Friday, August 18, 2017

Law & Wellness: Interview with Jodi D. Taylor (Shareholder at Baker Donelson)

Jodi D. Taylor, a shareholder at the law firm Baker Donelson and a former classmate of mine, recently won the firm’s Work-Life Warrior Award. “Baker Donelson established the Work-Life Warrior Award to honor an attorney in the Firm who demonstrates an ongoing commitment to excellence in maintaining a healthy work-life balance or has advocated on behalf of work-life balance issues for the benefit of others.” Jodi graciously accepted my request to answer a few questions for this post, as part of the series I am doing on law and wellness.

The interview is below the break.

Continue reading

August 18, 2017 in Haskell Murray, Lawyering, Service, Wellness | Permalink | Comments (0)

University of Richmond School of Law Seeks Business Prof

The University of Richmond School of Law seeks to fill three tenure-track positions for the 2018-2019 academic year, including one in corporate/securities law.  Candidates should have outstanding academic credentials and show superb promise for top-notch scholarship and teaching.  The University of Richmond, an equal opportunity employer, is committed to developing a diverse workforce and student body and to supporting an inclusive campus community.  Applications from candidates who will contribute to these goals are strongly encouraged. 

Inquiries and requests for additional information may be directed to Professor Jessica Erickson, Chair of Faculty Appointments, at lawfacultyapp@richmond.edu. 

August 18, 2017 in Ann Lipton, Jobs | Permalink | Comments (0)

Law & Wellness: Introduction

On July 15 of this year, The New York Times ran an article entitled, “The Lawyer, The Addict.” The article looks at the life of Peter, a partner of a prestigious Silicon Valley law firm, before he died of a drug overdose.

You should read the entire article, but I will provide a few quotes.

  • “He had been working more than 60 hours a week for 20 years, ever since he started law school and worked his way into a partnership in the intellectual property practice of Wilson Sonsini.”
  • “Peter worked so much that he rarely cooked anymore, sustaining himself largely on fast food, snacks, coffee, ibuprofen and antacids.”
  • “Peter, one of the most successful people I have ever known, died a drug addict, felled by a systemic bacterial infection common to intravenous users.”
  • “The history on his cellphone shows the last call he ever made was for work. Peter, vomiting, unable to sit up, slipping in and out of consciousness, had managed, somehow, to dial into a conference call.”
  • “The further I probed, the more apparent it became that drug abuse among America’s lawyers is on the rise and deeply hidden.”
  • “One of the most comprehensive studies of lawyers and substance abuse was released just seven months after Peter died. That 2016 report, from the Hazelden Betty Ford Foundation and the American Bar Association, analyzed the responses of 12,825 licensed, practicing attorneys across 19 states. Over all, the results showed that about 21 percent of lawyers qualify as problem drinkers, while 28 percent struggle with mild or more serious depression and 19 percent struggle with anxiety. Only 3,419 lawyers answered questions about drug use, and that itself is telling, said Patrick Krill, the study’s lead author and also a lawyer. “It’s left to speculation what motivated 75 percent of attorneys to skip over the section on drug use as if it wasn’t there.” In Mr. Krill’s opinion, they were afraid to answer. Of the lawyers that did answer those questions, 5.6 percent used cocaine, crack and stimulants; 5.6 percent used opioids; 10.2 percent used marijuana and hash; and nearly 16 percent used sedatives.”

There is much more in the article, including claims that the problems with mindset and addiction, for many, start in law school.

After reading this article, and many like it (and living through the suicide of a partner at one of my former firms), I decided to do a series of posts on Law & Wellness. These posts will not focus on mental health or addiction problems. Rather, these posts will focus on the positive side. For example, I plan a handful of interviews with lawyers and educators who manage to do well both inside and outside of the office, finding ways to work efficiently and prioritize properly. My co-editors may chime in from time to time with related posts of their own.

August 18, 2017 in Current Affairs, Ethics, Family, Haskell Murray, Law School, Management, Wellness | Permalink | Comments (0)

Thursday, August 17, 2017

AALS Section on Business Associations: Call for Nominations - Outstanding Mentors of 2017

The Executive Committee of the AALS Section on Business Associations seeks to recognize Section members who demonstrate exemplary mentoring qualities.  We seek nomination letters on behalf of a deserving colleague (please no self-nominations) on or before November 1, 2017, sent to Professor Anne Tucker at amtucker@gsu.edu.

