Legislation Commons^™

Employee Stock Ownership Plans And Corporate Takeovers: Restraints On The Use Of Esops By Corporate Officers And Directors To Avert Hostile Takeovers, Margaret E. Mclean

Pepperdine Law Review

In 1974, Congress enacted the Employee Retirement and Income Security Act (ERISA), which was designed to promote employee benefit plans and provide safeguards for the assets of the plans. An employee stock ownership plan is a device used by corporations which holds corporate stock as the primary asset of the employee benefit plan. Recently, corporate executives have seized the opportunity to use ESOPs as a defensive tactic for averting takeovers considered to be adverse to the corporation. However, provisions of ERISA, particularly relating to fiduciary duty, exclusive benefit, and prudence, seriously impede the use of an ESOP by incumbent management …

The Professional Corporation—Has The Death Knell Been Sounded?, Forest J. Bowman

Pepperdine Law Review

The favorable tax reasons for incorporating a professional practice have been substantially reduced by the Tax Equity and Fiscal Responsibility Act. The retirement benefits of the professional corporation have effectively been eliminated by TEFRA. In addition, the new allocation of income powers provided by TEFRA may have eliminated the tax incentive for forming a professional corporation. The professional's decision whether to incorporate his practice will now rest with his desires as to how he wishes to carry out that practice. This article discusses the changes that TEFRA has wrought, and its impact on the professionals' decision to incorporate.

Corporation Code Sections 309 And 1203: California Redefines Directors' Duties Towards Shareholders, Ernest F. Batenga, Mark Willis

Pepperdine Law Review

No abstract provided.

The "In Connection With" Requirement Of Rule 10b-5, C. Edward Fletcher Iii

Pepperdine Law Review

No abstract provided.

Private Equity & Private Suits: Using 10b-5 Antifraud Suits To Discipline A Transforming Industry, Kenneth J. Black

Michigan Business & Entrepreneurial Law Review

This note demonstrates why private equity will no longer be able to avoid private investor suits as it has (mostly) done in the past and explores the industry’s response to a growing number of investor suits. Notably, the industry has already begun to shift its strategy from regulatory avoidance to regulatory capture, at least in part to avoid investor suits. Given these changes, this note proposes that the best way to maintain discipline in the transforming private equity market is to protect the ability of investors to bring private suits.

Recent Changes In U.S. And U.K. Overseas Anti-Corruption Enforcement Under The Fcpa And The U.K. Bribery Law: Private Equity Compliance, Isaac A. Binkovitz

Michigan Business & Entrepreneurial Law Review

The following discussion provides a preliminary guide for those tasked with steering private equity firms through the shifting obstacle course of overseas anti-corruption compliance. Section I briefly reviews the centrality of overseas anti-corruption enforcement and its role in creating a more hospitable business climate in emerging markets. Section I also examines the American and British enforcement regimes in general before analyzing the most recent changes–specifically, changes as to the scope of liability and expansion of their jurisdiction. This section is designed to help determine whether investments or acquisitions fall within the purview of either enforcement regime. Section II discusses various …

Revisiting 'Truth In Securities Revisited': Abolishing Ipos And Harnessing Private Markets In The Public Good, Adam C. Pritchard

Articles

My thesis is 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. The insight builds on Cohen's thought experiment where Congress first enacted the Exchange Act. My proposed public-private standard would take the company-registration model to its logical conclusion. The customary path to public-company status is through an IPO, typically with simultaneous listing of the shares on an exchange. There is nothing about public offerings, however, that makes them inherently antecedent to public-company status. What if companies became public, with required periodic disclosures …

Crowdfunding Securities, Andrew A. Schwartz

Publications

A new federal statute authorizes the online "crowdfunding" of securities, a new idea based on the concept of "reward" crowdfunding practiced on Kickstarter and other websites. This method of selling securities had previously been banned by federal securities law but the new CROWDFUND Act overturns that prohibition.

