Business Organizations Law Commons^™

Eden Order On Summary Judgment And Motion To Strike, Alice D. Bonner

Superior Court of Fulton County: Metro Atlanta Business Case Division Opinions

No abstract provided.

Partner Capture In Public International Organizations, Christopher G. Bradley

Akron Law Review

The Article unfolds in four parts.

Part I discusses the changes that public-private partnerships have wrought on the landscape of international organization funding and describes, as an example, the expanding partnership activities of the United Nations. The U.N. recently established an Office for Partnerships, which grew out of a decade of extensive contact with Ted Turner’s U.N. Foundation. The U.N.’s experience illustrates the importance partners can have, not simply on specific projects but also in bringing large-scale structural change to organizations.

Part II unpacks the concept at the heart of this Article: partner capture. Drawing on principles of bureaucratic behavior …

Competing With Delaware: Recent Amendments To Ohio's Corporate Statutes, David Porter

Akron Law Review

House Bill 301 is evolutionary, not revolutionary, in its content, but its changes are nonetheless significant for Ohio corporations and their lawyers. To place these changes in context, this article summarizes corporate statutory developments since 1997 that highlight Ohio’s previous initiatives to keep up with Delaware, America’s dominant state of incorporation, and then discusses at greater length the recent amendments contained in House Bill 301, concluding with a look ahead at some additional changes that may occur as early as this year.

A Study On Rule 145 Of The Securities Act Of 1933: How To Provide Clarity And Predictability In Rule 145 Transactions, Kab Lae Kim

Akron Law Review

Rule 145 is complex and incongruous with the general congressional intention of the 1933 Act. Thus, it involves the following theoretical and practical problems. First, Rule 145(a) fails to provide a clear standard for determining whether a certain recapitalization or reorganization involves a sale to trigger registration requirements...Second, Rule 145(c) and (d), as special resale provisions for “securities acquired in a Rule 145 transactions” (hereinafter Rule 145 securities), are inconsistent with general resale provisions under the 1933 Act. The SEC’s authority to establish Rule 145 was mandated by provisions of the 1933 Act. Accordingly, the resale provisions of Rule 145 …

Back To Basics: Harmonizing Delaware's Law Governing Going Private Transactions©, Clark W. Furlow

Akron Law Review

This Article agrees with the objectives of the hybrid approach, but argues that a more doctrinally consistent way to achieve that result would be to shift the analytical focus from the duties of the controlling stockholder to the duties of the corporation’s board. The Article will show that the Delaware Supreme Court’s focus on the duties of controlling stockholders in going-private transactions and its resistance to applying traditional modes of analysis to decisions by independent, disinterested directors has led to the current “incoherence” of Delaware’s going-private jurisprudence. Moreover, under the approach urged by the Court of Chancery in the Pure …

Why Martha Stewart Did Not Violate Rule 10b-5: On Tipping, Piggybacking, Front-Running And The Fiduciary Duties Of Securities Brokers©, Ray J. Grzebielski

Akron Law Review

This article will set out to show that Martha Stewart did not engage in insider trading. First, the article will present the legal standards for insider trading. Then, the article will examine whether Martha Stewart received an improper tip from Sam Waksal, the president of ImClone and a personal friend of Martha Stewart. The article will then proceed to look at whether Martha Stewart’s knowledge of Waksal’s attempted trading constituted material nonpublic information on which she improperly traded. Lastly, the article will examine whether Peter Bacanovic’s breach of Merrill Lynch’s confidentiality policy in telling Martha Stewart of another customer’s trading …

Looking Back And Looking Forward: Sarbanes-Oxley And The Future Of Corporate Governance, Scott Harshbarger, Goutam U. Jois

Akron Law Review

In this Article, we argue that all groups: business leaders, regulators and shareholders, should recognize the steps that must be taken to create a competitive, fair and ethical corporate climate. We are not calling merely for “voluntary cooperation” from businesses to improve the current situation. Indeed, SOX exists and is appropriate for this situation precisely because it imposes baseline obligations with which corporations are required to comply. Moreover, other regulations regarding independent directors, expensing of stock options, etc. are needed and are vital to keeping business interests in line with society’s. However, business leaders and regulators will have an easier …

