Business Organizations Law Commons^™

Too Many Cooks In The Kitchen: Battling Corporate Corruption In Brazil And The Problems With A Decentralized Enforcement Model, Michelle A. Winters

Richmond Journal of Global Law & Business

No abstract provided.

Fiduciary Duties Of Llc Managers: Are They Subject To Prospective Waiver Under The New York Llc Statute?, Jack Graves, Yelena Davydan

Touro Law Review

No abstract provided.

Expanding The Array Of Accountable Actors: Human Rights And Corporate Social Responsibility, Erika George

Faculty Scholarship

Additional actors are being asked to assume responsibility for protecting human rights and preventing violations. I argue that it is appropriate and important to expand the human rights paradigm into other arenas, including corporate social responsibility. Expanding the array of actors understood to have a responsibility to respect human rights could serve to aid an under-resourced and overburdened human rights system to advance the rights protections that it was created to promote. While human rights activists have traditionally turned to intergovernmental institutions and state governments to protect rights and to remedy violations, the recent trend is to expand our understanding …

Taxation Of State Owned Enterprises: A Review Of Empirical Evidence From China, Wei Cui

All Faculty Publications

This chapter reviews empirical evidence from China that bears on the general theory of the income taxation of state-owned enterprises (SOEs). Prior theoretical literature has offered three conflicting views of SOE taxation. The first is that SOE taxation is superfluous, because the government shareholder can simply demand profit distributions. The second is that SOE taxation is necessary to put state-owned and private firms on an equal competitive footing. The third view holds that the significance of SOE taxation lies in the fact that SOE managers, like managers of private firms, may be dividend averse; in the absence of other effective …

Let Me In: The Right Of Access To Business Disputes Conducted In State Courts, David W. Brown

Journal of Dispute Resolution

After examining the history of the First Amendment right of access to civil proceedings, this note will analyze how the two-pronged historical test applies to arbitrations conducted in a state court. The prongs of the test — experience and logic — provide the framework for the analysis conducted in this note.6 This note argues the analysis conducted in Strine was the correct approach, and suggests the implementation of Sunshine Laws similar to those in other states as a constitutionally permissible alternative that would satisfy the holding in Strine.

Fighting Foreign-Corporate Political Access: Applying Corporate Veil-Piercing Doctrine To Domestic-Subsidiary Contributions, Ryan Rott

Michigan Law Review

Campaign finance regulations limit speech. The laws preclude foreign nationals, including foreign corporations, from participating in U.S. politics via campaign contributions. The unusual characteristics of corporations, however, may allow foreign corporations to exploit a loophole in the regulatory regime. A foreign corporation may contribute to political campaigns by acquiring a domestic subsidiary and dominating it. This Note addresses how these unusual corporate behaviors enable foreign corporations to illegally corrupt the political process. This Note concludes that to close the loophole without violating the free speech rights of domestic subsidiaries, Congress should enact legislation which would apply corporate veil-piercing theory to …

The Responsible Corporation: Its Historical Roots And Continuing Promise, Larry D. Thompson

Scholarly Works

The article focuses on the on the history of American corporations from the colonization period and its impact on private corporations such as venture capitalism. Topics discussed include legal and sustainable approach to corporate responsibility, role of laws in shaping corporate duties and behavior and devastating effect of excessive dividend payments. It also discusses the cases in which courts refuse to interfere with management's long-term decision making.

Banker Loyalty In Mergers And Acquisitions, Andrew F. Tuch

Scholarship@WashULaw

When investment banks advise on merger and acquisition (M&A) transactions, are they fiduciaries of their clients, gatekeepers for investors, or simply arm’s-length counterparties with no other-regarding duties? Scholars have generally treated M&A advisors as arm’s-length counterparties, putting faith in the power of contract law and market constraints to discipline errant bank behavior. This Article counters that view, arguing that investment banks are rightly characterized as fiduciaries of their M&A clients and thus required to loyally serve client interests.

This Article also develops an analytical framework for assessing the liability rules that will most effectively deter disloyalty on the part of …

The New Financial Order: An Essay For Alan Bromberg - Tributes To Professor Alan R. Bromberg, Joel Seligman

Scholarship@WashULaw

In the aftermath of the 2008-2009 financial crisis, I characterized its causes broadly:

First, there was an ongoing economic emergency, initially rooted in the housing and credit markets, which has been succeeded by the collapse of several leading investment and commercial banks and insurance companies, dramatic deterioration of stock market indices, and a rapidly deepening recession.

Second, there were serious breakdowns in the enforcement and fraud deterrence missions of federal financial regulation, notably as illustrated by matters involving Bear Stearns and the other four then independent investment banks subject to the SEC's former Consolidated Supervised Entities program, the government creation …

Appraisal Arbitrage And The Future Of Public Company M&A, Minor Myers, Charles R. Korsmo

Faculty Scholarship

No abstract provided.

