Friday, July 22, 2016

Thank You Letters

Following on Joan's excellent post about networking letters, I wanted to share a few words about thank you letters.

Attorney Kyle Westaway organizes "thank yous" into four levels:

  • Level 1 — Email saying thanks for the time and insight.
  • Level 2 — Level 1 + this is how your insight impacted my life.
  • Level 3 — Handwritten thank you note.
  • Level 4 — Level 3 + a small gift.

This seems right, and Kyle's entire post is well worth reading at the link above.

A mere thank you e-mail usually isn't worth much, but it is better than nothing (unless the thank you is typo-riddled, and then it might be worse than nothing). The e-mail is worth more if the author recounts meaningful specifics from your conversation or picks up on a way that he/she might be of assistance.

The handwritten note has made a comeback after interviews, but I don't think it has had the same resurgence after networking/advice meetings. This is a shame because generally the interviewer is just doing his or her job, while the person who is honoring your networking/advice request is usually the one bestowing a true gift. Due to the relative rarity, I think handwritten notes are even more appreciated after a networking/advice meeting than after an interview. For handwritten notes, I think it is worth investing in personalized stationery and trying to remember to send the notes right away so that the delay is not elongated.  

As to small gifts, those obviously would not be appropriate after an interview, but might be a really nice touch after a networking/advice meeting. If any readers have good thoughts on appropriate small gifts, please share in the comments or over email. I have always had a hard time thinking of these kinds of gifts. Wine seems like a common choice, but it could be risky unless you know the person drinks alcohol.

Finally, this recent article in the Harvard Business Review entitled Stop Making Gratitude All About You struck a chord. The author suggests praising the recipient rather than just describing how the recipient benefited you or made you felt. Of course, praise should be sincere and can be overdone, but I think the author is onto something.

July 22, 2016 in Business School, Haskell Murray, Joan Heminway, Jobs | Permalink | Comments (1)

Tuesday, July 19, 2016

Central States Law Schools Association Conference: Registration is Open!

Registration is now open for the Central States Law Schools Association 2016 Scholarship Conference, which will be held on Friday, September 23 and Saturday, September 24 at the University of North Dakota School of Law in Grand Forks, ND. We invite law faculty from across the country to submit proposals to present papers or works in progress.

CSLSA is an organization of law schools dedicated to providing a forum for conversation and collaboration among law school academics. The CSLSA Annual Conference is an opportunity for legal scholars, especially more junior scholars, to present on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment. More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work. Scholars from member and nonmember schools are invited to attend.

Please click here to register. The deadline for registration is September 2, 2016.

Hotel rooms are now available for pre-booking. The conference hotel is the Hilton Garden Inn in Grand Forks. The hotel phone number is (701) 775-6000. When booking, identify yourself as part of the “UND School of Law” block to receive a daily rate of $89. Please note that conference participants are responsible for all of their own travel expenses including hotel accommodations.

For more information about CSLSA and the 2016 Annual Conference please subscribe to our blog.

We look forward to seeing you in Grand Forks!

Sincerely,

The 2016 CSLSA Board
For more information about CSLSA, visit our website at http://cslsa.us/ or contact a board member.

July 19, 2016 in Conferences, Joan Heminway | Permalink | Comments (0)

Monday, July 18, 2016

The Networking Letter: Sibling of the Job-Seeking Cover Letter

As an adjunct to my posts (here and here) on law placement cover letters, I commend to you this blog post on networking letters, correspondence that seeks to establish a career or job-related connection--maybe even a longer-term relationship--rather than apply for a specific position.  Truth be told, in some form or another, four of the five tips in the post also apply to job-seeking cover letters.  The outlier?  Tip #2: "Don't ask for an interview or a job."

My take on the relevance of the other four tips for job placement cover letters is as follows:

  1. Respect your reader's time.  Always a good idea when you are asking for anything.  Do not demand.  Ask graciously.  But also be careful not to fall over yourself in being respectful.  It's just not attractive.  It's usually sufficient to use a pair of sentences like these after making an "ask" to show your respect:  "I know that you have a busy schedule.  Accordingly, if this request is unduly burdensome, please just let me know."
  2. Sell your strengths.  This is important and seems obvious.  But folks still miss this prompt!  Why would someone want to meet with a person they don't know well or at all unless the person was interesting to them in some respect?  As readers may recall, I recommend using the PAR method in sharing professional and personal strengths--using a short, pointed narrative, rather than merely describing knowledge, experience, or skills with adjectives and adverbs.
  3. Consider the timing of your letter.  I just had a request from a student on this very issue--when to get back in touch with folks he had positive connections with last year who asked him to "stay in touch" about his permanent job search.  These questions (as to timing) are highly contextual and can be tough to navigate.  I recommend consulting with multiple people to get their views about particularly sticky timing questions.  For example, with respect to my student, the timing of/participation of the firms in on-campus interviews plays a role.  So, I recommended that he also consult with folks in our Career Services office.
  4. Stick to it.  The advice the blog post author (Miriam Salpeter) gives here is dead-on right.  Key sentence: "You don't want to stalk the person, but it's okay to touch base a few times before you consider the door closed."  Again, I advise using advisors from various "walks" to help determine what crosses the line.  It's very important to those consultations that the letter writer keep accurate and complete records of contacts with the proposed letter recipient and others in the same workplace that can be shared with the consultants so that they can best advise. 

