Business Organizations Law Commons^™

The Hypocrisy Of The Milberg Indictment: The Need For A Coherent Framework On Paying For Cooperation In Litigation, Bruce H. Kobayashi, Larry E. Ribstein

Journal of Business & Technology Law

No abstract provided.

Costa Brava Partnership Iii V. Telos Corp.: Striking An Inconsistent Balance In Plaintiff Shareholder Suits, Patrick W. Flavin

Journal of Business & Technology Law

No abstract provided.

Does "Say On Pay" Work? Lessons On Making Ceo Compensation Accountable, Stephen Davis

Ira M. Millstein Center for Global Markets and Corporate Ownership

Based on a review of UK experience, advisory shareowner votes on executive compensation policies (“say on pay”) appear practical for adaptation in North America and other markets. They represent a lever that could strengthen both boards and shareholders in the quest to better align top corporate pay with performance. But they are hardly a panacea on their own. They are likely to spur dialogue between boards and shareholders. However, market parties in the UK—which pioneered the advisory vote concept — remain concerned that boards and investors are each falling short of success in tethering pay to performance. US players may …

Balancing Rights With Responsibilities: Looking For The Global Drivers Of Materiality In Corporate Social Responsibility & The Voluntary Initiatives That Develop And Support Them , Rachel Kyte

American University International Law Review

No abstract provided.

Ec Reforms Of Corporate Governance And Capital Markets Law: Do They Tackle Insiders' Opportunism?, Luca Enriques, Matteo Gatti

Northwestern Journal of International Law & Business

Company and capital markets laws are rapidly evolving everywhere: there are few countries around the world where they have not been the subject of reform or where at least a reform agenda has not been devised. There are various reasons for this, both global and local. Among the global (or common) reasons for reform, two at least deserve to be singled out: large-scale market crises or prominent economic scandals, and financial development.

Assurance Services As A Substitute For Law In Global Commerce, Margaret M. Blair, Cynthia A. Williams, Li-Wen Lin

All Faculty Publications

In this article we examine the rapid emergence and expansion of a private-sector compliance and enforcement infrastructure that we believe may increasingly be providing a substitute for public and legal regulatory infrastructure in global commerce, especially in developing countries where rule of law is weak and court systems are absent or inadequate. This infrastructure is provided by a proliferation of performance codes and standards, and a rapidly-growing global army of privately-trained and authorized inspectors and certifiers that we call the "third-party assurance industry." The growth in the third party assurance business has been phenomenal in the last decade. The business …

Developing Markets In Baby-Making: In The Matter Of Baby M, Carol Sanger

Faculty Scholarship

In this Essay, I want to explore the Baby M case from a different, less philosophical perspective. The question I pose is simply this: how did the Sterns and the Whiteheads find one another in the first place? After all, apart from their New Jersey location (and a shared fondness for Bruce Springsteen), the two couples had little in common. Mary Beth was a high school dropout; Betsy had a Ph.D. and M.D. from the University of Michigan. Rick was a Vietnam vet fighting an ongoing battle with unemployment and alcoholism; Bill led what close friends called "a quiet, industrious …

Law And The Market: The Impact Of Enforcement, John C. Coffee Jr.

Faculty Scholarship

Are the U.S. capital markets losing their competitiveness? A fascinating question, but what does it mean and how can it be intelligently assessed? This Article will explore the newly popular thesis that draconian enforcement and overregulation are injuring the United States and will offer a sharply contrasting interpretation: higher enforcement intensity gives the U.S. economy a lower cost of capital and higher securities valuations. This higher intensity attracts some foreign listings, but deters others.

This Article will proceed by first mapping the marked variation in the intensity of enforcement efforts by securities regulators in selected nations and then relating these …

Lawyers Asleep At The Wheel? The Gm-Fisher Body Contract, Victor P. Goldberg

Faculty Scholarship

In the analysis of vertical integration by contract versus ownership one event has dominated the discussion – General Motors' merger with Fisher Body in 1926. The debates have all been premised on the assumption that the ten-year contract between the parties signed in 1919 was a legally enforceable agreement. However, it was not. Because Fisher's promise was illusory the contract lacked consideration. This note suggests that GM's counsel must have known this. It raises a significant question in transactional engineering: what is the function of an agreement that is not legally enforceable.

