Business Organizations Law Commons^™

Repeat Player Vs. One-Shotter: Is Victory All That Obvious, Bahaar Hamzehzadeh

UC Law Business Journal

This study tests Marc Galanter's theory in his work entitled Why the 'Haves' Come Out Ahead: Speculations on the Limits of Legal Change. In his article, Galanter argues that classes of litigants with the greatest resources and the lowest relative risk in litigation have the highest rates of success in court. Galanter explains his theory by categorizing litigants as either repeat players or oneshotters. Repeat players consist of litigants who generally have the most resources and the lowest relative risk, and one-shotters consist of litigants who generally have the least resources and the greatest relative risk. To test his theory, …

The Governance Of Contemporary Sovereign Wealth Funds, Yvonne C. L. Lee

UC Law Business Journal

Recent contemporary sovereign wealth funds developments, viewed against the historical backdrop of international law and practice, particularly foreign investment law and practice, underscore the inter-action between economics, law and politics. This article first introduces the issues that have emerged as a result of sovereign wealth funds contemporary investments and observes how sovereign wealth funds and recipient countries have reacted to these developments. It proposes a model of sovereign wealth fund governance based on consultation, cooperation and coordination. This model draws on the experience of current deliberative fora such as the G20 summits and the International Working Group of Sovereign Wealth …

Every Rose Has Its Thorn: A New Approach To Deaccession, Andrew W. Eklund

UC Law Business Journal

In January 2009, Brandeis University announced that it planned to sell off the entire art collection of the Rose Art Museum. The purpose of this Note is to compare the situation at Brandeis against three previously-suggested methods of dealing with "deaccession," the sale of artwork by museums, and to suggest a fourth, hybrid approach to deaccession. The approach takes elements of the other models, and based on the American Association of Museum's Code of Ethics for Museums, proposes a new standard. Part I gives an overview of the American Association of Museum's Code of Ethics for Museums and a brief …

Lights, Camera, Sanction - Whether A Proposed Anti-Paparazzi Ordinance Would Limit Investigative Journalism In The News Business, Shelly Rosenfeld

UC Law Business Journal

While the value of paparazzi-driven journalism is very low, it would be a detriment to the public if paparazzi regulations would potentially limit, or even have a chilling effect on valuable investigative news, merely because there were similar ways the two acquired information. Certain newsgathering torts permit one to consider the newsworthiness, and hence public interest of the stories in question in evaluating the claim. Just as a driver who runs a red light on the way to visit a sick relative in the hospital has still broken the law, if a reporter breaks the more stringent regulations imposed on …

Evolution And Effectiveness Of Independent Directors In Indian Corporate Governance, Umakanth Varottil

UC Law Business Journal

The purpose of this Article is two-fold: (i) to identify the rationale for the emergence of independent directors by tracing their evolution in the U.S. and the U.K. where they originated; and (ii) to examine the transplantation of that concept into India with a view to evaluating the effectiveness of independent directors in that country. This Article finds that there are significant differences in the corporate ownership structures and legal systems between the countries of origin of independent directors on the one hand and India on the other. Due to the diffused shareholding structures in the U.S. and the U.K., …

Confusing Bundling With Tying Under Article 82 Ec: Batteries Included Or It Only Comes With Fries, Robert M. Schwartz

UC Law Business Journal

"Bundling" and "tying" are terms commonly used to describe business practices engaged in by undertakings at every level of economic power. In nine separate instances the Court of First Instance in its Microsoft Decision held that the Commission had established Microsoft Corporation's practice of "abusive bundling"(the first time a Community Court had used the term). The CFI also upheld the Commission's findings by indiscriminately referring to them as either "tying" or "bundling" and justifying the result because it "can be deduced both from the very concept of bundling and from the case-law...". Shortly after the Commission issued its Guidance on …

Four Key Elements To Successful Financial Regulatory Reform, Reza Dibadj

UC Law Business Journal

The most recent crisis on Wall Street presents our nation with an extraordinary opportunity to begin a conversation about the economic and social policies that have led to the financial meltdown we have witnessed over the past few years. In keeping with the timely and crucial theme of the Hastings Business Journal's 2009 Symposium, this Article does not chronicle the crisis, but rather focuses on the lessons it might hold in getting "beyond the bailout." To mitigate, or perhaps even avoid, future disasters I argue that policymakers should focus on remedying four pernicious facilitators to scandal: dissemination of untruthful or …

Restoring The Balance Of Power In Corporate Management: Enforcing An Officer's Duty Of Obedience, Megan Wischmeier Shaner

Faculty Articles

No abstract provided.