As another interview season is on the horizon (although interviewing never seems to stop these days, does it?), some of this advice may come in handy for folks soon.  I also recommend in this regard, btw, Haskell Murray's great post on resumes and interviews.  I cite to it in my initial cover letter post, but I want to note its value again here.

Thanks to Jim Levy for this post on the Legal Skills Prof Blog that alerted me to the networking letter piece.

July 18, 2016 in Joan Heminway, Jobs | Permalink | Comments (2)

Monday, July 11, 2016

Innovative Teaching in Bankruptcy and Reorganizations

OK.  I know it's not yet quite time to panic about syllabi and such for the fall semester.  But that first day of class does approach, and I know some of you out there have already given some thought to innovating your teaching for the fall.  Maybe you're new to teaching or teaching a new (or new-to-you) course.  Maybe you're trying to spice up or change the direction of a course you've taught for a while.  Maybe this post will give you some new food for thought . . . .

For a number of years, my colleague George Kuney, the Director of the business law center at UT Law, has asked students to invest in a particular Chapter 11 bankruptcy case as a capstone experience in his Bankruptcy and Reorganizations course.  The students, working in pairs or small groups,  are required to review all of the documents in the case docket and provide summaries that integrate those filings with learning from the course and supplemental research.  George makes the resulting case studies available to the public.  The cumulation of case studies created by students in this course has gotten quite impressive over the years.  And the case studies get significant readership.

I often have said that it's hard for a law student to identify gaps in knowledge unless the student undertakes to write or speak about the law.  George's exercise offers students the opportunity to both write and speak about the law in a practical setting.  The final work product is a joint writing, but along the way, the students engage verbally to discuss between or among themselves what to present and how to present it in the final case study.

The project also helps students to see the immediate relevance of the law they are learning to find and apply in the course.  Someone out there is using that law right now in a context that requires issue and rule identification and legal analysis and judgment.  The students review and assess the decisions and actions of legal counsel and their clients real-time--just as the news media is reporting on those decisions and actions, in some cases.  Wow.

I see a lot of value in this method of teaching.  I am playing around with changing my Securities Regulation course (which next will be offered in the spring) to incorporate a smaller-scale version of an exercise like this.  It may take me a while to come up with something that works, but I am going to give it a go.  Let me know if you've used a project like this in any of your classes.  I would be curious to know what folks are doing in this regard.

July 11, 2016 in Bankruptcy/Reorganizations, Joan Heminway, Teaching | Permalink | Comments (0)

Saturday, July 9, 2016

Marist College, School of Management - Assistant/Associate Professor of Law/Business Law Opening

I am stealing Haskell's thunder on this one (at his suggestion) to promote this position at Marist College.  Little known facts (other than for folks, like Haskell, who know my family well): my daughter is a Marist Red Fox (that's the school's mascot) having graduated from there with a degree in Media Studies.  It's a lovely small liberal arts college in Poughkeepsie, NY.  And its new President is David N. Yellen, the former Dean and Professor of Law (criminal law expert) at Loyola University Chicago School of Law.  Here are key points from the position announcement (linked to from the first sentence below):


Marist College invites applications and nominations for the position of Assistant /Associate Professor of Law/Business Law to join the School of Management beginning Fall, 2016.

Duties and Responsibilities:
This tenure track position will involve teaching both undergraduate and graduate courses (including online courses) and maintaining a high level of professional activity through research and service in the candidate’s area of emphasis

Qualifications:
Candidates must have a commitment to excellence in teaching and research and should have a JD degree and previous experience teaching legal related and business law courses in a School of Management and/or Business. Professional experience as a practitioner is also desirable.

