Business Organizations Law Commons^™

The New Regulation Of Small Business Capital Formation: The Impact—If Any—Of The Jobs Act, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

The Jumpstart Our Business Startups Act (JOBS Act) was—at least apparently—driven by the desire to promote job creation by facilitating small business capital formation. The legislation was premised on the correct assumptions that small businesses create jobs and that an efficient access to capital is essential for small businesses to emerge, compete, and survive in our competitive, market economy. It is certain that the JOBS Act will have an effect on businesses’ access to external capital. With regard, however, to the capital formation efforts of small businesses—businesses that may account for more than 25% of our national economy—the analysis offered …

The Expanding Reach Of The Executive In Foreign Direct Investment: How Ralls V. Cfius Will Alter The Fdi Landscape In The United States, Hunter Deeley

American University Business Law Review

No abstract provided.

To Pay Or Not To Pay: Interpretation Of Section 302 Of The Labor Management Relations Act As Evidenced By Titan Tire, Dylan Mooney

American University Business Law Review

No abstract provided.

The Monitor-“Client” Relationship, Veronica Root

Journal Articles

This Article argues that providing a set of clear, enforceable, predictable rules regarding the scope of monitorships that facilitate a monitor’s function as a legal counselor will improve the long-term effectiveness of monitorships. This Article suggests one mechanism for achieving this goal—a statutory privilege—aimed at encouraging a formalized relat+H23ionship amongst a monitor, the government, and the corporation, which re-conceptualizes the relationship as “The Monitor-‘Client’ Relationship.”

Commentary On The Ohchr’S Study On Domestic Law Remedies: Corporate Liability For Gross Human Rights Abuses, Erika George, Lisa J. Laplante

Faculty Scholarship

Corporate Liability for Gross Human Rights Abuses offers a comprehensive study of the present state of domestic judicial mechanisms, including remedial systems, in relation to corporate involvement in gross human rights abuses. This commentary offers observations, comments, questions and suggestions that the University of Utah S.J. Quinney College of Law Center for Global Justice and the Center for International Law and Policy (CILP) at New England Law | Boston agreed were important to share with the OHCHR in the spirit of moving this important and valuable project forward.

The Contractual Foundation Of Family-Business Law, Benjamin Means

Faculty Publications

Most U.S. businesses are family owned, and yet the law governing business organizations does not account adequately for family relationships. Nor have legal scholars paid sufficient attention to family businesses. Instead, legal scholars operate within a contractarian model of business organization law, which holds that a firm is comprised of a nexus of contracts among economically rational actors. Intimate relationships appear irrelevant except insofar as they affect contractual choices. Indeed, strictly speaking, there is no such thing as family-business law.

This Article lays the foundation for a law of family business by expanding the contractarian model: a firm includes not …

Fiduciary Duty And The Ex Officio Conundrum In Corporate Governance: The Troublesome Murkiness Of The Gubernatorial Trustee's Obligations, Salar Ghahramani

UC Law Business Journal

Should governors serve on the boards of incorporated universities as ex officio members? This article examines the question by considering the expeience of Pennnsylvania State University and analyzes the implications of governors serving on the boards of state- aided corporations by focusing on the fiduciary responsibilities of directors under corporate law. The article concludes that the current statutory framework needs reconsideration and asserts that while there is no question that the state's public interests should trump an institution's "private" interests, it is the state that has chartered the corporation for the promotion of a public good (education) and has appointed …

From Revolutionary To Palace Guard: The Role And Requirements Of Intermediaries Under Proposed Regulation Crowdfunding, Andrew D. Stephenson, Brian R. Knight, Matthew Bahleda