Institutional Investing When Shareholders Are Not Supreme, Christopher Greczy, Jessica S. Jeffers, David K. Musto, Anne M. Tucker

Scholarly Works

Institutional investors, with trillions of dollars in assets under management, hold increasingly important stakes in public companies and fund individual retirement for many Americans, making institutional investors' behaviors and preferences paramount determinants of capital allocation. In this paper, we examine high fiduciary duty institutions' (HFDIs') response to decreased profit maximization pressure as measured by the effect of constituency statutes on HFDI investment. We ask this question, in part, to anticipate HFDIs' response to alternative purpose firms, like benefit corporations. Only with access to institutional investors' capital can alternative purpose firms gain economic significance to rival the purely for-profit corporation. In …

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

The Derivative Nature Of Corporate Constitutional Rights, Margaret M. Blair

Vanderbilt Law School Faculty Publications

This Article engages the two hundred year history of corporate constitutional rights jurisprudence to show that the Supreme Court has long accorded rights to corporations based on the rationale that corporations represent associations of people from whom such rights are derived. The Article draws on the history of business corporations in America to argue that the Court’s characterization of corporations as associations made sense throughout most of the nineteenth century. By the late nineteenth century, however, when the Court was deciding several key cases involving corporate rights, this associational view was already becoming a poor fit for some corporations. The …

Boards Of Directors As Mediating Hierarchs, Margaret M. Blair

Vanderbilt Law School Faculty Publications

In June of 2014, the board of directors of Demoulas Supermarkets, Inc.-better known as Market Basket, a mid-sized chain of grocery stores in New England-decided to oust the man who had been CEO for the previous six years, Arthur T. Demoulas.' Most likely, the board of directors did not anticipate what happened next: Thousands of employees, customers, and fans of Market Basket boycotted the stores and staged noisy public protests asking the board to reinstate "Arthur T., The reaction by employees and customers made what had been a simmering, nasty, intrafamily feud within the closely held Market Basket chain into …

Public Actors In Private Markets: Toward A Developmental Finance State, Robert C. Hockett, Saule T. Omarova

Cornell Law Faculty Publications

The recent financial crisis brought into sharp relief fundamental questions about the social function and purpose of the financial system, including its relation to the “real” economy. This Article argues that, to answer these questions, we must recapture a distinctively American view of the proper relations among state, financial market, and development. This programmatic vision – captured in what we call a “developmental finance state” – is based on three key propositions: (1) that economic and social development is not an “end-state” but a continuing national policy priority; (2) that the modalities of finance are the most potent means of …

Slouching Towards Monell: The Disappearance Of Vicarious Liability Under Section 10(B), Ann Lipton

Publications

Liability under section 10(b) of the Securities Exchange Act is one of the primary mechanisms for enforcing the federal securities laws. Section 10(b), however, prohibits only intentional or reckless deception, and there has never been consensus as to how to determine whether an organization, rather than a natural person, harbors the relevant mens rea. Traditionally, organizational liability under federal law is determined according to agency principles, and most courts pay lip service to the notion that agency principles govern under section 10(b). As this Article demonstrates, they do not.

Many section 10(b) actions involve "open-market" frauds, whereby the allegedly fraudulent …

Incorporating Rights: Making The Most Of The Meantime, Erika George

Faculty Scholarship

In June 2014 the U.N. Human Rights Council adopted a resolution establishing an open‐ended intergovernmental working group to commence deliberations and draft an international legally binding instrument on transnational corporations. The Council also agreed to extend the mandate of the U.N. Working Group on Business and Human Rights, the entity created to promote the U.N. Guiding Principles on Business and Human Rights. The Guiding Principles are a non‐legally binding set of standards created consistent with an earlier Council mandate to “operationalize” the “Protect, Respect and Remedy Framework.”

The Council’s action advancing treaty talks could be seen as calling into question …

Comments On The Oecd's "Due Diligence Guidance For Meaningful Stakeholder Engagement In The Extractives Sector", Lisa J. Laplante, Erika George

Faculty Scholarship

Professor Lisa Laplante of New England Law | Boston’s Center for International Law and Policy (CILP) and Professor Erika George of the University of Utah S.J. Quinney College of Law’s Center for Global Justice respectfully submitted this collaborative commentary in response to the OECD’s Draft Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractives Sector which build off of the OECD Guidelines for Multinational Enterprises which offer comprehensive recommendations to promote responsible business conduct. The 2011 revisions to the OECD MNE Guidelines introduced an important new provision on stakeholder engagement. Pursuant to the provision, multinational enterprises should: “engage with …

Public Benefit Corporations In Kentucky: What Impact Should Kentucky Corporations Expect?, Mary Katherine Kington

Kentucky Law Journal

No abstract provided.

