Business Organizations Law Commons^™

The Gatekeepers Of Shareholder Litigation, Jessica M. Erickson

Law Faculty Publications

Concerns over agency costs dominate corporate law. The central challenge is ensuring that directors act in the corporation's best interests, rather than their own best interests. Shareholder litigation is a key tool in controlling these agency costs. If directors cross the line, the law provides an array of litigation options that shareholders can use to hold directors accountable. Shareholders can file securities class actions if directors lie to them. They can file shareholder derivative suits if directors engage in egregious misconduct. And they can file lawsuits under both state and federal law if directors try to sell the company at …

To Thine Own Ceo Be True: Tailoring Ceo Compensation To Individual Personality And Circumstances, William O. Fisher

Law Faculty Publications

Eight-figure compensation. Cash. Restricted stock. Options. Performance shares. And more. Companies shower their CEOs with pay in large amounts, delivered in multiple ways, and dependent on complex and intricate formulae. It is all intended to motivate the top officers to make decisions that will best benefit their companies. Common sense tells us that the value of a complicated, multifaceted pay package- and hence its ability to motivate- will depend on the psychological characteristics and financial circumstances of the particular executive being paid. Economic theory and empirical studies confirm this intuition. Yet, companies generally ignore these vital factors. Substantive and disclosure …

Restoring Pre-Existing Compliance Through The Fcpa Pilot Program, Andrew B. Spalding

Law Faculty Publications

For a quarter-century, incentives to invest in corporate compliance programs have been a cornerstone of federal white-collar enforcement. But the U.S. Department of Justice's most recent announcement of anti-bribery enforcement policy-the FCPA Pilot Program-takes a peculiar and possibly inadvertent turn. In providing newly transparent and explicit penalty reductions, and rolling out the Department's declination policy, the program neglects to incentivize investments in pre-existing compliance. Though remedial, or postviolation, compliance receives a newly heightened importance, pre-existing compliance receives virtually no attention. This is strange, but should not be understood as a new policy change on the benefits of pre-existing compliance; no …

Piling On? An Empirical Study Of Parallel Derivative Suits, Jessica M. Erickson

Law Faculty Publications

Using a sample of all companies named as defendants in securities class actions between July 1, 2005 and December 31, 2008, we study parallel suits relying on state corporate law arising out of the same allegations as the securities class actions. We test several ways that parallel suits may add value to a securities class action. Most parallel suits target cases involving obvious indicia of wrongdoing. Moreover, we find that although a modest percentage of parallel suits are filed first, over 80 percent are filed after a securities class action (termed “follow-on” parallel suits). We find that parallel suits and, …

When Is It Necessary For Corporations To Be Essentially At Home: An Exploration Of Exceptional Cases, Pricilla Heinz

Law Student Publications

This comment examines the current state of the law surrounding the exercise of general jurisdiction and forecasts the circumstances under which the Supreme Court is likely to clarify its recent decisions. Its purpose is to explore the principles announced in Goodyear Dunlop Tires Operations, S.A. v. Brown and Daimler AG v. Bauman and consider whether the due process rationales offered in the past coincide with the new essentially at home standard imposed for general jurisdiction. Moreover, this comment analyzes the reactions of the lower courts in the wake of these decisions and predicts where the Supreme Court is headed in …

Corporate And Business Law, Laurence V. Parker Jr.

University of Richmond Law Review

Over the past three years, there have been a number of legislative changes to Virginia's business entity statutes. In Part I,this article highlights the changes to the Virginia Stock Corporation Act ("VSCA") and the Virginia Nonstock Corporation Act ('"VNSCA"). Part II highlights changes to the Limited Liability Company Act ("LLC Act"). Part III summarizes Virginia's new intrastate crowdfunding law. The Supreme Court of Virginia has also addressed several significant issues over the last three years, including the applicability of appraisal rights in a stepped transaction. Part IV reviews several of the significant cases during this period.

On Maximizing Deterrence Per Dollar: Thoughts Inspired By Peter Reilly, Andrew B. Spalding

Law Faculty Publications

Professor Peter Reilly addresses concerns that practitioners in this space have privately and publicly debated for years. What exactly is cooperation credit? Can we quantify it? The government promises that self-reporting is in our self-interest, but the government’s interest in saying so is obvious enough. What evidence can the government provide?