Nominations should address personal experience with the mentor, and any additional information illustrative of the nominee’s dedication to mentoring including qualities such as:

  • Is eager to discuss others’ early ideas and contributes to the development and improvement of others’ work;
  • Promotes and encourages the success of junior scholars by reading and providing meaningful and useful feedback on drafts;
  • Promotes a supportive and rigorous environment for conference presentations;
  • Speaks frankly, provides useful professional and personal advice when asked;
  • Actively participates in a network of scholars;
  • Facilitates professional opportunities for junior scholars such as providing introductions to others in the field, and encouraging participation in the scholarly community through writing and speaking; 
  • Mentors those from underrepresented communities in academics and the study of law;
  • Actively/willingly participates in the promotion process for others by advising on tenure process, writing review letters, and providing useful guidance on career advancement.

Who May Nominate: Any member of the Section on Business Associations. 

Who is Eligible to Be Nominated: Members of the Section on Business Associations and others are eligible for nomination.  Nominees should have 10 years or more of law teaching.

Recognition: The Executive Committee will recognize all nominees at the AALS 2018 Annual Meeting and distribute the list to Section members.

In 2015, the Section recognized the following outstanding mentors:

Egon Guttman, Lynne L. Dallas, Claire Moore Dickerson, Christopher Drahozal, William A ("Bill") Klein, Donald C. Langevoort,  Juliet Moringiello, Marleen O'Connor, Charles (Chuck) O'Kelley, Terry O'Neill, Alysa Rollack, Roberta Romano & Gordon Smith

August 17, 2017 in Anne Tucker, Joan Heminway, Law School | Permalink | Comments (0)

ICYMI: #corpgov Midweek SSRN & Law Review Roundup (August 17, 2017)

August 17, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, August 16, 2017

The CEOs of Corporate America vs. The CEO of America

Business leaders probably didn’t think the honeymoon would be over so fast. A CEO as President, a deregulation czar, billionaires in the cabinet- what could possibly go wrong?

When Ken Frazier, CEO of Merck, resigned from one of the President’s business advisory councils because he didn’t believe that President Trump had responded appropriately to the tragic events in Charlottesville, I really didn’t think it would have much of an impact. I had originally planned to blog about How (Not) To Teach a Class on Startups, and I will next week (unless there is other breaking news). But yesterday, I decided to blog about Frazier, and to connect his actions to a talk I gave to UM law students at orientation last week about how CEOs talk about corporate responsibility but it doesn’t always make a difference. I started drafting this post questioning how many people would actually run to their doctors asking to switch their medications to or from Merck products because of Frazier’s stance on Charlottesville. Then I thought perhaps, Frazier’s stance would have a bigger impact on the millennial employees who will make up almost 50% of the employee base in the next few years. Maybe he would get a standing ovation at the next shareholder meeting. Maybe he would get some recognition other than an angry tweet from the President and lots of news coverage.

By yesterday afternoon, Under Armour’s CEO had also stepped down from the President’s business advisory council. That made my draft post a little more interesting. Would those customers care more or less about the CEO's position? By this morning, still more CEOs chose to leave the council after President Trump’s lengthy and surprising press conference yesterday. By that time, the media and politicians of all stripes had excoriated the President. This afternoon, the President disbanded his two advisory councils after a call organized by the CEO of Blackstone with his peers to discuss whether to proceed. Although Trump “disbanded” the councils, they had already decided to dissolve earlier in the day.

I’m not teaching Business Associations this semester, but this is a teachable moment, and not just for Con Law professors. What are the corporate governance implications? Should the CEOs have stayed on these advisory councils so that they could advise this CEO President on much needed tax, health care, immigration, infrastructure, trade, investment, and other reform or do Trump’s personal and political views make that impossible? Many of the CEOs who originally stayed on the councils believed that they could do more for the country and their shareholders by working with the President. Did the CEOs who originally resigned do the right thing for their conscience but the wrong thing by their shareholders? Did those who stayed send the wrong message to their employees  in light of the Google diversity controversy? Did they think about the temperament of their board members or of the shareholder proposals that they had received in the past or that they were expecting when thinking about whether to stay or go? 

Many professors avoid politics in business classes, and that’s understandable because there are enough issues with coverage and these are sensitive issues. But if you do plan to address them, please comment below or send an email to mweldon@law.miami.edu.

August 16, 2017 in Business Associations, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Law School, Marcia Narine Weldon, Shareholders, Teaching | Permalink | Comments (1)

Tuesday, August 15, 2017

Wharton School of the University of Pennsylvania - Business and Law Professor Position

From an e-mail I received earlier today: 

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FACULTY POSITION IN BUSINESS AND LAW 

The Wharton School of the University of Pennsylvania invites applications for a tenure-track position at any level (Assistant, Associate, or Full Professor) in its Department of Legal Studies and Business Ethics.  Applicants must have a J.D., a J.S.D./S.J.D., a Ph.D. in law, or an equivalent law degree from an accredited institution. An additional graduate degree in a relevant field is desirable but not required. For applicants in a doctoral program, an expected degree completion date of no later than July 1, 2019 is acceptable.

