Business Organizations Law Commons^™

Wilkes V. Springside Nursing Home, Inc.: A Historical Perspective, Mark J. Loewenstein

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No abstract provided.

Business-Like: The Supreme Court's 2009-2010 Labor And Employment Decisions, Melissa Hart

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The 2009-10 Term at the Supreme Court was a relatively quiet one for labor and employment law. While the Justices were in the news for decisions on corporate political donations and the Second Amendment, the Court’s work-related docket grabbed no headlines. In fact, though, the Court considered 7 work law cases this Term, in areas ranging from standards for arbitration agreements to employee privacy rights in new technology to time limitations for filing Title VII disparate impact claims. This article discusses the Court’s labor and employment cases for the Term. While they may not have made much news, several of …

An Arm's Length Solution To The Shareholder Loan Tax Puzzle, Wayne M. Gazur

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No abstract provided.

State Responsibility In Promoting Environmental Corporate Accountability, Lakshman Guruswamy

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No abstract provided.

A Standard Clause Analysis Of The Frustration Doctrine And The Material Adverse Change Clause, Andrew A. Schwartz

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In the darkest depths of a corporate merger agreement lies the MAC clause, a term that permits the acquirer to walk away from a transaction if, between signing and closing, the target company experiences a "Material Adverse Change." Multibillion-dollar deals rise or fall based on the anticipated interpretation of a MAC clause, and invocation of the clause in a sensitive transaction could trigger the collapse of the global financial system. In short, the MAC clause is the most important contract term of our time. And yet--due to an almost total lack of case law--no one knows what it means.

In …

The Diverging Meaning Of Good Faith, Mark J. Loewenstein

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This article explores the meaning of "good faith" in the context of corporations and unincorporated entities. The courts, particularly in Delaware, have developed two different approaches. In the corporate arena, the courts are fashioning a notion of good faith that seems to require an examination of director motivations. In the unincorporated arena, good faith has a meaning grounded in contract law. These are two different concepts and reflect the fundamental differences between corporations and unincorporated entities, with the former based on fiduciary duties and the latter on contract. There are, however, indications that this "divergence" is starting to disappear, and …

A Perspective On Federal Corporation Law, Mark J. Loewenstein

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No abstract provided.

Fiduciary Duties And Unincorporated Business Entities: In Defense Of The "Manifestly Unreasonable" Standard, Mark J. Loewenstein

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This article wades into the debate between contractarians and anti-contractarians over the extent to which statutes on unincorporated business entities should limit the ability of the participants in those entities to contract around fiduciary duties. Statutes enacted in the past several years provide considerable, but not complete, freedom to limit fiduciary duties. Contractarians argue that statutory limitations are inefficient and unnecessary, while anti-contractarians take the view that the statutes provide too much freedom of contract. This article stakes out a middle ground, arguing that the drafters of the statutes got it right and that in the absence of statutory limitations …

The Corporation As Insider Trader, Mark J. Loewenstein, William K.S. Wang

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With regard to issuer purchases, some of the traditional policy rationales against insider trading do not apply or apply with less force. Nevertheless, courts, commentators, and the SEC have all stated or assumed that a public corporation violates rule 10b-5 by buying its own shares in the market based on material, nonpublic information. In rule 10b-5 cases involving face-to-face transactions, several circuit courts have ruled that the company may not purchase its own stock based on material information not known to the seller. No good reason exists not to apply these precedents to stock market trades by issuers, especially because …

The Supreme Court, Rule 10b-5, And The Federalization Of Corporate Law, Mark J. Loewenstein

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This Article examines Supreme Court jurisprudence since 1997 under the federal securities laws in light of the Court's earlier securities law decisions and in light of its recent decisions construing the Constitution and federal statutes as they relate to the regulation of business. These post-1977 cases strongly suggest that the much-heralded new federalism philosophy of the Supreme Court is not a factor in securities law cases or in business cases generally. Indeed, the opposite seems to be the case. In this context, new federalism cases appear to be an anomaly, with the reality being that the Court is still as …

The Quiet Transformation Of Corporate Law, Mark J. Loewenstein

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No abstract provided.

Stakeholder Protection In Germany And Japan, Mark J. Loewenstein

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This Essay considers the stakeholder debate in the context of the German and Japanese legal systems. Although, nominally, corporations in those countries must operate in the interests of shareholders, in fact nonshareholder constituencies have considerable influence on corporate decision makers. Of equal importance, weak securities markets and ineffective or nonexistent legal protections for shareholders are also important factors in strengthening the position of nonshareholder constituencies and freeing directors to consider their interests. Thus, the stakeholder debate is more of an issue in the United States and Britain, where more shareholder-centic models flourish.

