Tuesday, October 21, 2014

Law and Ethics of Big Data│Bloomington, IN│April 17-18, 2015

Below is a call for papers that I received by e-mail earlier today.  

RESEARCH COLLOQUIUM: CALL FOR PAPERS

Law and Ethics of Big Data

April 17 & 18, 2015

Indiana University- Bloomington, IN.

Abstract Submission Deadline: January 17, 2015

A research colloquium, “Law and Ethics of Big Data,” co-hosted by Professor Angie Raymond of Indiana University and Janine Hiller of Virginia Tech, is sponsored by the Center for Business Intelligence and Analytics in the Pamplin College of Business, Virginia Tech; the Kelley School of Business at Indiana University; and the Poynter Center for the Study of Ethics and American Institutions at Indiana University.

Up to six invitations for research presentation slots will be extended based on this call for papers. In order to receive consideration, researchers are invited to submit an abstract by January 17, 2015.

Continue reading

October 21, 2014 in Business Associations, Call for Papers, Conferences, Ethics, Haskell Murray | Permalink | Comments (0)

Monday, October 20, 2014

14th Annual Transactional Clinic Conference - April 24, 2015

The following announcement comes to us from Alicia Plerhoples (Georgetown).  The 14th annual transactional clinic conference will be held at UMKC School of Law in Kansas City, Missouri and the Ewing Marion Kauffman Foundation is serving as a host partner. Proposals are due by December 15, 2014 and more information about the conference is available after the break.

14TH ANNUAL TRANSACTIONAL CLINICAL CONFERENCE

CALL FOR PROPOSALS, PAPERS, & PANELISTS

Teaching and Writing Methods of the Transactional Clinician

This year’s conference theme is Teaching and Writing Methods of the Transactional Clinician. The conference will have two tracks: (1) a “Nuts & Bolts” Teacher Workshop and (2) a “Pen & Paper” Scholarship Workshop. The Planning Committee seeks proposals for (1) presentations, (2) papers, and (3) panelists as outlined below.   

Continue reading

October 20, 2014 in Call for Papers, Conferences, Haskell Murray, Law School | Permalink | Comments (0)

Friday, October 17, 2014

Alison Lundergan Grimes and Public Speaking Classes

256px-Alison_Lundergan_Grimes

(Photo courtesy of Wikimedia Commons, by Patrick Delahanty from Louisville, United States)

Alison Lundergan Grimes and I both graduated from Rhodes College, a small liberal arts college in Memphis, TN. I have not spoken to Alison since college, so I was surprised to see her mentioned on CNN a number of weeks ago as the democratic nominee for U.S. Senator from Kentucky. Since then, she has been in the news quite a bit. She will face Minority Leader Mitch McConnell, in what has turned into one of the hotter Senate races this year.    

Even in college I did not know Alison well, but we did take a public speaking class together. Alison was the type of student who was often in a suit and pearls in class, while I wore flip flops year-round and whatever wrinkled, Goodwill-purchased clothes were the most clean. She was a Chi Omega (easily the most refined group on campus), and I was a part of the football team for all four years (if there was a rowdier group on campus than the football team, it was the rugby club, which I joined because my playing time on the football team was minimal).

The public speaking class that Alison and I took together was definitely one of the most practical classes I took. Each student gave short speeches almost every day, and we were video-taped. We then watched and critiqued the videos as a class. Almost all of us had at least a few nervous habits, but we all appeared to break them after our nervous habits were seen on the screen and pointed out in front of the entire class. It was all quite embarrassing, but effective. I think there were only about a dozen of us in the class, which made this sort of personal attention possible. Our final exam was a presentation to an audience of 100 or more people, and our professor had lined up enough options for each of us, which must have taken a lot of time to organize. 

I had some opportunities to do public speaking in law school. I know those who competed in moot court and trial advocacy had even more opportunities, but I think we should try to give our students even more chances to hone their public speaking skills. Regardless of post-graduation job, almost all students will need public speaking skills, even if their audiences are small. I try to include student presentations in as many of my classes as I practically can.   

