Wednesday, February 10, 2016

Roots of Scholarly Productivity (Take I)

A colleague recently encouraged me to undertake to write a blog post series.  The essence of his idea?   Reveal how those who regularly turn out quality research and writing over a period of time do it. He suggested it might be valuable for readers to know how one might organize the applicable research, deal with research assistants, write, etc.  He indicated his belief that I am qualified to undertake this task (which was/is both flattering and daunting at the same time).  He concluded with the following observation:  "I'm sure that you work harder than many people, but my guess is there's more to it than that."

I recognized immediately the value of his suggestion.  Many of us struggle with keeping the scholarship leg of the three-legged academic stool for law faculty roughly as long as the teaching and service legs.  But what enables law faculty not only to survive this struggle, but also to consistently produce worthy scholarship?  And am I really qualified to speak on this?  

Because I do think the topic is meritorious and because I respect the colleague who made this suggestion, I am going to give the topic a shot.  This post offers my preliminary reflections.  They may or may not represent reality for others.  Perhaps (regardless) my thoughts will sponsor other productive ideas.

First, I do work long hours.  Those who know me well know this well.  My husband has said that he believes I work longer hours in law teaching than I did in private practice (and I worked long hours in private practice).  I admit that, although my doctor has indicated it's not good for my health, I do not always get eight hours of sleep.  But I want to be clear that my short nights of sleep, when they happen, are largely my choice.  That choice is made because of the heartfelt passion I have for my work.  (The key is to not let things go to an extreme . . . .)

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February 10, 2016 in Joan Heminway, Research/Scholarhip | Permalink | Comments (1)

Friday, February 5, 2016

Why a Corporation?

Starting on the first day of my Advanced Business Associations course, I attempt to tease out the policy underpinnings and theoretical conceptions of entity law and, in particular, corporate law.  This turns out to be a somewhat difficult task, since most students in the course, to the extent that they remember anything at all from their experience in the foundational Business Associations course, are more focused on what a corporation is and does than why we might have one in the first place.  As the semester proceeds and the readings unfold, the students get more comfortable talking about the rationale for certain aspects of the corporate form and why corporate law structures and operating rules promise to achieve the goals of those organizing a firm as a corporation.  But it's a slow process.

I have to believe that some of my fellow law professors face similar challenges with their students.  I also believe that instructors in other educational settings face analogous difficulties when they incorporate abstract notions into the teaching of more "black letter" (for want of a better term at this point in my day) concepts.  My approach has been to assign readings of primary and secondary material and use classroom discussion time and projects to reveal things about why the corporation exists, why venturers form them (as opposed to conducting business as sole proprietors or using another business form), and what issues we observe and might expect to observe as among corporate constituents as time unfolds.  So, I plan to cover everything from the general role of entity law in fostering the conduct of business (by offering off-the-shelf rules for use by venturers in structuring and operating  businesses) to notions of corporate personhood and the role of the corporation in society.

I am wondering if there is an alternative to my approach that any of you use in a similar course, or whether there is a particularly good set of foundational readings that you use to approach this set of issues in a business law offering.  At the end of this semester, I will have taught this course in this general format twice, and I will be taking stock to shore it up to make sure the third time's a charm.  [FYI, I start the semester with Bebchuk and Bainbridge, take a tour through the public company using the Disney case and its corporate documents, then move on to compare/contrast the publicly held firm with closely held corporations and unincorporated business associations before moving into some depth topics (M&A, complex business litigation, corporate social responsibility and the benefit corporation, etc.).  It is a two-hour course.]  Suggestions and other thoughts in comments or by email are welcomed.

February 5, 2016 in Business Associations, Corporate Governance, Corporate Personality, Corporations, Joan Heminway, Teaching | Permalink | Comments (6)

Wednesday, January 27, 2016

Mindfulness and Legal Drafting for Business Lawyers (A Yoga Analogy)

As many of you know, I teach both traditional doctrinal and experiential learning courses in business law.  I bring experiential learning to the doctrinal courses, and I bring doctrine to the experiential learning courses.  I see the difference between doctrinal and experiential learning courses as a matter of emphasis.  Among other things, this post explores the intersection between traditional classroom-based law teaching and experiential law teaching by analogizing business law drafting to yoga practice principles.  This turned out to be harder than it "felt" when I first started to write it.  So, the post may be wholly or partially unsuccessful.  But I persevere . . . .

I begin by noting that we are, to some extent, in the midst of a critical juncture with respect to experiential learning in legal education.  Some observers, including both legal practitioners and faculty, criticize the lack of experiential learning, noting that legal education is too theoretical and policy-oriented, resulting in the graduation of students who are ill-prepared for legal practice.  Yet, other commentators note that too great an emphasis on experiential learning leaves students without the skills in theory and policy that they need to make useful interpretive judgments and novel arguments for their clients and to participate meaningfully in law reform efforts.  Of course, different law schools have different programs of legal education (something not noted well enough, or at all, in many treatments of legal education).  But even without taking that into account, many in and outside legal education (including, for example, in articles here and here) advise a law school curriculum that merges the two.  I think about and struggle with constructively effectuating this all merger the time.

Now, about the yoga . . . .  Most of you likely do not know that, in addition to teaching law, being a wife and mom, and other stuff, I enjoy an active yoga practice.  As I finished a yoga class on Sunday afternoon, I realized that yoga has something to say about integrating doctrinal and experiential learning, especially when it comes to instruction on legal drafting in the business law area.  Set forth below are the parallels that I observe between yoga and business law drafting.  They are not perfect analogs, but they are, in my view, instructive in a number of ways important to the teaching mission in business law.  The first two bullet points are, as I see it, especially important as expressions of the idea that law teaching is more complete and valuable when it holistically integrates doctrine, policy, theory, and skills.  The rest of the bullets principally offer other insights.

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January 27, 2016 in Compliance, Corporate Finance, Joan Heminway, Law School, Securities Regulation, Teaching | Permalink | Comments (0)

Tuesday, January 26, 2016

2016 American Bar Association LLC Institute

At the request of Tom Rutledge, chair of the American Bar Association Section of Business Law's Committee on LLCs, Partnerships and Unincorporated Entities (that sure is a mouthful!),  I am passing on the following:


While the dates are still being resolved, this October, 2016, the Committee of LLCs, Partnerships and Unincorporated Entities will again be sponsoring a two-day LLC Institute in Arlington, Virginia. This program brings together more than 100 high-level practitioners and academics to review a variety of issues involving the law of unincorporated business organizations. In recent years presentations have been made by Joan Heminway, Carter Bishop, Dan Kleinberger, Colin Marks, Michelle Harner and Benjamin Means. I think each will vouch for the quality of the program.