Applicants must have a demonstrated research interest in an area of law relevant to the Wharton School's business education and research missions. Examples of such fields include, without limitation, corporate law, employment and labor law, financial regulation, securities regulation, and global trade and investment law.

The Wharton School has one of the largest and most widely published business school faculties in the world, with ten academic departments and over twenty research centers. Legal scholars in its Legal Studies and Business Ethics Department publish their research in leading law reviews and journals in the United States and abroad. The Department’s faculty teach a variety of required and elective courses in law and business ethics in Wharton's undergraduate, MBA, and EMBA divisions, as well as in its own Ph.D. program in Ethics and Legal Studies.

Applicants are requested to electronically submit a letter of introduction, c.v., and at least one selected article or writing sample in PDF format via the following website,https://lgst.wharton.upenn.edu/faculty/faculty-positions/ , by November 1, 2017.   Decisions for interviews will be made on a rolling basis, so candidates are encouraged to apply early. The appointment is expected to begin July 1, 2018.

 

The University of Pennsylvania is an equal opportunity employer.  Minorities, women, individuals with disabilities and veterans are encouraged to apply.

 

August 15, 2017 in Business Associations, Business School, Haskell Murray, Jobs | Permalink | Comments (0)

Poor LLC Language Leads to Poor LLC Doctrine (And Unnecessary Veil Piercing)

Earlier this week, Professor Bainbridge posted California court completely bollixes up business law nomenclature, discussing Keith Paul Bishop's post on Curci Investments, LLC v. Baldwin, Cal. Ct. App. Case No. G052764 (Aug. 10, 2017).  The good professor, noting (with approval) what he calls my possibly "Ahabian" obsession with courts and their LLC references, says that "misusing terminology leads to misapplied doctrine."  Darn right.

To illustrate his point, let's discuss a 2016 Colorado case that manages to highlight how both Colorado and Utah have it wrong. As is so often the case, the decision turns on incorrectly merging doctrine from one entity type (the corporation) into another (the LLC) without acknowledging or explaining why that makes sense.  To the court's credit, they got the choice of law right, applying the internal affairs doctrine to use Utah law for veil piercing a Utah LLC, even though the case was in a Colorado court. 

After correctly deciding to use Utah law, the court then went down a doctrinally weak path.  Here we go:

Marquis is a Utah LLC. (ECF No. 1 ¶ 7.) Utah courts apply traditional corporate veil-piercing principles to LLCs. See, e.g., Lodges at Bear Hollow Condo. Homeowners Ass'n, Inc. v. Bear Hollow Restoration, LLC, 344 P.3d 145, 150 (Utah Ct. App. 2015). The basic veil-piercing analysis requires two steps:
The first part of the test, often called the formalities requirement, requires the movant to show such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist. The second part of the test, often called the fairness requirement, requires the movant to show that observance of the corporate form would sanction a fraud, promote injustice, or condone an inequitable result.
Jones v. Marquis Properties, LLC, 212 F. Supp. 3d 1010, 1021 (D. Colo. 2016). 
 
First, say it with me: You Can’t Pierce the Corporate Veil of an LLC Because It Doesn't Have One.  Second, the so-called "the formalities requirement" is a problem for Utah LLCs if one looks at the Utah LLC Act. The Colorado court does not do that, and neither does the Utah court that decided Bear Hollow Restoration, upon which Colorado relied.  They should have. You see, Utah has adopted the Revised Uniform Limited Liability Act, and the Utah version states expressly: 
The failure of a limited liability company to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a member or manager of the limited liability company for a debt, obligation, or other liability of the limited liability company.
Utah Code Ann. § 48-3a-304(b). So, that is at least potentially a problem, because the Utah test for the formalities requirement is supposed to be determined by looking at seven factors:
(1) undercapitalization of a one-[person] corporation; (2) failure to observe corporate formalities; (3) nonpayment of dividends; (4) siphoning of corporate funds by the dominant stockholder; (5) nonfunctioning of other officers or directors; (6) absence of corporate records; [and] (7) the use of the corporation as a facade for operations of the dominant stockholder or stockholders....
Lodges at Bear Hollow Condo. Homeowners Ass'n, Inc. v. Bear Hollow Restoration, LLC, 344 P.3d 145, 150 (Utah App. 2015).
 
I know some will argue I am being overly formalistic in highlighting how corporate focused these factors are, but this is problematic.  Virtually all of these factors must, at a minimum, be contorted to apply to LLCs.  If the test is going to be applied, the least a court should do is to rewrite the test so it refers LLCs specifically.  Why? Well, primarily because in doing so, it would make clear just how silly these factors are when trying to do so.  (For example, LLCs don't have stockholders, corporate funds, dividends, and generally don't have an obligation to have officers or directors.) 