Required Applicant Documents:
Resume, Cover Letter, References

Position Open Date:
07/08/2016

July 9, 2016 in Haskell Murray, Joan Heminway, Jobs | Permalink | Comments (0)

Monday, July 4, 2016

Berle VIII and a Delaware Law Puzzle

Anne Tucker (who, together with Haskell Murray, me, and many others, attended the 8th Annual Berle Symposium in Seattle a week ago) penned an excellent post last week on the importance of shareholder value under Delaware law.  Her post covers important outtakes from the symposium presentation given by former Delaware Chancellor William (Bill) Chandler and Elizabeth Hecker, both lawyers in the Wilmington, Delaware office of Wilson Sonsini Goodrich & Rosati. In the post, Anne accurately and succinctly summarizes a key take-away from the former Chancellor's remarks:

[A] Delaware court will invalidate a board of directors' other serving actions only if they are in conflict with shareholder value, but never when it is complimentary. And there is a expanding appreciation of when "other interests" are seen as complimentary to, and not in competition with, shareholder value maximization.

Specifically, as Anne's summary indicates, Chancellor Chandler stated his view that a Delaware corporate board must place shareholder financial wealth (whether in the short term or the long term) ahead of any other value in its decision making.  This is hardly a surprise to anyone who follows Delaware corporate law judicial opinions (although the former Chancellor's statement of the law was among the clearest and most definite I have heard).  After all, Chancellor Chandler's opinion in the eBay case is widely cited for this proposition.

The Berle symposium focused on benefit corporations this year, and my draft paper for the symposium highlights the central importance of a corporation's charter-based corporate purpose in that type of firm.  So, I asked the former Chancellor for his personal view on how a Delaware court might handle a specific type of corporate purpose clause in a non-benefit-corporation Delaware corporate law context.  The specific corporate purpose clause I had in mind is one that expresses a clear "second bottom line" (other than the promotion of shareholder value) and clearly indicates that neither bottom line is to be given constant or presumed precedence over the other in decisions made by the board of directors or the corporate officers.

Continue reading

July 4, 2016 in Business Associations, Conferences, Corporate Governance, Corporations, Delaware, Joan Heminway, Shareholders | Permalink | Comments (0)

Happy Fourth of July Y'All. Red, White, and Blue, for You and You and You!

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As an expression of love for my country, I do try to wear red, white, and blue on Independence Day and, in fact, for the entire holiday weekend.  This causes some wardrobe challenges for obvious reasons.  And it's probably more than a bit hokey.

However, I did not plan on coordinating my food choices for the weekend with my sartorial selections!  So, when I opened the lovely yogurt parfait that I made to take to Starbucks for breakfast on Saturday morning, I was delighted and surprised to note its appropriate color scheme (and promptly posted a picture memorializing the same to Facebook).  I include the picture above.

Happy Fourth of July to one and all.  Regardless of whether you are as crazy as I am about celebrating with the colors of the day, I wish you a safe and pleasant holiday.  Happy Birthday, U.S.A.!

July 4, 2016 in Joan Heminway | Permalink | Comments (0)

Thursday, June 30, 2016

Some (Don't) Like it Hot

Back in May, I posted about a legal action against Starbucks for too much ice in its drinks.  I referenced in that post the earlier legal action taken against Starbucks for under-filling its latte drinks and against McDonald's for damage done by hot coffee.  I can't resist adding another hot coffee case to the mix . . . .

Another suit has been brought against Starbucks--my daughter's employer (as I disclosed at the outset in my previous post).  This time, the case involves damage caused by hot coffee resulting from a bad drive-through pass-off.  The plaintiff requests up to $1 million "for medical expenses, loss of work, and for the mental and physical pain she claims the burning coffee caused her," according to the news report.  The case involves second-degree burns--a serious matter in anyone's eyes.  Depending on the facts elucidated at trial, this case may (like the McDonald's case from 20+ years ago) have some traction in court.  (Apparently, there have been other Starbucks cases involving hot drinks.)

I do feel sorry for plaintiffs who are damaged by hot coffee or beverages.  These cases undoubtedly have more gravitas than cases alleging damages based on the amount of ice or beverage served.  Yet, the hot beverage cases still nag at me a bit--maybe because I have trouble conceptualizing suing a coffee service business for damage created by a hot beverage that I ordered.  Today, reflecting on this new Starbucks case, I did some soul-searching to determine why I am unlikely to sue.

The bottom line is that I understand there is something inherently dangerous about ordering hot coffee in a paper cup with a plastic lid, especially for pick-up at a drive-through window.  I know I am assuming a risk in those circumstances.  I also know that I may share or bear blame for any spill that happens after I order--the lid on a cup properly sealed and handed to me loosens and sometimes pops right off if I grab the cup from the top under the lid area.  Maybe you've noticed that in handling coffee at your favorite coffee shop . . . .  

I am no tort lawyer, but I guess I see myself in many of these cases, which makes me wonder whether the plaintiffs and their lawyers place too much reliance on litigation for the achievement of their respective desired objectives . . . .  I would hope that many controversies between businesses and consumers, as I indicated in my prior post, could be resolved outside the litigation process.  Not every injury is or should be compensable through a legal action.