Michigan Business & Entrepreneurial Law Review

Intermediaries in securities crowdfunding face significant requirements as a result of the statutory mandates of Title III of the JOBS Act. The SEC, in its proposed rules, provided structure to these requirements. The proposed rules would create strict requirements for intermediaries regarding their relationships with investors and how they undertake crowdfunding transactions under Section 4(a)(6) of the Securities Act. The proposed rules would also create and establish the guidelines for funding portals, a new type of limited purpose securities broker. While some commentators decry the SEC for placing undue burdens and legal liabilities on intermediaries in securities crowdfunding, the SEC …

The Jobs Act Trojan Horse: A Gift To Startups With Something Else Inside?, Erik Gordon

Michigan Business & Entrepreneurial Law Review

This Comment will analyze which provisions of the Act are consistent with the purpose that sponsors would have the public believe, that emphasized by the name “JOBS Act,” and distinguish them from those provisions that serve as menacing soldiers hidden under the cover of a name that diverts attention from the Act’s true purpose.

Enhancing The Legal And Regulatory Environment For Investment In Social Enterprise, Dilpreet K. Minhas

Michigan Business & Entrepreneurial Law Review

The objectives of this Note are: 1) to provide readers interested in social enterprise and entrepreneurship an introduction to these endeavors and the growing trend toward using them; 2) to present the challenges stemming from the legal and financial frameworks surrounding social investment activity, which can inhibit the survival and growth of social enterprises; and 3) to propose suggestions for addressing such challenges and limitations in order to better support the survival of social enterprise. Part II and Part III provide a broad perspective of the types of investment in and nurturing of social entrepreneurship in the U.S. Part IV …

Insider Trading And Other Securities Frauds In The United States: Lessons For Chile, Dante Figueroa

Michigan Business & Entrepreneurial Law Review

This Article is a comparative analysis of insider trading law in the United States and Chile. The study summarily reviews the historical, political, and legal foundations of insider trading regulation in both jurisdictions, identifying areas of convergence, as well as areas in which the Chilean securities market could benefit vis- ` a-vis the more advanced experience of the considerably larger American securities market. The Article also highlights the axiological closeness between both jurisdictions concerning the protection of inside corporate information and the fiduciary role of those who intervene in securities markets in their various capacities (as investors, shareholders, corporate officers, …

Legally "Strong" Shareholders Of Japan, Gen Goto

Michigan Business & Entrepreneurial Law Review

Foreign investors often criticize Japanese corporations for not paying enough attention to the interests of their shareholders. It might surprise these critics, then, to learn that shareholders’ legal rights under the Japanese Companies Act are actually quite strong. Indeed, many of the rights that shareholders’ rights advocates often support, including shareholders’ power to alter a corporate charter without board consent, shareholders’ power to control dividend payments, majority voting for board elections, shareholders’ power to replace the board of directors, and shareholder access to a corporate ballot—all of which are strongly debated elsewhere— are already effective in Japan. Moreover, derivative suits …

Profile - The Wildlife Conservation Society, James Hagy, Lana Buchbinder, Barbara Beau

Rooftops Project

What might it be like if your not-for-profit was responsible for projects with occupants consisting of humans plus some 1,700 other species? How can physical location and the needs of animals and visitors be harmonized through architectural design? Barbara Beau, Lana Buchbinder, and Professor James Hagy of The Rooftops Project interview Sue Chin about her work as Chief Architect at the Wildlife Conservation Society.

Quotas And The Transatlantic Divergence Of Corporate Governance, Darren Rosenblum

Elisabeth Haub School of Law Faculty Publications

The French adoption of a corporate board quota for women reflects Europe's increasingly stakeholder-oriented approach to corporate governance, one that stands in marked contrast with that of the United States. This Article discusses how the corporate board quota will shift French and European corporate governance. The change accentuates an already established stakeholder corporate culture widespread in Europe, most notably evidenced by the presence of worker representation on boards. In contrast, the United States' corporate governance structure increasingly places the shareholder at its center. The proliferation of quotas for women on corporate boards in the national and transnational European contexts is …

A Court For The One Percent: How The Supreme Court Contributes To Economic Inequality, Michele E. Gilman