 The Marquis Properties court skips actually applying the test saying simply that an SEC investigation report was sufficient to allow veil piercing. The court determined that an SEC report establishes that sole member of the LLC used the entity "to create the illusion of profitable investments and thereby to enrich himself, with no ability or intent to honor" the LLC's obligations. "Given this, strictly respecting [the LLC's] corporate form [ed. note: UGH] would sanction [the member's] fraud."  The Court then found that veil-piercing was appropriate to hold the member "jointly and severally liable for the amounts owed by" the LLC to the plaintiffs.

But veil piercing is both neither appropriate nor necessary in this case.  In discussing the SEC report earlier in the case, the court found that "all elements of mail and wire fraud are present." I see nothing that would absolve either the LLC as an entity of liability for the fraud and I see no reason why the member of the LLC would not be personally liable for the fraud he committed purportedly on behalf of the LLC and for his own benefit.  

This case illustrates another problem with veil piercing: both courts and lawyers are too willing to jump to veil piercing when simple fraud will do. This case illustrates clearly that fraud was evident, and fraud should be sufficient grounds for the plaintiffs to recover from the individual committing fraud. That means the entire veil piercing discussion should be treated as dicta. The entity form did not create this problem, and the entity form does not need to be disregarded, at least as far as I can tell, to allow plaintiffs to recover fully.  Before even considering veil piercing, a court should be able to state clearly why veil piercing is necessary to make the plaintiff whole. Otherwise, you end up with bad case law that can lead to bad doctrine, which leads to inefficient courts and markets.  

Oh, and while I'm at it, Westlaw needs to get their act together, too.  The Westlaw summary and headnotes say "limited liability corporation (LLC)" five times in connection with this case.  Come on, y'all.  

 

August 15, 2017 in Business Associations, Corporations, Joshua P. Fershee, Lawyering, LLCs, Shareholders, Unincorporated Entities | Permalink | Comments (0)

Monday, August 14, 2017

Steve Bradford on Online Dispute Resolution for Crowdfunding Fraud

Former BLPB editor Steve Bradford has posted a new paper adding to his wonderful series of articles on crowdfunding (on which I and so many others rely in our crowdfunding work).  This article, entitled "Online Arbitration as a Remedy for Crowdfunding Fraud" (and forthcoming in the Florida State University Law Review), focuses on a hot topic in many areas of lawyering--online dispute resolution, or ODR.  Steve brings the discussion to bear on his crowdfunding work.  Specifically, he suggests online arbitration as an efficacious way of resolving allegations of fraud in crowdfunding.  Here's the abstract:

It is now legal to see securities to the general public in unregistered, crowdfunded offerings. But offerings pursuant to the new federal crowdfunding exemption pose a serious risk of fraud. The buyers will be mostly small, unsophisticated investors, the issuers will be mostly small startups about whom little is known, and crowdfunded offerings lack some of the protections available in registered offerings. Some of the requirements of the exemption may reduce the incidence of fraud, but there will undoubtedly be fraudulent offerings.

An effective antifraud remedy is needed to compensate investors and help deter wrongdoers. But, because of the small dollar amounts involved, neither individual litigation nor class actions will usually be feasible; the cost of suing will usually exceed the expected recovery. Federal and state securities regulators are also unlikely to focus their limited enforcement resources on small crowdfunding offerings. A more effective remedy is needed.

Arbitration is cheaper, but even ordinary arbitration will often be too expensive for the small amounts invested in crowdfunding. In this article, I attempt to design a simplified, cost-effective arbitration remedy to deal with crowdfunding fraud. The arbitration remedy should be unilateral; crowdfunding issuers should be obligated to arbitrate, but not investors. Crowdfunding arbitration should be online, with the parties limited to written submissions. But it should be public, and arbitrators should be required to publish their findings. The arbitrators should be experts on both crowdfunding and securities law, and they should take an active, inquisitorial role in developing the evidence. Finally, all of the investors in an offering should be able to consolidate their claims into an arbitration class action.

Although I haven't yet read the paper (which was just posted this morning, it seems), Steve's idea totally makes sense to me on so many levels.  Among other things, ODR has a history in e-commerce and social media, two front-runners and foundations of crowdfunding.  Also, the dispute resolution expense issue that Steve alludes to in the abstract is real.  It has been raised by a number of us, including by me in this draft paper, in which I assert, among other things:

Prosecutors and regulators may not be willing or able to devote financial and human resources to enforcement efforts absent statutory or regulatory incentives or extraordinary policy reasons for doing so . . . . Individual funders also are unlikely to bring private actions or even engage alternative dispute resolution since the cost of vindicating their rights easily could exceed their invested money and time, although the availability of treble damages (often a statutory right for willful violations of consumer protection statutes) or other extraordinary remedies may change the calculus somewhat.