While we can all work public speaking into at least some of our classes, a required class fully dedicated to public speaking might be worthwhile. Do any law schools do this? I know public speaking is usually a part of a legal writing or litigation class, but I have not heard of a required course devoted specifically to public speaking.

Update: I should note that Alison is also legally trained. She is a graduate of American University's Washington College of Law.

October 17, 2014 in Business School, Haskell Murray, Law School, Teaching | Permalink | Comments (6)

Friday, October 10, 2014

Collier on "The Plundered Planet" and Breaking Down Silos

Last night (actually this morning around 1 a.m.), I returned to Nashville after a delayed connection on my way back from an excellent conference at Seattle Pacific University. The conference was hosted by SPU's Center for Integrity in Business.

I was only in Seattle for about 48 hours, but the trip was well worth it. As I have mentioned before, there isn’t a good substitute for meeting people in person. Seattle Pacific University gathered an excellent, diverse group of practitioners and academics from various disciplines to discuss topics at the intersection of faith and social enterprise. I may write more about the conference later, but am pretty wiped out right now after limited sleep, catching up, and teaching today.  

While I seem to always get at least one delayed flight when I travel, I do not mind traveling because I love the quiet time on the plane or the car. (With an 18-month old son at home "quiet" is relatively rare in my life.) Almost always, I can finish at least one full book on the airplane on a trip like this one. This time I read Paul Collier’s The Plundered Planet. I might write more on the book later, but for now I will just provide an excerpt from the opening pages:

Environmentalists and economists have been cat and dog. Environmentalists see economists as the mercenaries of a culture of greed, the cheerleaders of an affluence that is unsustainable. Economoists see environmentalists as romantic reactionaries, wanting to apply the brakes to an economic engine that is at last reducing global poverty.

 

The argument of this book is that environmentalists and economists need each other. They need each other because they are on the same side of a war that is being lost. The natural world is being depleted and natural liabilities accumulated in a manner that both environmentalists and economists would judge to be unethical. But the need for an alliance runs deeper than the practical necessities of preventing defeat. Environmentalists and economists need each other intellectually. (pg. 9)

Paul Collier is a good person to write a book about the intersection of economics and environmentalism; he is an economics professor at Oxford University and his wife is an environmental historian.

This conference at Seattle Pacific University not only brought together economists and environmentalists, but also professors in finance, marketing, management, accounting, political science, geography, psychology, theology, and law. A number of business and legal practitioners, including Bill Clark (the primary drafter of the Model Benefit Corporation Legislation) and multiple business owners, were also part of the group. The conversation was rich, in large part because we all brought different perspectives on the issue from our own areas.      

October 10, 2014 in Business School, Haskell Murray, Religion, Social Enterprise | Permalink | Comments (0)

Georgia State University - Legal Studies Position

GSU

Georgia State University has posted a legal studies professor opening in their Robinson College of Business. I graduated from law school at Georgia State University, was a VAP at the law school, and taught a few sections of business law in the business school. It is a wonderful school, right in the heart of Atlanta, with an excellent faculty.

The full business school (legal studies professor) position list is here. The full law school (business law professor) position list is here.

The position posting is below:

GEORGIA STATE UNIVERSITY:

Robinson College of Business, Department of Risk Management & Insurance

TENURE TRACK and/or NON-TENURE TRACK POSITIONS IN LEGAL STUDIES

GEORGIA STATE UNIVERSITY invites applications for one or more tenure track and/or non-tenure track appointments in Legal Studies for openings effective fall 2015 in the Department of Risk Management and Insurance at the Robinson College of Business.  Rank is open but we expect to hire at the level of Assistant Professor (tenure track) and/or Clinical Assistant Professor (non-tenure track).