The Myth Of The Unbiased Director, Regina F. Burch

Akron Law Review

This Article seeks to use social science research to better understand why these and other corporate governance problems persist. One reason may be that boards are biased as to how they respond to these issues. Social science research on risk perception informs us that individuals’ “preferences among different types of risk taking (or avoiding), correspond to cultural biases—that is, to worldviews or ideologies entailing deeply held values and beliefs defending different patterns of social relations.” Cultural theorists have identified four competing worldviews: communitarian, individualistic, hierarchical, and egalitarian. The communitarian and individualistic worldviews are at opposite ends of a spectrum measuring …

Reforming The Regulation Of Political Advocacy By Charities: From Charity Under Siege To Charity Under Rescue?, Adam Parachin

Chicago-Kent Law Review

A newly elected liberal federal government in Canada has pledged to reform the legal distinction between charity and politics. This paper provides context to this reform initiative, linking it to a controversial political activities audit program funded by the former conservative federal government. It identifies three distorting ideas about charity—that charity can be understood as a tax expenditure, economic or neutral concept—that should be eschewed in the reform process. It also identifies three characteristics of charity—the capacity of charities for thought leadership, the pervasiveness of messaging in charitable programming and the distinctiveness of charity and government—that should guide reformers.

Exile To Main Street: The I.R.S.'S Diminished Role In Overseeing Tax-Exempt Organizations, Evelyn Brody, Marcus Owens

Chicago-Kent Law Review

The Internal Revenue Service’s post-Citizens United approach to political activity by would-be tax-exempt organizations has threatened the financial health of the entire agency. Suffering from a siege mentality in the best of times, the IRS predictably and understandably responded to the asserted “scandal” by retreating into a shell of bureaucratic reshuffling, management mumbo-jumbo, and paper moving. A fresh cadre of senior management lacking relevant experience has overhauled the exempt-organization function and emphasized granting recognition of exemption now and (possibly) asking questions later. The new self-certification process of exemption for small charities could also be setting the agency up for the …

European Non-Profit Oversight: The Case For Regulating From The Outside In, Oonagh B. Breen

Chicago-Kent Law Review

When it comes to the regulation of non-profits, the European Commission experiences many of the same pressures and constraints faced by national charity regulators. It suffers, however, from an added disadvantage in that, arguably, it lacks jurisdictional competence to regulate non-profits qua non-profits. This article explores the consequences of the Commission’s unsuccessful attempt to secure the passage of its proposal for a European Foundation Statute (“EFS”). Notwithstanding the European Council’s inability to muster the necessary Member State unanimity required to pass the proposal and its subsequent demise, the Commission is still dogged by the problems it identified as giving rise …

Australia – Two Political Narratives And One Charity Regulator Caught In The Middle, Myles Mcgregor-Lowndes

Chicago-Kent Law Review

After two decades of debate about the regulation of the nonprofit sector, Australia established a national charity regulator in December 2012. The creation of the Australian Charities and Not-for-profits Commission (“ACNC”) had as one of its objectives to reduce red tape, and to increase clarity by enacting a statutory definition of charity. Less than two years later, a new government proposed to abolish the ACNC, also in the name of reducing red tape. There appears to be a paradox—or at least diametrically opposed views about red tape reduction and how it can be achieved. With the government nearly two-thirds through …

The Charity Commission For England And Wales: A Fine Example Or Another Fine Mess?, Debra Morris

Chicago-Kent Law Review

The ability of the Charity Commission for England and Wales to regulate the charitable sector effectively has been repeatedly called into question in recent years. At the same time, public sector funding cuts have led to its budget being almost halved in real terms since 2007/08. Numerous official reviews and inquiries into its effectiveness have highlighted its weaknesses and raised concerns about it failing to take sufficient action to prevent abuses of charitable status. In response to the Commission’s claims that it lacks sufficient legal powers to deal with such abuse, new legislation has been passed which will fill some …

Politics, Disclosure, And State Law Solutions For 501(C)(4) Organizations, Linda Sugin

Chicago-Kent Law Review

Since the Supreme Court’s 2010 decision in Citizens United v. FEC, there has been an explosion in section 501(c)(4) organizations active in politics. Unable to effectively process applications, the IRS mishandled organizations with conservative political ties, producing a scandal from which the agency has yet to recover. It proposed regulations that would have helped it more easily determine eligibility for 501(c)(4) exemption, but after massive public outcry, the regulations were withdrawn. No new regulations will be proposed before the 2016 presidential election.

