Business Organizations Law Commons^™

Regulation Of Energy By The Colorado Public Utilities Commission, William Hamilton Mcewan, Peter R. Nadel

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

When Europe Hits Home: How Europeanization Triggers The Conflict Of Capitalism In The German System Of Corporate Control, Alexander El Alaoui

Claremont-UC Undergraduate Research Conference on the European Union

No abstract provided.

The Shareholder Value Myth, Lynn A. Stout

Cornell Law Faculty Publications

No abstract provided.

Business Roundtable V. Securities And Exchange Commission: The Sec's First Big Shot At Proxy Access In The Shadow Of Dodd-Frank, Raymond E. Areshenko

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

When The Government Attempts To Change The Board, Investors Should Know, William O. Fisher

Pepperdine Law Review

In 2008 and 2009, the federal government effectively hired and fired directors at American International Group and Bank of America, without any securities filing of the sort that would have been required had a private market actor attempted to change the boards at those companies. The fact that current law allows the government to secretly reconstitute the governing bodies of multibillion-dollar, publicly traded companies is cause for concern, for who controls the board controls the company. This Article argues that, just as securities filings alert investors when private parties attempt board change, a new required filing should inform investors when …

E-Verify Can Stop Refund Fraud, Richard Thompson Ainsworth, Andrew Shact

Faculty Scholarship

Two issues in the current Washington debates need to be linked. E-Verify, the Internet-based database that allows employers to verify an employee’s work eligibility that is at the center of the immigration debate, is the ideal tool for stopping tax refund fraud. All that is needed is a digital signature of the E-Verify result, and the mandatory inscription of this signature on tax documents to make them self-authenticating.

The central features of this proposal have been made before. The technology it requires is tried and proven. The processes and procedure it advocates are in place and effectively deployed in foreign …

Financial System Engineering, Manuel A. Utset

Scholarly Publications

No abstract provided.

Towards A Moral Agency Theory Of The Shareholder Bylaw Power, Jay B. Kesten

Scholarly Publications

Corporate bylaws are the new leading edge of a decades-long struggle between shareholders and managers over the allocation of decision-making authority in public companies. Bylaws are the only method by which shareholders can unilaterally restrict the powers and discretion of the board. Yet the scope of this statutory authority remains notoriously uncertain. Corporate law scholars generally agree that there is a limited domain in which shareholders can restrict managerial authority, but disagree on the appropriate boundary. The Delaware Supreme Court recently confronted this issue for the first time in CA, Inc. v. AFSCME Employees Pension Plan, but that decision …

“Comply Or Explain”—A Flexible Mechanism To Countervail Behavioral Biases In M&A Transactions, Gerrit M. Beckhaus

University of Miami Business Law Review

Mergers and acquisitions (M&A) are a common phenomenon of great importance in today’s business world. However, the majority of them fail to achieve the aspired objectives. These failures can be attributed to various circumstances, inter alia decision-makers’ vulnerability to behavioral biases due to the complexity, uncertainty, and time pressure characteristic of M&A transactions. Such biases often lead to predictable irrational behavior resulting in momentous misjudgments. Despite numerous psychological studies proving that people systematically tend to make irrational decisions under uncertainty, neither the transactional practice nor its current legal framework address this problem. Instead, the present law shields decision-makers from potential …

When Does Sleaze Become A Crime? Redefining Honest Services Fraud After Skilling V. United States, Teresa M. Becvar

Chicago-Kent Law Review

Honest services fraud, which is defined as a scheme or artifice to deprive another of the intangible right of “honest services,” is just one tool in the federal government’s extensive arsenal used to prosecute public corruption and private corporate fraud. The Supreme Court curtailed the expansion of this versatile theory twice in the past three decades, most recently in June 2010 in Skilling v. United States. In Skilling, the Court held, inter alia, that the federal honest services statute covers only bribery and kickback schemes and not undisclosed self-dealing. Months later, members of Congress proposed the Honest Services …

Panorama - Jefferson Mok, James Hagy, Arthy Bakthavasalam

Rooftops Project

What is your real estate strategy when you are the first on-the-ground representative of a social service not-for-profit entering a remote market abroad with a new program? Jefferson Mok reflects on four years in Burundi in a conversation with The Rooftops Project’s Arthy Bakthavasalam and Professor James Hagy.

Perspectives - Michael Carlton Of Carlton Architecture, James Hagy, Emily Barile

Rooftops Project

Michael Carlton talks with The Rooftops Project’s Emily Barile and Professor James Hagy about the intersections among architecture, interior design, real estate, and not-for-profit strategic planning.