The difficulty of measuring this credit is somewhat ironic, given the government’s dependence on cooperation. As this essay will show, our modern enforcement regime, which has four components—the internal or independent investigation, voluntary disclosure, cooperation credit, and a negotiated settlement—is the government’s method of maximizing general deterrence with finite …

Caselaw Developments 2015, William O. Fisher

Law Faculty Publications

This report was prepared for the ABA Business Law Section’s Federal Regulation of Securities Committee, Subcommittee on Annual Review. The paper contains sections on relevant Supreme Court decisions, SEC rulemaking, SEC enforcement actions, proxy solicitation, forward-looking statements, insider trading, materiality, duty to disclose, Scienter and scienter pleading, and the Securities Litigation Uniform Standards Act ("SLUSA").

Merger And Acquisition Due Diligence Part Ii- The Devil In The Details, James A. Sherer, Taylor M. Hoffman, Kevin M. Wallace, Eugenio E. Ortiz, Trevor J. Satnick

Richmond Journal of Law & Technology

Our prior scholarship examined the legal and technical challenges involved in modern Merger & Acquisition ("M&A") due diligence practices associated with transactions ("Deals"), given recent but steady advances in technology and related increases in sophistication seen in Deal participants-primarily the organizations or assets targeted (the "Targets") as part of the Deal, and the organizations that pursued and/or resulted from the Deal (the "Acquirers"). We then proposed a framework addressing five particular verticals of interest and concern: data privacy ("DP"), information security ("IS"), e-Discovery, information governance ("IG"), and the due diligence and record keeping associated with the Deal itself ("Deal Information") …

Too Many Cooks In The Kitchen: Battling Corporate Corruption In Brazil And The Problems With A Decentralized Enforcement Model, Michelle A. Winters

Richmond Journal of Global Law & Business

No abstract provided.

Corporate Governance In Search Of The Shareholder-Manager Balance Of Power, Razeen Sappideen

Richmond Journal of Global Law & Business

No abstract provided.

The Market For Leadership In Corporate Litigation, Jessica M. Erickson

Law Faculty Publications

Conventional wisdom has long held that leadership decisions in corporate litigation are best left to the lawyers. Even as the world of corporate litigation has changed dramatically, courts have consistently relied on the lawyers themselves to decide who among them will control litigation decisions. As a result, leadership decisions in corporate litigation are almost always made in private negotiations and back room deals. This Article pulls back the curtain on these decisions, using empirical data to conduct the first in-depth examination into the market for leadership in corporate litigation. This examination reveals a market that bears little resemblance to the …

Corruption, Corporations, And The New Human Right, Andrew B. Spalding

Law Faculty Publications

We should no longer expect the Alien Tort Statute to be the principal federal statute that deters overseas corporate rights violations. That distinction rightly belongs to the Foreign Corrupt Practices Act, an antibribery statute that rests on undisputed principles of corporate liability, contains a clear congressional statement of extraterritorial application, and routinely collects penalties from multinational corporate defendants. Scholars have not associated the FCPA with human rights, owing principally to a thin understanding of rights theory. But freedom from corruption can and should be understood as a human right, one that is as old as social contract theory but new …

The Power Of Paradox: The Need For Alternative Remedies In Virginia Minority Shareholder Oppression Cases, Stephanie Martinez

Law Student Publications

This comment addresses where Virginia's current scheme falls short and why equitable remedies are needed in Virginia minority shareholder oppression cases. Part I looks at how the MBCA attempted to solve the problem of minority shareholder oppression. Part II explores how other jurisdictions have interpreted or added to the MBCA so as to provide additional remedies in minority shareholder oppression cases. Finally, Part III advocates for adoption of a new dissolution statute in Virginia that includes equitable remedies for such cases.

Managing Conflicts Of Interest In China's Public Sector: Fighting Corruption At The Early Stage, Hao (Victor) Wu, Xiaoqi (Claudia) Sun

Richmond Journal of Global Law & Business

No abstract provided.

Assessing Effectiveness Of International Private Regulations In The Csr Arena, Martijn W. Scheltema

Richmond Journal of Global Law & Business

No abstract provided.

Corporate And Business Law, Laurence V. Parker Jr.

University of Richmond Law Review

No abstract provided.

An Examination Of Foreign Corrupt Practices Act Issues, Mike Koehler

Richmond Journal of Global Law & Business

This article provides an overview of 2012 Foreign Corrupt Practice Act enforcement and examines the top FCPA issues from the year. The goal of the article is to place FCPA enforcement in better context and provide readers a more informed base in analyzing enforcement trends, assess- ing enforcement agency rhetoric and policy positions, and in sifting through the mounds of information disseminated by FCPA Inc.