JOB QUALIFICATIONS

Candidates for a non-tenure track position must have significant professional experience as a lawyer, the capability for publishing research in refereed professional or pedagogical journals, evidence of excellence in teaching preferably in an accredited AACSB business school, and an earned J.D. from an ABA accredited law school.

Candidates for a tenure track position must have an earned J.D. from an ABA accredited law school, have the capability of significant scholarship in law reviews as well as peer reviewed journals, and capability for high quality teaching.  Candidates for more senior positions must have a significant and current scholarly research record consistent with appointment at the appropriate rank.

For all candidates we are particularly interested in those who study the relationship between law and risk. Applications from those with specific interests in the areas of life and disability insurance, employee benefits, and/or financial planning are especially welcome, but candidates in all areas of business law will be considered.

ABOUT THE ENVIRONMENT

The mission of the Department of Risk Management and Insurance at Georgia State University is to better understand how risks faced by individuals, institutions, and societies can be more accurately measured and more efficiently managed. Faculty members have risk-related research interests including behavioral economics, experimental methods, actuarial science, mathematical finance, econometrics, household finance, corporate decision making, legal risk, and insurance economics, among others. 

The department is one of the oldest and most influential risk management programs in the U.S. and has a distinguished history of serving students, alumni, and the risk management profession for more than 60 years. We are currently rated #4 in the U.S. News and World Report ranking of RMI programs; we hold a Center of Actuarial Excellence designation from the Society of Actuaries; and we are an Accredited Risk Program according to the Professional Risk Management International Association (PRMIA).

The salary level and course load are competitive. 

Positions are contingent on budget approval. Applications received prior to November1 may be given preference, but applications will be accepted until the position is filled. To apply, send a letter of application, curriculum vitae, three recommendation letters, teaching evaluations, if any, to ademicjobsonline.org (strongly preferred) or mailed to Ms. Carmen Brown, Department of Risk Management & Insurance, Robinson College of Business, Georgia State University, PO Box 4036, Atlanta. GA 30302. Be sure to indicate in the cover letter that you are applying for the legal studies position (tenure track) or the legal studies position (Non-tenure track).

Georgia State University is an equal opportunity educational institution and an affirmative action employer.

October 10, 2014 in Business School, Haskell Murray, Jobs | Permalink | Comments (0)

Tuesday, October 7, 2014

Georgetown University Law Center - Transactional Clinic

Georgetown University Law Center invites applicants interested in establishing and teaching in a transactional clinic.  This position is tenure track. The successful applicant will begin on July 1, 2015.  Georgetown seeks to add to its spectrum of business related clinics. Currently we offer clinics that teach business formation in the field of social entrepreneurship, community development and strategic planning, and that assist low income residents in the acquisition, renovation, and operation of their buildings as long-term affordable housing.

At Georgetown Law, professors dedicated to clinical teaching are fully integrated into the faculty. Both entry level and lateral hires are urged to apply. The person selected for this position would join our large clinical community, develop the clinic, be assisted by a clinical fellow and teach the clinic each semester.

The successful applicant will have a strong commitment to promoting access to justice and a demonstrated interest in nurturing student development.  Candidates must demonstrate intellectual engagement including scholarly promise (for entry-level candidates) or be a proven scholar (for lateral candidates).  Successful applicants will also have subject-matter expertise and a positive reputation in the field, the communication, organizational and collaborative skills necessary to direct and manage a clinic and a commitment to teaching clinically over the long term. Georgetown values excellent teaching and a successful applicant will have pedagogical skills, creativity, and enthusiasm for the academic endeavor.  This law school is committed to diversity, and candidates of diverse backgrounds are encouraged to apply.

Please send a resume, including the names of references and a statement of interest to Hope Babcock, the Chair of the Clinical Subcommittee of the Appointments Committee. Her email is Babcock@law.georgetown.edu.

[Posted at the request of Haskell Murray, who is traveling today.]