Market Power In Power Markets: The Filed-Rate Doctrine And Competition In Electricity, Sandeep Vaheesan

University of Michigan Journal of Law Reform

State and federal initiatives have opened the American electric power industry to competition over the past four decades. Although the process has not occurred uniformly across the country, wholesale electricity markets exist everywhere today. Independent power producers can construct generation facilities and sell their output to utilities and industrial customers through bilateral contracts. In many regions, centralized power markets now facilitate the sale of billions of dollars in electricity annually through auctions. Although market forces have replaced direct price regulation in electricity, antitrust enforcement has not expanded its role commensurately. A lack of competition has been a serious problem in …

“Package Deal”: The Curious Relationship Between Fiduciary Duties And The Implied Covenant Of Good Faith And Fair Dealing In Delaware Limited Liability Companies, Monica E. White

University of Miami Business Law Review

Since 1977, the popularity of the limited liability company (“LLC”) has grown tremendously, overtaking the corporation and the partnership as the preferred business structure in many jurisdictions. Amidst this growth in popularity, a legal debate has sparked concerning the existence, nature, and extent of the fiduciary and contractual duties owed in the LLC context.

Drafters of LLC agreements can adjust fiduciary “norms” through limitation or, in certain jurisdictions like Delaware, through complete elimination of fiduciary duties. However, the implied contractual covenant of good faith and fair dealing (the “Implied Covenant” or the “Covenant”) remains and cannot be waived by the …

Should Angel-Backed Start-Ups Reject Venture Capital?, Darian M. Ibrahim

Faculty Publications

The conventional wisdom is that entrepreneurs seek financing for their high-growth, high-risk start-up companies in a particular order. They begin with friends, family, and "bootstrapping" (e.g., credit card debt). Next they turn to angel investors, or accredited investors (and usually ex-entrepreneurs) who invest their own money in multiple, early-stage start-ups. Finally, after angel funds run dry, entrepreneurs seek funding from venture capitalists (VCs), whose deep pockets and connections lead the startup to an initial public offering (IPO) or sale to a larger company in the same industry (trade sale).

That conventional wisdom may have been the model for start-up success …

Panorama - Caring For The Palace Museum, Bejing, China, James Hagy, Cai Bowen

Rooftops Project

Shi Zhimin discusses his work as Director of the Ancient Building Management Office of The Palace Museum in Beijing, still also recognized by many visitors as the former Chinese imperial palace known as The Forbidden City, with Cai Bowen and Professor James Hagy, Director of The Rooftops Project.

Perspectives - Richard Cohn, Motion Picture Gaffer, Magician, Musician, James Hagy, Kristen Porro

Rooftops Project

The Rooftops Project’s Kristen Porro talks with Richard Cohn, Gaffer (Chief Electrician) to the television and movie industry on location in New York City, and performing magician, who shares tricks of his two trades that not-for-profits can use to make the most of often imperfect performance spaces.

Perspectives - Kimse Yok Mu: An Organization’S Effort For The Advancement Of Life, James Hagy, Shaan Lodi

Rooftops Project

The Rooftops Project’s Shaan Lodi talks with Turkish relief organization Kimse Yok Mu about its approach to the real estate needed to support disaster response and other work in often challenging settings in 96 countries.

The Business Judgment Rule As An Immunity Doctrine, Lori Mcmillan

William & Mary Business Law Review

The business judgment rule is a judicially created doctrine that protects directors from personal civil liability for the decisions they make on behalf of a corporation. In today’s era of corporate scandals, global financial meltdowns, and directorial malfeasance, it has become especially important in setting the bar for when directors are appropriately responsible to shareholders for their actions. Traditionally the business judgment rule has been regarded as a standard of liability, although it has never really been explored or enunciated as such. This view determines eligibility for business judgment rule protection of a directorial decision after an examination of certain …

The Social Enterprise Revolution In Corporate Law: A Primer On Emerging Corporate Entities In Europe And The United States And The Case For The Benefit Corporation, Robert T. Esposito

William & Mary Business Law Review

Remarkably, in the face of a global recession, the social enterprise sector continued to experience extraordinary growth in both financial support and the number of newly authorized corporate entities aimed at social entrepreneurs who seek to use the power of business to simultaneously achieve profit and social or environmental benefits. This Article highlights recent developments in the social enterprise movement in Europe and the United States and focuses on the emergence of a surprisingly broad range of newly authorized corporate entities on both continents in response to the needs of social entrepreneurs. These include social cooperatives and the community interest …

The First Year Of "Say On Pay" Under Dodd-Frank: An Empirical Analysis And Look Forward, Randall Thomas, James F. Cotter, Alan R. Palmiter

Vanderbilt Law School Faculty Publications

Using voting data from the first year of say-on-pay votes under Dodd- Frank, we look at the patterns of shareholder voting in advisory votes on exec- utive pay. Consistent with the more limited say-on-pay voting before Dodd- Frank, we find that shareholders in the first year under Dodd-Frank generally gave broad support to management pay packages. But not all pay packages received strong shareholder support. At some companies, management suf- fered the embarrassment of failed say-on-pay votes-that is, less than fifty per- cent of their company's shareholders voted in favor of the proposal. In particular, we find that poorly performing …

Who Wants To Watch? A Comment On The New International Paradigm Of Financial Consumer Market Regulation, Toni Williams

Seattle University Law Review

This Article explores the capacity of the G20’s model of financial consumer protection to reconfigure relationships between financial firms and consumers, focusing in particular on the market conduct of financial firms. Although this Article does not focus directly on Adolf A. Berle’s work, it does engage with some of his enduring concerns about economic relations between corporations, regulators, and individuals; the socialcontext of those economic relations; and the role of law and legal regulation in shaping market relations. More specifically, this Article considers new international regulatory principles related to corporate social responsibility— a recurring theme of Berle’s work11—in the somewhat …