Wasting The Corporate Waste Doctrine: How The Doctrine Can Provide A Viable Solution In Controlling Excessive Executive Compensation, Steven Clayton Caywood

Michigan Law Review

In the midst of the global recession of the late 2000s, there was an outcry against corporate executives and what the public deemed to be their excessive compensation. Although this anger is still featured in today's headlines, it is nothing new. In fact, excessive executive compensation complaints arose when the very concept of a corporation was still new. Most of the complaints that the public has leveled have had little effect on boards of directors' decisions. Occasionally, however the outcry is so great that the public compels a company's leadership to take action. This happened early in 2009 when American …

Subverting Shareholder Rights: Lessons From News Corp.'S Migration To Delaware, Jennifer G. Hill

Vanderbilt Law Review

Convergence theory and shareholder empowerment represent two major debates in contemporary corporate governance. A pervasive underlying assumption in these debates is that a high level of corporate governance homogeneity exists within the common law world in relation to shareholder rights. This Article challenges that assumption through a detailed case study of the decision by News Corporation ("News Corp.") to move from Australia to Delaware. As events surrounding News Corp.'s reincorporation illustrate, although there are undoubtedly basic similarities between corporate law in the United States and in other common law jurisdictions, there are also fascinating, but underappreciated, differences.

In late 2007, …

Power Without Property, Still: Unger, Berle, And The Derivatives Revolution, Cristie Ford, Carol Liao

All Faculty Publications

This paper was produced for “In Berle’s Footsteps,” a symposium marking the launch of the Adolf A. Berle, Jr. Center on Corporations, Law and Society at the University of Seattle School of Law. It considers the light that the “derivatives revolution” sheds on the theoretical perspectives of Roberto Unger and Adolf Berle. While an unlikely pair, both Unger and Berle focused, in different ways, on the same issues: property, the power associated with property, and the impact of “smashing the atom” of traditional property rights. For Unger, breaking down consolidated property holding at the societal level was a pro-democratic move. …

Corporate War Crimes: Prosecuting Pillage Of Natural Resources, James G. Stewart

All Faculty Publications

Pillage means theft during war. Although the prohibition against pillage dates to antiquity, pillaging is a modern war crime that can be enforced before international and domestic criminal courts. Following World War II, several businessmen were convicted for the pillage of natural resources. And yet modern commercial actors are seldom held accountable for their role in the illegal exploitation of natural resources from modern conflict zones, even though pillage is prosecuted as a matter of course in other contexts. This book offers a doctrinal road-map of the law governing pillage as applied to the illegal exploitation of natural resources by …

Renegotiation Of Cash Flow Rights In The Sale Of Vc-Backed Firms, Brian Broughman, Jesse Fried

Articles by Maurer Faculty

Incomplete contracting theory suggests that VC cash flow rights - including liquidation preferences - may be subject to renegotiation. Using a hand-collected dataset of sales of Silicon Valley firms, we find common shareholders do sometimes receive payment before VCs' liquidation preferences are satisfied. However, such deviations tend to be small. We also find that renegotiation is more likely when governance arrangements, including the firm's choice of corporate law, give common shareholders power to impede the sale. Our study provides support for incomplete contracting theory, improves understanding of VC exits, and suggests that choice of corporate law matters in private firms.