 . . . [C]lass actions tend to be procedurally complex—difficult to get in front of a court—and may not be available in some jurisdictions. Moreover, the prospects for recovery are unknown and, based on recent information from U.S. securities class action litigation, financial compensation to individual members of the plaintiff class is likely to be relatively insignificant in dollar value and in relationship to losses suffered, even if the aggregate amount of damages paid by the defendant is relatively high . . . . Accordingly, class action litigation also may be of limited utility in bringing successful legal claims in the crowdfunding context.

This will be an area for much further thought as the crowdfunding adventure continues . . . .

August 14, 2017 in ADR, C. Steven Bradford, Crowdfunding, Joan Heminway, Lawyering, Technology, Web/Tech | Permalink | Comments (0)

Sunday, August 13, 2017

ICYMI: #corpgov Weekend Roundup (August 13, 2017)

August 13, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Saturday, August 12, 2017

Index as Cartel

Whenever new corporate governance terms are developed that function to diminish shareholder power – like arbitration provisions, or forum selection, or loser-pays – concern develops among (at least some) investors that these terms will become the norm.  It’s not about one company that does or doesn’t adopt the term; it’s about the fear that several companies will adopt them, and eventually it will become standard, so that shareholders will not be able to exert discipline by avoiding companies with the disfavored provision.

In other words, companies will behave as though they’re in a cartel when selecting these terms, and they’ll be able to do it because they can easily coordinate with each other.  There are a limited set of underwriters and white shoe law firms that will advise them, and those entities will propagate the new development throughout the system.  Cf. Elisabeth de Fontenay, Law Firm Selection and the Value of Transactional Lawyering, 41 J. Corp. Law 393 (2015) (explaining the value-added by elite law firms – knowledge of the latest in deal technology); Roberta Romano & Sarath Sanga, The Private Ordering Solution to Multiforum Shareholder Litigation  (finding that law firm advice is behind the adoption of forum-selection clauses at the IPO stage).  Investors may prefer to coordinate with each other to boycott companies that adopt these terms, but investors are widely dispersed, and have no obvious coordination mechanism. 

Except it seems they do.  They have ISS, for one – which doesn’t help with buying, but does help with voting.  ISS, according to The Power of Proxy Advisors: Myth or Reality? 59 Emory L.J. 869 (2010), by Jill E. Fisch, Stephen J. Choi, Marcel Kahan, bases its recommendations very much on the preferences of its clients, more so than other advisory services.  In other words, ISS serves as a coordination point.

And now on the buying side, we have the indexes.

As I’m sure readers of this blog are aware, a couple of major indexes, under heavy pressure from investors, decided to exclude companies with certain multiple-class share structures.  The investors’ concern was that if these companies were included, indexed investors would have to buy them even if they didn’t want to.  And that’s an odd argument, of course, because nothing is stopping them from setting up their own index or buying according to a modified index, though we can agree that doing so would be at the very least impractical (though it’s fascinating to contemplate why).  That said, the exclusion is unusual, because index investors aren’t supposed to be actively picking stock characteristics, and – until now – the indexes did not make specific governance characteristics part of the criteria for inclusion.

So this latest move suggests that as passive investing gains more power, the indexes have become – or have the potential to become – a kind of cartel mechanism.  They are a means by which dispersed investors can coordinate their buying and thereby express preferences collectively. 

What happens, for example, if a company accepts Michael Piwowar’s invitation and tries to eliminate class actions via arbitration at the IPO stage?  Will we see investor pressure to keep those companies out of the index as well?  Time will tell, but recent events suggest this is another tool that investors can use to coordinate with each other.

August 12, 2017 in Ann Lipton | Permalink | Comments (0)

Friday, August 11, 2017

Business Law Professor Positions

In this post I will compiled legal studies professor positions (mostly in business schools) and law school positions that indicate a business law preference. I will not be listing adjunct positions. Please feel free to e-mail me with any additions. I will update the list from time to time.

Updated August 15, 2017

Legal Studies Positions (Mostly Business Schools)

Law School Positions (Expressed Interest in Business Law)

 

August 11, 2017 in Business School, Haskell Murray, Jobs, Law School | Permalink | Comments (0)

Thursday, August 10, 2017

ICYMI: #corpgov Midweek Roundup (August 10, 2017)

August 10, 2017 in Stefan J. Padfield | Permalink | Comments (0)

University of Nebraska College of Law - Tenured/Chaired Position in International Trade and Finance

From an e-mail I received this week:

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The UNIVERSITY OF NEBRASKA COLLEGE OF LAW invites applications for lateral candidates for a tenured faculty position to hold the Clayton K. Yeutter Chair at the College of Law. This chaired faculty position will be one of four faculty members to form the core of the newly-formed, interdisciplinary Clayton K. Yeutter Institute for International Trade and Finance. The Institute also will include the Duane Acklie Chair at the College of Business, the Michael Yanney Chair at the College of Agriculture and Natural Resources, and the Haggart/Works Professorship for International Trade at the College of Law. The Yeutter Chair, along with the other three professors, will be expected to support the work and objectives and ensure the success of the Yeutter Institute. The Yeutter Chair will teach courses at the College of Law, including International Finance. Other courses may include Corporate Finance and/or other classes related to business and finance. More on the Yeutter Institute can be found at http://news.unl.edu/free-tags/clayton-k-yeutter-institute-of-international-trade-and-finance/.

Minimum Required Qualifications: J.D Degree or Equivalent; Superior Academic Record; Outstanding Record of Scholarship in International Finance and/or other areas related to international business; and Receipt of Tenure at an Accredited Law School. General information about the Law College is available at http://law.unl.edu/. Please fill out the University application, which can be found at https://employment.unl.edu/postings/51633, and upload a CV, a cover letter, and a list of references. The University of Nebraska-Lincoln is committed to a pluralistic campus community through affirmative action, equal opportunity, work-life balance, and dual careers. See http://www.unl.edu/equity/notice-nondiscrimination. Review of applications will begin on September 15, 2017 and continue until the position is filled. If you have questions, please contact Associate Dean Eric Berger or Professor Matt Schaefer at lawappointments@unl.edu.

August 10, 2017 in Financial Markets, Haskell Murray, International Business, International Law, Jobs, Law School | Permalink | Comments (0)

Wednesday, August 9, 2017

AALS Section on Business Associations Call for Papers: Institutional Investors and Corporate Governance

Call for Papers (DEADLINE: August 24, 2017)

AALS Section on Business Associations

Institutional Investors and Corporate Governance

AALS Annual Meeting, January 5, 2018

The AALS Section on Business Associations is pleased to announce a Call for Papers for a joint program to be held on Friday, January 5, 2018 at the 2018 AALS Annual Meeting in San Diego, California.  The topic of the program is “Institutional Investors and Corporate Governance.”

In thinking through the difficulty of agency costs within the public corporation, corporate law academics have turned repeatedly to institutional investors as a potential solution.  The agglomeration of shares within a large investing firm, together with ongoing cooperation amongst a large set of such investors, could overcome the rational apathy the average shareholder has towards participation in corporate governance.  Alternatively, activist investors could exert specific pressure on isolated companies that have been singled out—like the weakest animals in the herd—for extended scrutiny and pressure.  In these examples, the institutionalization of investing offers a counterbalance to the power of management and arguably provides a systematized way of reorienting corporate governance.  These institutional-investor archetypes have, in fact, come to life since the 1970s and have disrupted the stereotype of the passive investor.  But have we achieved a new and stable corporate governance equilibrium?  Or have we instead ended up with an additional set of agency costs – the separation of ownership from ownership from control?  This program seeks to explore these questions and assess the developments in the field since the beginning of the new century. 

The program is cosponsored by the Section on Securities Regulation.

Form and length of submission

Eligible law faculty are invited to submit manuscripts or abstracts that address any of the foregoing topics. Abstracts should be comprehensive enough to allow the review committee to meaningfully evaluate the aims and likely content of final manuscripts.  Any unpublished manuscripts (including unpublished manuscripts already accepted for publication) may be submitted for consideration.  Untenured faculty members are particularly encouraged to submit manuscripts or abstracts.

The initial review of the papers will be blind.  Accordingly, the author should submit a cover letter with the paper.  However, the paper itself, including the title page and footnotes must not contain any references identifying the author or the author’s school.  The submitting author is responsible for taking any steps necessary to redact self-identifying text or footnotes. 

 

Deadline and submission method

To be considered, manuscripts or abstracts must be submitted electronically to Professor Matthew Bodie, Chair-Elect of the Section on Business Associations, at  mbodie@slu.edu.  Please use the subject line: “Submission: AALS BA CFP.”  The deadline for submission is Thursday, August 24, 2017.  Papers will be selected after review by members of the Executive Committee of the Section on Business Associations.  The authors of the selected papers will be notified by Thursday, September 28, 2017.

 

Eligibility

Full-time faculty members of AALS member law schools are eligible to submit papers.  The following are ineligible to submit: foreign, visiting (without a full-time position at an AALS member law school) and adjunct faculty members; graduate students; fellows; non-law school faculty; and faculty at fee-paid non-member schools. Papers co-authored with a person ineligible to submit on their own may be submitted by the eligible co-author.

The Call for Paper participants will be responsible for paying their annual meeting registration fee and travel expenses.