October 7, 2014 in Haskell Murray, Joan Heminway, Jobs, Law School | Permalink | Comments (0)

Friday, October 3, 2014

Loyola Law School, Los Angeles - Director of Business Law Practicum

LLS

Elizabeth Pollman (Loyola, Los Angeles) notified us that Loyola Law School, Los Angeles is hiring for an Associate Clinical Professor of Law/Director of the Business Law Practicum.

The details are below the break.

Continue reading

October 3, 2014 in Haskell Murray, Jobs, Law School | Permalink | Comments (0)

Law Professor Positions - Business Law Areas

Earlier, I posted a list of legal studies positions in business schools.

Today, I decided to go through the helpful PrawfsBlawg spreadsheet on hiring committees to draw out the law schools that listed at least one business law area of interest. The PrawfsBlawg spreadsheet is a few months old, so it is possible that the schools' needs have changed somewhat in the interim. Also, many schools did not list any specific areas of interest, but hopefully this list is still helpful to our readers.

If readers know of any other law schools that have an interest in hiring in one or more business law areas, please leave the school name in the comments (with a link to the posting, if possible) or send me an email. Updated positions (that are not on the PrawfsBlawg list) will include a link to the posting, if possible. 

Updated 10/18/14

Alabama (business law)

Belmont (business law)

California Western (business associations)

Campbell (financial regulation)

Detroit Mercy (business law)

Florida A&M (business law)

Florida State (business law)

Fordham (international economic law)

Georgetown (transactional clinic, tenure track)

Loyola (Los Angeles) (associate clinical professor/director of business law practicum)

Maryland (business law)

North Carolina (corporate finance, international business transactions)

UMKC (business law, entrepreneurship) 

West Virginia (entrepreneurship clinic)

Wyoming (business law)

October 3, 2014 in Haskell Murray, Jobs, Law School | Permalink | Comments (1)

Fuller on Teaching Law

I am back teaching law students again this semester, in addition to teaching business school students. Last class, I did my "mid-course" teaching evaluations in the law school, which I do voluntarily each semester to gauge how the courses are going for the students. Almost always, I pick up on some important trends from the responses. One somewhat frustrating thing, however, is that students often want contradicting things. (e.g., "the previous class review is extremely helpful" and "the previous class review is a complete waste of time.")

The Lon Fuller quote below, from his article On Teaching Law, 3 Stan. L. Rev. 35, 42-43 (1950), helped me realize that some of the contradition, even within the same individual, is natural and expected.

Herein lies a dilemma for student and teacher. The good student really wants contradictory things from his legal education. He wants the thrill of exploring a wilderness and he wants to know where he stands every foot of the way. He wants a subject matter sufficiently malleable so that he can feel that he himself may help to shape it, so that he can have a sense of creative participation in defining and formulating it. At the same time he wants that subject so staked off and nailed down that he will feel no uneasiness in its presence and experience no fear that it may suddenly assume unfamiliar forms before his eyes.

 

No teacher is skillful enough to satisfy these incompatible demands. I don't think he should try. Rather he should help the student to understand himself, should help him to see that he wants (and very naturally and properly wants) inconsistent things of his legal education. Much frustration will be avoided if the student realizes that an unresolved antinomy runs through his education, and that this antinomy cannot be resolved so long as men want of life, as they do of the preparation for life called education, both security and adventure.

October 3, 2014 in Haskell Murray, Law School, Teaching | Permalink | Comments (0)

Monday, September 29, 2014

Law Professor Position - Belmont University

Belmont
Belmont University's School of Law in Nashville, TN has posted a tenure-track assistant professor opening here.

(Disclosure: I am a professor at Belmont University's business school and am teaching Business Associations in the law school this fall.)

Belmont1

September 29, 2014 in Haskell Murray, Jobs, Law School | Permalink | Comments (0)

Friday, September 26, 2014

Yockey on The Compliance Case for Social Enterprise

Joseph Yockey (Iowa) has posted a new paper on social enterprise.  I have not read this one yet, but enjoyed his first article on the subject and have added this second one to my long "want to read" list.  The abstract is below.

