Business Organizations Law Commons^™

Potentially Perverse Effects Of Corporate Civil Liability, Samuel W. Buell

Faculty Scholarship

Inadequate civil regulatory liability can be an incentive for public enforcers to pursue criminal cases against firms. This incentive is undesirable in a scheme with overlapping forms of liability that is meant to treat most cases of wrongdoing civilly and to reserve the criminal remedy for the few most serious institutional delicts. This effect appears to exist in the current scheme of liability for securities law violations, and may be present in other regulatory structures as well. In this chapter for a volume on "Prosecutors in the Boardroom," the author argues that enhancements of the SEC's enforcement processes likely would …

Sandbagging: Default Rules And Acquisition Agreements, Charles K. Whitehead

Cornell Law Faculty Publications

In the M&A world, a buyer "sandbags" a seller when, knowing the seller has materially breached a warranty, it closes the deal and then asserts a post-closing claim. Traditionally, the buyer must have relied on the warranty, without knowledge of the breach, in order to prevail. The modern trend, with some exceptions, permits the buyer to sue without regard to knowledge. Parties, in both cases, can contract around the default rule--so that the default rule should affect how acquisition agreements are structured. Yet, a survey of publicly available deals, from July 2007 to June 2011, reveals that--regardless of default rule--roughly …

The Collapse Of An Empire? Rating Agency Reform In The Wake Of The 2007 Financial Crisis, Elizabeth Devine

Fordham Journal of Corporate & Financial Law

In 1996, Thomas Friedman’s remarks echoed the sentiments of many. The rating agency business was booming, and it seemed like the agencies themselves could do no wrong.

323 Non-Managing Underwriters’ Role In Securities Offerings: Just Eye Candy?, Elena Marty-Nelson

Fordham Journal of Corporate & Financial Law

While there is considerable scholarship on the due diligence defense of lead underwriters in defective corporate securities offerings, there is surprisingly little analysis of the due diligence defense of non-managing underwriters. This article challenges the common perception that lead and non-managing underwriters necessarily “sink or swim” together for purposes of due diligence. An analysis of the statutory structure of Section 11 of the Securities Act of 1933 reveals that non-managing underwriters are not inextricably tethered to the lead. Rather, non-managing underwriters who actively question the lead’s due diligence investigation should be able to meet their own affirmative defense even when …

Deconstructing Corporate Governance: Director Primacy Without Principle?, René Reich-Graefe

Fordham Journal of Corporate & Financial Law

For almost eighty years now, corporate law scholarship has centered around two elementary analytical findings made in what has once been described as the “last major work of original scholarship”within the field.

Normative Justifications For Lax (Or No) Corporate Fiduciary Duties: A Tale Of Problematic Principles, Imagined Facts And Inefficient Outcomes, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Corporate fiduciary duty standards are at an all-time low in this country. Ironically, the deterioration in standards has come to full maturity during the last two decades, a period of significant and notorious corporate managerial failures.

The deterioration in the standards by which we measure the appropriateness of the actions of corporate managers has been fueled by influential judges' and scholars' ("Advocates"'), who vigorously-and seemingly quite effectively-argue in favor of a lax fiduciary duty regime for corporate managers.

Normative justifications for lax corporate fiduciary duty standards, however, are weak. The justifications fail to provide a persuasive reason to abandon the …

The Perils Of Shareholder Voting On Executive Compensation, Minor Myers

Faculty Scholarship

No abstract provided.

The Search For An Unbiased Fiduciary In Corporate Reorganizations, Michelle M. Harner

Faculty Scholarship

When a company experiences financial distress, a control contest often follows. Management fights to remain in control of the company, and shareholders, creditors and others try to influence management’s exercise of that control—or wrest it away. This is not a new phenomenon. The degree of influence now exerted by corporate stakeholders in the distressed context, however, is strikingly different than in the past. Recent headlines highlight that stakeholder control issues are at the forefront of financially-distressed situations large and small. The U.S. government, as creditor, dictated the terms of Chrysler’s and General Motors’ bankruptcies. It also demanded and received preferred …

Gangs And Gang Activity In America: A Prevention Report, Portland State University. Criminology And Criminal Justice Senior Capstone

Criminology and Criminal Justice Senior Capstone Project

This report covers information on gangs, gang activity, and gang prevention. The report reveals information such as the history of gangs in the U.S., the definition of “gang,” data on prevalence, persons affected by gang activity, demographics of gangs and their members, criminal activity committed by gangs, gang hierarchical structure, prevention strategies, and effectiveness of gang prevention programs.

Corporate Governance And Competition Policy., Spencer Weber Waller

Faculty Publications & Other Works

No abstract provided.

Governance In The Public Corporation Of The Future: The Battle For Control Of Corporate Governance, Z. Jill Barclift

Faculty Scholarship

Eight years after passage of the Sarbanes-Oxley Act, Congress has again passed sweeping legislation in response to a corporate crisis. In addition to changes in the regulatory environment for Wall Street financial firms and banks, the Dodd-Frank Act (D-F Act) also proposes reforms to corporate governance.

