Business Organizations Law Commons^™

Companies In The European Community: Are The Conflict-Of-Law Rules Ready For 1992?, Andreas Reindl

Michigan Journal of International Law

This article describes the current situation in the emerging integrated system of the European Community, focusing on the potential conflict between Community rules on the freedom of establishment and national conflict-of-law rules relating to companies. In the first part, I shall outline the relevant provisions of EC law and the two conflict-of-law concepts presently exhibited in the national laws of the Member States. In the second part, I shall discuss three cases in which the European Court of Justice recently addressed this subject. In the third part, I shall analyze the impact of the Court's opinions, and finally outline options …

Corporate Philanthropy And The Business Benefit: The Need For Clarity, Shelby D. Green

Elisabeth Haub School of Law Faculty Publications

The need for clarity or harmony is the subject of this essay. Part II summarizes a philosophical debate between two scholars on the mission of the corporation. Part III briefly traces the historical development of the relevant principles and Part IV examines the actual philanthropic practices of several large publicly held corporations. Finally, Part V considers the continuing significance of the common law rule in light of these practices and urges support for the ALI proposal.

It Does The Crime But Not The Time: Corporate Criminal Liability In Federal Law, Michael E. Tigar

Faculty Scholarship

No abstract provided.

The Art Of Regulation Drafting: Structured Discretionary Justice Under Section 355, John W. Lee

Faculty Publications

This article analyzes the 35-year evolution of the section 355 regulations from the perspectives of the jurisprudential dichotomy between general principles and detailed rules and administrative law theory as to agency discretion.

Misreading The Williams Act, Lyman Johnson, David Millon

Michigan Law Review

This Article examines the emerging controversy over preemption of the most potent of recent antitakeover laws, the so-called business combination statutes recently passed by Delaware, New York, and other states, and Pennsylvania's director-approval statute. After examining the strategy employed by the states to shield these statutes from constitutional attack, we consider the issues raised by the preemption claim and the arguments currently being advanced by the SEC and others in favor of preemption. Resolving the preemption controversy requires inquiry into the original meaning and objectives of the Williams Act. We argue that this should involve attention not only to the …

The Basics Of Disclosure: The Market For Information In The Market For Corporate Control, James Harlan Koenig

University of Miami Law Review

No abstract provided.

Coase Defends Coase: Why Lawyers Listen And Economists Do Not, Stewart Schwab

Michigan Law Review

A Review of The Firm The Market and The Law by Ronald Coase

Reverse Piercing The Corporate Veil: Should Corporation Owners Have It Both Ways?, Michael J. Gaertner

William & Mary Law Review

No abstract provided.

Missing The Point About State Takeover Statutes, Lyman Johnson, David Millon

Michigan Law Review

In a recent article in this journal, Professor Richard Booth offers an extended appraisal of state legislation regulating hostile corporate takeovers. We think Booth's article requires comment for two reasons. The first reason is perhaps more obvious, though less interesting from our point of view. To be blunt, "unfairness" to shareholders due to coercion arising out of two-tier or partial offers simply does not occur with enough frequency to warrant a sixty-seven-page article in a major law review. According to recent congressional testimony by SEC Commissioner Cox, from 1982 to 1986 the number of two-tier offers declined from 18% of …

The Corporate Attorney-Client Privilege: A Study Of The Participants, Vincent C. Alexander

Faculty Publications

Empirical research on the practical effects of the attorney-client privilege in the corporate context has been almost nonexistent. This Article seeks to help fill the gap by synthesizing traditional doctrinal analysis with the results of a survey of individuals with first-hand information about the subject: corporate attorneys, corporate management, and federal judges and magistrates. The survey, which consisted of 182 interviews in New York City, produced a broad range of information about some of the assumptions underlying the corporate privilege, the forms and processes of corporate attorney-client communications and the adjudication of privilege claims.

Executive Loans From Corporate Funds, Jayne W. Barnard

Faculty Publications

The author surveys the laws affecting loans made by a corporation to its executives, including the state loan enabling statutes, the applicable tax laws, and any disclosurerequirements. Also discussed is the applicability of Regulation G to loans made by a corporation to facilitate share purchases by its executives. Finally, the author enumerates the risks inherent in executive lending and makes suggestions for risk minimization.

