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Fiduciary duties

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Full-Text Articles in Law

Mass Tort Bankruptcy Goes Public, William Organek -- Assistant Professor Of Law Apr 2024

Mass Tort Bankruptcy Goes Public, William Organek -- Assistant Professor Of Law

Vanderbilt Law Review

Large companies like 3M, Johnson & Johnson, Purdue Pharma, and others have increasingly, and controversially, turned from multidistrict litigation to bankruptcy to resolve their mass tort liability. While corporate attraction to bankruptcy’s unique features partially explains this evolution, this Article reveals an underexamined driver of this trend and its startling results: government intervention. Governments increasingly intervene in high-profile bankruptcies, forcing firms into insolvency and dictating the outcomes in their bankruptcy cases. Using several case studies, this Article demonstrates why bankruptcy law should subject such governmental actions to greater scrutiny and procedural protections. Governments often assume multiple incompatible roles in these …


Expanding Mfw: Delaware Law Should Offer A Business Judgment Rule Safe Harbor For All Conflicted Controller Transactions, Alex Lindsey Dec 2023

Expanding Mfw: Delaware Law Should Offer A Business Judgment Rule Safe Harbor For All Conflicted Controller Transactions, Alex Lindsey

Fordham Journal of Corporate & Financial Law

While courts usually defer to a board’s business decisions under the business judgment rule, courts will apply a much less deferential standard of review due to loyalty concerns if a conflicted controller is involved in a business decision such as a merger. However, in Kahn v. M & F Worldwide (“MFW”) when a squeeze out merger was challenged by a minority stockholder, the Delaware Supreme Court reviewed the transaction under the deferential business judgment rule standard because the Court found that the structure of the transaction neutralized the controller loyalty concerns. Building on this reasoning, the Court developed a checklist …


Fiduciary Duties And Corporate Climate Responsibility, Cynthia A. Williams Jan 2021

Fiduciary Duties And Corporate Climate Responsibility, Cynthia A. Williams

Vanderbilt Law Review

Corporate-law scholarship for decades has been occupied with agency costs and how to mitigate them. But when I teach the basic business organizations class, starting with agency law and looking at the fiduciary duties of care, loyalty, and full disclosure of any agent to her principal, we explore both costs and benefits of agency relationships. I do so by introducing Ronald Coase’s theory of the firm. Using an example close to most second-year law students’ experience, that of buying a suit for interviews, I contrast Brooks Brothers establishing its own factories (the “make” decision) with Brooks Brothers using supply chains, …


Corporate Governance And The Omnipresent Specter Of Political Bias, Stefan J. Padfield Jan 2020

Corporate Governance And The Omnipresent Specter Of Political Bias, Stefan J. Padfield

Marquette Law Review

Subject to important qualifications, corporate decision-makers are dutybound to maximize shareholder value. However, there is reason to believe corporate decision-makers are allowing their political biases to corrupt their decision-making. This Essay posits two related fact patterns that should concern advocates of good corporate governance. The first occurs when decision-makers expressly disavow any duty to maximize shareholder value, such as when Apple CEO, Tim Cook, told shareholders, “When we work on making our devices accessible by the blind, I don’t consider the bloody ROI [return on investment],” or when Ed Stack, the chairman and chief executive of Dick’s Sporting Goods, decided …


The Fiduciary Obligations Of Public Officials, Vincent R. Johnson Aug 2019

The Fiduciary Obligations Of Public Officials, Vincent R. Johnson

St. Mary's Journal on Legal Malpractice & Ethics

At various levels of government, the conduct of public officials is often regulated by ethical standards laid down by legislative enactments, such as federal or state statutes or municipal ordinances. These rules of government ethics are important landmarks in the field of law that defines the legal and ethical obligations of public officials. Such provisions can form the basis for the kinds of government ethics training that helps to minimize wrongful conduct by public servants and reduces the risk that the performance of official duties will be clouded by appearances of impropriety. Codified government ethics rules also frequently provide mechanisms …


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 May 2019

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 …


The Elephant In The Room: Helping Delaware Courts Develop Law To End Systemic Short-Term Bias In Corporate Decision-Making, Kenneth Mcneil, Keith Johnson Oct 2018

The Elephant In The Room: Helping Delaware Courts Develop Law To End Systemic Short-Term Bias In Corporate Decision-Making, Kenneth Mcneil, Keith Johnson

Michigan Business & Entrepreneurial Law Review

Short-termism in corporate decision-making is as problematic for long-term investors as relying on a three-mile radar on a supertanker. It is totally inadequate for handling the long-term risks and opportunities faced by the modern corporation. Yet recent empirical research shows that up to 85% of the S&P 1500 have no long-term planning. This is costing pension funds and other long-term investors dearly. For instance, the small minority of companies that do long-term planning and risk management had a long-term profitability that was 81% higher than their peers during the 2001–2014 period—with less stock volatility that costs investors dearly as well. …


