Business Organizations Law Commons^™

Poison Pill: A Panacea For The Hostile Corporate Takeover, 21 J. Marshall L. Rev. 107 (1987), Robert C. Micheletto

UIC Law Review

No abstract provided.

The Case For Employee Ownership In Overseas Operations Of U.S. Multinational Enterprises In Central America, William G. Hopping

Michigan Journal of International Law

Part II of this note explains the relevance of using U.S. direct investment in Central America as a starting point for encouraging employee ownership. Part III describes the essential legal framework of the ESOP in the U.S., providing a framework from which to adapt the ESOP to other countries. Part IV argues that all parties participating in this form of expanded ownership will realize significant short and long-term benefits, but points out some problems of transferring ESOPs, a U.S. legal innovation, to different cultural and business environments. Part V presents some of the legal and economic issues of adapting ESOPs, …

Legal Factors In The Acquisition Of A United State Corporation: Litigation By Hostile Targets, Johan E. Droogmans

LLM Theses and Essays

Acquisitions of United States corporations have become increasingly complex takeover contests, where bidders and target corporations are forced into offensive and defensive litigation strategies to protect their respective interests. Targets often assert that the bidders have violated federal or state securities laws, federal antitrust laws, federal margin regulations, federal and state regulatory systems, and federal anti-racketeering laws. These lawsuits are primarily based on the principal federal regulation of takeovers in section 14(a) of the Securities and Exchange Act of 1934 and the Williams Act. Target litigation is customary, but entails certain disadvantages; a lawsuit rarely stops an offer, is expensive, …

Evaluating Dual Class Common Stock: The Relevance Of Substitutes, Ronald J. Gilson

Faculty Scholarship

The proposal of the New York Stock Exchange to end its prohibition on listing the securities of companies with dual classes of common stock has focused public policy debate over this evolution in capital structure both too broadly and too narrowly.

The debate has been too broad because it has encompassed one situation – an initial public offering by a company with a capital structure containing dual class common stock – that should not be controversial at all. Whatever may have originally prompted the New York Stock Exchange's longstanding prohibition against listing non-voting common stock or common stock with voting …

Takeover Statutes: The Dormant Commerce Clause And State Corporate Law, Arthur R. Pinto

University of Miami Law Review

No abstract provided.

Shareholders Versus Managers: The Strain In The Corporate Web, John C. Coffee Jr.

Michigan Law Review

Part I will seek to understand why firms trade in the stock market at a substantial discount from their asset value. It will answer that existing theories of the firm have not given adequate attention to a critical area where shareholders and managers have an inherent conflict, one that the existing structure of the firm does not resolve or mitigate. Despite the significant changes in the internal structure of the corporation over the last half century that have been described by business historians, there remains a deep internal strain between shareholders, on the one hand, and managers and employees, on …

Corporate Social-Reform, The Business Judgment Rule And Other Considerations, Robert N. Leavell

Scholarly Works

In recent years there has been a well-publicized movement to induce corporations to use their economic wealth and power to achieve "social-reform," rather than carry on as usual by professing to be guided only by profit-making. Social change is sought by allowing shareholders to make, or influence directly, those management decisions which significantly affect the quality of life in this country. This approach has found support on college campuses and among the commentators in this field. The Securities Exchange Commission and the courts also have endorsed this approach by legitimating such a role for shareholders despite the fact that it …

Casenotes: Corporations — Securities Law — Definition Of Security — Federal Securities Laws Applicable To Sale Of A Business Effectuated By A Stock Sale Of All The Business's Stock. Landreth Timber Co. V. Landreth, 105 S. Ct. 2297 (1985), Jeff Cook

University of Baltimore Law Review

No abstract provided.

Of Lollipops And Law -- A Proposal For A National Policy Concerning Tender Offer Defenses, Ted J. Fiflis

Publications

Early last year, Mesa Petroleum Company made a tender offer for shares of Unocal Corporation in an effort to take over Unocal. Unocal responded by using the "lollipop" defense, which is a discriminatory issuer self-tender offer. Unocal's use of this defense resulted in huge economic losses to many of Unocal's small shareholders who were not knowledgeable about the ramifications of their participation or non-participation in the tender offer. The Delaware Supreme Court upheld Unocal's use of this defense as an appropriate exercise of business judgment. A federal district court in California refused to strike down the lollipop under federal law …

Involuntary Dissolution As A Remedy For Freeze-Outs Of Minority Shareholders: Two West Virginia Statutes, D. Christopher Wells

West Virginia Law Review

No abstract provided.