August 9, 2017 in Business Associations, Call for Papers, Conferences, Current Affairs, Joshua P. Fershee, Research/Scholarhip | Permalink | Comments (0)

Tuesday, August 8, 2017

GRE or LSAT? Careful: More Options for Schools Means More Options for Students, Too

TaxProf Blog has been passing along the news of law schools choosing to allow applicants to substitute the GRE in place of the LSAT. The most recent post: Georgetown Is Fourth Law School To Accept GRE For Admissions, Finds It Is Just As Accurate As LSAT In Predicting 1L Grades; LSAC Disagrees, Says 'The Rest Of The Top 14 Will Go Like Lemmings Off The Cliff'.

As to the substance of the matter, I don't feel too strongly.  It is my suspicion that combining grade point average with any standardized test (including GMAT and MCAT, along with GRE and LSAT) would do a reasonably good job of predicting success in law school. Sure, the MCAT  would likely be less on target, but probably not that much, especially when we're talking about highly selective schools like Georgetown and Northwestern.  

The value of competition in the testing marketplace does seem valuable to me in a few ways..  For one thing, the LSAT is still administered like it is 1989 (as Christine Hurt noted a while back). There would be value in making the LSAT more accessible, and it is is at least plausible that the highly limited access to the LSAT is negatively impacting the number of students choosing to apply to law school.  LSAC would be well served to catch up with the other tests (that are now offered with more regular testing dates and sometimes online) to give prospective law students more options. 

In addition, I think there is value in letting students have options.  I know there are some concerns that students taking the GRE might apply to law school without really thinking it through because it's easy, but I think that risk is limited.  For one thing, just taking the LSAT doesn't mean someone thought that hard about law school. It just means that planned ahead.  A little. There would be flaky GRE-taking law students, but there'd be highly motivated GRE-taking students who were thinking about a master's degree but would be great law students.

One thing some schools might be missing, though, is that the GRE thing swings both way. That is, if the GRE is acceptable for law school applications, students planning on law school might now choose to take the GRE and end up considering other kinds of graduate programs.  Schools looking to expand their pool may be creating competition in places that did not exist before (or was much milder).  

Ultimately, I support creating more options for students so that they can make better decisions about their future.  As long as the testing option (LSAT, GRE, etc.) serves as a reasonably good predictor of law school and bar passage success (and I think that is still an open question), I am okay with it.  I hope schools that chose to accept the GRE are doing so with an expectation that the admitted students will do well, and I hope schools monitor their students so that adjustments can be made if success rates are not as anticipated.  That, to me, is the biggest issue: whatever we do, we need to make sure we're delivering on our educational promises, regardless of how we assess our potential students' likelihood of success.  

 

August 8, 2017 in Joshua P. Fershee, Law School, Teaching | Permalink | Comments (0)

Monday, August 7, 2017

SEALS 2017 - Business Regulatory Reform

Yesterday, on the last morning of the 2017 Southeastern Association of Law Schools (SEALS) conference, Matt Lyon, the Associate Dean at Lincoln Memorial University - Duncan School of Law (UT Law's Knoxville neighbor) convened a discussion group on "Corporate and Financial Reform in the Trump Administration." I was grateful to be asked to participate.  In addition to me, BLPB co-bloggers Josh Fershee and Marcia Narine Weldon, my UT Law coworker Brian Krumm, Securities Law Prof Blog editor Eric Chaffee, and University of Houston Law Center colleague Darren Bush were among the discussants.

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Each of us came with issues and questions for discussion.  Each of us offered reflections.  Recently made, currently proposed, and possible future changes to business regulation were all on the table.  I wish this session had been held earlier in the program, since many had left before the Sunday morning sessions (and we were competing with, among other enticing alternatives, a discussion session on marijuana regulation). However, we honestly had more than enough to discuss as among the seven of us, in any case.

I had to leave the session early to attend the SEALS board meeting.  But before I left, I took some notes on topics relating to my interest in and potential future work on regulatory reform.  I continue, for example, to be interested in the best approaches to reducing and streamlining regulation.  (See my posts here and here.)  A few additional outtakes follow.

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August 7, 2017 in Conferences, Current Affairs, Joan Heminway | Permalink | Comments (0)

University of Akron School of Law International Law Faculty Position

The following comes from the University of Akron School of Law:

The University of Akron School of Law anticipates hiring a tenure-track or tenured faculty member with a focus in the area of international and comparative law to begin teaching in Fall 2018.  We seek a candidate demonstrating general international law expertise with a preference for private international law, including but not limited to international business transactions, international trade, and/or international commercial arbitration.  Both entry-level and lateral candidates are encouraged to apply.  The appointment may include opportunities for administrative leadership overseeing study abroad programs, programs for foreign lawyers, and other international programs.  The committee is interested in candidates with scholarly distinction or great promise as demonstrated by strong early scholarship and a thoughtful agenda for future work, as well as a commitment to excellence in teaching.