Corporate Power In The Public Eye: Reassessing The Implications Of Berle’S Public Consensus Theory, Marc T. Moore, Antoine Rebérioux

Seattle University Law Review

We analyze Berle’s overall corporate governance project in accordance with what we see as its four core sub-themes: (A) the limitations of external market forces as a constraint on managerial decision-making power; (B) the desirability of internal (corporate) over external (market) actors in allocating corporate capital; (C) civil society and the public consensus as a continuous informal check on managerial decision-making power; and (D) shareholder democracy (as opposed to shareholder primacy or shareholder wealth maximization) as a socially instrumental institution. We seek to debunk the popular misconception that Berle’s early work was a defense of the orthodox shareholder primacy paradigm …

Who's The Boss: Unmasking Oversight Liability Within The Corporate Power Puzzle, Anne M. Tucker

Scholarly Works

This article explores the competing interests between director authority and accountability within the doctrinal developments underpinning the arguments for and against director oversight liability. The historic losses suffered by companies entangled in the web of subprime mortgages, collateralized debt holdings, and the ensuing credit crisis have brought the role of corporate directors as risk managers under renewed public scrutiny. Directors' authority and their accountability to shareholders are two critical pieces to striking the appropriate balance among the roles, rights, and responsibilities of directors, officers, share- holders, and other corporate constituencies who operate within the corporate power puzzle. Numerous shareholder derivative …

Back To The Future: Rediscovering Equitable Discretion In Trademark Cases, Mark P. Mckenna

Journal Articles

Courts in recent years have increasingly made blunt use of their equitable powers in trademark cases. Rather than limiting the scope of injunctive relief so as to protect the interests of a mark owner while respecting the legitimate interests of third parties and of consumers, courts in most cases have viewed injunctive relief in binary terms. This is unfortunate, because greater willingness to tailor injunctive relief could go a long way to mitigating some of the most pernicious effects of trademark law’s modern expansion. This Essay urges courts to reverse this trend towards crude injunctive relief, and to re-embrace their …

Shareholder Ownership And Primacy, Julian Velasco

Journal Articles

According to the traditional view, the shareholders own the corporation. Until relatively recently, this view enjoyed general acceptance. Today, however, there seems to be substantial agreement among legal scholars and others in the academy that shareholders do not own corporations. In fact, the claim that shareholders do own corporations often is dismissed as merely a “theory,” a “naked assertion,” or even a “myth.” And yet, outside of the academy, views on the corporation remain quite traditional. Most people - not just the public and the media, but also politicians, and even bureaucrats and the courts - seem to believe that …

How Many Fiduciary Duties Are There In Corporate Law?, Julian Velasco

Journal Articles

Historically, there were two main fiduciary duties in corporate law, care and loyalty, and only the duty of loyalty was likely to lead to liability. In the 1980s and 1990s, the Delaware Supreme Court breathed life into the duty of care, created a number of intermediate standards of review, elevated the duty of good faith to equal standing with care and loyalty, and announced a unified test for review of breaches of fiduciary duty. The law, which once seemed so straightforward, suddenly became elaborate and complex. In 2006, in the case of Stone v. Ritter, the Delaware Supreme Court rejected …

Multiple Gatekeepers, Andrew F. Tuch

Scholarship@WashULaw

In the context of business transactions, gatekeepers are lawyers, investment bankers, accountants and other actors with the capacity to monitor and control the disclosure decisions of their clients – and thereby to deter corporate securities fraud. After each wave of corporate upheaval, including the recent financial crisis, the spotlight of responsibility invariably falls on gatekeepers for failing to avert the wrongs of their clients. A rich vein of literature has considered what liability regime would lead gatekeepers to deter securities fraud optimally, but has overlooked the phenomenon that multiple interdependent gatekeepers act on business transactions and thus form an interlocking …

Disputing Limited Liability, Christina L. Boyd, David A. Hoffman

Scholarship@WashULaw

This project presents six years of hand-collected federal district court data to analyze the first representative sample of veil piercing litigation. Our method identifies veil piercing complaints through Westlaw's trial pleadings database and codes each case through a detailed examination of PACER records. We test a variety of hypotheses to understand how such litigations are resolved. We find that plaintiffs succeed quite often in veil piercing litigation, if success is defined as winning on motions that do not terminate a case. A variety of legal and extra-legal factors predict such interstitial veil piercing successes. Voluntary creditor causes of action promote …