Given the federal government’s inability to address the problem of dark money politicking by 501(c)(4) organizations through …

Fragmented Oversight Of Nonprofits In The United States: Does It Work? Can It Work?, Lloyd Hitoshi Mayer

Chicago-Kent Law Review

The United States is well known for its distinctive, although not unique, division of political authority between the federal government and the various states. This division is particularly evident when it comes to oversight of nonprofit organizations. The historical focus of federal government oversight has been limited primarily to qualification for tax exemption and other tax benefits, with more plenary power resting with state authorities. Over time, however, the federal government’s role has come to overlap significantly with that of the states, and many nonprofits have become subject to regulation by multiple states as their operations and donor bases expand …

Profiles - Ucan’S New Campus Construction Project, Chicago, Illinois, James Hagy, Sahar Nikanjam

Rooftops Project

Funding and constructing a new $41 million facility may be a once-in-a-generation, if ever, event, for many social service not-for-profits. Choosing a site that invests directly in the neighborhood and the people served can have ripple effects far beyond the central purpose of the delivery of services the buildings are designed to support. The Rooftops Project’s Sahar Nikanjam and Professor James Hagy walked the site of UCAN’s new campus construction under way in the Lawndale neighborhood of Chicago.

Executive Compensation In Controlled Companies, Kobi Kastiel

Indiana Law Journal

Conventional wisdom among corporate law theorists holds that the presence of a controlling shareholder should alleviate the problem of managerial opportunism because such a controller has both the power and incentives to curb excessive executive pay. This Article challenges that common understanding by proposing a different view based on an agency problem paradigm. Controlling shareholders, this Article suggests, may in fact overpay managers in order to maximize controllers’ consumption of private benefits, due to their close social and business ties with professional managers or for other reasons, such as being captured by professional managers. This tendency to overpay managers is …

The Delaware Carve-Out's Carve: Examining And Repairing Slusa's State Law Exception, Kenneth Hsu

UC Law Business Journal

The "Delaware carve-out” is a carefully written savings clause that preserves state law claims that would otherwise be dismissible under SLUSA preclusion. The carve-out's broad statutory language, however, does not provide much clarity for parties litigating its applicability. While three circuit level opinions have addressed particular portions of the carve-out's text, none have offered a controlling understanding of the statute. The carve-out's precise scope instead remains largely defined by an assortment of lower court decisions relying on different interpretations of the statutory language and of related case law. Amid such uncertainty, this note seeks to discern some clarity to the …

Good-Cause Statutes Revisited: An Empirical Assessment, Adi Ayal, Uri Benoliel

Indiana Law Journal

One of the most vital debates in franchise law focuses on whether state or federal law should adopt “good-cause statutes” (GCSs), which require franchisors to show good cause before terminating contractual relations with a franchisee. The traditional law-and-economics analysis suggests that GCSs are inefficient. This inefficiency argument is based upon one central hypothesis: GCSs increase franchisee free riding since they limit the franchisor’s ability to terminate the franchise contract easily. The free-riding hypothesis has been significantly influential in the development of franchise law, as is evident in state and federal statutory regimes. To date, the majority of states and the …

A Look At Tradekey: Shifting Policing Burdens From Trademark Owners To Online Marketplaces, Ashley Bumatay

UC Law Business Journal

This note addresses contributory counterfeiting within online marketplaces. Contributory counterfeiting arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for the direct counterfeiting carried out by a third party. This note argues that online marketplaces should be required to take a more active role in combating counterfeiting through their platforms. This note proceeds in five parts. Part I serves as an introduction to the issue. Part II provides background information regarding trademark counterfeiting and gives an overview of the case law regarding contributory counterfeiting in online marketplaces. Part III looks at the implications of the TradeKey …