Business Organizations Law Commons^™

The 'Merge' Did Not Fix Ethereum, Hilary J. Allen

Popular Media

The Ethereum blockchain that facilitates much of the crypto world last month finally accomplished the long-promised and oft-delayed “Merge”, a technical switch in the way it works.

Sustainability Verification, Paul Rose

American University Law Review

From the earliest stages of the sustainable finance market and of green, social, and sustainable debt as an asset class, sustainability verifiers have been essential to the market’s function. Sustainability verifiers—professional service providers who provide an external review of an issuer’s alignment with established green bond frameworks—play a crucial role in reducing information asymmetries between sustainable finance instrument issuers and investors and serve as reputational intermediaries that assure buyers of the seller’s green, social, and sustainability-centered commitments. Yet, despite their essential function in facilitating the investment of trillions of dollars in green, social, and sustainable finance investments, the role and …

Caremark's Butterfly Effect, Angela N. Aneiros, Karen E. Woody

American University Law Review

In 1996, the Delaware Court of Chancery detailed the minimum standard for corporate boards of directors (“board”) with regard to corporate compliance programs and monitoring protocols. The landmark Caremark decision held that directors would not face liability for a breach of fiduciary duties unless they failed to implement a system of controls and compliance, or knowingly failed to monitor that system. In order to bring a successful Caremark claim, plaintiffs must prove that the board operated in bad faith by failing to exercise oversight in a sustained or systemic way. The Delaware Court of Chancery opinion noted that the theory …

Taking Misappropriation Seriously: State Common Law Disgorgement Actions For Insider Trading, Jeanne L. Schroeder

American University Business Law Review

This article examines the restitutionary remedy of disgorgement and connects it to the specific context of insider trading. It argues that disgorgement can and should be sought in private rights of actions brought under state common law rather than by the SEC under the federal securities laws.

The Ab5 Experiment — Should States Adopt California’S Worker Classification Law?, Samantha Prince

American University Business Law Review

A worker's classification as either independent contractor or employee drives whether a worker is entitled to minimum wage, overtime, worker's compensation, unemployment compensation, anti-discrimination protection, National Labor Relations Act protections, and many other safety-net protections. During the COVID-19 pandemic, unemployment protections were extended to independent contractors, but this is not the norm and is not slated to continue post-pandemic. Classifying certain workers, particularly those who work in the app- based economy, is challenging, so states are looking for an answer - either through their own innovation or through that of other states. California's answer was AB5. AB5's goals were to …

Empirical Evidence On Robot Taxation: Literature Review And Technical Analysis, Bret N. Bogenschneider

American University Business Law Review

The literature on robot taxation has continued to expand since 2018 with numerous articles now referring to empirical evidence. The evidence presented in prior studies comprises abstract modeling and statistical pattern reviews with no statistically significant findings reported to date. Notably, one article is an advocacy piece by a tech lobbyist who at one point purchased priority Google results for the search "robot taxation." In some cases, technical errors are sufficient to reverse the stated results. Examples of error in empirical analyses include (i) motivated reasoning, such as the failure to model simpler or best explanations; (ii) lack of causal …

Platform-Enabled Crimes: Pluralizing Accountability When Social Media Companies Enable Perpetrators To Commit Atrocities, Rebecca Hamilton

Scholarly Articles in Law Reviews & Journals

Online intermediaries are omnipresent. Each day across the globe, the corporations running these platforms execute policies and practices that serve their profit model, typically by sustaining user engagement. Sometimes, these seemingly banal business activities enable principal perpetrators to commit crimes. Online intermediaries, however, are almost never held to account for their complicity in the resulting harms. This Article introduces the concept of platformenabled crimes into the legal literature to highlight the ways in which the ordinary business activities of online intermediaries enable the commission of crime. It then focuses on a subset of platform-enabled crimes—those in which a social media …

Contracting For Process, David Snyder

Scholarly Articles in Law Reviews & Journals

This article introduces the concept of contracting for process and considers when it is likely to be the best contract design. Contracting for process is in widespread use, but it often goes unnoticed. Some characteristics of contracting for process suit it particularly well to situations of uncertainty, including the radical uncertainty that results from fundamental disruptions such as COVID-19. Parties can employ this design for both contracts made or renegotiated during a crisis and for contracts made in ordinary times. The concept articulated here, however, is not confined to contexts of uncertainty or complexity; it can be used to achieve …

Widening The Lens On Content Moderation, Jenna Ruddock, Justin Sherman

Joint PIJIP/TLS Research Paper Series

No abstract provided.

