Business Organizations Law Commons^™

"Say On Pay": Cautionary Notes On The U.K. Experience And The Case For Shareholder Opt-In, Jeffrey N. Gordon

Faculty Scholarship

Shareholder and public dissatisfaction with executive compensation has led to calls for an annual shareholder advisory vote on firms’ compensation practices and policies, so-called “say on pay.” Proposed federal legislation would mandate “say on pay” generally for U.S. public companies. This Article assesses the case for such a mandatory federal rule in light of the U.K. experience with a similar regime adopted in 2002. The best argument for a mandatory rule is that it would destabilize pay practices that have produced excessive compensation and that would not yield to firm-by-firm pressure. This has not been the U.K. experience; pay continues …

Bargaining Around Bankruptcy: Small Business Workouts And State Law, Edward R. Morrison

Faculty Scholarship

Federal bankruptcy law is rarely used by distressed small businesses. For every 100 that suspend operations, at most 20 file for bankruptcy. The rest use state law procedures to liquidate or reorganize. This paper documents the importance of these procedures and the conditions under which they are chosen using firm-level data on Chicago-area small businesses. I show that business owners bargain with senior lenders over the resolution of financial distress. Federal bankruptcy law is invoked only when bargaining fails. This tends to occur when there is more than one senior lender or when the debtor has defaulted on senior debt …

Enhancing Investor Protection And The Regulation Of Securities Markets, John C. Coffee Jr.

Faculty Scholarship

This is the congressional testimony of Professor John C. Coffee, Jr., before the United States Senate Committee on Banking, Housing and Urban Affairs, March 10, 2009.

Chrysler, Gm And The Future Of Chapter 11, Edward R. Morrison

Faculty Scholarship

Although they caused great controversy, the Chrysler and GM bankruptcies broke no new ground. They invoked procedures that are commonly observed in modern Chapter 11 reorganization cases. Government involvement did not distort the bankruptcy process; it instead exposed the reality that Chapter 11 offers secured creditors – especially those that supply financing during the bankruptcy case – control over the fate of distressed firms. Because the federal government supplied financing in the Chrysler and GM cases, it possessed the creditor control normally exercised by private lenders. The Treasury Department found itself with virtually the same, unchecked power that the FDIC …

The “New” Fiduciary Standards Under The Revised Uniform Liability Company Act: More Bottom Bumping From Nccusl, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Between 1995 and 2001, the influential National Conference of Commissioners on Uniform State Laws (NCCUSL) promulgated iterations of uniform laws pertaining to partnerships, limited partnerships and limited liability companies. One or more of those acts have been widely adopted by state legislatures.

Each of the three acts—the Uniform Partnership Act (1997) (RUPA), the Uniform Limited Partnership Act (2001) (ULPA (2001)), and the Uniform Limited Liability Company Act (1996) (ULLCA)—contains identical fiduciary duty provisions. The acts all adopt the same standards for the duty of care and the duty of loyalty, and offer parties the same limited rights to opt out …

The Plight Of The Bare Naked Assignee, Daniel S. Kleinberger

Faculty Scholarship

A new and separate opportunity for oppression exists because LLC law purports to (1) recognize a species of persons holding legal rights vis-á-vis the LLC (assignees) while (2) denying those persons any remedies whatsoever in connection with those rights. This article addresses the conceptual mechanics, history, and ultimate instability of that denial. The article also considers a note of irony­—namely, that the plight of the "bare naked assignee" derives from a construct, the organization as "aggregate," that LLC law has in all other respects emphatically transcended. To understand the plight of the assignee of an LLC interest, one must first …

Finessing Well-Plead Derivative Lawsuits: The Implications Of The Minnesota Supreme Court's Selection Of Auerbach Over Zapata, James F. Hogg

Faculty Scholarship

This article begins with the factual background and subsequent procedural history of the UnitedHealth Group Inc. shareholder derivitve litigation, as an instance where Minnesota courts effectively disposed of the factual allegations in a well-pleaded derivative action, directed at the behavior and actions of members of a board of directors, without reviewing finding of facts or reasoning behind the SLC's report or conclusions. The purpose of this article is to understand how a board-appointed committee can convince a court to dismiss and settle a derivative suit without showing detailed justification, and this is achieved by reviewing the statutes, case law, and …

Recognizing The "Bad Barrel" In Public Business Firms: Social And Organizational Factors In Misconduct By Senior Decision-Makers, James A. Fanto

Faculty Scholarship

No abstract provided.

Funding Public Pension Plans, 42 J. Marshall L. Rev. 837 (2009), Jonathan Barry Forman

UIC Law Review

No abstract provided.

Feminizing Capital: A Corporate Imperative, Darren Rosenblum

Elisabeth Haub School of Law Faculty Publications

This Article argues that Norway’s Corporate Board Quota Law (“CBQ”) fosters a productive symbiosis between the public and private spheres. Recent studies indicate that higher numbers of women in executive positions result in stronger rates of corporate return on equity (“ROE”). Countries with higher levels of women's political representation also tend to have higher levels of economic growth. Increasing women's workforce participation outside the home can drive overall economic growth. These factors prompted the CBQ's proponents to argue for the economic imperative of women's corporate leadership. The CBQ will not only ameliorate gender inequality, but will bring new life to …

A Little Of This, A Little Of That: Potential Effects On Entrepreneurship Of The Mccain And Obama Tax Proposals, Anthony J. Luppino

Faculty Works

No abstract provided.