Locked In: The Competitive Disadvantage Of Citizen Shareholders, Anne M. Tucker

Scholarly Works

Indirect investors—especially mutual fund investors—are often low-dollar, low-incentive, rationally apathetic investors facing enormous information asymmetries and collective action problems. These traits raise difficult corporate governance questions about how indirect investors exercise or should exercise their right to vote in fund elections, obtain fund-related information, and pursue litigation against the fund. These questions are all the more important in light of how many indirect investors own mutual funds through employer-sponsored defined contribution retirement plans.

John Morley and Quinn Curtis’s 2010 article, Taking Exit Rights Seriously, offers a clear answer to this problem. They assert that the best solution for all mutual …

Conduct Of Business Regulation, Andrew F. Tuch

Scholarship@WashULaw

This chapter provides a survey and comparative analysis of conduct of business (COB) regulation. COB regulation governs financial intermediaries’ conduct toward their clients, that is, toward the actors – whether individuals or institutions – with whom financial intermediaries transact in providing financial products and services. Modal regulatory strategies include anti-fraud rules, and duties of care, loyalty, fair-dealing and best-execution – and variants of these duties.

The chapter describes the justifications for COB regulation, the modal regulatory strategies used and the complex frameworks within which COB regulation operates. It then generally assesses US COB regulation, focusing on the regulation of broker-dealers …

Disclaiming Loyalty: M&A Advisors And Their Engagement Letters, Andrew F. Tuch

Scholarship@WashULaw

Are investment banks fiduciaries of their merger and acquisition clients? If not, what rules, if any, constrain the conflicts of interest M&A advisors may face when advising their clients? These questions are rarely asked but central to the regulation of investment banking activities. In their article Bankers and Chancellors, 93 TEX. L. REV. 1 (2014), Professors William W. Bratton & Michael L. Wachter contend that M&A advisors effectively contract out of fiduciary duties in their client engagement letters, “emerging] in practice as arm’s-length counterparties constrained less by rules of law than by a market for reputation.” They also regard recent …

Wto Agricultural Trade And The Unfulfilled Promise Of Development, Destaw A. Yigzaw

South Carolina Journal of International Law and Business

The World Trade Organization (WTO) was established with an alluring promise of enhancing the living standards of people around the world, creating jobs and spurring development, while ensuring equitable distribution of the fruits of trade, with particular regard to the needs of the poor. However, critics see the WTO as a mercantilist system tailored to the commercial interests of wealthy nations and their corporations, with little or no attention to the interests of the poor. What happens to agriculture affects the poor disproportionately. If spurring economic development and thereby enhancing the living standards of people is indeed the WTO’s goal, …

Corporate Governance In Search Of The Shareholder-Manager Balance Of Power, Razeen Sappideen

Richmond Journal of Global Law & Business

No abstract provided.

Complicity In Business And Human Rights, James G. Stewart

All Faculty Publications

These remarks, delivered on April 9, 2015 at the American Society of International Law’s Annual Conference, address the context of complicity discussions in public international law generally then their significance and scope in Business and Human Rights in particular. The Panel on which I delivered this talk was one of the first to discuss the topic of complicity across different fields, including International Criminal Law, the Alien Tort Statute, Business and Human Rights and the Public International Law of State Responsibility. In my comments, I offer five initial points contextualizing these discussions for the field of public international law writ …

The Harms Of The Benefit Corporation, Kennan El Khatib

American University Law Review

No abstract provided.

The Value Of Soft Variables In Corporate Reorganizations, Michelle M. Harner

Faculty Scholarship

When a company is worth more as a going concern than on a liquidation basis, what creates that additional value? Is it the people, management decisions, the simple synergies of the operating business, or some combination of these types of soft variables? And perhaps more importantly, who owns or has an interest in these soft variables? This article explores these questions under existing legal doctrine and practice norms. Specifically, it discusses the characterization of soft variables under applicable law and in financing documents, and it surveys related judicial decisions. It also considers the overarching public policy and Constitutional implications of …

Income Inequality And Corporate Structure, Matthew T. Bodie

All Faculty Scholarship

Efforts to address income inequality generally focus on wealth redistribution through taxation and government benefits. But these efforts do not attack the core problem -- the unfair distribution of wealth at the firm level. This essay, a contribution to the "Inequality, Opportunity, and the Law of the Workplace" symposium, argues that workers need power within their firms to stake their claims to larger slices of the corporate pie. Even though the current law of the workplace does provide regulatory support for workers, it fails to change internal firm governance. Policymakers who want to take on income inequality as a structural …

Publicly-Traded Llcs: The New Kid On The Exchange, Mary Siegel

Scholarly Articles in Law Reviews & Journals

No abstract provided.

A Failure Of Substance And A Failure Of Process: The Circular Odyssey Of Oklahoma's Corporate Law Amendments In 2010, 2012, And 2013, Steven Cleveland

Faculty Articles

No abstract provided.