Business Organizations Law Commons^™

Do Ais Dream Of Electric Boards?, Robert J. Rhee

UF Law Faculty Publications

When artificial intelligence (“AI”) acquires self-awareness, agency, and unique intelligence, it will attain ontological personhood. Management of firms by AI would be technologically and economically feasible. The law could confer AI with the status of legal personhood, as it did with the personhood of traditional business firms in the past, thus dispensing with the need for inserting AI as property within the legal boundary of a firm. As a separate and distinct entity, AI could function independently as a manager in the way that legal or natural persons do today: i.e., AI as director, officer, partner, member, or manager. Such …

The Fox Effect? Implications Of Recruiting Corporate Law To Combat Misinformation, Lili Levi

Articles

In 2023, Fox Corporation settled U.S. Dominion’s defamation action over Fox News’ broadcast of false election fraud claims after the 2020 presidential election for the staggering sum of $787.5 million. Now, a shareholder derivative action is pending in Delaware against the company’s board of directors for breach of state corporate law fiduciary oversight duties for their failure to prevent such defamatory programming. Beyond the specifics of the case, this development portends the emergence of a new politico-legal strategy—using corporate governance requirements as a weapon to promote press accountability and combat misinformation in public discourse. The question addressed in this Essay …

Repeal The Federal Arbitration Act's "Arising Out Of" Requirement, Stephen J. Ware

American University Business Law Review

Suppose Pfizer and CVS agree to arbitrate not only any disputes that might arise out of their contract containing an arbitration agreement but also any disputes that might arise out of any of the many earlier contracts between these two large corporations. Or Apple and Samsung agree to arbitrate any patent infringement claims either has against the other for the next five years. Or FedEx and UPS agree to arbitrate any tort claims either has against the other due to any collision of their vehicles in the next ten years. Or members of the Walton (Walmart) family agree to arbitrate …

Section 4 -- Jury, Trial: A Misnomer In The Faa, Tracey B. Frisch

American University Business Law Review

The purpose of the Federal Arbitration Act (FAA), according to the Supreme Court, was not merely to reverse judicial hostility towards arbitration by placing agreements to arbitrate on the same footing as other contracts but to actively promote the use of arbitration on a national scale. It is not surprising then that most provisions of the FAA envision limited court intervention into the arbitration process.

The Problem Of Unreasoned Reasoned Awards And The Judicial Failure To Remedy It: Statutory And Rule Solutions, John B. Mcarthur, Mark Travis

American University Business Law Review

American arbitrators have long been choosing between two common forms of awards: "reasoned awards" and "standard awards" with no reasons enumerated. Yet neither arbitration rules nor statutes define "reasoned award." This lack of guidance has gotten arbitration in trouble and threatens its ability to satisfy users' needs.

Without Noncompete Agreements, Can Employers Keep A (Trade) Secret?, Cynthia L. Dahl

American University Business Law Review

Data, algorithms, and proprietary information and processes are critical assets for increasing numbers of companies. Since information assets often cannot be protected through patent, companies may instead rely on trade secret law. To meet the legal standard of a trade secret, companies must show that their information assets confer a competitive advantage to them by virtue of the secret status, and that they have taken reasonable measures to preserve the secrecy.

One of the reliable methods companies use to maintain secrecy, and to show that they have taken the required reasonable measures, is the use of restrictive covenants. Traditionally, companies …

Conceptualizing Caremark, Roy Shapira

Indiana Law Journal

Who is accountable for corporate compliance failures? The issue of compliance has emerged as one of the most significant developments in corporate governance over the past decades. However, until recently, corporate law has had surprisingly little to say about the question, leaving the policing of issues such as toxic pollution, product safety, or data privacy, to other regulators. This situation has changed dramatically over the past few years. Today, virtually every corporate fiasco is followed by an oversight duty lawsuit against the company’s directors and officers for not doing enough to prevent the debacle. But the rapid resurgence of oversight …

Rowling Record 2025, The Robert B. Rowling Center For Business Law & Leadership

Rowling Record

No abstract provided.

The Failings Of Post-War Japanese Antitrust Reforms, Gregory Hayes

Northwestern Journal of International Law & Business

This paper discusses the antitrust reform measures taken during the occupation of Japan following the end of World War II. These antitrust reforms included the dissolution of the zaibatsu business groups and the adoption of the Antimonopoly Act. However, the trust-busting and antitrust measures taken by Japan failed to prevent the eventual rise of keiretsu business groups and lower the concentration of corporate ownership in Japan. The primary reasons behind this failure were the inability of the reformers to fully dismantle the zaibatsu business groups and the changing priorities of the reformers due to the growing threat of the spread …

Vice Capital, Andrew K. Jennings, Kimberly D. Krawiec

Faculty Articles

Academic and market interest in environmental, social, and governance (ESG) investing has grown markedly in recent years. Although less prominent, a substantial literature also explores whether “sin pays” in the public capital markets. This literature’s underlying theory is that social norms discourage the funding of businesses that promote vice. According to this theory, some investors—particularly institutions sensitive to social norms, such as pension funds and foundations—will shun vice investments. A consequence of this aversion is a “vice premium” for those investors who will invest in such companies. Largely unexplored, however, is what industries or business models qualify as “vice,” how …

Criminal Investors, Andrew K. Jennings

Faculty Articles

This Article reassesses the culpability of those who invest in law-breaking firms. Prosecutors currently treat investors as victims of corporate wrongdoing rather than as actors who might bear responsibility for it. This Article observes, though, that investment can facilitate, and even cause, illicit corporate activity. When investors intentionally contribute to those effects, substantive criminal law imposes liability on them just the same as it does on accomplices, conspirators, or principals in other contexts. Despite this formal parity, however, investor criminal liability is more a theoretical proposition than a practical reality.

