Business Organizations Law Commons^™

Too Busy To Mind The Business? Monitoring By Directors With Multiple Board Appointments, Stephen P. Ferris, Murali Jagannathan, Adam C. Pritchard

Articles

We examine the number of external appointments held by corporate directors. Directors who serve larger firms and sit on larger boards are more likely to attract directorships. Consistent with Fama and Jensen (1983), we find that firm performance has a positive effect on the number of appointments held by a director. We find no evidence that multiple directors shirk their responsibilities to serve on board committees. We do not find that multiple directors are associated with a greater likelihood of securities fraud litigation. We conclude that the evidence does not support calls for limits on directorships held by an individual.

Risk Management And Organizational Governance: The Case Of Enron, Robert Eli Rosen

Articles

No abstract provided.

For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah

Articles

This article discusses “inversion” transactions, in which a publicly traded U.S. corporation becomes a subsidiary of a newly established tax haven parent corporation. In the last three years, an increasing number of these transactions have been taking place, undeterred by the shareholderlevel tax imposed by the IRS on them in 1994. The article first discusses the reasons for the increasing popularity of the transactions and the tax goals they aim at achieving (primarily avoiding subpart F and U.S. earnings stripping). The article then discusses the tax policy implications of these transactions. In the short run, the article suggests that the …

Encouraging Race-Based Advocacy In Legal Services Practice, Jonel Newman

Articles

Every legal services program has a waiting room, some newly furnished, others with old sofas and tattered chairs. The families, children, and elderly sitting in these waiting rooms consistently are disproportionately racial and ethnic minorities. Despite this constant reminder that those seeking legal assistance for their perceived wrongs are disproportionately racial and ethnic minorities, legal services programs are bringing fewer and fewer affirmative challenges that incorporate race-based antidiscrimination claims.
/="/"> In this article we explore possible reasons for this lack of affirmative race- and national-origin-based discrimination claims and suggest some ideas for preserving or restarting this type of advocacy, ideas …

Corporate Complicity: From Nuremberg To Rangoon - An Examination Of Forced Labor Cases And Their Impact On The Liability Of Multinational Corporations, Anita Ramasastry

Articles

Part I of this article outlines various levels of corporate complicity as a way of understanding the spectrum of conduct for which MNCs have been criticized.This provides a necessary background for examining how courts have treated corporate actors with respect to their alleged involvement in war crimes and crimes against humanity. This also helps to delineate where on this continuum MNC conduct should give rise to accomplice liability.

Part II of this article examines the post-World War II trials of German and Japanese civilian businessmen for war crimes and crimes against humanity. The war crimes prosecutions provide an important starting …

Commentary: Convergence As Movement: Toward A Counter-Hegemonic Approach To Corporate Governance, Kellye Y. Testy

Articles

No abstract provided.

The Beginning Of Herstory For Corporate Law, Kellye Y. Testy

Articles

In The Gender Implications of Corporate Governance Change, Janis Sarra presents what has until now seemed oxymoronic to many: a feminist economic analysis of corporate governance in the global marketplace. In so doing, she joins a growing chorus of corporate governance scholars who are seeking to advance an alternative vision to the neoclassical, shareholder-centered model that is not only dominant in the United States, but is also widely exported-even to nations that do not share similar institutional configurations that support such a model. This diverse group of scholars--whose approaches have been labeled variously as "progressive," "communitarian," and "socio-economic,"--do not …

Form And Substance In Cyberspace, A. Michael Froomkin

Articles

In this Response to the preceding article by Joe Sims and Cynthia Bauerly, A. Michael Froomkin defends his earlier critique of ICANN. This Response first summarizes the arguments in Wrong Turn In Cyberspace, which explained why ICANN lacks procedural and substantive legitimacy. This Response focuses on how the U.S. government continues to assert control over the domain name system, and how this control violates the APA, the nondelegation doctrine as articulated by the Supreme Court in Carter Coal, and public policy. Professor Froomkin then proposes that ICANN's role be more narrowly focused away from policy making towards true …

