bogus

University of Michigan Journal of Law Reform

Following an epic battle in the marketplace between Apple and major book publishers, on one side, and Amazon, on the other side, the United States Department of Justice and thirty-three states filed an antitrust lawsuit against Apple and the publishers, alleging that they had conspired to fix the prices of ebooks. Both the district court and a divided panel of the United States Court of Appeals for the Second Circuit decided the case in the government’s favor. This Article argues that government regulators and the courts took the wrong side in the dispute and did so because of fundamental flaws …

The Private Law Critique Of International Investment Law, Julian Arato

Articles

This Article argues that investment treaties subtly constrain how nations organize their internal systems of private law, including laws of property, contracts, corporations, and intellectual property. Problematically, the treaties do so on a one-size-fits-all basis, disregarding the wide variation in values reflected in these domestic legal institutions. Investor-state dispute settlement exacerbates this tension, further distorting national private law arrangements. This hidden aspect of the system produces inefficiency, unfairness, and distributional inequities that have eluded the regime's critics and apologists alike.

Unraveling China's Capital Market Growth: A Political Economy Account, Tamar Groswald Ozery

SJD Dissertations

With modern, successful firms that operate globally and a capital market that is the second largest in the world, corporate governance in China has long passed the point of an “adjust or perish” prognostic. Yet its firm governance and capital market functions maintain strong idiosyncrasies that go against many fundamentals in economics and legal thought. These idiosyncrasies are products of the underlying configurations of China’s political economy and the shifts within it. Political economy in China has a determinant role on the ways corporate ownership is organized, firms operate, and the capital market functions. It is responsible for many of …

Intellectual Property: A Beacon For Reform Of Investor-State Dispute Settlement, Daniel Gervais

Michigan Journal of International Law

This Article attempts to resolve clashes between intellectual property and investor-state dispute settlement (“ISDS”). ISDS clauses contained in bilateral, plurilateral, or multilateral trade and investment agreements give multinational investors (corporations) a right to sue a state in a binding proceeding before an independent arbitral tribunal. This jurisgenerative right to file a claim against a state in an international tribunal with mandatory jurisdiction is exceptional; it is generally reserved to other states. Only multinational corporations can use ISDS to file claims against states in which they invest, provided the state is party to a bilateral investment treaty (“BIT”) or a trade …

Policing Corporate Conduct Toward Minority Communities: An Insurance Law Perspective On The Use Of Race In Calculating Tort Damages, Dhruti J. Patel

University of Michigan Journal of Law Reform

Courts commonly use U.S. Department of Labor actuarial tables, which explicitly take into account the race of the tort victim, to determine average national wage, work-life expectancy, and life expectancy. This practice has led to wide discrepancies between average damage awards for minority plaintiffs compared to white plaintiffs even if both plaintiffs are similarly situated. While recent legal scholarship criticizes the use of race-based tables and addresses the Equal Protection and incentive concerns such tables present, few courts have deviated from the explicit use of race in determining tort damages.

Though the use of demographic features, such as race, to …

What Corporate Veil?, Joshua C. Macey

Michigan Law Review

Review of Adam Winkler's We the Corporations: How American Business Won Their Civil Rights.