All Faculty Scholarship

This Article explores the United States Supreme Court’s role in furthering economic inequality. The Occupy Wall Street movement in 2011 not only highlighted growing income and wealth inequality in the United States, but also pointed the blame at governmental policies that favor business interests and the wealthy due to their outsized influence on politicians. Numerous economists and political scientists agree with this thesis. However, in focusing ire on the political branches and big business, these critiques have largely overlooked the role of the judiciary in fostering economic inequality. The Court’s doctrine touches each of the major causes of economic inequality, …

The Governance Structure Of Shadow Banking, Steven L. Schwarcz

Faculty Scholarship

No abstract provided.

Defined By Dictum: The Geography Of Revlon-Land In Cash And Mixed Consideration Transactions, Mohsen Manesh

Villanova Law Review (1956 - )

No abstract provided.

Maryland's Social Networking Law: No "Friend" To Employers And Employees, Alexander Borman

Journal of Business & Technology Law

No abstract provided.

The Hang-Up With Hamburg: How Center For Food Safety V. Hamburg Will Alter The Food Industry, Joella Roland

Journal of Business & Technology Law

No abstract provided.

Corporate Headhunting, Daniel C. Richman

Faculty Scholarship

A wide range of commentators – including some pretty sophisticated ones – have raked through the ruins of the 2008 financial collapse, confident that there are significant criminal prosecutions to bring against individuals and that the Justice Department should be faulted for its failure to bring them. Their confidence that blockbuster criminal cases could have been made rests on shaky grounds. So, too, does their faith that the hunting of heads is a socially productive response to the collapse. If anything, a focus on headhunting will only distract from, and reduce the pressure for, efforts to explain the collapse and …

Protecting Reliance, Victor P. Goldberg

Faculty Scholarship

Reliance plays a central role in contract law and scholarship. One party relies on the other's promised performance, its statements, or its anticipated entry into a formal agreement. Saying that reliance is important, however, says nothing about what we should do about it. The focus of this Essay is on the many ways that parties choose to protect reliance. The relationship between what parties do and what contract doctrine cares about is tenuous at best. Contract performance takes place over time, and the nature of the parties 'future obligations can be deferred to take into account changing circumstances. Reliance matters …

The Case For An Unbiased Takeover Law (With An Application To The European Union), Luca Enriques, Ronald J. Gilson, Alessio M. Pacces

Faculty Scholarship

Takeover regulation should neither hamper nor promote takeovers, but instead allow individual companies to decide the contestability of their control. Based on this premise, we advocate a takeover law exclusively made of default and menu rules supporting an effective choice of the takeover regime at the company level. For political economy reasons, we argue that different default rules should apply to newly public companies and companies that are already public when the new regime is introduced. Newly public companies should be governed by default rules that favor the interests of (minority) shareholders over those of management and controlling shareholders, because …

Irredeemably Inefficient Acts: A Threat To Markets, Firms, And The Fisc, Alex Raskolnikov

Faculty Scholarship

This Article defines and explores irredeemably inefficient acts – a conceptually distinct and empirically important category of socially undesirable conduct. Though inefficient behavior is, no doubt, pervasive, the standard view holds that inefficient conduct may be converted into efficient behavior by forcing actors to internalize the external harms of their decisions. For some acts, however such conversion is impossible. These acts are not just inefficient forms of otherwise socially beneficial activities – they are not just contingently inefficient. Rather, they are inefficient at their core; they reduce social welfare no matter what the regulator does. These irredeemably inefficient (or just …

The Nordic Model Of Corporate Governance: The Role Of Ownership, Ronald J. Gilson

Faculty Scholarship

It is commonplace to credit the invention of the public corporation as an important engine of economic growth. The creation of a long-lived vehicle that gave investors both tradable shares and limited liability allowed talented managers to raise capital to fund enterprise. Writing in 1926, the Economist magazine heralded this role:

The economic historian of the future may assign to the nameless inventor of the principle of limited liability, as applied to trading corporations, a place of honor with Watt and Stephenson, and other pioneers of the Industrial Revolution. The genius of these men produced the means by which man’s …

Fee-Shifting Bylaw And Charter Provisions: Can They Apply In Federal Court? – The Case For Preemption, John C. Coffee Jr.