Solely Beneficial: How Benefit Corporations May Change The Duty Of Care Analysis For Traditional Corporate Directors In Delaware, Dustin Womack Oct 2018

Solely Beneficial: How Benefit Corporations May Change The Duty Of Care Analysis For Traditional Corporate Directors In Delaware, Dustin Womack

Michigan Business & Entrepreneurial Law Review

Rather than adding to the voluminous literature assessing the necessity of benefit corporations themselves or the possible liability of their directors, this Note concerns itself only with how benefit corporations will impact the fiduciary duty of care analysis for the directors of traditional corporations constituted in the state of Delaware. Further, this Note is only concerned with liability arising from claims alleging that a day-to-day directorial decision resulted in a breach of the duty of care. As such, this Note does not address any other potential liability predicated on other situations or duties. Finally, this Note provides general background information …


Vicarious Charity: Social Responsibility And Catholic Social Teaching, Paula Dalley Sep 2018

Vicarious Charity: Social Responsibility And Catholic Social Teaching, Paula Dalley

Journal of Catholic Legal Studies

(Excerpt)

This Article begins with a brief introduction to the CSR debate. Part II describes the legal role of various human actors in the corporation, and Part III describes the legal restrictions on those actors’ socially responsible, but unauthorized, decisions. Part IV describes in some detail the relevant social teaching of the Catholic Church and explains that it does not apply to corporations or other corporate actors. Part V then describes the appropriate application of Catholic social doctrine to economic actors.


The Diminishing Duty Of Loyalty, Julian Velasco Apr 2018

The Diminishing Duty Of Loyalty, Julian Velasco

Washington and Lee Law Review

Fiduciary duties comprise an integral part of corporate law. It is generally understood that directors owe the corporation and its shareholders two fiduciary duties: the duty of care and the duty of loyalty. Although both duties are firmly established in corporate law, they are not treated equally. It is generally understood that the duty of loyalty is enforced far more rigorously than the duty of care. The justification for this dichotomy is twofold. First, differential treatment is appropriate because of the relative urgencies of the underlying subject matter: loyalty issues pose greater risks than do care issues. Second, the deference …


Polishing Up Wisconsin's Fiduciary Duties In Llc Law To Attract New Suitors, Collin D. Brunk Mar 2018

Polishing Up Wisconsin's Fiduciary Duties In Llc Law To Attract New Suitors, Collin D. Brunk

Marquette Law Review

None


The "New" Fiduciary Standards Under The Revised Uniform Limited Liability Company Act: More Bottom Bumping From Nccusl, Rutheford B. Campbell Jr. Oct 2017

The "New" Fiduciary Standards Under The Revised Uniform Limited Liability Company Act: More Bottom Bumping From Nccusl, Rutheford B. Campbell Jr.

Maine Law Review

Between 1995 and 2001, the influential National Conference of Commissioners on Uniform State Laws (NCCUSL) promulgated iterations of uniform laws pertaining to partnerships, limited partnerships and limited liability companies. One or more of those acts have been widely adopted by state legislatures. Each of the three acts—the Uniform Partnership Act (1997) (hereinafter RUPA), the Uniform Limited Partnership Act (2001) (hereinafter ULPA (2001)), and the Uniform Limited Liability Company Act (1996) (hereinafter ULLCA) —contains identical fiduciary duty provisions. The acts all adopt the same standards for the duty of care and the duty of loyalty, and offer parties the same limited …


The Fiduciary Enterprise Of Corporate Law, Christopher M. Bruner Apr 2017

The Fiduciary Enterprise Of Corporate Law, Christopher M. Bruner

Washington and Lee Law Review

No abstract provided.


Disciplining Corporate Boards And Debtholders Through Targeted Proxy Access, Michelle M. Harner Jan 2016

Disciplining Corporate Boards And Debtholders Through Targeted Proxy Access, Michelle M. Harner

Indiana Law Journal

Corporate directors committed to a failed business strategy or unduly influenced by the company’s debtholders need a dissenting voice—they need shareholder nominees on the board. This Article examines the biases, conflicts, and external factors that impact board decisions, particularly when a company faces financial distress. It challenges the conventional wisdom that debt disciplines management, and it sug-gests that, in certain circumstances, the company would benefit from having the shareholders’ perspective more actively represented on the board. To that end, the Article proposes a bylaw that would give shareholders the ability to nominate direc-tors upon the occurrence of predefined events. Such …