Competition Policy And Comparative Corporate Governance Of State-Owned Enterprises, D. Daniel Sokol

UF Law Faculty Publications

The legal origins literature overlooks a key area of corporate governance—the governance of state-owned enterprises ("SOEs"). There are key theoretical differences between SOEs and publicly-traded corporations. In comparing the differences of both internal and external controls of SOEs, none of the existing legal origins allow for effective corporate governance monitoring. Because of the difficulties of undertaking a cross-country quantitative review of the governance of SOEs, this Article examines, through a series of case studies, SOE governance issues among postal providers. The examination of postal firms supports the larger theoretical claim about the weaknesses of SOE governance across legal origins. In …

Undressing The Ceo: Disclosing Private, Material Matters Of Public Company Executives, Tom C.W. Lin

UF Law Faculty Publications

Disclosing material private matters of public company executives is a difficult and complex but sometimes necessary act. Advocates that favor more disclosure and advocates that favor more privacy both have many legitimate arguments and concerns. This article argues that when viewed in the context of contemporary capital markets, the enhanced role of the executive, and the modern media, additional disclosure from executives about material, private matters is desirable. In support of this argument, this article proposes a principle-based approach for executive disclosure that affords companies and executives reasonable deference on what to disclose and how to disclose it, while simultaneously …

Ohio's New Partnership Law , Jeanne M. Rickert

Cleveland State Law Review

This article focuses on key areas where Chapter 1776 and RUPA reflect changes in the law of partnerships. This article also highlights how Chapter 1776 differs from RUPA so that lawyers can tailor agreements to Ohio law, and lawyers and courts considering questions of Ohio partnership law can take into account statutory variations when considering the persuasiveness of case law from other jurisdictions that may not have the same statutory rules.

Piercing The Corporate Veil In Ohio: The Need For A New Standard Following Dombroski V. Wellpoint, Inc., Case Comment, Margaret A. Sweeney

Cleveland State Law Review

Part II.A of this Comment will discuss the history and purpose of the doctrine of piercing the corporate veil. Part II.B will describe the evolution of this doctrine within Ohio from the development of the Belvedere three-part test, through the conflict among the courts of appeals that gave rise to the Supreme Court of Ohio's latest attempt at clarification. Part III will discuss the facts and procedural history of Dombroski v. WellPoint, Inc. Part IV.A will show how the Supreme Court of Ohio's modification of the Belvedere test will inevitably cause another conflict among the courts of appeals. Part IV.B …

Losing Faith: Limited Liability Companies In Arkansas And The Fiduciary Duties Of Loyalty And Good Faith, Frances S. Fendler

University of Arkansas at Little Rock Law Review

No abstract provided.

Pain, Gain, Or Shame: The Evolution Of Environmental Law And The Role Of Multinational Corporations, Michael Ewing-Chow, Darryl Soh

Indiana Journal of Global Legal Studies

The evolution of environmental law in the past century has been linked to the growing acceptance of the notion of collective global responsibility, which entails the notion of sustainable development. At the turn of this century, the focus in environmental law has shifted from the creation of a global framework to deal with environmental problems to that of compliance with these frameworks. As a result, the primary actor of environmental policy has shifted from the state to the corporation. How has environmental law developed so as to encourage compliance by this new primary actor? Conversely, how has the corporation been …

Integration Of Corporate Social Responsibility Through International Voluntary Initiatives, Tim Baines

Indiana Journal of Global Legal Studies

Many multinational companies and financial institutions have adopted corporate social responsibility programs, often relying on the implementation of international voluntary initiatives. This article describes two such mechanisms. The first, the Equator Principles, provides guidance to financial institutions involved in project finance. The second, the Organization for Economic Cooperation and Development's Guidelines for Multinational Enterprises, helps governments to encourage businesses to be socially and environmentally responsible. This article suggests means by which voluntary initiatives can be implemented to benefit both the wider community and companies themselves. It also suggests ways of overcoming shortcomings resulting from the lack of access to formal …

Domestic Effects Of The Foreign Activities Of U.S. Multinationals, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr.

Articles

Do firms investing abroad simultaneously reduce their domestic activity? This paper analyzes the relationship between the domestic and foreign operations of US manufacturing firms between 1982 and 2004 by instrumenting for changes in foreign operations with GDP growth rates of the foreign countries in which they invest. Estimates produced using this instrument indicate that 10 percent greater foreign investment is associated with 2.6 percent greater domestic investment, and 10 percent greater foreign employee compensation is associated with 3.7 percent greater domestic employee compensation. These results do not support the popular notion that expansions abroad reduce a firm’s domestic activity, instead …

Role Of Corporate Board Executive Pay Decisions In Precipitating Financial Crisis, Erica Beecher-Monas

Law Faculty Research Publications

No abstract provided.

On Uncertainty, Ambiguity, And Contractual Conditions, Eric L. Talley

Faculty Scholarship

This article uses the recent Delaware Chancery Court case of Hexion v. Huntsman as a template for motivating thoughts about how contract law should interpret contractual conditions in general – and "material adverse event" provisions in particular – within environments of extreme ambiguity (as opposed to risk). Although ambiguity and aversion there to bear some facial similarities to risk and risk aversion, an optimal contractual allocation of uncertainty does not always track the optimal allocation of risk. After establishing these intuitions as a conceptual proposition, I endeavor to test them empirically, using a unique data set of 528 actual material …