The New Business Corporation Act: The Basics, Office Of Continuing Legal Education At The University Of Kentucky College Of Law, Rutheford B. Campbell Jr., David W. Harper, Stephen B. Catron, Keith G. Hanley

Continuing Legal Education Materials

Handouts provided at the UK/CLE seminar on the New Business Corporation Act on October 1, 1988.

Corporate Auctions And Directors' Fiduciary Duties: A Third-Generation Business Judgment Rule, Steven G. Bradbury

Michigan Law Review

This Note proposes a rationale and a methodology for applying the business judgment rule when directors resist a hostile bid during the auction phase of a control contest. Part I examines the changes that occur in the responsibilities of target directors when a corporate auction is initiated. This Part describes the Unocal business judgment rule test and discusses its usefulness in the auction phase of a takeover. While the test requires modification if it is to complement effectively the auction-phase duties announced in Revlon, this Part suggests that the business judgment rule continues to be relevant and important during …

Two Models Of Corporate Governance: Beyond Berle And Means, Lynne L. Dallas

University of Michigan Journal of Law Reform

This Article introduces a new model of corporate governance, which challenges, as did Berle and Means, the conclusions drawn from the traditional ownership model. Rather than focusing upon the inefficiencies of the large complex firm resulting from the separation of share ownership and control, however, this new model, which I call the power model, focuses upon the political nature of decision making in the large corporation, which exists regardless of the identity of the entrepreneur.

The Closely Held Corporation: Its Capital Structure And The Federal Tax Laws, William J. Rands

West Virginia Law Review

The labyrinthine provisions of the Internal Revenue Code make a decision on whether or not to incorporate a closely-held business astoundingly complex. To decide properly, one must understand the terms "C corporations," "S corporations," a partner's "distributive share," and a host of other cryptic concepts.' Even those initiated into the inner sanctums of Subchapters C2, K3 and S4 must advise their clients that their counsel.is based on the enterprise's projected revenues and expenses, estimates that may prove to be far off the mark. Moreover, changes in the Internal Revenue Code have been so constant that no one can feel confident …

The Promise Of State Takeover Statutes, Richard A. Booth

Michigan Law Review

The purpose of this article is, first, to describe the problems associated with two-tier tender offers and the closely related, and perhaps still more coercive, partial tender offer. Second, the article will address the natural question why such offers have not already been banned, suggesting a better view of what coercion means in the context of a tender offer. Third, the article will offer a management-oriented view of coercion, explaining the legitimate interests of managers (and other groups) in resisting takeovers, as well as how greenmail and poison pills, though subject to abuse, can be used quite properly to combat …

Corporations And Society: Power And Responsibility, Sara Anne Engle

Michigan Law Review

A Review of Corporations and Society: Power and Responsibility edited by Warren J. Samuels and Arthur S. Miller

Adventures In Finance, Deborah A. Demott

Michigan Law Review

A Review of Finance and Industrial Performance in a Dynamic Economy: Theory, Practice, and Policy by Merritt B. Fox

The Corporate Social Responsibility Movement - The Latest In Maginot Lines To Save Capitalism, H J. Glasbeek

Dalhousie Law Journal

The modem corporation bad a battle to be accepted as a legitimate institution. In England it was initially seen as a device which might lead to the undermining of individual responsibility, in the United States as subjugating the individual and individualism to the needs of the organization, and in Canada as offending the dignity of labour and endangering the political entente. In 1932, Berle and Means showed that most of the wealth in the United States was in the hands of corporations and a large proportion of that corporate wealth was controlled by a relatively small number of dominant corporations. …

Conflict Of Interest In The Board Room - Misconduct "Market Discipline" Cannot Kill, Jayne W. Barnard

Popular Media

No abstract provided.

Where Have All The Directors Gone: Corporate Director And Officer Liability And Coping With The Insurance Crisis, Richard A. Myers Jr.

Cleveland State Law Review

Smith v. Van Gorkom set in motion a trend of increased exposure for directors and officers of American corporations....Directors and officers insurance may be either unavailable or unaffordable,...As a general rule, the best way to cope with the change in the business environment and the insurance crisis is to plan in advance for it. Through careful corporate structuring and planning, while remaining flexible, a small company can maximize their protection from liability. The factors to consider range from a careful drafting of the corporate articles and bylaws to the creation of captive insurance companies.

Executives Raiding The Corporate Cookie Jar, Jayne W. Barnard

Faculty Publications

No abstract provided.

