Business Organizations Law Commons^™

Flores V. Southern Peru Copper Corporation: The Second Circuit Fails To Set A Threshold For Corporate Alien Tort Claim Act Liability, Lori D. Johnson

Scholarly Works

In Flores v. Southern Peru Copper Corporation, the U.S. Court of Appeals, Second Circuit, re-examined its Alien Tort Claims Act (ATCA) jurisprudence and assumed that a private domestic company acting in its private capacity could be liable to Peruvian nationals under the ATCA for a wide range of torts under international law, including violations of rights to “life and health.” Previous cases and other Circuits held that only a handful of egregious crimes, when committed by a private individual or corporation, can justify private liability under the ATCA. Rather than abiding by these interpretations, however, the court examined in depth …

The Poison Pill In Japan: The Missing Infrastructure, Ronald J. Gilson

Faculty Scholarship

The coming of hostile takeovers to Japan has been anticipated, and anticipated, and anticipated. Each report of a reduction in the size of crossholdings among Japanese companies and in the size of Japanese bank stockholdings in their clients has given rise to an expectation that now, at last, hostile offers would emerge. It is not surprising that commentators looked forward, optimistically, to the arrival of a potentially disruptive takeover technique. The extended Japanese recession, together with management resistance to internally implemented restructurings and the barriers to externally imposed restructurings, has created the potential for substantial private and social gain from …

Uncorporated Professionals, John Romley, Eric L. Talley

Faculty Scholarship

Professional service providers who wish to organize as multi-person firms have historically been limited to the partnership form. Such organizational forms trade the benefit of risk diversification off against the costs of diluted incentives and liability exposure in choosing their optimal size. More recently, states have permitted limited-liability entities that combine the simplicity, flexibility and tax advantages of a partnership with the liability shield of a corporation. We develop a game theoretic model of professional-firm organization that integrates the provision of incentives in a multi-person firm with the choice of business form. We then test the model's predictions with a …

Partnoy's Complaint: A Response, John C. Coffee Jr.

Faculty Scholarship

My article attempts to strike a balance and find a middle ground between the polar positions of those who favor strict liability (of whom Professor Partnoy is probably the most notable) and recent critics who believe it would produce market failure. Necessarily, those who take a middle position are exposed to fire from both sides. Although I admire Professor Partnoy's originality and incisive style, I do not believe that the market could easily survive his reforms and suspect that he has undervalued the hidden costs of strict liability. Deterrence is needed – but there can be too much of a …

Gatekeeper Failure And Reform: The Challenge Of Fashioning Relevant Reforms, John C. Coffee Jr.

Faculty Scholarship

Securities markets have long employed "gatekeepers" – independent professionals who pledge their reputational capital – to protect the interests of dispersed investors who cannot easily take collective action. The clearest examples of such reputational intermediaries are auditors and securities analysts, who verify or assess corporate disclosures in order to advise investors in different ways. But during the late 1990s, these protections seemingly failed, and a unique concentration of financial scandals followed, all involving the common denominator .of accounting irregularities. What caused this sudden outburst of scandals, involving an apparent epidemic of accounting and related financial irregularities, that broke over the …

Summary Of Redl V. Secretary Of State, 120 Nev. Adv. Rep. 13, Mike Feliciano

Nevada Supreme Court Summaries

Petition denied. Under NRS 78.730, the Secretary of State has discretion to revive a corporate charter that has been revoked for a period of five or more years.

