Business Organizations Law Commons^™

Of Convergence And Contingency: Some Thoughts On Public Firm Fiduciary Duties, Jay B. Kesten

Scholarly Publications

No abstract provided.

Paying For Performance? Attorneys' Fees In Securities Fraud Class Actions, Jessica M. Erickson

Law Faculty Publications

This Article studies whether plaintiffs’ lawyers matter in securities class actions. We use inverse propensity score weighting (IPW) to compare the results in cases led by top-tier firms against those brought by lower-tier firms. This technique addresses case selection effects by using all of the cases led by a top-tier firm and then weighting the cases led by lower-tier firms based on how similar these cases are to the cases led by top-tier firms. We do find that top-tier lawyers obtain better outcomes for shareholders in a subset of securities class actions, specifically the cases against the larger (although not …

Corporate Law As Decolonization, Martin W. Sybblis

Faculty Articles

After centuries of colonial subordination, Black and Brown former colonies are still fighting to achieve the fruits of decolonization. The traditional theory is that former colonies will emerge from the colonial period with the legal mandate and international recognition needed to chart their own futures. But, for those Black and Brown British colonies that achieved political independence, it became clear that, without economic strength to care for their societies, legal separation could not deliver on its promise of freedom from subordination. This Article argues that investments in corporate law innovations by some jurisdictions, such as Bermuda, the British Virgin Islands, …

Criminal Recordkeeping, Andrew K. Jennings

Faculty Articles

Business managers must create and keep records for decision-making. Yet doing so presents an obvious problem for those who manage illegal businesses: their records would make for powerful evidence in the hands of prosecutors. That problem raises a question—why would one knowingly create and keep such records when their mere existence risks detection and sanction? The answer, in short, is that the interaction of illicit activity’s complexity and continuity compels recordkeeping. A business, including a criminal one, cannot be managed without adequate information about its operations, obligations, and condition. Just how complex and long-lived its affairs are will drive the …

Human Capital Disclosure & Corporate Governance: The New Evidence, George S. Georgiev

Faculty Articles

This Article explores the evolution of human capital disclosure—firm-supplied information about various workforce-related matters—as a factor in contemporary corporate governance. Regulatory and nonregulatory developments from recent years have upended longstanding practices and generated extensive new evidence. Most notably, the Securities and Exchange Commission (SEC) adopted a human capital management (“HCM”) disclosure mandate in 2020, which, though long overdue, was criticized from the outset for its modest scope and lax design. In the meantime, courts have taken a renewed interest in board of directors’ oversight responsibilities in a number of areas, including HCM, while labor’s power has unexpectedly increased in some …

Criminal Subsidiaries, Andrew K. Jennings

Faculty Articles

Corporate groups comprise parent companies and one or more subsidiaries, which parents use to manage liabilities, transactions, operations, and regulation. Those subsidiaries can also be used to manage criminal accountability when multiple entities within a corporate group share responsibility for a common offense. A parent, for instance, might reach a settlement with prosecutors that requires its subsidiary to plead guilty to a crime, without conviction of the parent itself—a subsidiary-only conviction (SOC). The parent will thus avoid bearing collateral consequences—such as contracting or industry bars—that would follow its own conviction. For the prosecutor, such settlements can respond to criminal law’s …

Beyond Profit Motives, William J. Moon

Faculty Scholarship

Why do corporations exist? Generations of legal scholars have debated both the origins of business corporations and their purpose.1 Professor Stephen Bainbridge’s new book The Profit Motive: Defending Shareholder Value Maximization is a substantial contribution to this literature and an essential read for anyone who wishes to better understand a controversy that has an immense impact on how movers and shakers of today’s largest corporations make decisions.

Why Do Banks Fail Together? Evidence From Executive Compensation, Deniz Anginer, Jinjing Liu, Cindy A. Schipani, H. Nejat Seyhun

Fordham Journal of Corporate & Financial Law

Recent bank failures have elicited extensive interest about the causes, focusing on incompetence of bank executives, policymakers, bank regulators and supervisors and even uninsured depositors. Yet, before we can prescribe solutions to bank failures, we need to identify the correct causes of the underlying problems. We argue that the problem is not so much with incompetence of executives, depositors, or regulators per se, but rather with managerial incentives.

We provide both a conceptual basis as well as empirical evidence to show that bank executives have incentives to increase systemic risks in order to maximize the benefits of bank bailouts. Consequently, …

A Bona Fide Dispute: Can Bankrupt Debtors Sell Assets Free And Clear Of Federal Civil Forfeiture Claims?, Joseph Peter Gomez

Fordham Journal of Corporate & Financial Law

Auctions are wheeling-dealing extravaganzas in which frenzies of bidders fight over shiny objects. What would happen if the government busted down the doors of the auction house, took the shiny objects, and sold them online? An asset sale through section 363(b) of the Bankruptcy Code provides a court-supervised opportunity to maximize economic value for the bankruptcy estate. To sell estate assets, the debtor must either (1) pay off each creditor holding an interest in the assets or (2) strip the creditor’s interest and attach it to the proceeds of the sale. When the government asserts a civil forfeiture claim against …