We are actively soliciting proposals for panels. If you are working on something, or if there is something you would like to discuss before an audience that I can guarantee will be “hot”, please let me know.


Tom Rutledge


Indeed, I can vouch for the program, at which I have presented twice.  There typically is an opportunity presented to write a short piece for Business Law Today, if you are interested.  My contribution from the 2015 LLC Institute (a real page-turner--not) can be found here.

January 26, 2016 in Conferences, Joan Heminway, LLCs, Unincorporated Entities | Permalink | Comments (1)

Wednesday, January 20, 2016

More on the Cover Letter as an Important Link in the Law Placement Chain

Employers and hiring coordinators are busy people.  Like law review editorial boards, they get many more qualified submissions than they need for the openings they have.  One of our challenges in advising students in the job search game is making their submissions stand out.  Of course, personal connections and timing are very helpful in this regard.  But résumés and cover letters also are important and may make a real difference in obtaining interviews and getting desired offers of employment.  

As we settle into the new semester, my unemployed 3L students have begun to seek help from me in their quest to launch their careers post-graduation. One resource I highlight is the BLPB.  Co-blogger Haskell Murray earlier posted some super information about résumés and interviews.  I followed, at his suggestion, with a post on cover letters (and then one on following up with firms that have not initially extended an interview invitation).  This post adds some new details on cover letters that respond to common mistakes I see and questions I have been asked about my earlier post on that topic.

Specifically, I want to describe better the key personalized part of the cover letter--the body of the letter between the introductory and closing paragraphs.  This is the segment of the letter that, if everything else looks and sounds right, calls the applicant out on an individualized basis and holds the promise of positively distinguishing her or him from other applicants.  Here's what I said about this section of the cover letter in my original post:

The body of the letter is the most important as a matter of content. It is where you get to show that you have what the employer needs and wants for the position. You should rely on any position announcement you have to write this part of the letter. If there is no announcement or other position description, seek information about or rely on your knowledge of the position to identify the employer's needs and wants. Summarize for yourself from those needs and wants the specific skills and experience being sought by the employer. Then, demonstrate, preferably by example, how you fill these needs and satisfy these wants in a few (no more than three) short paragraphs. Avoid repeating what's on your resume and refrain from using characterizing adjectives and adverbs. Show the reader that you are a good fit and among the most qualified folks for the job. Don't just say it.

There's a lot in that passage!  Note also that the comments to that original post add a bit more on some of these (and other) matters.  Critical embedded messages in the quoted paragraph include the desirability of:

  • presenting customized information that directly addressees the job requirements set forth in the position announcement (or any other manifestations of the prospective employer's needs and wants);
  • demonstrating, rather than characterizing, the applicant's "fit" through the information provided;
  • avoiding mere repetition of information included in your résumé; and
  • avoiding the use of unnecessary adjectives and adverbs.

I address each in turn below.

Continue reading

January 20, 2016 in Haskell Murray, Joan Heminway, Law School | Permalink | Comments (2)

Sunday, January 17, 2016

Development Studies Workshop - Organized by the Banque Populaire Chair in Microfinance of the Burgundy School of Business (Dijon, France)



Development Studies Workshop
Organized by the
Banque Populaire Chair in Microfinance of the Burgundy School of Business (Dijon, France)
In collaboration with
BG Foundation (India)
With Support from
VLCC (India)

Theme: Spirituality, Organization and Development
Dates: 28th and 29th October, 2016
Venue: Gurgaon/Delhi (India)

At a time of terrorism, war, and general confusion on human values, there is increasing concern to develop the world in a more sustainable manner. Harmony with nature, ethics, morality and even spirituality is being sought at an individual level, at an organizational level and at the macro level, while continuing the focus on development and making life worth living for all our fellow human-beings. At this juncture, more and more academics and practitioners are turning towards religion to see if some spiritual lessons can be incorporated for an enhanced work-life. At the very least, understanding the spiritual culture of different persons is important to work in global corporations. It is even more important to understand large waves of immigrants and to mentally prepare for their differences in values. The theme of this workshop is therefore relevant to promote human understanding in a globalized world.

A research workshop's primary aim is to help each other improve our papers so that we can publish in high ranked international journals and specialized books on a topic. For this, we would like to bring together a large diversity of researchers from different backgrounds to focus on a relevant and interesting theme, which is meaningful to the present moment.


While papers in any of these individual themes is welcome, papers combining two or more elements of spirituality, organization and economic development will be given preference.

Examples of possible topics combining two themes (not exclusive, not exhaustive) to spark your thoughts:

  1. Spiritual Development
    a. Yoga in the workplace
    b. Gandhism and sustainable development
    c. Organizing Ayurvedic health systems
  2. Organizational Development
    a. Organization Leadership and community development
    b. Corporate transformation through Islamic Finance
    c. Managing Conflicts through the Art of Living
  3. Economic Development
    a. Microfinance and Hinduism
    b. Confucianism and development of intellectual property rights
    c. Economics of Spiritual tourism of Christian holy places

Please send abstracts by April 15, 2016 to 

Guidelines for Abstracts (150 to 300 words)

Title of the paper
Author Information: Names, designations and affiliations, current locations (city, country)
Research purpose
Theoretical Background
Research design/methodology/approach
Key results
Impact (on new research or on new practices, policies)
Value added/ Originality


There will be no parallel sessions. A minimum of six and a maximum of fifteen working papers can be presented.
Abstracts will be selected based on conformity to the theme and diversity of origins.
A few people whose abstract is not accepted can opt for being discussants or participants, subject to place availability.

[more below the fold]

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January 17, 2016 in Conferences, Corporations, Joan Heminway, Religion, Research/Scholarhip | Permalink | Comments (0)

Thursday, January 14, 2016

The Contractual Nature of LLCs, An AALS Conference Afterward

Last week, I threatened that I might have outtakes from the the Association of American Law Schools ("AALS") panel discussion for the Section on Agency, Partnerships, LLCs and Unincorporated Associations, "Contract is King, But Can It Govern Its Realm?".  The "conversation" between panelists and among panelists and audience members was rich and far-ranging, although much of it was not "new news" to those of us focused on the many legal questions relating to contracts in the unincorporated business associations space.  Here is my brief additional comment on the panel discussion, ex post.  A recording of the session should later be available, for those interested in listening in.

Although most of the discussion was intentionally not scripted (but, rather, organized by a set of questions shared with the panelists in advance), a few of us did have assignments.  I was charged with two key areas of earmarked participation.  First, I accepted an invitation to identify and categorize non-Delaware state law issues at the intersection of unincorporated business association law, contract law, and legislative drafting.  Second, I was invited to comment on my work on the LLC [operating] agreement as contract (or non-contract).  Although each topic is worthy of attention, I already have written a bit about the latter in this forum.  So, I will focus here on just the state law piece.

