Business Organizations Law Commons^™

Were The 1982 Merger Guidelines Old News?, Alan J. Meese, Sarah L. Stafford

Faculty Publications

This paper examines the impact of the 1982 Department of Justice Merger Guidelines on the stock market prices of publicly traded firms in the United States. We argue that those Guidelines were perceived by the market as a real change in enforcement policy that would result in substantial deregulation of mergers throughout the economy. We conduct an event study of S&P 500 firms to test this hypothesis and find evidence of a significant positive effect on the stock prices of firms in moderately concentrated industries subject to antitrust regulation, the firms for which the 1982 Guidelines articulate a substantially less …

Smith V. Van Gorkom And The Kobayashi Maru: The Place Of The Trans Union Case In The Development Of Delaware Corporate Law, Robert T. Miller

William & Mary Business Law Review

Although it is dangerous to attempt to say anything new about Smith v. Van Gorkom, the most controversial decision in the history of Delaware corporate law, this Article tries to do so by arguing that the extensive development of Delaware law since the time of the case allows us a perspective on Van Gorkom not available when the case was decided in 1985 or, indeed, for a long time thereafter. In particular, Van Gorkom had as important a role in the evolution of Delaware law as the three other outstanding cases decided by the Delaware Supreme Court in the …

Can Taxes Mitigate Corporate Governance Inefficiencies?, Noam Noked

William & Mary Business Law Review

Policymakers have long viewed tax policy as an instrument to influence and change corporate governance practices. Certain tax rules were enacted to discourage pyramidal business structures and large golden parachutes, and to encourage performance-based compensation. Other proposals, such as imposing higher taxes on excessive executive compensation, have also attracted increasing attention.

Contrary to this view, this Article contends that the ability to effectively mitigate corporate governance inefficiencies through the use of corrective taxes is very limited, and that these taxes may cause more harm than benefit. There are a few reasons for the limited effectiveness of corrective taxes. Importantly, the …

Corporate Directors In The United Kingdom, Stephen M. Bainbridge

William & Mary Law Review Online

In the United States, state corporation law uniformly provides that only natural persons may serve as directors of corporations. Corporations, limited liability companies, and other entities otherwise recognized in the law as legal persons are prohibited from so serving. In contrast, the United Kingdom allowed legal entities to serve as directors of a company. In 2015, however, legislation came into force adopting a general prohibition of these so-called corporate directors, albeit while contemplating some exemptions. This Article argues that there are legitimate reasons companies may wish to appoint corporate directors. It also argues that the transparency and accountability concerns that …

Distributed Governance, Carla L. Reyes, Nizan Geslevich Packin, Ben Edwards

William & Mary Law Review Online

Distributed ledger technology disrupts traditional business organizations by introducing new business entities without the directors and officers of traditional corporate entities. Although these emerging entities offer intriguing possibilities, distributed entities may suffer significant collective action problems and expose investors to catastrophic regulatory and governance risks. Our Article examines key considerations for stakeholders and argues that distributed entities must be carefully structured to function effectively. This Article breaks new ground by critically examining distributed entities. We argue that a distributed model is most appropriate when distributed ledger technology solves a unique corporate governance problem. We caution against ignoring the lessons painstakingly …

Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz

William & Mary Law Review

This Article makes two arguments that, combined, demonstrate an important synergy: first, including bondholders in corporate governance could help to reduce systemic risk because bondholders are more risk averse than shareholders; second, corporate governance should include bondholders because bonds now dwarf equity as a source of corporate financing and bond prices are increasingly tied to firm performance.

The Ethics Of Representing Founders, Paul R. Tremblay

William & Mary Business Law Review

Lawyers assisting entrepreneurial startups frequently work with individual founders before any formal organizational client materializes. In advising founders about such legal matters as whether to establish an entity, and if so, which entity best fits the needs of the enterprise, as well as how to arrange the owners’ relationships within the business, the lawyer necessarily has an attorney-client relationship with someone. The prevailing scholarship about startup representation pays surprisingly little attention to the posture of the lawyer and her founder-clients in the pre-organization context. This Article investigates the lawyer’s responsibilities and commitments in depth.

