Open Access. Powered by Scholars. Published by Universities.®
- Discipline
Articles 1 - 2 of 2
Full-Text Articles in Law
The Direct-Derivative Distinction, The Special Litigation Committee, And The Uniform Act: A Response To Professor Weidner, Daniel S. Kleinberger
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 …
Why The Corporation Locks In Financial Capital But The Partnership Does Not, Richard Squire
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 …