This specific area of focus, the non-Delaware issues, is a favorite area of mine in LLC law and business associations law more generally.  As teachers and scholars, we all-too-often focus on Delaware law--and most often, for good reason.  But sometimes we ignore, to our detriment, the fact that other laws, while not leading or as well developed, deserve attention in their own right--attention that may help the judiciary, the legislature, and the bar (including our former students).  So, I took on this first assignment for the AALS panel to help ensure that we consider state laws more broadly.  And for those who have done any work in this area, you know the specific doctrine can vary!

I made three observations on the non-Delaware state law issues relating to whether contract is king in LLC law.  First, I observed that states describe the contractarian nature of their LLC laws differently.  Some, like Delaware, articulate a policy of giving maximum effect to principles of freedom of contract and the enforceability of LLC [operating] agreements.  See, e.g., the statutes in Indiana, Kansas, Kentucky, Missouri, New Mexico, and Virginia.  At least one state, Pennsylvania, declares that contract is king unless otherwise noted in the certificate of organization or otherwise in the statute.  A number of states, including my home state of Tennessee, have what I refer to as "RUPA-like" provisions (i.e., statutory language similar to that included in the Revised Uniform Partnership Act) that merely, without being subject to an overarching policy as to interpretation, give effect to the provisions in the LLC [operating] agreement unless those provisions are expressly proscribed by statute.

My second observation was that states treat exculpation and private ordering with respect to fiduciary duties and the implied covenant of good faith and fair dealing differently.  Again, some states follow Delaware in allowing (1) exculpation except for bad faith violations of the implied covenant of good faith and fair dealing and (2) the elimination of fiduciary duties (but not the implied covenant of good faith and fair dealing).  Kansas is an example that I noted.  Mississippi, however, limits exculpation in ways not unlike those used in corporate law.  Colorado LLC law provides that fiduciary duties may be  restricted or eliminated if not "manifestly unreasonable" and allows for the provision of standards for compliance with the implied covenant of good faith and fair dealing (but does not permit its elimination).  Tennessee, the District of Columbia, and others use a RUPA-like approach that does not permit exculpation and allows tailoring, but not elimination, of fiduciary duties (under separate standards for loyalty and care) and the articulation of standards by which performance of the obligation of good faith and fair dealing is to be measured, if not "manifestly unreasonable".

Finally, I observed that state legislatures may or may not focus on these issues or the differences among the state statutes concerning these matters.  I noted, however, based on my experiences in Massachusetts and Tennessee, that the bar is attentive to both the issues and (at least to some extent) the differences.  In other words, I see anecdotal evidence of conscious path-dependence in business entity legislation planning and drafting.

I wonder if these observations ring true to you.  I also wonder if you have your own observations in this regard.  Let me know in the comments.

January 14, 2016 in Conferences, Joan Heminway, LLCs | Permalink | Comments (0)

Wednesday, January 6, 2016

Is Contract King in LLCs? (And What Does Being "King" Mean, Anyway?)

Tomorrow afternoon (as Anne promoted earlier today), I will participate in the annual Association of American Law Schools ("AALS") panel discussion for the Section on Agency, Partnerships, LLCs and Unincorporated Associations.  The panel discussion this year is entitled "Contract is King, But Can It Govern Its Realm?" and focuses on the contractarian aspects of LLC law.  Here's the panel description from the AALS annual meeting program:

This program will explore the role of contract in unincorporated associations, with particular emphasis on the LLC and limited partnership forms. In most jurisdictions, the sparse prescriptions in the default rules imply that the parties will draft an operating agreement that reflects the material points of their bargain. For example, Delaware emphasizes that its policy for LLCs and LPs is to give “maximum effect to the principle of freedom of contract.” Modern contract theory, however, raises significant questions about the extent to which any documentation of a transaction can be “complete,” even if sophisticated parties negotiate at arm’s length and attempt to fully reduce their expectations to writing. If complete contracts are indeed an ideal rather than the reality, can legislatures impose default rules (fiduciary or otherwise) to fill the gaps without undermining the benefits of private ordering? To what extent should judges look outside the operating agreement to determine the parties’ intent? Our format will be a lively moderated discussion, and we will invite significantly more audience participation from the outset than attendees may have come to expect from AALS section meetings.

As you may recall (and as Anne reminded us in her earlier post on the AALS conference sessions), we hosted a weblog micro-symposium on issues relating to this topic in anticipation of this annual meeting program back in November, for which the concluding post is here, and my contributions are here and here.

I expect that we will explore through the conference panel (which, as the program description indicates, will engage the audience for much of the time) the nature and status of LLC agreements as contracts and the coexistence of contract with fiduciary duties and the implied covenant of good faith and fair dealing.  I hope that we can cover points of theory, policy, doctrine, and practice.  I will be adding some non-Delaware flavor in some areas of the discussion and encouraging folks to contemplate whether LLC operating agreements are contracts or merely treated like contracts for certain LLC law purposes.  Please come join in on the fun if you are attending the conference this year!  I may have more to say after the discussion has concluded . . . .

January 6, 2016 in Anne Tucker, Business Associations, Joan Heminway, LLCs, Unincorporated Entities | Permalink | Comments (0)

2016 AALS Section Meetings

The AALS Annual meeting starts today in New York.  The full program is available here, and listed below are two Section meeting announcements of particular interest to business law scholars:

Thursday, January 7th from 1:30 pm – 3:15 pm the SECTION ON AGENCY, PARTNERSHIP, LLC’S AND UNINCORPORATED ASSOCIATIONS, COSPONSORED BY TRANSACTIONAL LAW AND SKILLS will meet in the Murray Hill East, Second Floor, New York Hilton Midtown for a program titled:

"Contract is King, But Can It Govern Its Realm?"  

The program will be moderated by Benjamin Means, University of South Carolina School of Law.  Discussants include:

  • Joan M. Heminway, University of Tennessee College of Law
  • Lyman P.Q. Johnson, Washington and Lee University School of Law
  • Mark J. Loewenstein, University of Colorado School of Law
  • Mohsen Manesh, University of Oregon School of Law
  • Sandra K. Miller, Professor, Widener University School of Business Administration, Chester, PA

BLPB hosted an online micro-symposium in advance of the Contract is King meeting.  The wrap up from this robust discussion is available here.

Friday January 8th, from 1:30 pm – 3:15 pm join the SECTION ON BUSINESS ASSOCIATIONS AND LAW
AND ECONOMICS JOINT PROGRAM at the Sutton South, Second Floor, New York Hilton Midtown for a program titled:

 "The Corporate Law and Economics Revolution Years Later: The Impact of Economics and Finance Scholarship on Modern Corporate Law".  