Ex Parte Interviews With Enterprise Employees: A Post-Upjohn Analysis, Louis A. Stahl

Washington and Lee Law Review

No abstract provided.

Japanese-Style Worker Participation And United States Labor Law, William S. Rutchow

Michigan Journal of International Law

This note will evaluate the current legal status of Japanese-style worker participation programs under the NLRA. First, it analyzes relevant sections of the NLRA and their interpretation by the Board and the courts. Second, the note describes various types of Japanese worker participation programs, and suggests how these programs can be legally implemented under current American labor law. Third, the note considers standards the Supreme Court may adopt to test the legality of worker participation programs in the future. Finally, this note recommends that the Supreme Court uphold those participation programs which are freely chosen by employees.

The Case For Employee Ownership In Overseas Operations Of U.S. Multinational Enterprises In Central America, William G. Hopping

Michigan Journal of International Law

Part II of this note explains the relevance of using U.S. direct investment in Central America as a starting point for encouraging employee ownership. Part III describes the essential legal framework of the ESOP in the U.S., providing a framework from which to adapt the ESOP to other countries. Part IV argues that all parties participating in this form of expanded ownership will realize significant short and long-term benefits, but points out some problems of transferring ESOPs, a U.S. legal innovation, to different cultural and business environments. Part V presents some of the legal and economic issues of adapting ESOPs, …

Standards Of Conduct For Directors Of Nonprofit Corporations, James J. Fishman

Elisabeth Haub School of Law Faculty Publications

This Article analyzes the standards of care and loyalty that should apply to directors of nonprofit corporations. It suggests that the movement toward corporate law principles neither reflects the differences in the types of nonprofit corporations nor provides a coherent rationale for the conduct regulated. The "trust law"-"corporate law" distinction has often centered upon the label to be applied rather than on an analysis of the principles involved. Too often the selection of the label has determined the result. At other times, the label has been used as a convenient rationalization of a socially desirable conclusion. This Article will attempt …

Limiting Directors' Duty Of Care Liability: An Analysis Of Delaware's Charter Amendment Approach, Craig W. Hammond

University of Michigan Journal of Law Reform

This Note explores the corporate law principles guiding the amendment of section 102(b)(7) and considers what effects this statute will have on the investor-director relationship. The Note focuses on whether this reform measure excessively protects directors at the expense of shareholders.

Part I analyzes the neoclassical economic view of the contractual relationship between stockholders and management that serves as the theoretical justification of section 102(b)(7). Part II proposes a modification of the Delaware statute that would provide for periodic shareholder review of charter amendments limiting liability.

Target Litigation, Michael Rosenzweig

Michigan Law Review

In Part I, I explore the motives of litigious target managers. I briefly examine the takeover defense literature and empirical evidence regarding the frequency of target litigation, both of which indicate that target managers usually sue bidders in order to defeat unwanted takeover attempts. I also suggest that judicial reactions to target lawsuits largely confirm this hypothesis.

I then discuss, in Part II, target management's conflict of interest in control contests and the particular strategic considerations that lead target managers to sue hostile bidders. I argue that target litigation is peculiarly likely to be frivolous and, based on a study …

Shareholders Versus Managers: The Strain In The Corporate Web, John C. Coffee Jr.

Michigan Law Review

Part I will seek to understand why firms trade in the stock market at a substantial discount from their asset value. It will answer that existing theories of the firm have not given adequate attention to a critical area where shareholders and managers have an inherent conflict, one that the existing structure of the firm does not resolve or mitigate. Despite the significant changes in the internal structure of the corporation over the last half century that have been described by business historians, there remains a deep internal strain between shareholders, on the one hand, and managers and employees, on …

Free Speech And Corporate Freedom: A Comment On First National Bank Of Boston V. Bellotti, Carl E. Schneider

Articles

The corporation was born in chains but is everywhere free. That freedom was recently affirmed by the United States Supreme Court in First National Bank of Boston v. Bellotti. In Bellotti, the Court overturned a Massachusetts criminal statute forbidding banks and business corporations to make expenditures intended to influence referenda concerning issues not "materially affecting" the corporation's "property, business, or assets." In doing so, the Court confirmed its discovery that commercial speech is not unprotected by the first amendment and announced a novel doctrine that corporate speech is not unprotected by the first amendment. Although several years have …