A lawyer working with a solo …

Intrapreneurship, Darian M. Ibrahim

Faculty Publications

This Article on “intrapreneurship” has several goals. First, it points out that while much of the legal literature on innovation is concerned with startups (entrepreneurship), the innovation that takes place inside our largest corporations (intrapreneurship) is substantial, important, and understudied. Second, the Article observes that while large technology corporations that used to be startups may remain intrapreneurial in culture, intrapreneurship is less common in the aggregate than we might expect. Reasons include organizational bureaucracy, laws favoring entrepreneurship, and what Clayton Christensen (Harvard Business School) calls “the innovator’s dilemma.” The innovator’s dilemma is, put simply, that good management causes large corporations …

Choice Of Business Entity, C. Wells Hall Iii

William & Mary Annual Tax Conference

No abstract provided.

Purchase And Sale Ofllc And S Corp Targets (Powerpoint), Robert G. Mcelroy, William M. Richardson

William & Mary Annual Tax Conference

No abstract provided.

Book Review: Business Regulation, Frederick W. Dingledy

Library Staff Publications

No abstract provided.

Regulating Culture: Improving Corporate Governance With Anti-Arbitration Provisions For Whistleblowers, Nizan Geslevich Packin, Ben Edwards

William & Mary Law Review Online

A focus on corporate culture, especially at financial institutions, has emerged as a regulatory, public, and media priority in the aftermath of the 2008 financial crisis. With Dodd-Frank, Congress embraced whistleblower statutes as a key instrument to improve corporate culture and governance, and to extirpate undesired and unethical business practices. Despite the clear policy goals, Dodd- Frank’s unclear statutory text has created interpretative controversies. Although Dodd-Frank adds anti-arbitration provisions to preexisting whistleblower statutes, it does not include a dedicated, standalone anti-arbitration provision for Dodd-Frank’s new whistleblower cause of action. This Article argues that courts should not allow employers to use …

Corporate Governance In An Era Of Compliance, Sean J. Griffith

William & Mary Law Review

Compliance is the new corporate governance. The compliance function is the means by which firms adapt behavior to legal, regulatory, and social norms. Formerly, this might have been conceived as a typical governance matter to be handled at the discretion of the board of directors. Compliance, however, does not fit traditional models of corporate governance. It does not come from the board of directors, state corporate law, or federal securities law. Compliance amounts instead to an internal governance structure imposed upon the firm from the outside by enforcement agents. This insight has important implications, both practical and theoretical, for corporate …

Lack Of Marketability And Minority Discounts In Valuing Close Corporation Stock: Elusiveness And Judicial Synchrony In Pursuit Of Equitable Consensus, Stephen J. Leacock

William & Mary Business Law Review

This Article discusses the often subtle tasks faced by the courts in construing close corporations law, which is state law. The judiciary in individual states has skillfully managed the invention, continuing development and ongoing evolution of lack of marketability and minority discounts as it strives to honor its constitutional mandate to resolve controversies between minority and majority shareholders in close corporations relating to valuing close corporations’ stock. These controversies arise in the context of share transactions in such corporations. Close corporations are traditionally not listed on stock exchanges, and the legislatures in some states have, in some instances, helped to …

Employee Benefits In Acquisitions, Paul M. Hamburger

William & Mary Annual Tax Conference

No abstract provided.

21st Century State Taxation Of The Closely Held Business, D. French Slaughter Iii, Duane Dobson

William & Mary Annual Tax Conference

No abstract provided.

Getting Up To Speed On Partnership Basis Adjustments, James B. Sowell

William & Mary Annual Tax Conference

No abstract provided.

Corporate Tax Update, Andrew F. Gordon, Lisa M. Zarlenga

William & Mary Annual Tax Conference

No abstract provided.

Delaware's Familiarity, Brian J. Broughman, Darian M. Ibrahim

Faculty Publications

No abstract provided.

U.S. V. Esquenazi: U.S. Appellate Court Defines “Instrumentality” Under The Foreign Corrupt Practices Act For The First Time, Jon Jordan

William & Mary Business Law Review

No abstract provided.