This Article introduces the CROWDFUND Act and explains that it can be expected to have two primary effects on securities law and capital markets. First, it will liberate startup companies to use peer networks and the Internet to obtain modest amounts of capital at low cost. Second, it will help democratize the market …

Rural Crowdfunding, Andrew A. Schwartz

Publications

One reason that economic development in rural America lags behind its urban counterpart is the persistent lack of venture capital for rural entrepreneurs. Geography deserves much of the blame, as angel investors and venture capitalists tend to live and work in metropolitan areas on the coasts, in places like Silicon Valley and Boston. Many rural areas are literally thousands of miles away, with the result that venture capital has rarely found its way to rural regions.

Recent federal legislation, however, has the potential to change this dynamic. The JOBS Act authorizes the sale of securities over the Internet to large …

Standing To Sue A Carrier's Killers , Davis J. Howard

Pepperdine Law Review

No abstract provided.

Legal Framework For Soviet Privatization, Olga Floroff, Susan Tiefenbrun

Pepperdine Law Review

No abstract provided.

Confusion And Unpredictability In Shareholder Derivative Litigation: The Delaware Courts' Response To Recent Corporate Scandals, Ann M. Scarlett

Florida Law Review

The Delaware courts responded to the recent wave of corporate scandals, exemplified by Enron and WorldCom, by changing their approach to shareholder derivative litigation. This Article analyzes the Delaware courts’ response to these scandals and concludes that the courts have created doctrinal confusion and introduced unpredictability into derivative litigation. This Article also analyzes the future negative consequences for shareholders, corporations, directors, investors, and other litigants. Finally, this Article proposes improvements for derivative litigation that may alleviate the confusion and unpredictability created by the Delaware courts’ response to the recent scandals

Interpreting Nonshareholder Constituency Statutes, Stephen M. Bainbridge

Pepperdine Law Review

No abstract provided.

Regulatory Conflicts: International Tender And Exchange Offers In The 1990s, John C. Maguire

Pepperdine Law Review

No abstract provided.

The New Uniform Statute Of Limitations For Federal Securities Fraud Actions: Its Evolution, Its Impact, And A Call For Reform, Anthony Michael Sabino

Pepperdine Law Review

No abstract provided.

Striking The Wrong Balance: Constituency Statutes And Corporate Governance , Edward D. Rogers

Pepperdine Law Review

No abstract provided.

How Long Can This Go On? The Controversy Over The Application Of The Statute Of Limitations To S Corporations And Their Shareholders, J. Marcus Sommers

Pepperdine Law Review

No abstract provided.

Federalism And Preemption In October Term 1999, Jonathan D. Varat

Pepperdine Law Review

No abstract provided.

Sales Between A Partnership And Non-Partners, Douglas A. Kahn

Articles

The code denies a deduction for a loss recognized on a sale or exchange between certain related parties. Two of the principal code sections that deny a deduction in that circumstance are sections 267(a)(1) and 707(b)(1)(A). Two regulatory provisions promulgated under section 267 apply the denial of a loss deduction rule to partnerships — reg. section 1.267(b)-1(b) and temp. reg. section 1.267(a)-2T(c), Question 2. I conclude that to the extent reg. section 1.267(b)-1(b) applies to section 267(a)(1), it is invalid and has been invalid since 1986. Also, two of the questions and answers in the temporary regulation are invalid.

Contribution Of A Built-In Loss To A Partnership, Douglas A. Kahn

Articles

Before 2004, it was possible to use the partnership tax provisions of the code to shift the benefit ofa loss deduction for a decline in property valuefrom the person who incurred it to another person.One method of accomplishing that goal involvedthe contribution of depreciated property to a partnership.

Determining The Proper Pleading Standard Under The Private Securities Litigation Reform Act Of 1995 After In Re Silicon Graphics , Erin Brady

Pepperdine Law Review

No abstract provided.