Faculty Scholarship

In the first months after a decision of the Delaware Supreme Court upholding a fee-shifting bylaw under which the unsuccessful plaintiff shareholder was required to reimburse all defendants for their legal and other expenses in the litigation, some 24 public companies adopted a similar provision – either by means of a board-adopted bylaw or by placing such a provision in their certificate of incorporation (in the case of companies undergoing an IPO). In effect, private ordering is introducing a one-sided version of the “loser pays” rules. Indeed, as drafted, these provisions typically require a plaintiff who is not completely successful …

Merger Control Procedures And Institutions: A Comparison Of The Eu And Us Practice, William E. Kovacic, Petros C. Mavroidis, Damien J. Neven

Faculty Scholarship

The objective of this paper is to discuss and compare the role that different constituencies play in US and EU procedures for merger control. We describe the main constituencies (both internal and external) involved in merger control in both jurisdictions and discuss how a typical merger case would be handled under these procedures. At each stage, we consider how the procedure unfolds, which parties are involved, and how they can affect the procedure. Our discussion reveals a very different ecology. EU and US procedures differ in terms of their basic design and in terms of the procedures that are naturally …

Systemic Harms And Shareholder Value, John Armour, Jeffrey N. Gordon

Faculty Scholarship

The financial crisis has demonstrated serious flaws in the corporate governance of systemically important financial firms. In particular, the norm that managers should seek to maximize shareholder value, as measured by the stock price, proves to be a faulty guide for managerial action in systemically important firms. This is not only because the failure of such firms will have spillovers that defy the cost-internalization of the tort system, but also because these spillovers will harm their own majoritarian shareholders. The interests of diversified shareholders fundamentally diverge from the interests of managers and other controllers because the failure of a systemically …

Value Creation By Business Lawyers In The 21st Century, Ronald J. Gilson

Faculty Scholarship

It’s a delight to be here. When I started working on Value Creation by Business Lawyers – or when I was in law school – we could have held today’s meeting in a telephone booth. There was nothing even remotely in the curriculum. Victor Brudney and Marvin Chirlestien’s Corporate Finance book was still in mimeograph form – note the dated technology reference. David Herwitz’s Business Planning book had been around for a while, but it was strictly legal. And that exhausted it. What I take the greatest pleasure from is the fact that a number of years later, enough to …

Corporate Governance And Executive Compensation: Evidence From Japan, Robert J. Jackson Jr., Curtis J. Milhaupt

Faculty Scholarship

Lawmakers around the world are now urging corporations to adopt governance and executive pay standards drawn largely from the American corporate law context. Yet little is known about how corporate governance actually influences executive compensation decisions outside of the United States-and whether adoption of these standards is likely to be desirable for investors abroad.

In this Article, we take advantage of a recent change in Japanese law to provide the first direct empirical evidence on executive pay in Japan. The evidence provides striking detail on the amount and structure of Japanese executive compensation. The data point to a previously unappreciated …

The Year Of Magical Thinking: Fraud, Loss, And Grief, Jayne W. Barnard

Faculty Publications

In The Year of Magical Thinking, her wrenching memoir of the year following the death of her husband John Gregory Dunne, Joan Didion describes the episodes of magical thinking that forestalled her acceptance of Dunne's sudden absence from her life. In the hours after his death, she charged his cell phone. Weeks later, she gave his clothes to charity but kept his shoes because, she thought, "He would need shoes if he were to return."

Modern grief theory tells us that episodes like these are common during the months following a loved one's death, particularly when the death, like …