A Control-Based Approach To Shareholder Liability For Corporate Torts, Nina A. Mendelson

Articles

Some commentators defend limited shareholder liability for torts and statutory violations as efficient, even though it encourages corporations to overinvest in and to externalize the costs of risky activity. Others propose pro rata unlimited shareholder liability for corporate torts. Both approaches, however, fail to account fully for qualitative differences among shareholders. Controlling shareholders, in particular, may have lower information costs, greater influence over managerial decisionmaking, and greater ability to benefit from corporate activity. This Article develops a control-based approach to shareholder liability. It first explores several differences among shareholders. For example, a controlling shareholder can more easily curb managerial risk …

Linking Progressive Corporate Law With Progressive Social Movements, Kellye Y. Testy

Articles

Professor Testy critically assesses what has been termed a "new" corporate social responsibility project After noting the hegemony of shareholder primacy in corporate law, she critiques four major counter-hegemonic discourses: team production theory, corporate social accountabiity, stakeholder theory, and corporate social responsibility (or progressive corporate law). Finding the first three ineffective foils for the problems of corporate power that have spurred calls for reform, she turns to an examination of the progressive corporate law project. That project, presently poised at a defining juncture as it attempts to use the "master's tools" to "dismantle the master's house," nonetheless holds promise for …

Why The Corporate Amt Should Be Retained, Reuven S. Avi-Yonah

Articles

The corporate AMT is under attack. Repeal has been proposed by the White House, endorsed by the ABA/AICPA/TEI tax simplification project, and included in the stimulus bill passed by the House of Representatives. Repeal is supported on two principal grounds: That the corporate AMT increases complexity, and that it is pro-cyclical.

Tax Competition And E-Commerce, Reuven S. Avi-Yonah

Articles

In the last four years, there has been increasing concern by developed countries about the potential erosion of the corporate income tax base by "harmful tax competition" (in the European Union since 1997, in the OECD since 1998). However, the data on tax competition available to date present a mixed and somewhat puzzling picture. On the one hand, there is considerable evidence that effective corporate income tax rates in many countries have been declining, and that the worldwide effective tax rates on multinational enterprises (MNEs) have been going down as well. On the other hand, macroeconomic data from developed countries …

Globalization And Tax Competition: Implications For Developing Countries, Reuven S. Avi-Yonah

Articles

This article analyses the effects of tax competition on developing countries. Since the 1980s, globalization and greater capital mobility have led many developing countries to adopt the policy of competing with one another to attract capital investment. One of the main forms taken by this competition has been the granting of tax holidays and other tax reductions to investing multinationals. This paper reviews the normative arguments for and against this type of tax competition, from a global perspective. It then examines these arguments in depth from the point of view of developing countries. The conclusion in general is that, since …

The U.S. Treasury's Subpart F Report: Plus Ça Change, Plus C'Est La Même Chose?, Reuven S. Avi-Yonah

Articles

On 29 December 2000, the U.S. Treasury Department released its long-awaited study of Subpart F, entitled “The Deferral of Income Earned through U.S. Controlled Foreign Corporations." This study was commenced in the aftermath of the controversy that ensued from the issuance and subsequent withdrawal of Notice 98-11. The study was originally expected to be issued in 1999 in response to the report published that year by the National Foreign Trade Council, which advocated significant changes in Subpart F. The Treasury Study’s delayed issuance at the end of the Clinton Administration means that it only has (at best) persuasive force for …

Tax, Trade And Harmful Tax Competition: Reflections On The Fsc Controversy, Reuven S. Avi-Yonah

Articles

This article contrasts three approaches to dealing with the BEPS problem: adopting a unitary taxation regime, ending deferral, and adopting anti-base-erosion measures. It concludes that while the first approach is the best long-term option, the other two are more promising as immediate candidates for adoption in the context of U.S. tax reform and the OECD BEPS project.