Another Major Question: The Department Of Labor Should Retire The Tiebreaker Rule And Reemploy Pecuniary Language In Erisa, Brandon Chesner

Fordham Journal of Corporate & Financial Law

The Employee Retirement Income Security Act of 1974 (“ERISA”) soon turns 50. Instead of celebrating with cake, retirees and future retirees alike get to witness a new chapter in the debate over the consideration of Environmental, Social, or Governance (“ESG”) factors in investing with plan assets. As employees cross the bridge into retirement, they look to their 401(k)s and pension plans for peace of mind, for it is ERISA that has been working silently in the background establishing minimum standards, practices, and fiduciary duties to protect participants. In recent years, the U.S. Department of Labor (“DOL”) has passed three regulations—two …

Speech Without Speakers: Eliminating Artificial Barriers To Pleading Corporate Scienter In Securities Fraud Claims, Jennifer Ligansky

Fordham Journal of Corporate & Financial Law

To successfully plead securities fraud claims under Rule 10b–5, the Private Securities Litigation Reform Act (“PSLRA”) requires that plaintiff-investors raise a “strong inference” that the defendant acted with scienter when issuing a false statement. But pleading scienter presents a challenging issue when the defendant is not a person, but an entity. When the defendant is a corporation, U.S. Circuit Courts of Appeals have adopted different approaches for determining whether the plaintiff has pleaded a strong inference of scienter. Some circuits hold that plaintiffs can raise a strong inference of corporate scienter only if the complaint identifies a speaker who knew …

The Lease Of All Evils: How A Middle-Ground Approach Can Resolve The Bankruptcy Code Conflict Between Section 363(F) Sales And Section 365(H) Lessee Protections, Kate Christensen

Fordham Journal of Corporate & Financial Law

The Fifth Circuit’s recent decision in In re Royal St. Bistro, LLC has awakened an unsettled issue in the Bankruptcy Code that has divided the bankruptcy community for over two decades. The question examined by the Fifth Circuit was whether a non-debtor lessee with a right to continued possession through section 365(h) of the Bankruptcy Code loses this right if the debtor-lessor can sell its property “free and clear” under section 363(f). While early decisions held that section 365(h) always protects lessees against debtors’ free and clear sales, some subsequent decisions created a circuit split by ruling that section 365(h) …

Foreword, Emily Montalvo, Natalie Tantisirirat

UC Law Business Journal

No abstract provided.

How European Human Rights Law Will Reshape U.S. Business, Rachel Chambers, David Birchall

UC Law Business Journal

In recent years several European states have enacted human rights due diligence laws, culminating in the imminent EU-wide Corporate Sustainability Due Diligence Directive.

This article provides a comprehensive analysis of these laws and explores their potential impact on U.S. businesses. Human rights due diligence emerges from the United Nations Guiding Principles on Business and Human Rights (2011) and was originally conceived as a voluntary means by which corporations could demonstrate that they proactively monitor and manage potential human rights abuses within their corporate group and supply chains. Since 2017, European states have begun enacting binding human rights due diligence laws. …

Masthead

UC Law Business Journal

No abstract provided.

The Professional Employer Organization Regulatory Regime, Ursula Ramsey

UC Law Business Journal

No abstract provided.

Minutes Are Worth The Minutes: Good Documentation Practices Improve Board Deliberations And Reduce Regulatory And Litigation Risk, Given As The 21st Annual Destefano Lecture, Leo E. Strine Jr.

Fordham Journal of Corporate & Financial Law

This Essay, originally the basis for the 21st Annual Albert A. DeStefano Lecture on Corporate, Securities & Financial Law given on February 27, 2024, at Fordham University School of Law, addresses the importance of good corporate minuting and board documentation practices. Using lessons from Delaware cases where the quality of these practices has determined the outcome of motions and cases, this Essay identifies effective and efficient practices to better address this decidedly not sexy, but unquestionably essential, corporate governance task. The recent Delaware cases underscore the importance of quality and timely documentation of board decision-making, the material benefits of doing …

Corporate Esg Falls Short: Systemic Anti-Black Racism And Inequality Should Be Addressed Through A Cumulative Integrated Approach, Ferrell L. Littlejohn

Fordham Journal of Corporate & Financial Law

In the 1896 case Plessy v. Ferguson, the Supreme Court endorsed the “separate but equal” doctrine, essentially codifying racial segregation. This decision guaranteed that systemic racism would permeate every fabric of society despite the abolition of slavery. Recently, many corporate institutions have pledged to actively support the fight against systemic racism through their environmental, social, and governance (“ESG”) initiatives. Corporate stakeholders have actively advocated for these initiatives, particularly in response to recent scholarship revealing the significant involvement of capitalist institutions in historical slavery, and the continued perpetuation of anti-Black racism. Nevertheless, such initiatives, for example, internal diversity, equity, and …

Corporate Purpose And The Road, William P. Murray, J. Haskell Murray

Transactions: The Tennessee Journal of Business Law

No abstract provided.