Social enterprises generate revenue to solve social, humanitarian, and ecological problems. Their products are not a means to the end of profits, but rather profits are a means to the end of their production. This dynamic presents many of the same corporate governance issues facing other for-profit firms, including legal compliance. I contend, however, that traditional strategies for corporate compliance are incongruent to the social enterprise’s unique normative framework. Specifically, traditional compliance theory, with its prioritization of shareholder interests, stands at odds with the social enterprise’s mission-driven purpose. Attention to this distinction is essential for developing effective compliance and enforcement policies in the future. Indeed, arguably the greatest feature of the social enterprise is its potential to harness organizational characteristics that inspire the values and culture most closely linked with ethical behavior — without resort to more costly or intrusive measures.

 

September 26, 2014 in Business Associations, Corporate Governance, Haskell Murray, Social Enterprise | Permalink | Comments (0)

Impact Investing Legal Symposium

The below is from an e-mail I received earlier this week about an impact investment legal symposium on October 2, 2014 from 8:30 a.m. to noon (eastern):

Bingham, in conjunction with the International Transactions Clinic of the University of Michigan Law School, Aspen Network of Development Entrepreneurs (ANDE) Legal Working Group and Impact Investing Legal Working Group, is proud to present a legal symposium on Building a Legal Community of Practice to Add Still More Value to Impact Investments.

The symposium will be held at Bingham McCutchen LLP's New York offices at 339 Park Avenue or you can attend virtually by registering here.

The panelists include Deborah Burand (Michigan), Jonathan Ng (Ashoka), Keren Raz (Paul Weiss), and many others.   

September 26, 2014 in Business Associations, Conferences, Corporate Governance, Entrepreneurship, Haskell Murray, Social Enterprise | Permalink | Comments (0)

Thursday, September 25, 2014

Senior Faculty Legal Studies Position - University of Central Florida

UCF

University of Central Florida is advertising for an associate or full professor in the area of legal studies, international law, and/or national security law.

The full listing is after the break and the position has been added to my legal studies position list.

Continue reading

September 25, 2014 in Business School, Haskell Murray, Jobs | Permalink | Comments (0)

Wednesday, September 24, 2014

Thomas and Van Horn on College Football Coaches' Salaries

Randall Thomas (Vanderbilt Law School) and Lawrence Van Horn (Owen Graduate School of Management, Vanderbilt University) have posted a new article entitled Are Football Coaches Overpaid? Evidence from Their Employment Contracts.

This is a rare article that appeals to both my academic interests and my interest in football. Rarely do these two set of interests overlap in my life, and the article has prompted me to think of ways I might incorporate my football knowledge into future academic articles. 

The article's abstract reads:

The commentators and the media pay particular attention to the compensation of high profile individuals. Whether these are corporate CEOs, or college football coaches, many critics question whether their levels of remuneration are appropriate. In contrast, corporate governance scholarship has asserted that as long as the compensation is tied to shareholder interests, it is the employment contract and incentives therein which should be the source of scrutiny, not the absolute level of pay itself. We employ this logic to study the compensation contracts of Division I FBS college football coaches during the period 2005-2013. Our analysis finds many commonalities between the structure and incentives of the employment contracts of CEOs and these football coaches. These contracts’ features are consistent with what economic theory would predict. As such we find no evidence that the structure of college football coach contracts is misaligned, or that they are overpaid.

September 24, 2014 in Corporate Governance, Haskell Murray, Sports | Permalink | Comments (1)

Judge James T. Vaughn, Jr. Nominated to Delaware Supreme Court

President Judge James T. Vaughn, Jr. of the Delaware Superior Court has been nominated to the Delaware Supreme Court by Governor Jack Markell. Judge Vaughn has served on the Delaware Superior Court for 15 years.

News.Delaware.Gov has more here.