Corporate Governance, Executive Compensation And Securities Litigation, Eric L. Talley, Gudrun Johnsen

Faculty Scholarship

It is generally accepted that good corporate governance, executive compensation and the threat of litigation are all important mechanisms for incentivizing managers of public corporations. While there are significant and robust literatures analyzing each of these policy instruments in isolation, their mutual relationship and interaction has received somewhat less attention. Such neglect is mildly surprising in light of a strong intuition that the three devices are structurally related to one another (either as complements or substitutes). In this paper, we construct an agency cost model of the firm in which corporate governance protections, executive compensation levels, and litigation incentives are …

The Entrepreneurship Effect: An Accidental Externality In The Federal Income Tax, Leandra Lederman

Articles by Maurer Faculty

Case law and commentators sometimes speak as if all income-producing activities are taxed similarly. However, that simply is not true for individuals. Although the expenses and losses of business activities generally are deductible from income of any source and net losses can be carried to other tax years, individuals' investment expenses and losses generally are deductible only from investment income. Although many of the provisions restricting investment-related deductions were enacted at different times, and each one has its own rationale, the combined effect of these provisions on individual investors is a systematic preference for business losses over investment losses.

Economists …

Rules, Principles, And The Accounting Crisis In The United States, William W. Bratton

Georgetown Law Faculty Publications and Other Works

The Sarbanes-Oxley Act and the Securities Exchange Commission move too quickly when they prod the Financial Accounting Standards Board, the standard setter for US GAAP, to move immediately to a principles-based system. Priorities respecting reform of corporate reporting in the US need to be ordered more carefully. Incentive problems impairing audit performance should be solved first through institutional reform insulating the audit from the negative impact of rent-seeking and solving adverse selection problems otherwise affecting audit practice. So long as auditor independence and management incentives respecting accounting treatments remain suspect, the US reporting system holds out no actor plausibly positioned …

Some Thoughts On Proposed Revisions To The Organizational Guidelines, Julie R. O'Sullivan

Georgetown Law Faculty Publications and Other Works

In this article, Professor O'Sullivan, who served as the reporter for the U.S. Sentencing Commission's Ad Hoc Advisory Group for Organizational Sentencing Guidelines, reflects on that Group's work. She concludes that the potential impact of many of the policy fixes within the power of the Sentencing Commission is dwarfed by decisions that lie solely within the power of the Department of Justice or Congress. Specifically, Department of Justice decisions regarding what constitutes organizational "cooperation" may have a determinative impact on organizational incentives regarding compliance efforts and decisions to investigate, self-report, and cooperate in the remediation of organizational wrongdoing. Professor O'Sullivan …

The Great Divide: Considering Section 157a Of The Singapore Companies Act, Pearlie Koh

Research Collection Yong Pung How School Of Law

The manner in which the powers of a company are carved out to be exercised by either the general meeting of shareholders or its board of directors is often a matter of interpretation of the constitution of the company. This approach retains a fair amount of flexibility in the differing models of power allocation that may be adopted by incorporators, but once carved out, the power allocation usually remains sacrosanct until such time as the constitution is validly altered. This was the position in Singapore before 2003. In 2003, the Companies Act of Singapore was amended to include s 157A, …

Gaming Delaware, William W. Bratton

Georgetown Law Faculty Publications and Other Works

Back in 2000, at the World Trade Center in Portland, Oregon, Time Belden and other Enron electricity traders carefully studied the regulations governing California's new electricity market. Belden thought that the complex rules were "prone to gaming." And game them he did. Under one strategy, Enron filed imaginary transmission schedules, creating nonexistent congestion, so as to draw on the rules' provision of payment to alleviate congestion. They called it "Death Star." Then there was "Ricochet," or megawatt laundering, under which Enron circumvented price caps by exporting power out of California, only to bring the power back later, when the State, …

Overcoming Resistance To Diversity In The Executive Suite: Grease, Grit, And The Corporate Tournament, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

Once we open the corporate governance/human resources nexus to deeper inquiry, mutual scholarly interest in diversity and discrimination follows naturally. Firms have complex motives to take nondiscrimination and the promotion of diversity seriously. First, at least certain forms of discrimination are both unlawful and socially illegitimate and hence present threats of potential liability and injury to reputation. Second, human resources demands are such that attracting and motivating a diverse workforce is a competitive imperative. At the same time, however, offsetting economic forces may exist that favor subtle forms of discrimination and hostility to diversity, even if intentional and overt racial …

Technological Evolution And The Devolution Of Corporate Financial Reporting, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

My claim is that the technology link to the recent disclosure scandals is no coincidence. To be sure, cheating tempts all who seek wealth, in whatever line of business they find themselves. I want to show, however, how the rapid pace of innovation at a number of levels offered motive, opportunity, and rationalization for a downshift in financial reporting norms, which in turn made outright fraud more probable.