Coster V. Uip Companies, Inc.: Corporate - Delaware Board Elections, William Gass

Transactions: The Tennessee Journal of Business Law

No abstract provided.

The Ftc & Doj’S New Merger Guidelines: A New Path Or More Of The Same?, Meredith Mommers, Angela Landry

Emory Business Law Review

No abstract provided.

Challenges And Recent Developments In Establishing Civil Aiding And Abetting Liability Under The Anti-Terrorism Act, Amanda Fox Perry

Emory Business Law Review

No abstract provided.

Institutional Investors As Climate Activists: Curb Your Enthusiasm, Markus Lieberknecht

American University Business Law Review

Institutional investors control a sizable portion of all votes in major public corporations. In contrast to their traditional deference to management, some institutional investors have begun to lobby portfolio companies for reductions in greenhouse gas (“GHG”) emissions because even broadly diversified portfolios are vulnerable to the systemic risks associated with climate change. In theory, this logic could align the interests of diversified investors and those of society at large, resulting in welfare-enhancing climate activism. However, because of the chasm between the portfolio-level goal of GHG reduction and the company-level goal of value maximization, climate activism by institutional investors is bound …

We Shall Overcome: The Evolution Of Quotas In The Land Of The Free And The Home Of Samba, Stella Emery Santana

Seattle University Law Review

When were voices given to the voiceless? When will education be permitted to all? When will we need to protest no more? It’s the twenty-first century, and the fight for equity in higher education remains a challenge to peoples all over the world. While students in the United States must deal with the increase in loans, in Brazil, only around 20% of youth between the ages of twenty-five and thirty-four have a higher education degree.

The primary objective of this Article is to conduct an in-depth comparative analysis of the development, implementation, and legal adjudication of educational quota systems within …

Pacific Islands And The U.S. Military: The Legal Borderlands Of The Environmental Movement, Sonia Lei

Seattle University Law Review

Climate change remains an urgent, ongoing global issue that requires critical examination of institutional polluters. This includes the world’s largest institutional consumer of petroleum: the United States military. The Department of Defense (DoD) is a massive institution with little oversight, a carbon footprint spanning the globe, a budget greater than the next ten largest nations combined, and overly generous exemptions to environmental regulations and carbon reduction targets. This Comment examines how this lack of accountability and oversight plays out in the context of three Pacific islands that have hosted U.S. military bases for decades. By considering the environmental impact of …

Protecting Worker Health Data Privacy From The Inside Out, Elizabeth A. Brown

UC Law Business Journal

This article investigates three new opportunities for complementary public, private, and design-centric protections of worker health data, an overlooked yet critical area of data privacy regulation. The expansion of biometric monitoring, of the $50 billion femtech industry, and the commercial value of health data also underscore the need for greater protection of worker health data. Now that states are developing more comprehensive data privacy laws, it is critical to consider innovative solutions that build on the best of these laws nationwide. Especially after the Supreme Court’s Dobbs decision, the health data of women workers has become especially prone to misuse. …

Taxing The New With The Old: Capturing The Value Of Data With The Corporate Income Tax In Virginia, Coleman H. Cheeley

Law Student Publications

The Commonwealth of Virginia markets itself as “The Largest Data Center Market in the World.” In 2019, the Northern Virginia market alone was the largest in the United States by inventory, with room to grow. In 2021, data centers in Northern Virginia required an estimated 1,686 megawatts of power; that number is expected to increase by 200 megawatts in the near future, reflecting data centers currently under development. For reference, in 2022, it was estimated that more than 100 homes could be powered by one megawatt of solar power in Virginia. Historically, data centers have been located in the Commonwealth …

Venture Capital's Esg Problem, Ryan A. Ashburn

Law Student Publications

Venture capital (“VC”) is repeatedly described as one of the “crown jewels” of the U.S. economy for its role in financing startups and innovation. However, recent corporate scandals, including fraud, have exposed a darker side of the VC industry and the startups in which venture capitalists (“VCs”) invest. For example, Theranos received $686 million in VC funding yet proved to be nothing more than a “house of cards” once it came to light that Theranos falsified blood test results. When Theranos founder Elizabeth Holmes was convicted of fraud, many VCs tried to distance themselves, saying Theranos was an exception and …

Equity For Intermediaries: The Resolution Of Financial Firms In Bankruptcy And Bank Resolution, Edward Janger

Faculty Scholarship

No abstract provided.

Of Chameleons And Esg, Ann Lipton

Publications

Ever since the rise of the great corporations in the late nineteenth and early twentieth centuries, commenters have debated whether firms should be run solely to benefit investors, or whether instead they should be run to benefit society as a whole. Both sides have claimed their preferred policies are necessary to maintain a capitalist system of private enterprise distinct from state institutions. What we can learn from the current iteration of the debate— now rebranded as "environmental, social, governance" or "ESG" investing— is that efforts to disentangle corporate governance from the regulatory state are futile; governmental regulation has an inevitable …