In this article, the author examines the latest governance mandates under the D-F Act. In particular, this article focuses on the disclosure requirements on the CEO and chairman positions, and argues that disclosures of whether the CEO is also the chairman benefit shareholders' governance rights under state law. The new provisions under D-F Act …

Revisiting The Inadvertent Investment Company, Brian Vito

Fordham Journal of Corporate & Financial Law

While the topic of financial regulation has recently experienced a resurgence in interest, one area that historically has received little attention and continues to exist in relative obscurity is the application of the Investment Company Act of 1940 (the “Company Act”) to commodity pools, as opposed to mutual funds, hedge funds and private equity funds. The purpose of this article is to distinguish the boundary between an investment company, as that term is defined in the Company Act, and a commodity pool, as the term is used to refer to an investment pool not within the auspices of the Company …

Lessons For Competition Law From The Economic Crisis: The Prospect For Antitrust Responses To The “Too-Big-To-Fail” Phenomenon, Jesse W. W. Markham, Jr.

Fordham Journal of Corporate & Financial Law

This article examines whether, and the extent to which, antitrust law could contribute to a broader regulatory effort to control the too-big-to-fail problem. The article begins by exploring the nature of the problem. Against this backdrop, it considers antitrust policy and rules to evaluate whether antitrust might play a meaningful role. The article concludes that antitrust law, if vigorously enforced with an emphasis on avoiding too-big-to-fail problems, can be a useful public policy tool to address the problem. However, it can come nowhere near solving it or preventing recurrences of recent systemic failures.

The Predictive Power Of Merger Analysis, John B. Kirkwood

Faculty Articles

This article looks first at the process courts use to resolve merger challenges and finds that in the area of product market definition, merger analysis is reasonably strong. Market definition remains complex and subjective, however, and could be improved, or avoided altogether, through econometric techniques such as merger simulation. Judicial analysis of entry is much weaker. Courts ask whether the market is protected by entry barriers but rarely ask whether the barriers are high enough to make entry unprofitable.

The article also examines the results of "marginal" mergers, mergers that would have been blocked had the government and courts been …

Deconstructing Corporate Governance: Director Primacy Without Principle?, René Reich-Graefe

Faculty Scholarship

If profit-maximizing is not enforced by corporate law, why does it nonetheless happen as a matter of almost overwhelming routine in today’s corporate reality? If indeed, director primacy is absolute and our theoretical models are all reliant on protolegal variables to explain general investor confidence ex-ante-investment despite the lack of director accountability ex-post-investment, then how can director primacy be understood and explained as a principled and, thus, just cor-porate governance structure in the first place? Or is director primacy not only absolute, but also without principle?

This Article provides a roadmap for purposes of answering this inquiry. Part II …

Interdisciplinary Transactional Courses, Eric J. Gouvin, Robert Statchen, Anthony J. Luppino, William Kell

Faculty Scholarship

This Article represents a panel presentation on interdisciplinary work in law school transactional courses. The Authors’ focus is on the Small Business Clinic at Western New England University School of Law. Topics covered are: interdisciplinary work and the classroom, professional liability and competency issues in rendering services through a clinic, culture class issues, ethical dilemmas, delivering professional products to the client, and co-curricular opportunities.

Symposium: Fiduciary Duties In The Closely Held Business 35 Years After Wilkes V. Springside Nursing Home: Foreword, René Reich-Graefe

Faculty Scholarship

On October 15, 2010—exactly fifty-nine years to the day after the opening of the original nursing home operation in 1951 which formed the core business asset of the closely held Springside Nursing Home, Inc. corporation—the Western New England University School of Law and School of Business jointly hosted their 2010 Academic Conference on “Fiduciary Duties in the Closely Held Business 35 Years after Wilkes v. Springside Nursing Home.” As with installments from prior years, the Conference was sponsored by the Western New England University Law and Business Center for Advancing Entrepreneurship. This Article examines the case of Wilkes v. Springside …

The Behavioral Economics Of Mergers And Acquisitions, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The world of mergers and acquisitions seems like a setting in which rationality necessarily dominates. There are high stakes, focused and sustained attention, and expert advisers who are repeat players. In the economics and management literature, however, there has been a great deal of research on what might be called “behavioral M&A”—using insights from psychology to explain observed patterns of behavior in the acquisitions marketplace. To date, the law has largely been uninterested in the psychological dynamics of corporate acquisitions. This essay looks at recent research on such issues as the role of overconfidence, hubris, anchoring, etc. in explaining buy-side …

The Post-Citizens United Fantasy-Land, Roy A. Schotland

Georgetown Law Faculty Publications and Other Works

First, a bouquet for the illuminating facts presented by Professors Wert, Gaddie, and Bullock. They make dramatically clear how minuscule independent spending by corporate PACs has been (that is, those PACs’ direct spending as distinct from support by those PACs or their corporate sponsors for spending by intermediaries like the Chamber of Commerce). Their showing is borne out by experience this year: corporate support for campaigns is almost all hidden, flowing through intermediaries, which is why getting effective disclosure is more important than ever, as the Court clearly recognizes (We probably owe much to Justice Kennedy for the fact that …

Lyondell: A Note Of Approbation, William W. Bratton

NYLS Law Review

No abstract provided.