Revised Uniform Partnership Act: Anomalies Of A Simplified, Modernized Partnership Law, Clay B. Wortham

Kentucky Law Journal

No abstract provided.

Microenterprise Through Microfinance And Microlending: The Missing Piece In The Overall Tribal Economic Development Puzzle, R. H. Tipton Iii

American Indian Law Review

No abstract provided.

Economic Organization In The Construction Industry: A Case Study Of Collaborative Production Under High Uncertainty, William A. Klein, Mitu Gulati

Faculty Scholarship

No abstract provided.

Derivative Suits In Bankruptcy, Keith Sharfman

Faculty Publications

(Excerpt)

It is a fundamental tenet of corporate law that creditors, unlike shareholders, may not bring derivative suits on a firm's behalf—even if the firm is, or is nearly, insolvent. Corporate law affords creditors who are unhappy with a corporate debtor's management various remedies, such as the right (in limited circumstances) to put the firm into receivership or to sue the directors and officers directly for breaches of fiduciary duty. But the derivative suit is not among them.

The formal rationale for denying derivative standing to creditors is that a derivative suit is an assertion of ownership rights, and (in …

"We Are An Equal Opportunity Employer": Diversity Doublespeak, Cheryl L. Wade

Faculty Publications

There are too few discussions about race and race relations among corporate managers and directors. The rhetoric used in these infrequent discussions revolves around the idea of diversity in the workplace. In recent years, when speaking about employees and race issues, corporate actors have become curiously silent about discrimination and racism. This Article provides several examples of the rhetorical devices used by corporate spokespersons that ignore persisting problems with discrimination and racism by focusing solely on diversity efforts. Diversity rhetoric allows corporate managers to avoid responsibility for enduring discrimination in the workplace. Diversity efforts, without antidiscrimination efforts, increase the likelihood …

Securities Law: Proxies Pull Mutual Funds Into The Sunlight: Mandatory Disclosure Of Proxy Voting Records, H. Anne Nicholson

Oklahoma Law Review

No abstract provided.

Law's Signal: A Cueing Theory Of Law In Market Transition, Robert B. Ahdieh

Faculty Scholarship

Securities markets are commonly assumed to spring forth at the intersection of an adequate supply of, and a healthy demand for, investment capital. In recent years, however, seemingly failed market transitions - the failure of new markets to emerge and of existing markets to evolve - have called this assumption into question. From the developed economies of Germany and Japan to the developing countries of central and eastern Europe, securities markets have exhibited some inability to take root. The failure of U.S. securities markets, and particularly the New York Stock Exchange, to make greater use of computerized trading, communications, and …

Partner To Plutocrat: The Separation Of Ownership From Management In Emerging Capital Markets - 19th Century Industrial America, Christian C. Day

University of Miami Law Review

No abstract provided.

Corporate-Owned Life Insurance: Another Financial Scheme That Takes Advantage Of Employees And Shareholders, Susan Lorde Martin

University of Miami Law Review

No abstract provided.

The Quiet Transformation Of Corporate Law, Mark J. Loewenstein

Publications

No abstract provided.

Structural Bias And The Need For Substantive Review, Julian Velasco

Journal Articles

One of the fundamental debates in corporate law pits the authority of the board of directors to make business decisions without judicial interference against the accountability of directors to shareholders for their decisions. The business judgment rule attests to the value ascribed to authority by providing only limited judicial review for claims of breach of the duty of care, while the entire fairness test demonstrates the value ascribed to accountability by providing far more exacting scrutiny for claims of breach of the duty of loyalty. In cases involving structural bias, however, neither doctrine is appropriate. Whenever the interests of directors …