The University of Akron School of Law is a public, mid-size law school of approximately 500 students located in the Akron/Cleveland metropolitan area.  With a new building, a new dean, and strong enrollments, Akron Law provides an energized community and faculty environment.  The School of Law has a strong tradition of teaching and offers students low tuition, a commitment to student success, strong job placement, award-winning clinical programs, a national trial team program, and unique mentorship with the local and regional bars.  It has research centers in Intellectual Property, Constitutional Law, and Professional Responsibility.  Akron Law has recently enhanced its international initiatives including new collaborative relationships with universities in Asia, an accelerated juris doctor program for international students, visiting international scholars, and a four-week, three-city, two-country study abroad program in Japan and South Korea.  In addition, the larger University has been expanding international initiatives and programming.  The University of Akron is a public research university of 25,000 students, with a national reputation in polymer science, engineering, and business in addition to law.  It is centered in Akron, Ohio, a city with a population of 200,000, known for its low cost of living and high quality of life, its surrounding natural beauty including the Cuyahoga Valley National Park, its history of industrial innovation, and its multitude of cultural, artistic, athletic, and recreational opportunities.

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August 7, 2017 in International Business, International Law, Jobs, Stefan J. Padfield | Permalink | Comments (0)

Sunday, August 6, 2017

The Inclusive Capitalism Shareholder Proposal

My latest paper, The Inclusive Capitalism Shareholder Proposal, 17 U.C. Davis Bus. L.J. 147 (2017), is now available on Westlaw. Here is the abstract:

When it comes to the long-term well being of our society, it is difficult to overstate the importance of addressing poverty and economic inequality. In Capital in the Twenty-First Century, Thomas Piketty famously argued that growing economic inequality is inherent in capitalist systems because the return to capital inevitably exceeds the national growth rate. Proponents of “Inclusive Capitalism” can be understood to respond to this issue by advocating for broadening the distribution of the acquisition of capital with the earnings of capital. This paper advances the relevant discussion by explaining how shareholder proposals may be used to increase understanding of Inclusive Capitalism, and thereby further the likelihood that Inclusive Capitalism will be implemented. In addition, even if the suggested proposals are rejected, the shareholder proposal process can be expected to facilitate a better understanding of the strengths and weaknesses of Inclusive Capitalism, as well as foster useful new lines of communication for addressing both poverty and economic inequality.

August 6, 2017 in Corporate Finance, Corporate Governance, CSR, Financial Markets, Research/Scholarhip, Securities Regulation, Shareholders, Social Enterprise, Stefan J. Padfield | Permalink | Comments (0)

Saturday, August 5, 2017

SEALS 2017 - White Collar Crime Discussion Group

I have been at the Southeastern Association of Law Schools (SEALS) conference all week.  As usual, there have been too many program offerings important to my scholarship and teaching.  I have participated in and attended so many things.  I am exhausted.

But I know that all of this activity also energizes me.  Once I am back at home tomorrow night and get a good night's sleep, I will be ready to rock and roll into the new academic year (which starts for us at UT Law in a few weeks).  I use the SEALS conference as this bridge to the new year every summer.

One of my favorite discussion groups at the conference was the White Collar Crime discussion group that John Anderson and I organized.  A number of us focused on insider trading law this year.  John, for example, shared his preliminary draft of an insider trading statute.  I asked folks to ponder the result under U.S. insider trading law of a tipping case with the following general facts:

  • A person with a fiduciary duty of trust and confidence to a principal conveys material nonpublic information obtained through the fiduciary relationship to a third person;
  • The recipient of the information is someone with whom the fiduciary has no prior familial or friendship relationship;
  • The conveyance is made to the recipient by the fiduciary without the consent of the principal;
  • The conveyance is made to the recipient gratuitously;
  • The fiduciary’s purpose in conveying the information is to benefit the recipient;
  • Specifically, the fiduciary knows that the recipient has the ability and incentive to trade on the information or convey it to others who have the ability and incentive to trade; and
  • The fiduciary has clear knowledge and understanding of resulting detriment to the principal.

The question, of course, is whether the fiduciary has engaged in deception that constitutes a willful violation of insider trading proscriptions under Section 10(b) and Rule 10b-5.  The answer, based on what we now know under U.S. insider trading law, depends on whether the fiduciary's sharing of information is improper.  What do you think?  I shared my views and others in the group shared theirs.  I may have more to say on this problem and my related work in a later post.

August 5, 2017 in Joan Heminway, Securities Regulation, White Collar Crime | Permalink | Comments (0)