The program will be moderated by Usha R. Rodrigues, University of Georgia School of Law, and feature the following speakers:

  • Frank Easterbrook, Judge, U.S. Court of Appeals for the Seventh Circuit, Chicago, IL
  • H. Kent Greenfield, Boston College Law School
  • Roberta Romano, Yale Law School
  • Tamara C. Belinfanti, New York Law School
  • Kathryn Judge, Columbia University School of Law
  • K. Sabeel Rahman, Brooklyn Law School

At the conclusion of the program, the officers of the Section on Business Associations would like to honor 13 faculty members
for their mentorship work throughout the year. 

I hope to see many of you in New York soon!

-Anne Tucker

January 6, 2016 in Anne Tucker, Conferences, Corporate Governance, Corporations, Delaware, Financial Markets, Joan Heminway, Law and Economics, Law School, Teaching, Unincorporated Entities | Permalink | Comments (0)

Wednesday, December 30, 2015

. . . And The Business Associations Grades Are IN

OK.  No more complaining about grading--at least for another few months.  Whew!  I think I am getting too old for this crazy few weeks in December that involve holiday preparations and reading for the purpose of assessment.

This week, as I promised last week, I do want to say a bit more about the exams themselves, however.  I noticed certain patterns of wrong answers this year (some of them common to ones noted in prior years that I have tried in various ways--unsuccessfully--to address in my teaching).  I sent a message to my students that captured those common mistakes.  An edited list of the observations I shared with them about those errors is included below.

  • Management/Control vs. Agency.  Management and control as an entity attribute is not the same as agency. The former involves internal governance--who among the internal constituents of the firm has the power to exercise the firm's rights and keep it operating, from a legal (and practical) point of view. The latter relates to the firm's liability to third parties. These two matters are set forth in different rules in each statute we covered in our course last semester. In the corporation, for example--the most complicated firm we studied, the board has the highest level of management and control rights. The officers have management and control power delegated by the corporation's organizational/organic documents (charter and bylaws, and maybe a shareholder agreement) and by the board. The shareholders have more limited management and control powers (through electing directors and approving charter and bylaw amendments, mergers and acquisitions, sales of all/substantially all the corporation's assets, and voluntary dissolutions). Of those three internal constituents, only the officers are agents of the firm who can bind the corporation to contracts and transactions with third parties. [I continued by offering other examples from partnership and LLC law.]  . . .  The main point is that one should not conflate management/control and agency. They are separate considerations.

  • Compensation vs. Distributions.  Rights to compensation and distribution are both financial benefits to the recipient, but they are different from each other in almost all respects. Compensation (salary and benefits) is paid in exchange for services. . . .  Distributions represent returns (including current returns, like dividends, as well as amounts paid in dissolution--at the end of wind-up) to owners/equity investors. The MBCA also defines distributions to include amounts received in exchange for shares when the corporation buys them back from its shareholders.

  • Limited Liability - Owners vs. Managers.  Both shareholders, as corporate owners, and directors/officers, as corporate managers, may enjoy some form of limited liability. Separate those concepts out, however. Shareholders are afforded limited liability under the statutes in a different way than directors/officers. This is largely because the former do not typically have fiduciary duties to the firm, while the latter do. So, the latter must be accountable for the interests of the firm in taking action for or on its behalf.

  • The Judicial Process.  When asked to convey information about how a court addresses cases in an area, the best approach is to identify the court's standard of review or methodology/process as evidenced in the applicable body of cases--not to summarize each case individually . . . . Although the case summary approach may ultimately respond to the inquiry, it is not a sure way to do that and it is not efficient in any case. Imagine a client sitting through a series of case summaries after asking how a court handles a particular issue . . . . Ask yourself: would the client know that her question was answered in the end, and if so, would she be able to understand the answer?

  • Using IRAC.  IRAC is a legal reasoning approach used to apply law to facts to resolve a legal question involving a legally cognizable action. If you are asked a question on an exam about a rule of law that does not engage a fact pattern, then you do not need IRAC. Part B of the exam did not involve the application of law to dispute resolution or other activities. Yet, some of you tried to set out an answer in IRAC form for that part of the exam. It wasn't ultimately very successful (since there could not be an "A").

  • Avoiding Redundancy/Inconsistency.  In using IRAC or another legal reasoning technique, state the legal rule once in all of its relevant detail; then, use it. A number of you repeated the rule several times (sometimes with differing levels of detail) in answering a single exam query. This redundancy cost you time that could have been better spent on other parts of the exam, in many cases, and the approach sometimes led to inconsistent applications of the rule (because it was stated differently). For example, many of you stated (correctly) that the current RULPA allows limited partners to enjoy limited personal liability for the obligations of the limited partnership even if the limited partners exercise control. But later in the same response, some of you took that back by noting (incorrectly) that certain types of control would subject limited partners to personal liability for the obligations of the firm. Both cannot be true . . . .

  • Using "Held" and Other Variants of "Holding".  . . . [S]tatutes do not have holdings. Lawyers do not say that statutes "hold" particular rules. Rather, statutes "provide" or "state" or "set forth" matters or rules. Also, many of you misuse the word "hold" when referring to information from cases. A holding in a case is the response to a legal issue raised in the case. So, you should not say that a case "held" something unless that something represents the response to a legal issue raised in the case. For example, it's inaccurate to say that a case "held" something that represents a policy consideration or dicta.

That's it.  (Although I cannot resist, especially in light of Josh Fershee's post yesterday, adding that one student did refer to LLC owners as shareholders--a bad cut-and-paste job from an earlier answer, imv.)  I suspect that many who teach Business Associations see some of these same things with their students.  Some of these mistakes are generic errors that also may be observed in other courses.  No doubt, as I observed last week, some of these errors would not be made in situations that do not involve the stress and time pressure that an in-class examination entails.  To me, however, all of these issues were important enough to bring to the attention to the entire class.  I also invited--encouraged--all students to come back and review their exams, whether they "did better, as well as, or less well than . . . expected, hoped, or wanted."  I hope that many of my students do take me up on that offer/suggestion.  But I am not holding my breath.


December 30, 2015 in Business Associations, Corporate Governance, Corporations, Joan Heminway, Teaching | Permalink | Comments (0)

Thursday, December 24, 2015

Merry Christmas, Law Profs (Lyrics, With Thanks and Apologies to The Carpenters)

Merry Christmas, Law Profs

Greeting cards have not been sent.

The Christmas stress is true.
But I still have one wish to make,
A special one for you:

Merry Christmas, law profs!
We're on break(?), that's true.
So I can dream,
And in my dreams,
There's no more grading to do!
Grading's ne'er joyful.
There's always something "new."
And every day's a taxing one,
When grades and gifts are due.
The lights on my tree
( . . . Wait--is there a tree?)
Perhaps we'll buy one today . . . ?!
No logs on the fire,
But I have real desire
To take a break and say
That I wish you Merry Christmas
--Happy New Year too.
I've just one wish
On this Christmas Eve:
I wish that grading was through!
I wish that grading was through!!
Merry Christmas, Merry Christmas, law profs.