Dinner Parties During “Lost Decades”: On The Difficulties Of Rethinking Financial Markets, Fostering Elite Consensus, And Renewing Political Economy, David A. Westbrook

Seattle University Law Review

This Article addresses two groups of problems that ought to be understood in relation to one another. This Article has three movements. In Part II, I discuss conceptual obstacles to forming the new elite consensus that rethinking the role of financial markets requires. To produce policy reform, it is not enough to have new ideas; the ideas must be understood, adopted, and acted upon by people. Policy reform is thus always a function of conversations. In Part III, I discuss some possible ways the elite consensus might be formed. In Part V, the conclusion, I offer a preliminary assessment of …

On The Rise Of Shareholder Primacy, Signs Of Its Fall, And The Return Of Managerialism (In The Closet), Lynn A. Stout

Seattle University Law Review

In their 1932 opus "The Modern Corporation and Public Property," Adolf Berle and Gardiner Means famously documented the evolution of a new economic entity—the public corporation. What made the public corporation “public,” of course, was that it had thousands or even hundreds of thousands of shareholders, none of whom owned more than a small fraction of outstanding shares. As a result, the public firm’s shareholders had little individual incentive to pay close attention to what was going on inside the firm, or even to vote. Dispersed shareholders were rationally apathetic. If they voted at all, they usually voted to approve …

Rebalancing Private Placement Regulation, William K. Sjostrom, Jr.

Seattle University Law Review

Regulating securities offerings entails balancing investor protection and capital formation. Inevitably, this balance gets upset. As financial markets evolve, Congress passes new legislation, the Securities and Exchange Commission (SEC) adopts new rules, and the courts issue unanticipated opinions. These events upset the balance because they happen in an uncoordinated and haphazard manner and oftentimes produce unintended consequences.The Article proceeds as follows. To set the stage, Part II provides background on the Securities Act and describes the differences between public offerings and private placements. Part III explains why rebalancing private placement regulation may be warranted. Part IV offers proposed statutory language …

Equity Derivatives And The Challenge For Berle’S Conception Of Corporate Accountability, Janis Sarra

Seattle University Law Review

With the proliferation of equity derivatives and related structured financial products, the North American conception of corporate governance faces a new and distinct challenge to its underlying premises.This Article analyzes these developments with a focus on the implications for director and officer accountability and corporate sustainability, using the occasion of the third symposium of the Adolf A. Berle, Jr. Center on Corporations, Law & Society to consider whether Berle’s analysis of corporate accountability offers any insights into how to address the uncoupling of economic interest and legal rights in corporate governance. Part II of this Article sets the context for …

Hedge Funds And Risk Decoupling: The Empty Voting Problem In The European Union, Wolf-Georg Ringe

Seattle University Law Review

The law must remain adaptive and responsive to the constantly changing challenges of our society and our business life. One of the most pressing challenges of the past years is the emergence of alternative investment funds, in particular hedge funds, which masterfully exploit the traditional categories of corporate law, financial derivatives, and risk management. This Article is only concerned with the first of these two forms— negative decoupling.9 It looks at the various forms of negative riskdecoupling strategies and tries to shed light on their overall desirability. Three distinct theoretical perspectives are used as an analytical framework to examine the …

Revisiting “Truth In Securities” Revisited: Abolishing Ipos And Harnessing Private Markets In The Public Good, A. C. Pritchard

Seattle University Law Review

This article's focus is the idea that the transition between private- and public company status could be less bumpy if we unify the public–private dividing line under the Securities Act and Exchange Act. Part II of this article outlines the current public–private dividing lines under the Securities Act and the Exchange Act. This part also explores Facebook’s recent transition from private to public status under that framework, as well as Congress’s recent intervention in the field with the JOBS Act. Part III explores the problems of making the transition from private to public, focusing on IPOs and their role in …

Corporate Governance As A School Of Social Reform, Ciarán O’Kelly

Seattle University Law Review

In this paper, I present a vision of the corporation as a moral person. I point to “the separation of ownership and control” as a moment when the corporation broke away from the moral lives of ownermanagers. I then draw out the manner in which we can speak of the company as a moral person. Finally, through a discussion of social reporting in two British banks, I point to a shift in how this moral personhood is articulated, with the rise of corporate governance—or doing business well—as its own foundation of corporate responsibility. I propose a view of corporate responsibility …

The Common Link In Failures And Scandals At The World’S Leading Banks, Justin O’Brien, Olivia Dixon

Seattle University Law Review

This Article argues that both the root cause of the crisis and the route to restoring trust and confidence is to be found in ascertaining how to regulate culture across mandates, processes, and use of discretion. Part II identifies the internal and external failings of four of the most recent global banking scandals within the CEDAR matrix. Part III discusses the regulatory challenges faced when compliance serves no practical function and the consequent material risk to market integrity. This Article concludes by suggesting that it is unsustainable for regulation to be decided, implemented, and monitored at a national level. Global …