The Promise And Perils Of Strategic Publication To Create Prior Art: A Response To Professor Parchomovsky, Rebecca S. Eisenberg

Articles

In a provocative recent article in the Michigan Law Review, Professor Gideon Parchomovsky observes that a firm racing with a competitor to make a patentable invention might find it strategically advantageous to publish interim research results rather than risk losing a patent race. This strategy exploits legal rules limiting patent protection to technological advances that are new and "nonobvious" in light of the "prior art" or preexisting knowledge in the field. By publishing research results, a firm adds to the prior art and thereby limits what may be patented in the future. Parchomovsky posits that, before it is able to …

Corporate Governance Lessons From Russian Enterprise Fiascos, Merritt B. Fox, Michael A. Heller

Articles

This Article draws on a rich array of deviant behavior in Russian enterprises to craft lessons for corporate governance theory. First, Professors Fox and Heller define corporate governance by looking to the economic functions of the firm. Based on this definition, they develop a typology that comprehensively shows all the channels through which bad corporate governance can inflict damage on a country's real economy. Second, they explain the causes of Russian enterprise fiascoes by looking to the particular initial conditions prevailing at privatization-untenable firm boundaries and insider allocation of firm shares-and the bargaining dynamics that have followed. This focus offers …

Governments, Citizens, And Injurious Industries, Hanoch Dagan, James J. White

Articles

In this Article, Professors Hanoch Dagan and James White study the most recent challenge raised by mass torts litigation: the interference of governments with the bilateral relationship between citizens and injurious industries. Using the tobacco settlement as their case study, Dagan and White explore the important benefits and the grave dangers of recognizing governments' entitlement to reimbursement for costs they have incurred in preventing or ameliorating their citizens' injuries. They further demonstrate that the current law can help capture these benefits and guard against the entailing risks, showing how subrogation law can serve as the legal foundation of the governments' …

Bonus Questions--Executive Compensation In The Era Of Pay For Performance, Charles M. Yablon

Articles

The article critically examines the evolution of executive compensation, particularly the shift from traditional pay structures to performance-based systems, and argues that this shift has not resolved the underlying issues of excessive pay and misaligned incentives. Instead, it has introduced new conflicts of interest and inefficiencies. The author proposes a regulatory solution—a deductibility cap on executive pay—to curb excessive compensation and better align executive incentives with shareholder interests.

Corporate Judgement Proofing: A Response To Lynn Lopucki's 'The Death Of Liability', James J. White

Articles

In "The Death of Liability" Professor Lynn M. LoPucki argues that American businesses are rendering themselves judgment proof.- Using the metaphor of a poker game, Professor LoPucki claims American businesses are increasingly able to participate in the poker game without putting "chips in the pot." He argues that it has become easier for American companies to play the game without having chips in the pot because of the ease with which a modern debtor can grant secured credit, because of the growth of the peculiar form of sale known as asset securitization, because foreign havens for secreting assets are now …

Corporations, Criminal Law And The Color Of Money, Joseph Vining

Articles

This part of From Newton's Sleep, published by Princeton University Press in 1995 and in a paperback edition in early 1997, is reprinted by permission of the publisher. From Newton's Sleep is a book on the legal form of thought and its meaning for science and religion. It consists of some two hundred and fifty self-contained pieces arranged in eight sections. In its form, the book is much like and is meant to be much like the material with which lawyers routinely deal. Here, Law Quadrangle Notes excerpts a piece that touches on a subject of lively debate today, among …

Minority Discounts, Fair Market Value, And The Culture Of Estate Taxation, William S. Blatt

Articles

No abstract provided.