Looking Back And Looking Forward: Sarbanes-Oxley And The Future Of Corporate Governance, Scott Harshbarger, Goutam U. Jois Jul 2015

Looking Back And Looking Forward: Sarbanes-Oxley And The Future Of Corporate Governance, Scott Harshbarger, Goutam U. Jois

Akron Law Review

In this Article, we argue that all groups: business leaders, regulators and shareholders, should recognize the steps that must be taken to create a competitive, fair and ethical corporate climate. We are not calling merely for “voluntary cooperation” from businesses to improve the current situation. Indeed, SOX exists and is appropriate for this situation precisely because it imposes baseline obligations with which corporations are required to comply. Moreover, other regulations regarding independent directors, expensing of stock options, etc. are needed and are vital to keeping business interests in line with society’s. However, business leaders and regulators will have an easier …


The New York Limited Liability Company Law At Twenty: Past, Present & Future, Meredith R. Miller Jan 2015

The New York Limited Liability Company Law At Twenty: Past, Present & Future, Meredith R. Miller

Touro Law Review

The New York Limited Liability Company Law (“LLC Law”) has turned 20. This occasion presents an opportunity to reflect on its past, present and future.


Fiduciary Duties Of Llc Managers: Are They Subject To Prospective Waiver Under The New York Llc Statute?, Jack Graves, Yelena Davydan Jan 2015

Fiduciary Duties Of Llc Managers: Are They Subject To Prospective Waiver Under The New York Llc Statute?, Jack Graves, Yelena Davydan

Touro Law Review

No abstract provided.


Broker-Dealers And Investment Advisers: A Behaviorial-Economics Analysis Of Competing Suggestions For Reform, Polina Demina Dec 2014

Broker-Dealers And Investment Advisers: A Behaviorial-Economics Analysis Of Competing Suggestions For Reform, Polina Demina

Michigan Law Review

For the average investor trying to save for retirement or a child’s college fund, the world of investing has become increasingly complex. These retail investors must turn more frequently to financial intermediaries, such as broker-dealers and investment advisers, to get sound investment advice. Such intermediaries perform different duties for their clients, however. The investment adviser owes his client a fiduciary duty of care and therefore must provide financial advice that is in the client’s best interests, while the broker-dealer must merely provide advice that is suitable to the client’s interests—a lower standard than the fiduciary duty of care. And yet …


Insider Trading And Other Securities Frauds In The United States: Lessons For Chile, Dante Figueroa Jan 2014

Insider Trading And Other Securities Frauds In The United States: Lessons For Chile, Dante Figueroa

Michigan Business & Entrepreneurial Law Review

This Article is a comparative analysis of insider trading law in the United States and Chile. The study summarily reviews the historical, political, and legal foundations of insider trading regulation in both jurisdictions, identifying areas of convergence, as well as areas in which the Chilean securities market could benefit vis- ` a-vis the more advanced experience of the considerably larger American securities market. The Article also highlights the axiological closeness between both jurisdictions concerning the protection of inside corporate information and the fiduciary role of those who intervene in securities markets in their various capacities (as investors, shareholders, corporate officers, …


Beck Vs. Pace International Union: A Mask Of Unanimity To Conceal Disagreement And Confusion, Sharon Hritz Apr 2013

Beck Vs. Pace International Union: A Mask Of Unanimity To Conceal Disagreement And Confusion, Sharon Hritz

Journal of the National Association of Administrative Law Judiciary

No abstract provided.


“Package Deal”: The Curious Relationship Between Fiduciary Duties And The Implied Covenant Of Good Faith And Fair Dealing In Delaware Limited Liability Companies, Monica E. White Apr 2013

“Package Deal”: The Curious Relationship Between Fiduciary Duties And The Implied Covenant Of Good Faith And Fair Dealing In Delaware Limited Liability Companies, Monica E. White

University of Miami Business Law Review

Since 1977, the popularity of the limited liability company (“LLC”) has grown tremendously, overtaking the corporation and the partnership as the preferred business structure in many jurisdictions. Amidst this growth in popularity, a legal debate has sparked concerning the existence, nature, and extent of the fiduciary and contractual duties owed in the LLC context.

Drafters of LLC agreements can adjust fiduciary “norms” through limitation or, in certain jurisdictions like Delaware, through complete elimination of fiduciary duties. However, the implied contractual covenant of good faith and fair dealing (the “Implied Covenant” or the “Covenant”) remains and cannot be waived by the …


Corporation Code Sections 309 And 1203: California Redefines Directors' Duties Towards Shareholders, Ernest F. Batenga, Mark Willis Jan 2013

Corporation Code Sections 309 And 1203: California Redefines Directors' Duties Towards Shareholders, Ernest F. Batenga, Mark Willis

Pepperdine Law Review

No abstract provided.