Dudenhoeffer: Why Concealment Of Fraud Violates The Fiduciary Duty-Of-Prudence, Kolton G. Whitmire

American University Business Law Review

I. INTRODUCTION

In 1974, Congress sought to encourage a form of a retirement fund known as an employee stock ownership plan (“ESOP”). The statutory mandates of these plans are outlined in the Employee Retirement Income Security Act (“ERISA”). ESOPs are invested in stock of the company in which the employee works. In this way, ESOP planners’ (“plan fiduciaries”) obligations are necessarily unique. Whereas most fiduciaries are required to prudently diversify investments to protect their beneficiaries, ESOP planners are not similarly mandated. Further, Congress allows ESOP planners to concurrently be officers of the corporation in which the stock was invested. This …

The Corporate Contract And The Internal Affairs Doctrine, Mohsen Manesh

American University Law Review

In the landmark case Salzberg v. Sciabacucchi, the Delaware Supreme Court upheld the validity of a corporate charter provision restricting the rights of shareholders to bring federal securities law claims. Although rights arising under federal securities law lie beyond the internal affairs doctrine, which has traditionally defined the boundaries of state corporate law, the Salzberg court ruled that such rights may be regulated by the “corporate contract,” created by state corporate law and comprised of a corporation’s charter and bylaws. Embracing contractarian precepts, the Salzberg court rejected the lower Chancery Court’s concession theory of the corporate contract as inextricably bound …

The Inchoate Meaning Of “Covered Security” Under The Securities Act Of 1933 – A Look At A Bank “In Organization”, Michael D. Waters

American University Business Law Review

No abstract provided.

Towards Shareholder Vote On Equity Issuances, Niccolò Calvi

American University Business Law Review

No abstract provided.

Unlocking Progressive Corporate Governance: The Black And Brown Hdfc Key, Gregory Louis

American University Business Law Review

No abstract provided.

The Feca’S Foreign Nationals Prohibition In United States V. Singh: Criminalizing Campaign Contributions Without The Requisite Mens Rea And The Ramifications For Foreign Corporations With Domestic Subsidiaries, Abigail Gampher

American University Business Law Review

No abstract provided.

Symposium Transcripts: International Arbitration: Friend Or Foe Of Corporations? February 12, 2019 Introductory Remarks, American University Business Law Review

American University Business Law Review

No abstract provided.

Discrimination As A Business Policy: The Misuse And Abuse Of Corporate Social Responsibility Programs, Marc Greendorfer

American University Business Law Review

No abstract provided.

Prosecuting Foreign Bribery In National Projects: A Multi-Phased Approach To Reduce Corruption, Julia E. Johnson

American University Business Law Review

The gradual establishment of an international mechanism to review and prosecute allegations of corruption could help to deter fraudulent conduct. Fraudulent conduct often reduces the economic benefits associated with large-scale development or investment projects. These projects are generally awarded through contract bidding; the bidding outcome may be dictated by bribery and other corrupt behaviors by local officials overseeing the project. The money earmarked for the project may in turn be siphoned off to the bribe recipients for private gain, leaving citizens unable to appreciate the fruits of any such project. For this reason, reducing corruption should remain a key priority. …

Doubling Down On A Billion Dollar Blind Spot: Women Business Owners And Tax Reform, Caroline Bruckner

American University Business Law Review

No abstract provided.

Mission Critical: How Fiduciary Duties Of Oversight Can Aid Corporations In Managing Stakeholder Interests, Krishna P. Pathak

Upper Level Writing Requirement Research Papers

After several public tragedies, corporate missteps, and catastrophes; politicians, certain investors, and other stakeholders have called for accountability in capitalism, proactive action to alleviate climate change, and performance of social obligations from corporations. The Business Roundtable and World Economic Forum have come out with proposals that signify a paradigm shift to the stakeholder approach to capitalism. Delaware, a haven for shareholder primacy, has permissive standards that allow a corporation to engage in any lawful business activity. However, concerns about fiduciary duties, especially the implied duties of good faith, legal compliance, and oversight, have created obligations for directors to engage in …

Pisc In The Wind? Holding Healthcare Organizations Liable For Publicly Issued Statements Of Conduct, Joshua E. Perry, Timothy L. Fort

American University Law Review

Has the moment arrived when we can no longer permit a company, that espouses value statements and ethical programs professing a dedication to help and to heal, to act in ways that are contrary and harmful to individual or collective goods? Fully acknowledging that we, two legally trained business ethics professors, are pursuing a line of inquiry rooted in the aspiration of a more robustly just marketplace, we are convinced that it is time for serious reflection upon the question: Should healthcare companies be held accountable for ways in which they deviate from publicly issued statements of conduct (PISC)?