Unocal Revisited: No Tiger In The Tank, Mark J. Loewenstein

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No abstract provided.

Delaware As Demon: Twenty-Five Years After Professor Cary's Polemic, Mark J. Loewenstein

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No abstract provided.

Corporate Finance, Corporate Law And Finance Theory, Peter H. Huang, Michael S. Knoll

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No abstract provided.

Teaching Corporate Law From An Option Perspective, Peter H. Huang

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No abstract provided.

The Conundrum Of Executive Compensation, Mark J. Loewenstein

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Much of the scholarship on executive compensation that appears in law reviews assumes that large U.S. corporations overpay their chief executive officers ("CEOs"). This assumption is understandable, as many of these compensation packages are indeed stunning. The question of whether CEOs are overpaid, however, is complicated. Some scholars in other disciplines, principally in economics and management science, have studied the issue but, as this Article demonstrates, this literature does not confirm the assumption. Indeed, some studies suggest that CEO pay is competitive. Moreover, efforts to reduce the level of executive compensation may have the unintended consequence of achieving the opposite …

Shareholder Derivative Litigation And Corporate Governance, Mark J. Loewenstein

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In approving settlements of derivative actions that include fees for plaintiff's attorney, courts typically announce that attorney's fees are approved if a substantial benefit is obtained. In fact, courts, particularly Delaware courts, approve settlements in shareholder derivative actions that included substantial fees for plaintiff's attorney, despite the absence of a corresponding benefit to the corporation. Frequently, the "benefit" obtained is a reform in corporate governance, which is of dubious value to the corporation. To deter frivolous litigation, courts should resist the temptation to approve these settlements just to dispose of the litigation. The paper concludes that fees should not be …

Tapping Rainy Day Funds For The Reluctant Entrepreneur: Downsizing, Paternalism, And The Internal Revenue Code, Edward J. Gac, Wayne M. Gazur

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No abstract provided.

Notice And Notification Under The Revised Uniform Partnership Act: Some Suggested Changes, J. Dennis Hynes

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This Article addresses the decision by the drafters of the revised Uniform Partnership Act (1996) (RUPA) to reduce the traditional defenses available to partnerships in apparent authority cases. RUPA eliminated the requirement that apparent authority claims against a partnership be based on the claimant's reasonable expectations. Under RUPA a partnership is liable for a partner's unauthorized act even when the claimant had reason to know the act was unauthorized. A defense based on the claimant's knowledge is effective only when the claimant actually knows--is cognitively aware--that the act was unauthorized. This Article argues that this places an unfair burden on …

The Corporate Director's Duty Of Oversight, Mark J. Loewenstein

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No abstract provided.

Freedom Of Contract, Fiduciary Duties, And Partnerships: The Bargain Principle And The Law Of Agency, J. Dennis Hynes

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No abstract provided.

A New Direction For State Corporate Codes, Mark J. Loewenstein

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No abstract provided.

What's In A Name: An Argument For A Small Business Limited Liability Entity Statute (With Three Subsets Of Default Rules), Dale A. Oesterle, Wayne M. Gazur

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The recent proliferation of small business entity forms is primarily a result of their tax characterization. With the recent adoption of the IRS "check-the-box" regulations and, as a consequence, the elimination of traditional tax distinctions, many of these forms have lost their appeal. This article proposes starting over with one form, the "limited liability entity." Part I discusses the history of small business forms. Part II analyzes the current forms in light of the recent check-the- box legislation. Part III discusses the necessity of and rationale behind a unified entity statute. Finally, Part IV outlines a unified limited liability entity …

Reflections On Executive Compensation And A Modest Proposal For (Further) Reform, Mark J. Loewenstein

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No abstract provided.

Fiduciary Rules And Rupa, J. Dennis Hynes

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No abstract provided.

The Limited Liability Company Experiment: Unlimited Flexibility, Uncertain Role, Wayne M. Gazur

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No abstract provided.

Foreword, J. Dennis Hynes

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No abstract provided.

The Sec And The Future Of Corporate Governance, Mark J. Loewenstein

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No abstract provided.

The Forgotten Link: Control In Section 482, Wayne M. Gazur

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The foundation of international taxable income allocations between related parties is formed by the imposition of an arm's length standard. The presence of "control" over a person invokes this measure. The author examines the implications of control presented by continuing developments in the global business environment, including the rise of cooperative interfirm arrangements.