December 24, 2015 in Joan Heminway, Law School | Permalink | Comments (1)

Wednesday, December 23, 2015

Having Fun With Business Law Final Exam Typos

Still grading, and (in the process) reflecting on the line in Marcia Narine's post from last week on the references to “creepy tender offers” and “limited liability corporations” in her students'  final exam submissions . . . .  I thought I might share today a few of my own favorite outtakes from my students' Business Associations exams.  I know that the time crunch and the nature of the exam software contribute mightily to the typing errors in student submissions, but on the reading end, some of the answers submitted are just . . . well . . . funny.  As you'll no doubt note, today's post focuses mostly on closely held corporations (with one typo relating to limited partnerships).

First , there are, of course, the transposed letters.  Most of these don't warrant more than a brief mention.  The limited partnership act references to UPLA and RUPLA, instead of ULPA and RULPA fit into this category.  Similar are the inevitable variants of case names (Donahue becoming Danahue, Donahur, and Donaue, etc.). 

Then, there are the many misspelling of fiduciary(ies)--which I have come to believe may just be a hard word to type.  (Or maybe no one actually knows how to spell it.)  Uncommon misspellings of this often misspelled exam word include three versions that I found in one exam, in the same paragraph: foiducaries, fidurcairy, and fiducaiys.  (I should note that all of these correct to "fiduciary" or "fiduciaries" in the spellcheck, which I had to override to make this post.  Hmm.  Maybe they were not as far off as I thought.) 

Perhaps my favorite submission from the closely held corporation parts of the exam, however, was the one from the student who (repeating at the outset of his/her answer a short-form version of the prompt from my exam question) simply wrote: "What is the f duty?"  There was a bit of blank space after the letter "f" in that submission, so, given the possible existence of some exam period frustration . . . .  I think you can see where my mind went as I read that.  (Or maybe that would be--with words transposed--"What the f is duty?")  :>)  Please forgive the irreverance!

Anyway, more on exams next week, when I am done.  Can't wait.  To be finished with grading, that is.  Look for my holiday post for you all on my state of mind in that regard tomorrow morning.  Ho, ho, ho.

December 23, 2015 in Business Associations, Corporations, Joan Heminway, Law School, Partnership | Permalink | Comments (0)

Wednesday, December 16, 2015

Teaching the Corporate Counsel of Tomorrow

A number of months back, the Business Law Prof Blog hosted a series of five posts by Marcos Antonio Mendoza (here, here, here, here, and here) that were quite popular.  He wrote about (among other things) the need to educate students for the evolving roles in which they may serve as corporate counsel.  His recent article on corporate offers much food for thought along those lines and serves as a good reminder, as we head into a new semester, of what our students may need long-term in the workplace.  In both this article and his earlier BLPB posts, Marcos is reacting to an academic research paper, "Finding the Right Corporate Legal Strategy" (available to subscribers or for purchase), published last year in the MIT Sloan Management Review by Professor Robert C. Bird of the University of Connecticut School of Business and Professor David Orozco from the Florida State University College of Business.

Although you all should read Marcos's Corporate Counsel article (and his posts) for yourselves, I will offer a few quotes from the article and related law school instruction take-aways here.  These largely repeat and reframe Marcos's own observations in his BLPB posts.

  • "[T]he most successful companies determine which of five legal strategies is the most effective in their legal environment, and then deploy their legal resources to accomplish their goals." The five legal strategies are avoidance, compliance, prevention, value, and transformation.  We would be doing our students a great service in identifying and explaining these five strategies and showing the students how legal doctrine, theory, and policy connect with the strategies.
  • "One of the most effective ways for companies to promote . . . attorney education [about business issues] is through job rotations, in which counsel are temporarily assigned to managerial positions in the business units they support."  Courses in the standard law school curriculum--and even new offerings focusing on business skills (e.g., reading and interpreting financial statements)--obviously do not (cannot) serve this function, although some clinic and simulation experiences offer students a limited exposure to business issues.  We should consider designing field placements, internships, externships, etc. for business law students to give them some quality, sustained exposure to business issues.
  • "[E]xecutives should create a cross-functional strategic team composed of lawyers and operational business managers who are guided by the chief legal strategist. The team’s responsibility is to hypothesize legal strategies that have a clear impact on a profit-loss statement."  Can we model these strategic teams for our students? Can a consciously constructed curricular or co-curricular program with a business school (easier to accomplish for those of us in universities) offer a useful experience of this kind to our students?

Again, as we finalize course planning and syllabi for (and, in general, think about) the new semester, the types of educational experiences identified by Marcos in his earlier posts--including those highlighted here--are well worth bearing in mind.

December 16, 2015 in Joan Heminway, Jobs, Law School, Lawyering | Permalink | Comments (0)

Thursday, December 10, 2015

On Avoiding Whining: The Blessings of Exam Season

A few days ago, co-blogger Steve Bradford posted on law professor complaints about grading under the title Warning: Law Professor Whine Season.  OK.  I typically am one of those whiners.  But today, rather than noting that grading is the only part of the semester I actually need to be paid for (and all that yada yada), I want to briefly extoll one virtue of exam season:  the positive things one sees in students as they consciously and appropriately struggle to synthesize the material in a 14-week jam-packed semester.

My Business Associations final exam was administered on Tuesday.  Like many other law professors, I gave my students sample questions (with the answers), held a review session, and responded to questions posted to the discussion board on our class course management site.  Sometimes, I dread any and all of that post-class madness.  This year, I admit that there were few of the thinly veiled (and, by me, expressly discouraged and disdained) "is this on the exam?" or "please re-teach this part of the course . . ." types of questions or requests in any of the forums that I offered for post-class review and learning.  That was a relief.

The students' final work product for my Corporate Finance planning and drafting seminar was due Monday.  I met with a number of students in the course about that drafting assignment and about the predecessor project in the final weeks before each was due.  I watched them work through issues and begin to make decisions, uncomfortable as they might be in doing so, that solve real client problems.  Satisfying times . . . .

In fact, there have been a number of moments over the past week in which I was exceedingly proud of the learning that had gone on and was continuing to go on during the post-class exam-and-project-preparation phase of the semester.  I  offer a few examples here to illustrate my point.  They come from both my Business Associations course, for which students take a comprehensive written final examination, and my Corporate Finance planning and drafting seminar, for which students solve a corporate finance problem through planning and drafting and write a review of a fellow student's planning and drafting project.