The New Professional Plaintiffs In Shareholder Litigation, Jessica M. Erickson

Law Faculty Publications

This Article proceeds in three parts. Part I describes the old professional plaintiffs in shareholder litigation, detailing Congress's efforts in the 1990s to eliminate these plaintiffs. Part II describes the new professional plaintiffs in shareholder litigation, combining empirical data with a discussion of illustrative cases. Part III builds on this discussion by proposing a·new conceptual framework to address the problem of professional plaintiffs in corporate litigation.

Issuing New Shares And Preemptive Rights: A Comparative Analysis, Marco Ventoruzzo

Richmond Journal of Global Law & Business

No abstract provided.

Business Insolvency And The Irish Debt Crisis, Paul B. Lewis

Richmond Journal of Global Law & Business

No abstract provided.

Introduction: Contains Cover, Table Of Contents, Letter From The Editor, And Masthead, Joel Hermsdorfer

Richmond Journal of Law & Technology

The Richmond Journal of Law and Technology is proud to present its Annual Survey issue of the 2011-2012 academic year.

Overlitigating Corporate Fraud: An Empirical Examination, Jessica M. Erickson

Law Faculty Publications

Corporate law leaves no stone unturned when it comes to litigating corporate fraud. The legal system has developed a remarkable array of litigation options shareholder derivative suits, securities class actions, SEC enforcement actions, even criminal prosecutions all aimed at preventing the next corporate scandal. Scholars have long assumed that these different lawsuits offer different avenues for deterring the masterminds of corporate fraud yet this assumption has gone untested in the legal literature. This Article aims to fill that gap through the first empirical examination of the broader world of corporate fraud litigation. Analyzing over 700 lawsuits, the study reveals that …

Corporate And Business Law, Laurence V. Parker

University of Richmond Law Review

In the 2011 session, the Virginia General Assembly passed House Bill 2358, Benefit Corporations, to be codified as article 22 (the "Benefit Corporations Article") of the Virginia Stock Corporation Act ("VSCA"). The Benefit Corporations Article is largely based on legislation prepared in other states and allows a Virginia corporation to elect in its articles of incorporation to be treated as a "benefit corporation." These for-profit corporations are required to pursue not only profitability but also a general public benefit and, if one so elects, one or more specific public benefits. In Section II of this article, the author discusses the …

The Future Of Hedge Fund Regulation: A Comparative Approach: United States, United Kingdom, France, Italy, And Germany, Anne Riviere

Richmond Journal of Global Law & Business

No abstract provided.

Corporate Governance In The Courtroom: An Empirical Analysis, Jessica M. Erickson

Law Faculty Publications

Conventional wisdom is that shareholder derivative suits are dead. Yet this death knell is decidedly premature. The current conception of shareholder derivative suits is based on an empirical record limited to suits filed in Delaware or on behalf of Delaware corporations, leaving suits outside this sphere in the shadows of corporate law scholarship. This Article aims to fill this gap by presenting the first empirical examination of shareholder derivative suits in the federal courts. Using an original, hand-collected data set, my study reveals that shareholder derivative suits are far from dead. Shareholders file more shareholder derivative suits than securities class …

Stakeholder Theory In Corporate Law: Has It Got What It Takes?, Andrew Keay

Richmond Journal of Global Law & Business

There has been much debate for many years regarding what should be the objective of the large public corporation. This issue is important for a number of reasons, not least of which is that the theory nominated will underpin corporate governance and dictate, to a large extent, the kind of corporate governance system that will exist. As far as the corporation’s objective is concerned, two theories have been dominant: the shareholder primacy theory and the stakeholder theory. The former is operative in what I will call “Anglo-American jurisdictions,” namely jurisdictions that model their law and practice on one or both …

You Can Come Under The Tarp, But First... The Bank Of America-Merrill Lynch Merger Was A Failure Of Corporate Governance, James K. Donaldson

Law Student Publications

In response to the financial credit crisis in the fall of 2008, Congress, the U.S. Treasury, and the Federal Reserve Board of Governors took unprecedented action to prevent both large and small financial institutions from insolvency. Ultimately, the Troubled Asset Relief Program was created to inject various banks with the cash necessary to prevent the banks' insolvency and the threat that bank failures posed to the nation's economy. In the midst of that crisis, Bank of America agreed to acquire Merrill Lynch. Each institution, in their individual capacity, received TARP funds from the Treasury several weeks after entering into the …

Congress, Corporate Boards, And Oversight: A Public Law/Private Law Comparison, Paul S. Miller

University of Richmond Law Review

No abstract provided.

Corporate And Business Law, Laurence V. Parker

University of Richmond Law Review

No abstract provided.