Who Is The Client? Rethinking Professional Responsibility For Benefit Corporations, Joseph Pileri

Scholarly Articles in Law Reviews & Journals

A growing social enterprise movement has led companies to increasingly opt into the benefit corporation form, and those companies are hiring lawyers. Benefit corporations challenge the notion that corporate law’s primary focus is on furthering shareholder interests. While many have written about the benefit corporation with respect to corporate fiduciary law, this Article is the first to explore the form’s ethical implications for lawyers. Ethical obligations necessarily reflect substantive law governing client organizations; changes to the corporate form presented by benefit corporation legislation should reverberate in legal ethics. The legal profession, however, has not addressed how to lawyer to a …

Some Implications Of The Agency-Cost Theory Of The Nonprofit Firm, Benjamin Leff

Contributions to Books

Social enterprises are business enterprises that seek to pursue social goals. In order to do that, they need to be able to make binding commitments to a variety of stakeholders that they will indeed pursue such goals. At least since Henry Hansmann wrote his seminal works on nonprofit organizations in the early nineteen eighties, it has been widely understood that a significant value of the nonprofit organizational structure is the ability of the "nondistribution constraint" to serve as just such a commitment mechanism. In the case of for-profit social enterprises, where the nondistribution constraint does not apply, what mechanisms might …

Uncharted Waters? Legal Ethics And The Benefit Corporation, Joseph Pileri

Scholarly Articles in Law Reviews & Journals

Corporate law norms are reflected in lawyers’ ethical duties. The enactment of benefit corporation legislation across the country signals a legislative acknowledgment that corporate law can serve as a public, rather than a merely private, ordering mechanism. Benefit corporations expressly adopt a public benefit as a legal purpose of the enterprise. While many have written about this important development with respect to corporate fiduciary law, this essay is the first to explore the professional and ethical responsibility of lawyers representing benefit corporations. In the last century, as scholars and courts drove an understanding of corporate law that elevated the interests …

International Financial Regulatory Standards And Human Rights: Connecting The Dots, Daniel D. Bradlow, Motoko Aizawa, Margaret Wachenfeld

Scholarly Articles in Law Reviews & Journals

This paper’s hypothesis is that the international standard setting bodies (SSBs) could improve the quality of their international standards by incorporating a human rights analysis. It focuses on five SSBs and seven of their international standards and its findings include the following: First, the standards all implicate the right of non-discrimination, and the rights to information, privacy and an effective remedy. Second, they each raises economic, social and cultural rights issues, including the obligation to allocate ‘maximum available resources’ to the progressive realization of economic, social and cultural rights; the human rights responsibilities of private actors exercising delegated regulatory authority, …

Corporate Directors' And Officers' Cybersecurity Standard Of Care: The Yahoo Data Breach, Lawrence J. Trautman, Peter C. Ormerod

American University Law Review

On September 22, 2016, Yahoo! Inc. ("Yahoo") announced that a data breach and theft of information from over 500 million user accounts had taken place during 2014, marking the largest data breach ever at the time. The information stolen likely included names, birthdays, telephone numbers, email addresses, hashed passwords, and, in some cases, encrypted or unencrypted security questions and answers. Yahoo further disclosed its belief that the stolen data "did not include unprotected passwords, payment card data, or bank account information." Just two months before Yahoo disclosed its 2014 data breach, it announced a proposed sale of the company's core …

The Price Of Free Mobile Apps Under The Video Privacy Protection Act, Suzanne L. Riopel

American University Business Law Review

No abstract provided.

Where The Cco Fits In The C-Suite: A Corporation's Moral Compass, Alexander Foster

American University Business Law Review

No abstract provided.

Conspicuous Philanthropy: Reconciling Contract And Tax Laws, William A. Drennan

American University Law Review

It sold for $15 million, and the IRS treated it as worthless. Avery Fisher, a titan of industry and a lover of classical music, made a generous contribution to renovate a charity's building, and in exchange the charity agreed to name the building after Fisher in perpetuity. Forty years later, the Fisher family sold the naming rights back to the charity for $15 million in cash. The IRS treats these publicity rights as worthless when charities grant them, and this generates substantial tax benefits for the donor and the donor's family. In contrast, the common law can treat these publicity …

It Is Time For Something New: A 21st Century Joint-Employer Doctrine For 21st Century Franchising, Steven A. Carvell, David Sherwyn

American University Business Law Review

No abstract provided.