Intellectual Property At The Public-Private Divide: The Case Of Large-Scale Cdna Sequencing, Rebecca S. Eisenberg

Articles

The Human Genome Project provides fertile ground for studying the role of intellectual property at the wavering boundary between public and private research science. It involves a major commitment of both public and private research funds in an area that is of significant interest both to research scientists working in university and government laboratories and to commercial firms. It thus provides a wealth of new scientific discoveries that are simultaneously potential candidates for commercial development and inputs into further research. Its obvious implications for human health raise the stakes of getting the balance between private property and public access right, …

Public Research And Private Development: Patents And Technology Transfer In Government-Sponsored Research, Rebecca S. Eisenberg

Articles

This article revisits the logical and empirical basis for current government patent policy in order to shed light on the competing interests at stake and to begin to assess how the system is operating in practice. Such an inquiry is justified in part by the significance of federally-sponsored research and development to the overall U.S. research effort. Although the share of national expenditures for research and development borne by the federal government has declined since 1980, federal funding in 1995 still accounted for approximately thirty-six percent of total national outlays for research and development' and nearly fifty-eight percent of outlays …

How To Negotiate A Sales Contract, James J. White

Articles

A. Introduction 1. In my experience, lawyers begin negotiating only after the business people have decided upon the description and quality of the product, the time of delivery, and the mode and amount of payment. The lawyers are left with the pathological problems - who gets what in case of trouble. 2. Most of those pathological problems relate to the seller's responsibility if the product does not conform to the contract or otherwise fails to please the buyer. These failures can cause economic loss to the buyer, economic loss to a remote purchaser, or personal injury or property damage to …

Nationalism And The Right To Self-Determination: The Arab-Israeli Conflict, Malvina Halberstam

Articles

Self-determination is a slogan that has captured the imagination of people throughout the world. Numerous U.N. General Assembly resolutions have exalted self-determination, often above the fundamental rights specifically provided for in the U.N. Charter. Notwithstanding these resolutions, in practice, self-determination generally has been applied only to the dismemberment of colonial empires. Its universal application is neither possible nor desirable.

In the Arab-Israeli conflict, self-determination was never truly the issue. The conflict has been deliberately transformed into a claim for self-determination as a political tactic designed to gain the support of third world countries in the United Nations. The issues in …

Section 338 And Its Foolish Consistency Rules - The Hobgoblin Of Little Minds, Douglas A. Kahn

Articles

The purposes of this Article are to examine whether there is any longer a reason for concern because a target corporation can choose selected assets for nonrecognition and to what extent the 1994 regulations properly deal with potentially abusive circumventions of tax goals. Before examining the current status of the consistency requirements, the historical background that led to the adoption of Section 338 and the operation of the section is discussed. The historical background includes: the judicially created Kimbell-Diamond rule, the codification and modification of that rule by the old version of Section 334(b)(2), the operation of the old version …

The Merger Puzzle, John A. Miller

Articles

No abstract provided.

Limiting The Role Of Patents In Technology Transfer, Rebecca Sue Eisenberg

Articles

Federal policy since 1980 has reflected an increasingly confident presumption that patenting discoveries made in the course of government-sponsored research is the most effective way to promote technology transfer and commercial development of those discoveries in the private sector. Whereas policymakers in the past may have thought that the best way to achieve widespread use of government-sponsored research was to make the results freely available to the public, the new propatent policy stresses the need for exclusive rights as an incentive for industry to undertake the further investment to bring new products to market. Although this propatent policy may make …

Limiting The Role Of Patents In Technology Transfer, Rebecca S. Eisenberg

Articles

Federal policy since 1980 has reflected an increasingly confident presumption that patenting discoveries made in the course of government-sponsored research is the most effective way to promote technology transfer and commercial development of those discoveries in the private sector. Whereas policymakers in the past may have thought that the best way to achieve widespread use of government-sponsored research was to make the results freely available to the public, the new propatent policy stresses the need for exclusive rights as an incentive for industry to undertake the further investment to bring new products to market. Although this propatent policy may make …