The Delaware Series Llc: Sophisticated And Flexible Business Planning, Ann E. Conaway, Peter I. Tsoflias

Michigan Business & Entrepreneurial Law Review

The authors conclude that the Delaware series supplies a beneficial, efficient use of a combined contractual Delaware entity form when pooled with sensible, informed planning by sophisticated business attorneys. Such benefits are particularly noticeable in investment vehicles where managers embark to minimize risk by diversifying the fund’s assets or receive funding with specific covenants attached that limit the acceptable uses of the funds. The series is not, however, for general practitioners who have the occasional client wishing for the latest benefit Delaware has to offer its investors. To provide context, Parts II-IV of this article provide a brief overview of …

A Very Quiet Revolution: A Primer On Securities Crowdfunding And Title Iii Of The Jobs Act, Thaya Brook Knight, Huiwen Leo, Adrian A. Ohmer

Michigan Business & Entrepreneurial Law Review

This essay introduces the complex regulatory regime that governs the public sale of all securities, no matter how small the offeror. It is intended as a rudimentary roadmap for the start-up or its counsel and will, hopefully, help to illuminate the traps for the unwary while providing an overview of the regulatory universe in which securities crowdfunding will operate.

The Use Of Federal Law To Curb Excessive Executive Compensation: Lessons In Past Failures And Lessons For The Future, 57 Vill. L. Rev. 551 (2012), Kathryn J. Kennedy

UIC Law Open Access Faculty Scholarship

When one thinks of the use of legislative power to curb the size and the type of compensation paid to executives, one normally thinks such power is reserved to the states. That is, one tends to think that regulating corporate governance falls within traditional state police powers. However, while state courts have been willing to review the processes boards of directors use in setting the size and type of executive compensation, they have been less willing to review the actual results of such decisions. Hence, it is no shock that Congress continues to dabble in the area of corporate governance …

Contributor, Cassady V. Brewer

Faculty Publications By Year

No abstract provided.

The New Section 1202 Tax-Free Business Sale: Congress Rewards Small Businesses That Survived The Great Recession, Beckett G. Cantley

Fordham Journal of Corporate & Financial Law

On September 27, 2010, President Barack Obama signed the Creating Small Business Jobs Act of 2010 (“SBJA”) that contains a temporary amendment to Internal Revenue Code (“IRC”) § 1202. The amendment permits original shareholders of eligible corporation stock to sell the stock without being taxed on the sale. The temporary amendment initially only applied to certain stock acquired after the enactment of the SBJA and before January 1, 2011, but the amendment was extended on December 17, 2010 for another year ending January 1, 2012. With the impending sunset of the 15% capital gains rate at the end of 2012, …

American Legal History Survey: Syllabus, Anders Walker

All Faculty Scholarship

This syllabus provides an overview of American Legal History, focusing on the manner in which law has been used to organize American society. Several themes will be traced through the semester, including law’s role in encouraging innovation and regulating social relations, in part through the elaboration of legal disciplines like property, tort, contract, criminal law, tax, business associations, administrative law, environmental law, securities regulation, commercial law, immigration, and health law. Emphasis will also be placed on the origins and evolution of constitutional law, from the founding to the present.

Corporate And Business Law, Laurence V. Parker

University of Richmond Law Review

In the 2011 session, the Virginia General Assembly passed House Bill 2358, Benefit Corporations, to be codified as article 22 (the "Benefit Corporations Article") of the Virginia Stock Corporation Act ("VSCA"). The Benefit Corporations Article is largely based on legislation prepared in other states and allows a Virginia corporation to elect in its articles of incorporation to be treated as a "benefit corporation." These for-profit corporations are required to pursue not only profitability but also a general public benefit and, if one so elects, one or more specific public benefits. In Section II of this article, the author discusses the …

Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah

Articles

On March 21, 2011, AT&T announced that it will buy T-Mobile from Deutsche Telekom for $39 billion. This transaction will be tax free to Deutsche Telekom (DT) not because it qualifies as a reorganization, but because DT is a foreign corporation and capital gains of nonresidents are generally not subject to U.S. taxation because they are deemed to be foreign source. Also, DT is protected from taxation by article 13(5) of the Germany-U.S. tax treaty, which provides that capital gains are generally taxable only by the country of residence.

A Capitalist Joker: The Strange Origins, Disturbing Past, And Uncertain Future Of Corporate Personhood In American Law, 44 J. Marshall L. Rev. 643 (2011), David H. Gans, Douglas T. Kendall

UIC Law Review

No abstract provided.