Hidden Foreign Aid, David Pozen

Faculty Scholarship

Few issues in global politics are as contentious as foreign aid – how much rich countries should give, in what ways, to whom. For years, it has been a commonplace that U.S. policies are stingy. The Organization for Economic Cooperation and Development (OECD) routinely ranks the United States far behind its industrialized peers in official development assistance (ODA), measured as a percentage of gross national income (GNI). An endless parade of critics has implored the government to do more; some suggest that the Bush Administration's support for the Monterrey Consensus, which sets a goal of increasing assistance to 0.7% of …

Controlling Family Shareholders In Developing Countries: Anchoring Relational Exchange, Ronald J. Gilson

Faculty Scholarship

In recent years, corporate governance scholarship has begun to focus on the most common distribution of public corporation ownership: outside of the United States and the United Kingdom, publicly owned corporations often have a controlling shareholder. The presence of a controlling shareholder is especially prevalent in developing countries. In Asia, for example, some two-thirds of public corporations have one, most of whom represent family ownership. The law and finance literature, exemplified by a series of articles by Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, Robert Vishny and others, treats the prevalence of controlling shareholders as the result of bad law; …

Introduction Symposium: Nonprofit Law, Economic Challenges, And The Future Of Charities: Introduction, Linda Sugin

Faculty Scholarship

This Symposium grew out of what I see as the public/private conundrum facing the nonprofit community and the law governing it. Nonprofit organizations are being called upon to better resemble for-profit organizations in a variety of ways. Those calls come from different sources-from donors increasingly interested in results that can be understood in terms parallel to bottom-line assessments to which businesses are accustomed, from cuts in government funding and increased programming that make nonprofits add more businesslike activities to finance their work, and from increasing numbers of for-profit competitors who have been able to mobilize technology and marketing to succeed …

The Impact On Director And Officer Behavior: Reflective Essays, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

I fall on the side of the skeptics about whether criminal liability in financial reporting cases is a healthy tool because I have doubts about whether judgments are likely to be proportionate. And proportionality is a very important measure in criminal law for two reasons. First, we expect the punishment to fit the crime as a matter of justice. Secondly, if we have disproportionately harsh treatment, then the behavior of officers and directors in response to over-deterrence is that they will pay too much attention to matters that are precautionary as opposed to profit-generating. And the point of a business …

New Hope For Corporate Governance In China?, James V. Feinerman

Georgetown Law Faculty Publications and Other Works

China's recent revisions to its Company Law and Securities Law have brought new attention to issues of corporate governance in Chinese companies and financial markets. Among the chief criticisms of the earlier laws - in both their provisions and application - were the lack of protection for minority shareholders, the paucity of independent directors, the absence of transparency and inadequate financial disclosure. The acknowledged need for greater congruence between Chinese law and practice and that of countries with more developed capital markets led to the proposal of amendments to China's legislation during the first half of this decade. This article …

Constraining Dominant Shareholders' Self-Dealing: The Legal Framework In France, Germany, And Italy , Pierre-Henri Conac, Luca Enriques, Martin Gelter

Faculty Scholarship

All jurisdictions supply corporations with legal tools to prevent or punish asset diversion by those, whether managers or dominant shareholders, who are in control. As previous research has shown, these rules, doctrines and remedies are far from uniform across jurisdictions, possibly leading to significant differences in the degree of investor protection they provide. Comparative research in this field is wrought with difficulty. It is tempting to compare corporate laws by taking one benchmark jurisdiction, typically the US, and to assess the quality of other corporate law systems depending on how much they replicate some prominent features. We take a different …

Financial Assistance - The Case For Re-Examining Section 76 Of The Companies Act, Wai Yee Wan

Research Collection Yong Pung How School Of Law

Section 76 of the Companies Act prohibits the giving by a company of financial assistance for the purpose of or in connection with the acquisition of its own shares. This penal provision is highly controversial in view of its breadth and uncertainty in its application. In the recent criminal prosecution of PP v Lew Syn Pau and in the recent civil litigation of Wu Yang Construction Group v Zhejiang Jinyi Group Co, Ltd, the Singapore High Court had to determine the scope of the prohibition under s 76 of the Companies Act. This case comment examines the two Singapore decisions …

On Leaving Corporate Executives "Naked, Homeless And Without Wheels": Corporate Fraud, Equitable Remedies, And The Debate Over Entity Versus Individual Liability, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

There is a lively debate about the relative merits of entity versus individual liability in cases involving securities fraud. After reviewing this debate in the context of both private securities litigation and SEC enforcement, this paper considers whether the legal tools available against individual executives are adequate, and if not, what changes might be made. The main focus is on equitable remedies, especially rescission and restitution, under both state and federal law. As to the former, Vice Chancellor Strine’s opinion in In re Healthsouth offers an interesting template, although there are limits on the usefulness of derivative suits to police …

The Social Construction Of Sarbanes-Oxley, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The closer one looks at SOX and its origins in the financial scandals of the early 2000s, the blurrier the picture, which lets commentators see what they want to see and draw inferences accordingly. That is why social construction is so crucial. My aim in this paper is to illuminate the social nature of SOX's diffusion into practice. I will leave to the reader the judgment about whether this has been or will be good or bad, and for whom. If I seem to challenge SOX's critics more than its supporters, it is because the critics have been more venomous …

Criminal Procedure Within The Firm, Samuel W. Buell

Faculty Scholarship

It seems improbable that the theoretical and doctrinal framework of criminal procedure, developed mostly through a binary model of the individual and the state, would fit without modification in the tripartite model of the state, the firm, and the individual that characterizes the investigation and sanctioning of criminal conduct within legal entities. This intuition—which has been underexplored in spite of heated public debate about the state’s practices in this area—proves correct. I develop some components of a framework for understanding procedure for individual cases of criminal wrongdoing within firms and generating insights to guide reform. The process of pursuing individual …