This Article questions that status quo by asking whether and …

Developing Data Handling Guidelines For Open-Source Llm Training In Compliance With Section 37 Under Thailand’S Pdpa And Related Legal Provisions, Nattakrit Kawejaiboon

Chulalongkorn University Theses and Dissertations (Chula ETD)

This study examines the application of Section 37 under Thailand’s PDPA to the fine-tuning of Open-weight Models in decentralized LLM development. Data controllers are defined as developers responsible for their specific stages including collection, storage, fine-tuning, and deployment, excluding the original base model liability. Utilizing doctrinal analysis, international frameworks, and semi-structured interviews with Thai practitioners, the research proposes a practical guideline for LLM data handling. Designed to assist small-scale developer groups who possess foundational knowledge of LLM data handling, the guidelines aim not to replace existing practices, but to guide and align current workflows towards legal compliance. This ensures that …

Reputation Reconsidered, James Gibson

Law Faculty Publications

Reputation has a great reputation. We know this because the law values, venerates, and subsidizes reputation in many ways. Contract law relies on it as a means of disciplining the market without the need for intrusive regulation. Defamation law lets individuals and businesses seek relief when their reputations are sullied. Trademark law grants exclusive rights in order to encourage rightsholders to invest in their reputations. In these fields and others, the law views reputation as an important, socially positive good.

This faith in the integrity and value of reputation is unwarranted. Our impression of any given business is subject to …

Fixing Mfw: Fairness And Vision In Controller Self-Dealing, Zohar Goshen, Assaf Hamdani, Dorothy S. Lund

Faculty Scholarship

The legal regime governing controlling shareholders relies on the ability of Delaware courts to police conflicted transactions under the stringent "entire fairness" standard of review. This review involves both implicit valuation – evaluating the transaction process, and explicit valuation – assessing the fairness of the transaction's financial terms. This Article reveals a critical flaw in this regime: courts cannot reliably engage in valuation when the transaction involves an entrepreneur's idiosyncratic vision for the company. As a result, there is a gaping hole in Delaware's framework for policing the fairness of controller transactions.

Delaware courts have developed guardrails to avoid judicial …

Altering Rules: The New Frontier For Corporate Governance, Gabriel Rauterberg, Sarath Sanga

Faculty Scholarship

Corporate law has taken a contractarian turn. Shareholders are increasingly contracting around its foundational rules — statutory rights, the fiduciary duty of loyalty, even the central role of the board — and Delaware courts are increasingly enforcing these contracts. In the one case where they did not, the legislature swiftly overruled the decision and adopted a new statutory provision permitting boards to completely cede their powers to a shareholder by contract. These developments have sparked a polarized debate, with some calling for a return to mandatory rules, while others push for total contractual freedom.

We argue, however, that the best …

Interlocking Directorates In The United States, Yaron Nili

Faculty Scholarship

In corporate America, directors wield increasing influence across multiple companies, often within the same industry (“horizontal directors”), which creates tension between antitrust laws and corporate governance. Horizontal directors are well-positioned to bring industry expertise and potentially increase higher profits, benefiting shareholders but also possibly enabling potential collusion. This chapter provides an overview of the prevalence of horizontal directors, the regulatory grey space in which they exist and the connection to some recently debated issues, including that of common ownership by institutional investors. To inform this debate, this chapter provides a thorough overview of horizontal directors from corporate and antitrust perspectives …

Business Law In The Ring: Nevada's Rebel Rules Versus Delaware's Corporate Crown, Kalin Sokell, Collin Weires

Nevada Law Journal Forum

This White Paper will begin with an analysis of specialized courts, starting with the Delaware Court of Chancery. It will then compare Delaware’s courts with the business courts in Texas and Nevada and will provide a detailed implementation plan for a specialized business court in Nevada. Next, this White Paper will address the differences between the corporate laws in Nevada and Delaware, including the benefits of incorporating in Nevada versus Delaware. The White Paper will then briefly discuss the proposed general jurisdiction bill in Nevada, and why it ultimately failed. Finally, this White Paper will end with remarks on where …

Alternatives To Delaware? Evaluating Corporate Law In Nevada, Texas, And Wyoming, Joseph Landau, Bailey Swartz, Anthony Rickey, Robert Ragazzo, Benjamin Edwards, George A. Mocsary

Fordham Journal of Corporate & Financial Law

No abstract provided.

The Political Commitment Of The Supreme Court Of Texas To Protecting Controlling Equity Owners, Val Ricks

Fordham Journal of Corporate & Financial Law

The Supreme Court of Texas has revealed a political commitment to protecting controlling equity owners—e.g., shareholders, LLC members, limited partners—from liability related to their equity ownership. The Court does not say this, of course. The commitment the Court intends to reveal is a legal one. The political commitment must be teased out of what the Court does. The purpose of this article is to tease. Its method is to examine how the Supreme Court of Texas, in cases involving controlling or significant equity owners, extends the reasoning of its opinions out beyond law, and sometimes in conflict with it. When …

Reviving Shareholder Voice By Redefining Pre-Suit Demand, Wendy Gerwick Couture

Fordham Journal of Corporate & Financial Law

This Article diagnoses, and seeks to cure, an undertheorized dynamic relationship between two levers of shareholder influence in the modern public corporation: suit and voice. This Article demonstrates that, under current Delaware law, a shareholder must stifle its voice in order to retain the ability to pursue a viable derivative claim, thus inhibiting the shareholder’s monitoring and information-sharing roles. In particular, the onerous “demand made” litigation pathway disincentivizes pre-suit demand, and the expansive definition of pre-suit demand captures shareholder communications to the board seeking corrective action other than litigation. To avoid this collision between suit and voice, this Article proposes …