Arbitration Clauses In Fee Retainer Agreements., Chrissy L. Schwennsen Jan 2013

Arbitration Clauses In Fee Retainer Agreements., Chrissy L. Schwennsen

St. Mary's Journal on Legal Malpractice & Ethics

Due to the variety of approaches jurisdictions employ when determining the legal ramifications of arbitration clauses in fee retainer agreements, it’s best to include an explanation of the legal consequences of arbitration in the agreements. The attorney can, and should, fully explain the potential benefits of arbitration to clients. State courts take various viewpoints on the issue, and most stand contrary to the position of the American Bar Association (ABA) and state ethics committees on the subject. Consequently, attorneys must disclose truthful and accurate information regarding arbitration agreements when engaged in multijurisdictional practice in order to ensure protection from malpractice …


A Limit On Downsizing: Varity Corp. V. Howe, James B. Shein Oct 2012

A Limit On Downsizing: Varity Corp. V. Howe, James B. Shein

Pepperdine Law Review

No abstract provided.


Fiduciary Duties And Exculpatory Clauses: Clash Of The Titans Or Cozy Bedfellows, Louise Lark Hill Jun 2012

Fiduciary Duties And Exculpatory Clauses: Clash Of The Titans Or Cozy Bedfellows, Louise Lark Hill

University of Michigan Journal of Law Reform

Centuries ago, when land represented the majority of wealth, the trust was used primarily for holding and transferring real property. As the dominant form of wealth moved away from family land, the trust evolved into a device for managing financial assets. With this transformation came the use of exculpatory clauses by both amateur and professional trustees, providing an avenue for these fiduciaries to escape liability for designated acts. With the use of exculpatory provisions, discussion abounded about whether fiduciary duties were mandatory or subject to modification. The latter view eventually prevailed, with the majority of jurisdictions viewing fiduciary duties as …


L3cs: The Next Big Wave In Socially Responsible Investing Or Just Simply Too Good To Be True?, David J. Schwister Jan 2012

L3cs: The Next Big Wave In Socially Responsible Investing Or Just Simply Too Good To Be True?, David J. Schwister

The Journal of Business, Entrepreneurship & the Law

No abstract provided.


Private Equity Firms: Beyond Sec Registration As An Investment Adviser How To Build And Administer An Effective Compliance Program, Susan Mosher Jan 2012

Private Equity Firms: Beyond Sec Registration As An Investment Adviser How To Build And Administer An Effective Compliance Program, Susan Mosher

Michigan Business & Entrepreneurial Law Review

The Securities and Exchange Commission (the “SEC” or the “Commission”) recently adopted new rules and rule amendments under the Investment Advisers Act of 1940 (the “Advisers Act”) that serve to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).1 The new rules and rule amendments under the Advisers Act relate to provisions of Title IV of the Dodd-Frank Act (the Private Fund Investment Advisers Registration Act of 2010) that, among other things, require certain private fund advisers and private equity firms to register with the Commission.2 This article is intended to assist firms that …


Not All "Units" Are Created Equal: How Hebble V. Shell Western E&P, Inc. Missed An Opportunity To Curb The Expansion Of Fiduciary Obligations In Oklahoma Oil And Gas Law, Brad Secrist Jan 2012

Not All "Units" Are Created Equal: How Hebble V. Shell Western E&P;, Inc. Missed An Opportunity To Curb The Expansion Of Fiduciary Obligations In Oklahoma Oil And Gas Law, Brad Secrist

Oklahoma Law Review

No abstract provided.


The Federal Common Law Of Vicarious Fiduciary Liability Under Erisa, Colleen E. Medill Feb 2011

The Federal Common Law Of Vicarious Fiduciary Liability Under Erisa, Colleen E. Medill

University of Michigan Journal of Law Reform

The Employee Retirement Income Security Act of 1974 ("ERISA"), the federal law that regulates employer-sponsored benefit plans, has a rich history of judiciallycreated federal common law. This Article explores the theoretical, policy, statutory, and stare decisis grounds for the development of another area offederal common law under ERISA-the incorporation of respondeat superior liability principles to impose ERISA fiduciary liability ("vicarious fiduciary liability") upon a corporation for the fiduciary activities of its employees or agents. The Article proposes that the federal courts should adopt a federal common law rule of vicarious fiduciary liability under ERISA based on the traditional scope of …


2.02(B)(4) Or Not 2.02(B)(4): That Is The Question, Bryn R. Vaaler Jan 2011

2.02(B)(4) Or Not 2.02(B)(4): That Is The Question, Bryn R. Vaaler

Law and Contemporary Problems

No abstract provided.