Predicting Corporate Governance Risk: Evidence From The Directors' & Officers' Liability Insurance Market, Tom Baker, Sean J. Griffith

Faculty Scholarship

This Article examines how liability insurers transmit and transform the content of corporate and securities law. Directors' & Officers' (D&O) liability insurers are the financiers of shareholder litigation in the American legal system, paying on behalf of the corporation and its directors and officers when shareholders sue. The ability of the law to deter corporate actors thus depends upon the insurance intermediary. How, then, do insurers transmit and transform the content of corporate and securities law in underwriting D& 0 coverage?In this Article, we report the results of an empirical study of the D&O underwriting process. Drawing upon in-depth interviews …

Resisting The Corporatization Of Nonprofit Governance: Transforming Obedience Into Fidelity Symposium: Nonprofit Law, Economic Challenges, And The Future Of Charities: Panel Iv: The Increasing Resemblance Of Nonprofit And Business Organizations Law, Linda Sugin

Faculty Scholarship

It is my privilege, as organizer of this conference, to reflect on the excellent papers published in this issue and the wonderful discussions that they inspired. The presentations left me with the impression that the law of nonprofit governance is moving toward a more corporate model of accountability-a model that emphasizes audits and other formal financial controls, and that focuses enforcement on financial wrongdoing and misuse of charitable funds by directors and managers. Along with these developments, it appears that the legal role of donors in nonprofit governance is growing, increasing donors' ability to impose their vision on the organizations …

Foreword: Introducing The Law Of Nonprofit Organizations And Philanthropy, David A. Brennen

Georgia Law Review

On January 5, 2007, the Nonprofit and Philanthropy Law Section of AALS held its first program at the AALS Annual Meeting in Washington, D.C. The program, entitled "State-Level Legal Reform of the Law of Nonprofit Organizations,"was a fitting way to launch what should prove to be a valuable contribution to the study of law relating to nonprofit organizations and philanthropy. This burgeoning area of academic legal study is well poised to grow by leaps and bounds in the coming years due to its impact on many traditional areas of legal study, including tax law, corporate law, estate law, trust law, …

Incorporation Choice, Uniformity, And The Reform Of Nonprofit State Law, Garry W. Jenkins

Georgia Law Review

This Article explores the significance of private lawmaking initiatives in the reform process of nonprofit state law. Specifically, Professor Jenkins considers projects led by the American Bar Association, American Law Institute, and National Conference of Commissioners on Uniform State Laws. He documents and explains how various institutional dynamics, ingrained habits, and other factors unique to the tax-exempt sector, most notably the choices of nonprofit organizations regarding where to incorporate,affect the ways in which nonprofit law is developed. To that end, the Article presents empirical findings revealing that nonprofits are far less likely than for-profit corporations to opt for out-of-state incorporation.This, …

Revising The Model Nonprofit Corporation Act: Plus Qa Change, Plus C'Est La M~Me Chose, Lizabeth A. Moody

Georgia Law Review

The proposed revision of the 1988 version of the Model Nonprofit Corporation Act (MNCA) leaves most of the 1988 revisions in place. Overall the changes will bring the Act closer to the Model Business Corporation Act which was the stated intention of the 1988 revision. The major changes which are being proposed include: dropping the classification scheme which divided nonprofit corporations into Public Benefit, Mutual Benefit and Religious corporations;deleting certain provisions with respect to the role of the attorney general; prohibiting cumulative voting; including provisions of the Model Entity Transactions Act (META); and providing for Select Exempt Corporations.

Plea Bargaining's Survival: Financial Crimes Plea Bargaining, A Continued Triumph In A Post-Enron World, Lucian E. Dervan

Oklahoma Law Review

No abstract provided.

The Pivotal Role Of The Corporate General Counsel In Promoting Corporate Integrity And Professional Responsibility, Sarah Helene Duggin

Scholarly Articles

Part I of this article begins with an overview of the history of the corporate general counsel position and then outlines formal and informal roles contemporary general counsel play, concluding with a discussion of the importance of a broad vision of the role in fostering corporate integrity and professional ethics. Part II looks at the responsibilities of general counsel in connection withSarbanes-Oxley and the 2003 amendments to the Model Rules of Professional

Conduct.

Part III focuses on two areas that merit careful consideration concerning the role of general counsel in the struggle to promote corporate integrity and professional responsibility. The …

Taking Shareholder Rights Seriously, Julian Velasco

Journal Articles

The great corporate scandals of the recent past and the resulting push for legal reform have revived the role of the shareholder in the corporation as a subject of great debate. Those who favor an expanded role for shareholders in corporate governance tend to focus on developing new legal rights for shareholders, and their critics respond with reasons why such rights are unnecessary and inappropriate. While these issues certainly are worthy of consideration, issues concerning existing shareholder rights are more fundamental. If existing rights are adequate or could be improved, then new rights may not be necessary; but if existing …