Walking On Thin Ice: Does The Revenue Procedure 2013-13 Signify The Demise Of Leveraged Spin-Offs?, Natalia Caruso

William & Mary Business Law Review

Corporate taxpayers, when weighing leveraged spin-off transactions, have long relied on the comfort of Internal Revenue Service rulings to “bless” the deals. These transactions, when structured properly, are not subject to tax under section 355 of the Internal Revenue Code (“I.R.C.”) and can potentially provide great monetizing opportunities to public companies. Recent developments in the Internal Revenue Service’s ruling policy, however, removed the safety blanket companies had relied upon, as the Internal Revenue Service announced its decision to cease the issuance of the rulings addressing the deals’ qualification for tax-free treatment.

This Note will examine the history and the complex …

Thoughts On Religious Discrimination From The Cairo Geniza, Nathan B. Oman

Popular Media

No abstract provided.

Religion And For-Profit Corporations: A Real Issue Hidden By Flimsy Arguments, Nathan B. Oman

Popular Media

No abstract provided.

Markets, Religion, And The Limits Of Privacy, Nathan B. Oman

Popular Media

No abstract provided.

The Derivative Nature Of Corporate Constitutional Rights, Margaret M. Blair, Elizabeth Pollman

William & Mary Law Review

This Article engages the two-hundred-year history of corporate constitutional rights jurisprudence to show that the Supreme Court has long accorded rights to corporations based on the rationale that corporations represent associations of people from whom such rights are derived. The Article draws on the history of business corporations in America to argue that the Court’s characterization of corporations as associations made sense throughout most of the nineteenth century. By the late nineteenth century, however, when the Court was deciding several key cases involving corporate rights, this associational view was already becoming a poor fit for some corporations. The Court’s failure …

Corporate Social Responsibility & Concession Theory, Stefan J. Padfield

William & Mary Business Law Review

This Essay examines three related propositions: (1) Voluntary corporate social responsibility (CSR) fails to effectively advance the agenda of a meaningful segment of CSR proponents; (2) None of the three dominant corporate governance theories—director primacy, shareholder primacy, or team production theory—support mandatory CSR as a normative matter; and, (3) Corporate personality theory, specifically concession theory, can be a meaningful source of leverage in advancing mandatory CSR in the face of opposition from the three primary corporate governance theories. In examining these propositions, this Essay makes the additional claims that Citizens United: (A) supports the proposition that corporate personality theory matters; …

A Concept-Sensitive Managerial Analysis With Law: Applying A Business Concept To A Legal Rule To Identify The Domain Of Business Situations, James E. Holloway

William & Mary Business Law Review

The traditional fact-sensitive managerial analysis with law analyzes business situations to identify legal issues and applies legal rules to facts to make judicial decisions. The fact-sensitive managerial analysis takes decades to identify a family of business situations and lacks the analytical capacity to use business knowledge (concepts) and analytical methods to identify business situations. Alternatively, a concept-sensitive managerial analysis with law increases factual sensitivity by applying a business concept to a legal rule to shorten the duration of identifying an extensive family of business situations. All situations are not useful or effective when making business decisions or managing a business. …

The Federal Common Law Of Successor Liability And The Foreign Corrupt Practices Act, Taylor J. Phillips

William & Mary Business Law Review

In recent years, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have vigorously enforced the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits bribery of foreign government officials, and the statute provides for significant civil and criminal sanctions. Settling and remediating violations can cost corporate defendants millions, with several corporate enforcement actions exceeding $100 million in sanctions. Moreover, enforcement actions related to the FCPA often are not brought until many years after the alleged violations.

Because the massive potential liabilities associated with an FCPA violation may not manifest themselves until years after the violation occurred, prospective …

Stock-Market Law And The Accuracy Of Public Companies’ Stock Prices, Kevin S. Haeberle

Faculty Publications

The social benefits of more accurate stock prices—that is, stock-market prices that more accurately reflect the future cash flows that companies are likely to produce—are well established. But it is also thought that market forces alone will lead to only a sub-optimal level of stock-price accuracy—a level that fails to obtain the maximum net social benefits, or wealth, that would result from a higher level. One of the principal aims of federal securities law has therefore been to increase the extent to which the stock prices of the most important companies in our economy (public companies) contain information about firms’ …

Women In The Crowd Of Corporate Directors: Following, Walking Alone, And Meaningfully Contributing, Joan Macleod Heminway

William & Mary Journal of Race, Gender, and Social Justice

No abstract provided.