Rule 10b-5 And Santa Fe--Herein Of Sue Facts, Shame Facts, And Other Matters, Harvey Gelb

West Virginia Law Review

No abstract provided.

The Plight Of Small Issuers (And Others) Under Regulation D: Those Nagging Problems That Need Attention, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Regulation D traces its roots to section 4(2) and section 3(b) of the Securities Act of 1933. Both of these sections are designed to relieve an issuer from the pains of registration under the 1933 Act in situations where Congress deemed such registration inappropriate. Therefore, under section 4(2), no registration is required for "transactions by an issuer not involving any public offering." Section 3(b) is not a self-executing exemption but instead permits the Securities and Exchange Commission to enact rules and regulations exempting issuers from registration requirements "if it finds that ... [registration] is not necessary in the public interest …

Book Review Of Passion: An Essay On Personality , Richard F. Devlin Frsc

Articles, Book Chapters, & Popular Press

Passion is a cogently structured, compel Jingly argued and seductively enthralling masterpiece which, in years to come, will undoubtedly stand out as an inspirational source for many who seek social transformation. Unger's style, in this essay at least, is lucid and inviting. Substantively, Passion demonstrates not only the depth of his penetrating intellect but also his command of an array of' disciplines. Unger's polymathy is all the more impressive when we remember that ours is an era in which idiosyncratic specialization is the norm.

Tender Offer Litigation And State Law, Mark J. Loewenstein

Publications

The recent spate of hostile takeover battles has focused attention and criticism on the federal securities laws. Most claims of defeated offerors and disappointed shareholders have been based on sections 14(e) and 10(b) of the Securities Exchange Act of 1934. The United States Supreme Court, however, has limited such federal remedies and suggested that plaintiffs bring state-law actions for interference with a prospective economic advantage. Professor Loewenstein discusses this tort, which has not been used widely in this context, and reviews the tort's traditional elements, its formulation in the Restatement (Second) of Torts, and its recent treatment by state courts. …

The Unfaithful Champion: The Plaintiff As Monitor In Shareholder Litigation, John C. Coffee Jr.

Faculty Scholarship

When the legal history of the 1970's is written, it will note a significant shift in the way courts perceived shareholder litigation. Only a generation ago, the Supreme Court described the derivative action as "the chief regulator of corporate management." Even into the 1960's, those issues involving shareholder litigation that percolated up to the Supreme Court were typically resolved so as to extend the availability of a litigation remedy by removing arbitrary or overbroad barriers to the plaintiff.

The New Virginia Stock Corporation Act: A Primer, Daniel T. Murphy

Law Faculty Publications

During its 1985 session, the Virginia General Assembly enacted a new stock corporation statute for Virginia ("Revised Statute"). The new statute became effective January 1, 1986. The Revised Statute represents a complete revision of the Virginia corporation statute and is the result of a thorough review of prior law. This article will discuss some of the significant changes in Virginia corporate law effected by the Revised Statute and will offer some guidelines for the interpretation and application of its provisions.

Schreiber V. Burlington Northern, Inc., Lewis F. Powell Jr.

Supreme Court Case Files

No abstract provided.

Landreth Timber Co. V. Landreth, Lewis F. Powell Jr.

Supreme Court Case Files

No abstract provided.

Corporate Morality And Management Buyouts

Washington and Lee Law Review

No abstract provided.

The Sale Of Business Doctrine: Judicial Exemption From The Federal Securities Laws

Washington and Lee Law Review

No abstract provided.

Federal Security Laws And Their Applicability To The Sale Of A Business: An Appeal For Regulatory Action, 17 J. Marshall L. Rev. 393 (1984), John W. Blenke Jr.

UIC Law Review

No abstract provided.