September 24, 2014 in Current Affairs, Delaware, Haskell Murray | Permalink | Comments (0)

Friday, September 19, 2014

Some Thoughts on Hiring Committees

We are less than a month away from the AALS Faculty Recruitment Conference (a/k/a the “meat market” or the “FRC”). Reading the comments at PrawfsBlawg from the nervous candidates brings me back to my time on the meat market in 2010.

In this post, I hope to encourage hiring committees to engage in some perspective taking and improve the typical law school hiring process for candidates.

Instead of focusing on schools that I felt needed improvement in their hiring processes, I want to highlight one hiring committee that I think got it exactly right. The hiring committee was from The University of Oklahoma College of Law, made up of Emily Hammond (now at George Washington), Katheleen Guzman, and Joseph Thai.

Four years later, I remember their names vividly. I only made it to the FRC interview level with Oklahoma, and never got a call-back with the school, which makes their conduct that much more admirable. Oklahoma’s hiring committee excelled in three areas that I think all hiring committees should focus on and that I discuss more fully after the break: communication, transparency, and humanity.

Continue reading

September 19, 2014 in Haskell Murray, Jobs, Law School | Permalink | Comments (1)

Thursday, September 18, 2014

Law Professor Positions - Lakehead University

Lakehead

Lakehead University in Thunder Bay, Ontario has three tenure-track law professor openings.

Information is available here.  

September 18, 2014 in Haskell Murray, Jobs, Law School | Permalink | Comments (0)

Legal Studies Position - Oklahoma State University

OSU

Oklahoma State University is the most recent addition to my updated legal studies position list.  Oklahoma State is looking for an assistant professor of legal studies to begin in a tenure-track position in August of 2015. 

September 18, 2014 in Business School, Haskell Murray, Jobs | Permalink | Comments (0)

Saturday, September 13, 2014

North Dakota State University - ESPN's College GameDay and Business Law

NDSU

First Joshua Fershee visits North Dakota, now ESPN's College GameDay

North Dakota State University, which is being featured on GameDay this morning, is also one of the schools looking for a business law professor (albeit a "lecturer") on my updated list here.

While most of my co-bloggers teach at much bigger sports schools than I, as I mentioned previously, it is a lot of fun teaching at a school that gets at least occasional national attention for its sports teams.  

September 13, 2014 in Business School, Haskell Murray, Sports | Permalink | Comments (0)

Friday, September 12, 2014

Delaware Judges and Law Review Articles

In 2007, J. W. Verret (George Mason) and then Chief Justice Myron Steele authored an article entitled Delaware's Guidance: Ensuring Equity for the Modern Witenagemot, which discussed "some of the extrajudicial activities in which members of the Delaware judiciary engage to minimize the systemic indeterminacy resulting from the resolution of economic disputes by a court of equity."

One of these extrajudicial activities is authoring or co-authoring law review articles.  In this post, I am not going to weigh in on whether Delaware judges should be authoring law review articles, but rather, I simply note that there are two recent law review articles and one recent book chapter by Delaware judges that warrant our attention. 

Vice Chancellor Travis Laster - Evidence-Based Corporate Law.

John Maynard Keynes is said to have observed, "When the facts change, I change my mind. What do you do, sir?" In Delaware's Choice, Professor Subramanian argues that the facts underlying the constitutionality of Section 203 have changed. Assuming his facts are correct, and the Professor says that no one has challenged his account to date, then they have implications for more than Section 203. They potentially extend to Delaware's jurisprudence regarding a board's ability to maintain a stockholder rights plan, which becomes a preclusive defense if a bidder cannot wage a proxy contest for control of the target board with a realistic possibility of success. Professor Subramanian's facts may call for rethinking not only the constitutionality of Section 203, but also the extent of a board's ability to maintain a rights plan.

Chief Justice Leo E. Strine, Jr. and Nicholas Walter (Yale), Conservative Collision Course?: The Tension between Conservative Corporate Law Theory and Citizens United.