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December 10, 2015 in Business Associations, C. Steven Bradford, Corporate Finance, Joan Heminway, M&A, Teaching | Permalink | Comments (1)

Thursday, December 3, 2015

Emory Law's Fifth Biennial Conference on the Teaching of Transactional Law and Skills


Emory’s Center for Transactional Law and Practice is delighted to announce its fifth biennial conference on the teaching of transactional law and skills. The conference, entitled “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills,” will be held at Emory Law, beginning at 1:00 p.m. on Friday, June 10th and ending at 3:45 p.m. on Saturday, June 11th.


We are accepting proposals immediately, but in no event later than 5 p.m. on Monday, February 15, 2016. We welcome proposals on any subject of interest to current or potential teachers of transactional law and skills, focusing particularly on our overarching theme: “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills.”

We hope to receive proposals about teaching: business/corporate law; contract drafting and other transactional drafting; deal skills (interviewing a client, conducting due diligence, negotiating, etc.); business and financial literacy; and ethics and professionalism.

We also welcome proposals about the interplay between teaching transactional law and skills and the ABA’s new experiential learning requirement (Standard 303(a)(3)). Moreover, with regard to the teaching of transactional law and skills, we would like to hear about your efforts to use technology in the classroom, create meaningful assessment tools, and conduct empirical studies. Please submit the proposal form electronically via the Emory Law website at before 5 p.m. on Monday, February 15, 2016.

Each session will be approximately 80 minutes long. We invite you to present your topic individually or with a panel of other participants and we encourage you to make your presentation creative and interactive. We look forward to receiving your proposals so that we can finalize the Program.

As in prior years, some of the conference proceedings as well as the materials distributed by speakers will be published in Transactions: The Tennessee Journal of Business Law, a publication of the Clayton Center for Entrepreneurial Law of The University of Tennessee.


Both attendees and presenters must register for the Conference and pay the registration fee of $189.00. The registration fee includes a pre-Conference lunch beginning at 11:30 a.m., snacks, and a reception on June 10, and breakfast, lunch, and snacks on June 11. We are planning an optional dinner for attendees and presenters on Friday evening, June 10, at an additional cost of $45 per person.

Registration is now open for the Conference and the optional Friday night dinner at our Emory Law website at


Attendees and presenters are responsible for their own travel arrangements and hotel accommodations. Special hotel rates for conference participants are available at the Emory Conference Center Hotel, less than one mile from the conference site at Emory Law. Subject to availability, rates are $129 per night. Free shuttle transportation will be provided between the Emory Conference Center Hotel and Emory Law.

To make a reservation at the special conference rate, call the Emory Conference Center Hotel at 800.933.6679 and mention “The Emory Law Transactional Conference.” Note: The hotel’s special conference rate expires at the end of the day on Wednesday, May 18, 2016.

If you encounter any technical difficulties in submitting your proposal or in registering online, please contact Kelli Pittman, Conference Coordinator, at or 404.727.3382.

We look forward to seeing you in June!

Sue Payne                                                  Katherine Koops
Executive Director                               Assistant Director

December 3, 2015 in Call for Papers, Joan Heminway, Teaching | Permalink | Comments (0)

Wednesday, December 2, 2015

Educating Students on the Common Law of Corporations

I so often find Keith Bishop's blog, California Corporate & Securities Law, both informative and entertaining.  Monday's post in that forum is no exception.  In that post, Keith describes three important principles of Delaware corporate law that are not codified in the General Corporation Law of the State of Delaware (commonly and fondly known as the Delaware General Corporation Law or DGCL).  No surprise, but the three principles he identifies and describes are:

  • the business judgment rule;
  • derivative suit pleading requirements; and
  • the intermediate standard of review applicable in certain limited fiduciary duty actions.

Great list.  And I agree with what he says.

Of course, anyone who teaches corporate law has had to consider (and, to sone degree, call out) the areas of that body of law that derive from decisional, rather than statutory, law.  I often have been heard to say, in the basic Business Associations course, that if students forget--or need to leave behind--one of the two required texts (a casebook and a statutory resource book) when they come to class, most days, they should forget/leave behind the casebook, since it is more important for them to have the statutory law in front of them to answer most Business Associations law questions.  I note, however, that there are two large areas of exception:  veil piercing and fiduciary duty.  For those two doctrinal areas, I inform them that they won't need the statutory resource book as much as the casebook.

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December 2, 2015 in Business Associations, Corporate Governance, Corporations, Delaware, Joan Heminway | Permalink | Comments (0)

Friday, November 27, 2015

Last-Minute Call for Papers - Microfinance (ITEM 7)

Please accept my apologies for not posting this notice sooner.  I received the call for papers a few weeks ago and meant to post it then.  But I now see that the deadline for abstract submissions is Monday!  Mea culpa.  Please feel free to post a comment here or contact me by email for more information if you want to submit.  I have a more full-blown version of the call for papers that I can send by email to those who are interested in more information.  (I omitted here prior conference locations as well as the names and affiliations of members of the conference academic and practice review boards and organizing committee.) 

I have participated in this conference for the past two years.  While there are few law academics in attendance, I have found the work of our international colleagues from the business side of the aisle to be both very informative to my work and interesting in many other respects.  This conference also has enabled me to forge new relationships that have positively impacted my scholarship.

Call for Papers
7th Conference on Innovative Trends Emerging in Microfinance (ITEM-7)
Pumping up Innovations In and Around Microfinance
(Microfinance, Crowdfunding and Community Development Finance)
Organized by the
Banque Populaire Chair in Microfinance of the Burgundy School of Business, Dijon, France
In collaboration with
The Chinese Association of Microfinance
Shanghai Jiao Tong University Centre for Financial Inclusion

March 15-17, 2016
In Shanghai, China

Poverty is a deep-rooted problem. Science magazine has published research indicating that poverty is even associated with cognitive problems. One hope to eradicate poverty is to provide the poor with the resources necessary to cope with it, the resources being specific to their situation. One possible resource is microfinance. Today, more and more researchers are getting involved in research that makes a difference to practitioners who want to create a new world of hope for the poor. Although it is too early to prove either a positive or a negative impact of financial leverage on the poor, other financial products are being offered to the poor so that they are financially included.
The international conference on Innovative Trends Emerging in Microfinance (ITEM) is aimed at researchers, both from academic field and from the industry, who are looking at institutional and technological environmental factors that could increase outreach or reduce costs or both. Previous editions of this conferences have been held in India, France and Morocco.