Demise Of The Director's Duty Of Care: Judicial Avoidance Of Standards And Sanctions Through The Business Judgment Rule, Stuart R. Cohn

UF Law Faculty Publications

Courts love the so-called business judgment rule. It dispenses quickly and easily with derivative actions against corporate directors and officers, and other challenges to corporate conduct. Unfortunately, the business judgment rule has come to mask its underlying premise, i.e. that there must have been a business judgment made. This article examines the dominance of the business judgment rule over the underlying requirement of the duty of care and suggests reform measures that will bring the duty of care back to its appropriate role in determining the merits of management decision-making processes.

Daily Income Fund, Inc. V. Fox, Lewis F. Powell Jr.

Supreme Court Case Files

No abstract provided.

Limiting The Use Of The Rico Act As A Defense To Hostile Corporate Takeovers, Mary Ann Lesniak

University of Michigan Journal of Law Reform

This Note argues that RICO could be a legitimate defense to a hostile corporate takeover pursuant to a cash tender off er if shareholders who retain stock will be harmed by the takeover. Part I of this Note examines the general background of the RICO Act. Part II applies the Act to a hostile cash tender offer and examines each element of a civil RICO action. Part III advocates the use of RICO's injury requirement to limit this application of the Act and analyzes the potential injuries to shareholders and management during a hostile cash tender offer. This limitation upon …

Section 14(E) Of The Williams Act And The Rule 10b-5 Comparisons, Mark J. Loewenstein

Publications

The passage of the Williams Act in 1968 added a set of provisions to the Securities Exchange Act of 1934 to govern tender offers. In this article, Professor Loewenstein examines the antifraud provision of the Williams Act, codified as section 14(e) of the Securities Exchange Act of 1934, and the development of decisional law under it. After discussing the propriety of inferring a private cause of action from section 14(e), Professor Loewenstein argues that the judiciary's reliance on rule 10b-5 precedents to set the bounds of the 14(e) cause of action is unwarranted. He concludes: 1) that scienter should not …

The Fallacy Of Weighting Asset Value And Earnings Value In The Appraisal Of Corporate Stock, Elmer J. Schaefer

Faculty Publications

No abstract provided.

Developments In Corporate Takeover Techniques: Creeping Tender Offers, Lockup Arrangements, And Standstill Agreements

Washington and Lee Law Review

No abstract provided.

The Effect Of Insider Trading Rules On The Internal Efficiency Of The Large Corporation, Robert J. Haft

Michigan Law Review

Academics have hotly debated these justifications for years, and none of the three has achieved universal acclaim. This Article suggests another perspective: Prohibiting insider trading may enhance business decision-making in large corporations. With the exception of proponents of the Business Property view, analysts have focused on how an insider trading rule affects the national securities markets and traders in those markets. The internal governance of the large corporation is a different matter, one deserving separate consideration.

The Case Against Shark Repellent Amendments: Structural Limitations On The Enabling Concept, Ronald J. Gilson

Faculty Scholarship

The tactical history of the tender offer movement resembles an unrestrained arms race. Faced with offeror assaults in the form of Saturday night specials, various types of bear-hugs, godfather offers, and block purchases, target management responded with equally intriguing defensive tactics: the black book, reverse bear-hug, sandbag, show stopper, white knight, and, drawing directly on military jargon, the scorched earth. But however varied the labels given particular defensive strategies, they share the common characteristic of being responsive: They are available only after an offer is made and the battle for the target's independence joined. From the target's perspective, what was …

Seeking Competitive Bids Versus Pure Passivity In Tender Offer Defense, Ronald J. Gilson

Faculty Scholarship

Responding to my comments in the Stanford Law Review, and to those of Lucian Bebchuk in the Harvard Law Review, Professors Easterbrook and Fischel have reiterated their preference for a rule of pure passivity by target management in response to a tender offer. Unlike my more limited rule barring defensive tactics designed to prevent the offer but not barring the facilitation of competitive bids, Easterbrook and Fischel would prohibit both. Because their response to the points that Bebchuk and I raised goes beyond their initial treatment of the subject, it is appropriate that I respond here by extending …