One important aspect of Citizens United has been overlooked: the tension between the conservative majority’s view of for-profit corporations, and the theory of for-profit corporations embraced by conservative thinkers. This article explores the tension between these conservative schools of thought and shows that Citizens United may unwittingly strengthen the arguments of conservative corporate theory’s principal rival.

 

Citizens United posits that stockholders of for-profit corporations can constrain corporate political spending and that corporations can legitimately engage in political spending. Conservative corporate theory is premised on the contrary assumptions that stockholders are poorly-positioned to monitor corporate managers for even their fidelity to a profit maximization principle, and that corporate managers have no legitimate ability to reconcile stockholders’ diverse political views. Because stockholders invest in for-profit corporations for financial gain, and not to express political or moral values, conservative corporate theory argues that corporate managers should focus solely on stockholder wealth maximization and non-stockholder constituencies and society should rely upon government regulation to protect against corporate overreaching. Conservative corporate theory’s recognition that corporations lack legitimacy in this area has been strengthened by market developments that Citizens United slighted: that most humans invest in the equity markets through mutual funds under section 401(k) plans, cannot exit these investments as a practical matter, and lack any rational ability to influence how corporations spend in the political process.

Because Citizens United unleashes corporate wealth to influence who gets elected to regulate corporate conduct and because conservative corporate theory holds that such spending may only be motivated by a desire to increase corporate profits, the result is that corporations are likely to engage in political spending solely to elect or defeat candidates who favor industry-friendly regulatory policies, even though human investors have far broader concerns, including a desire to be protected from externalities generated by corporate profit-seeking. Citizens United thus undercuts conservative corporate theory’s reliance upon regulation as an answer to corporate externality risk, and strengthens the argument of its rival theory that corporate managers must consider the best interests of employees, consumers, communities, the environment, and society — and not just stockholders — when making business decisions.

Chief Justice Leo E. Strine, Jr. and Vice Chancellor Travis Laster, The Siren Song of Unlimited Contractual Freedom

One frequently cited distinction between alternative entities — such as limited liability companies and limited partnerships — and their corporate counterparts is the greater contractual freedom accorded alternative entities. Consistent with this vision, discussions of alternative entities tend to conjure up images of arms-length bargaining similar to what occurs between sophisticated parties negotiating a commercial agreement, such as a joint venture, with the parties successfully tailoring the contract to the unique features of their relationship.

As judges who collectively have over 20 years of experience deciding disputes involving alternative entities, we use this chapter to surface some questions regarding the extent to which this common understanding of alternative entities is sound. Based on the cases we have decided and our reading of many other cases decided by our judicial colleagues, we do not discern evidence of arms-length bargaining between sponsors and investors in the governing instruments of alternative entities. Furthermore, it seems that when investors try to evaluate contract terms, the expansive contractual freedom authorized by the alternative entity statutes hampers rather than helps. A lack of standardization prevails in the alternative entity arena, imposing material transaction costs on investors with corresponding effects for the cost of capital borne by sponsors, without generating offsetting benefits. Because contractual drafting is a difficult task, it is also not clear that even alternative entity managers are always well served by situational deviations from predictable defaults.

In light of these problems, it seems to us that a sensible set of standard fiduciary defaults might benefit all constituents of alternative entities. In this chapter, we propose a framework that would not threaten the two key benefits that motivated the rise of LPs and LLCs as alternatives to corporations: (i) the elimination of double taxation at the entity level and (ii) the ability to contract out of the corporate opportunity doctrine. For managers, this framework would provide more predictable rules of governance and a more reliable roadmap to fulfilling their duties in conflict-of-interest situations. The result arguably would be both fairer and more efficient than the current patchwork yielded by the unilateral drafting efforts of entity sponsors.

September 12, 2014 in Business Associations, Constitutional Law, Corporate Governance, Haskell Murray, LLCs, Partnership, Unincorporated Entities | Permalink | Comments (0)