Conference themes
The 7th edition brings together researchers from three areas: Microfinance, Crowdfunding and Community Development Finance. However, the conference is open to other closely related microfinance fields and papers on impact measures, social governance, innovation, and sustainable development are welcomed.
The ITEM conference provides a forum for both researchers and practitioners to discuss and exchange on financial inclusion. The conference in March 2016 seeks quantitative, qualitative and experience-based papers from industry and academia. Case studies and PhD research-in-progress are also welcomed. It encourages reflections on the potential and use of technology in microfinance in developed and developing countries.
Papers can be in English, French and Chinese. Normally, there is no provision for translations. So, English is preferred.

Publication opportunity
The conference invites both professional presentations and research papers. Since we are all aiming for high level publications, we do not publish books or copyrighted proceedings. It is expected that the review process and the partnerships developed would help the researchers develop the paper towards a high impact journal and that, perhaps, they would think of acknowledging their participation in the conference. However, if researchers want, their papers are directly considered for journal special issues or books that the organizers or other participants may be associated with. These journals include Strategic Change (Wiley) and Cost Management (Thomson-Reuters).

Submission procedure
Proposals: All contribution types require a proposal in the first instance, including a short abstract between 300 and 500 words, up to five keywords, the full names (first name and surname, not initials), email addresses of all authors, and a postal address and telephone number for at least one contact author.

The abstract should indicate:

Title of the paper

Track of the paper (see below)

Authors and affiliations

Research purpose

Research design/methodology/approach

Key results

Impact: (on new research or on new practices, policies)

Value added/originality

Tracks proposed:

Stream 1: Microfinance

Track 10: Microfinance (all other)
English / French
Track 11: Communication and Microfinance
English/ French
Track 12: Experiments in Microfinance
Track 13: Market research in microfinance
Track 14: Microfinance in China

Stream 2: Crowdfunding

Track 20: Crowdfunding (all other)
English / French
Track 21: Communication et crowdfunding
English/ French
Track 22: Regulation in Crowdfunding
English / French
Track 23: Engaging the crowd
Track 24: Strategies of crowdfunding
Track 25: Governance in Crowdfunding
English / French

Stream 3 : Community Development Finance

Track 30: Community Development (all other)
English / Chinese
Track 31: Impact Investment Funds
Track 32: Community Development Funds
Track 33: Slow Money / Agricultural Investment

Full Papers are only required after acceptance of abstract. Papers should not to be more than 5000 words including abstract, keywords and references. Submission period for the full papers is till December 31st, 2015. These will be sent for review after the registration fee has been paid. Each author of a full paper will also be required to review a paper and be a discussant at the conference.

Deadline / Timeline
November 30, 2015: Submission of abstract of proposals
December 10, 2015: Confirmation of acceptance
December 31, 2015: Early-bird registration ends
January 15, 2015: Full papers for those who want their papers reviewed
January 31, 2016: Normal registration ends
March 15-17, 2016: Conference

Registration and Payment: instructions will be sent at the time of confirmation of acceptance of abstract.
There are special discounts available for early-bird registration and for students. These will be posted on the conference website.

Web site:

November 27, 2015 in Conferences, Corporate Finance, Joan Heminway | Permalink | Comments (0)

Wednesday, November 25, 2015

Giving Thanks for Amazing Colleagues



Last year, in my first Thanksgiving week post, I gave public thanks for my students. I could just as easily have done that again this year.  My students continue to impress and inspire me.  And that is certainly something to be grateful for--year in, and year out.

This year, however, I also want to acknowledge my thanks for all of the special colleagues I have in the academy (and yes, fellow BLPB editors, that includes you!) and the bar that make my job complete.  When I have needed assistance, support, or just a good laugh, it is my fellow law peeps--and especially my business law peeps--to whom I most often turn and on whom I almost always rely.

You, my law teacher and lawyer friends, have:

  • read and edited my early syllabi, exams, and assignments, preventing me from making mistakes that new law professors often make;
  • taught my Business Associations class when my mother was dying so I could be by her side;
  • helped my son learn about e-discovery and various types of law practice so that he could launch his career;
  • provided assistance to my Corporate Finance students when they needed specialized guidance or advice on their planning and drafting projects;
  • reviewed innumerable drafts of law review articles and provided honest, insightful criticism and comments;
  • supplied (whether knowingly or unknowingly) material that I can and do use to help educate my students about real-world legal problems that impact businesses and the people who engage with them;
  • forgiven me when I have done stupid sh*t in conducting my professional activities that doesn't warrant mercy or amnesty;
  • stayed up with me late at night to draft portions of self-study reports, legislation, and other important documents; 
  • invited or elected me to serve in professional leadership positions, on academic panels, on professional association and bar committees, and in other capacities that have enabled me to both serve and continue to learn;
  • collaborated with me on materials and presentations for important continuing legal education programs; 
  • extended publication or submission deadlines to give me time and space to handle emergent personal or professional obligations that I determined were important; and
  • built solid foundations in theory, policy, and doctrine from which I can build my teaching and scholarship.

I am sure I am forgetting important things, large and small, in this list.  But you get the picture and the point.  And I am sure that each of you reading this could come up with your own similar list of things about which you are thankful relative to our colleagues--truly remarkable, extraordinary people.

In any event, I am grateful for you all.  Have a blessed Thanksgiving.

November 25, 2015 in Joan Heminway | Permalink | Comments (1)

Tuesday, November 24, 2015

Contract Is King Micro-Symposium Wrap Up

This post concludes the Contract Is King, But Can It Govern Its Realm? Micro-symposium.  The symposium was hosted as part of the AALS section on Agency, Partnership, LLCs and Unincorporated Associations in advance of the section meeting on January 7th at 1:30 where the conversation will be continued.

I summarized the conversation and provided links to all of the individual posts.  Bookmark this page-- there is great commentary at your finger tips on a range of topics.  Please keep reading (and commenting) on these great contributions by our insightful participants to whom we are very grateful.

Jeffrey Lipshaw kicked off the symposium conversation with his post (available here) questioning, in practice, how different LLCs are from traditional corporations.  He used a great map analogy to talk about the role of formation documents and default rules as gap fillers. 

“The contractual, corporate, and uncorporate models are always reductions in the bits and bytes of information from the complex reality, and that’s what makes them useful, just as a map of Cambridge, Massachusetts that was as complex as the real Cambridge would be useless.” 

After asserting that LLCs differ from corporations only in matters of degrees, Jeff went on to to them illustrate how degrees of difference may still matter.  He provided a good example of a situation where the ability to eliminate fiduciary duties may produce the right result—an option only available in alternative entities not corporations.  

Mohsen Manesh contributed two posts (available here and here).

Mohsen argued that if contract is king, business revenue rules the reign in Delaware.  Franchise taxes and revenues generated from being the business domicile of so many businesses, in all forms, is a source of riches, one that Mohsen argued will be protected by preserving a commitment to freedom of contract.

“Delaware’s annual tax charged to alternative entities is flat. All LLCs and LPs, no matter how large or small, whether publicly traded or closely held, pay the state only $300 annually for the privilege of being a Delaware entity. Thus, unlike the corporate context, where Delaware’s business is dependent on attracting large, publicly traded corporations, in the alternative entity context, Delaware’s business depends on volume alone.”

In his first post, Mohsen also addressed Delaware Chief Justice Strine and Vice Chancellor Laster’s provocative “Siren Song” book chapter, where the pair advocate for mandatory fiduciary duties in publicly traded LLCs and LPs.  Mohsen questioned the limitation arguing that

“[M]any of critiques that Strine and Laster levy at publicly traded alternative entities– unsophisticated investors, the absence of true bargaining, and confusing contract terms that often unduly favor the managers—could be levied at many private entities as well. If so, then why should Strine & Laster’s proposal be limited to public entities?”

Sandra Miller blogged here about investor sophistication and its relationship to fiduciary duty waivers.  She highlighted her scholarship in the area and provided helpful links to her papers discussing her points in greater detail.

“[T]here are asymmetries in the marketplace that make it unlikely that the marketplace will efficiently discount the effects of waivers.  Given the investor profile, at a very minimum, the duty of loyalty should be non-waivable for publicly-traded entities.” 

Joan Heminway questioned whether LLC operating agreements are contracts, and if not the implication for fiduciary duties, statue of frauds, capacity and public policy challenges and enforceability against third parties.

“[W]ith judicial and legislative attention on freedom of contract in the LLC, the status of the LLC as a matter of contract law may shed light on the extent to which contract law can or should be important or imported to legal issues involving LLC operating agreements...So, while contract may be king in LLC law, we may question whether a contract even exists under LLC law.”

Joan also highlighted her recent appearance at the ABA LLC Institute in a related post available here and shared the many functions of an operating agreement (whether contract or not!).

Daniel Kleinberger contributed to the conversation in four parts (appearing in three separate posts here (1), here (2) and here(3)).  Daniel focused on Delaware’s implied contractual covenant of good faith and fair dealing and the covenant’s role in Delaware entity law.  He carefully distinguished the covenant from the UCC implied covenant of good faith and fair dealing and from the corporate standards of good faith as articulated in Stone v. Ritter and Smith v. Van Gorkum.  Thirdly he addressed waivers of good faith and fair dealing both in the governing agreement and arising from contract in Delaware and under the Uniform Limited Partnership Act. 

“Perhaps ironically (or some might even say “counter-intuitively”), the Uniform Limited Liability Company Act (2006) (Last Amended 2013) permits an ULLCA operating agreement to go where a Delaware operating agreement cannot.” 

In his final post, available here, Kleinberger addressed interpretation questions with implied covenants analogizing the analysis to that used with impracticability. 

“For impracticability or a breach of the implied covenant to exist, the situation at issue must have been fundamentally important to the deal and yet unaddressed by the deal documents.  Put another way:  the notion of a “cautious enterprise” means that only a condition that is egregious or at least extreme is capable of revealing a gap to be remedied by the implied covenant.”

BLPB editor, Joshua Fershee, was inspired by the topic and contributed his own post to the micro-symposium.  In his post, he declared himself a Larry Ribstein devotee and highlighted how the structural differences in the LLC form, as opposed to the corporate form, provide business benefits for LLC members.

“The flexibility of the LLC form creates opportunity for highly focused, nimble, and more specific entities that can be vehicles that facilitate creativity in investment in a way that corporations and partnerships, in my estimation, do not.”

Greg Day, another BLPB-generated contribution to the conversation, blogged about sophisticated parties’ utilization of freedom of contract in LLC, and sophisticated investors demand for the conformity of traditional corporate formation over LLCs.

“[W] hen Delaware LLCs become big, and attract big funds, a condition of investment almost always requires an LLC to convert into a Delaware corporation. It seems that the lack of predictability associated with the freedom of contract scares potential investors who prefer the comforts of fiduciary duties, among other corporate staples. …So the parties who ostensibly are best served by contractual freedoms—i.e., sophisticated parties—appear to be the ones most likely to demand the traditional corporate form. And on a related note, this helps to explain why such a paltry number of LLCs and LPs have become public companies.”

Finally, Peter Molk & Verity Winship also contributed a last-minute addition to the symposium highlighting their empirical work on LLC operating agreement dispute resolution provisions as it relates to the question of contracting rights in unincorporated entities.  They reported some of their early findings and linked it to the discussion about contractual freedom and the implications of mandatory fiduciary duties. 

“More than a third of the agreements in our sample selected the forum for resolving disputes, primarily through exclusive forum provisions or mandatory arbitration provisions.  The agreements also modified litigation processes through terms that imposed fee-shifting, waived jury trials, and, less commonly, through other means like books and records limitations.”

Participants in the Micro-Symposium were asked to respond to a series of questions (available here) that will be further discussed at the AALS section meeting.  Joan MacLeod Heminway (BLPB editor), Dan KleinbergerJeff LipshawMohsen Manesh, and Sandra Miller.will be panelists at the AALS meeting and joined by Lyman Johnson and Mark Loewenstein

November 24, 2015 in Anne Tucker, Conferences, Corporate Governance, Corporations, Delaware, Joan Heminway, Joshua P. Fershee, LLCs, Partnership, Unincorporated Entities | Permalink | Comments (0)

Thursday, November 19, 2015

Contract Law, Fiduciary Duties, Good Faith, Fair Dealing, and the Legal Status of LLC Operating Agreements (Contract Is King Micro-Symposium)

The title of this post undoubtedly promises too much.  But that won't prevent me from trying to establish a few points that approach the many topics that could be discussed under a title that includes this much great stuff.  I make that attempt here.

I start with contract law.  As I noted in my prior post for this micro-symposium, one of my appearances at last week's ABA LLC Institute included a debate on whether an operating agreement is a common law contract.  This question arose in connection with my teaching of operating agreements (and also has arisen in my teaching of partnership agreements) in Business Associations.  Of course, lawyers understand that not all agreements are contracts.  A significant amount of energy is spent on this matter in the beginning of the standard contracts course in law school.  

Is an LLC operating agreement a contract?  I like the question not just for its face value, but because I believe that the answer does or may matter for purposes of resolving other questions arising in and outside LLC law.  I captured some thoughts about this question in a draft essay soon to be published in revised form in the SMU Law Review.  (I blogged about it here over the summer.)  Among other things, with judicial and legislative attention on freedom of contract in the LLC, the status of the LLC as a matter of contract law may shed light on the extent to which contract law can or should be important or imported to legal issues involving LLC operating agreements.

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November 19, 2015 in Business Associations, Joan Heminway, LLCs | Permalink | Comments (2)