Moreover, in my work, I have been critical of many securities fraud (including insider trading) class actions as at best inefficient means of addressing certain plaintiffs' concerns.  In my experience, I also have seen cases brought against high-profile or deep-pocket defendants more for their settlement value than to redress or prevent a wrong to the plaintiff or society.  My gut tells me that I might be critical of some of the hot coffee cases on the same bases if I came to know more of the facts.  But I cannot be sure.  

Is my instinct off-base?  Am I too quick to see fault in the claims of potential plaintiffs?  Am I giving coffee service businesses too much cred?  I am interested in any thoughts you may have.  In any event, we can be confident that the hot beverage cases will continue for the foreseeable future.

Hat tip to Lou Sirico at Legal Skills Prof Blog for pointing out this case to me.

June 30, 2016 in Food and Drink, Joan Heminway, Litigation | Permalink | Comments (6)

Monday, June 27, 2016

Save the Dates - 2017 National Business Law Scholars Conference

I am still at Berle VIII with Haskell Murray and Anne Tucker.  One more day of my June Scholarship and Teaching Tour to go--and I have a final presentation to do.  Then, back to Knoxville to stay until late in July.  Whew!

As you may recall or know, my Berle appearance this week follows closely on the heels of a talk on the same work (on corporate purpose and litigation risk in publicly held U.S. benefit corporations) that I made at last week's 2016 National Business Law Scholars conference.  While I am thinking about this conference, please join me in saving the date for the next one:  the 2017 National Business Law Scholars conference.  Next year's conference will be held June 8-9 at The University of Utah S. J. Quinney College of Law, with Jeff Schwartz hosting.  I will post more information and the call for papers, etc. once I have it.

June 27, 2016 in Anne Tucker, Business Associations, Conferences, Corporate Finance, Corporate Governance, Corporate Personality, Corporations, CSR, Haskell Murray, Joan Heminway, Research/Scholarhip, Teaching | Permalink | Comments (0)

Monday, June 20, 2016

The Last Tour Leg: The Windy City And The Emerald City

Having helped a few Tennessee bar applicants get straight on their knowledge of agency, unincorporated business associations, and personal property law last Friday at my BARBRI lecture (such a nice group present at the taping to keep me company!), it's now time for me to wrap up my June Scholarship and Teaching Tour with a twofer--a week of travel to two of my favorite U.S. cities: Chicago, for the National Business Law Scholars Conference and Seattle for Berle VIII.  At both events, I will present my draft paper (still in process today, unfortunately) on publicly held benefit corporations, Corporate Purpose and Litigation Risk in Publicly Held U.S. Benefit Corporations.  Here's the bird's-eye view from the introduction:

Benefit corporations—corporations organized for the express purpose of realizing both financial wealth for shareholders and articulated social or environmental benefits—have taken the United States by storm. With Maryland passing the first benefit corporation statute in 2010, legislative growth of the form has been rapid. Currently, 31 states have passed benefit corporation statutes.

The proliferation of benefit corporation statutes and B Corp certifications can largely be attributed to the active promotional work of B Lab Company, a nonprofit corporation organized in 2006 under Pennsylvania law that supports social enterprise (“B Lab”). B Lab works with individuals and interest groups to generate attention to social enterprise generally and awareness of and support for the benefit corporation form and B Corp certification (a social enterprise seal of approval, of sorts) specifically. B Lab also supplies model benefit corporation legislation, social enterprise standards that may meet the requirements of benefit corporation statutes in various states, and other services to social enterprises.

Benefit corporation statutes have not, by and large, been the entity law Field of Dreams. Despite the legislative popularity of the benefit corporation form, there have not been as many benefit corporation incorporations as one might expect. In the first four years of benefit corporation authority, for example, Maryland reported the existence of fewer than 40 benefit corporations in total. Tennessee’s benefit corporation statute came into effect in January 2016, and as of May 2, 2016, Secretary of State filings evidence the organization of 26 for-profit benefit corporations. However, a review of these filings suggests that well more than half were erroneously organized as benefit corporations. Colorado, another recent adopter of the benefit corporation, does appear to have a large number of filings (90 in total as of June 12, 2016 based on the list of Colorado benefit corporations on the B Lab website). However, as with Tennessee, a number of these listed corporations appear to be erroneously classified. These anecdotal offerings indicate that published lists of benefit corporations—even those constructed from state filings—over-count the number of benefit corporations significantly.

Research for this article identified no publicly held U.S. benefit corporations. For these purposes (and as referenced throughout this article), the term “publicly held” in reference to a corporation is defined to mean a corporation (a) with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (“1934 Act”), or (b) otherwise required to file periodic reports with the Securities and Exchange Commission under Section 13 of the 1934 Act. Yet, benefit corporations may be subsidiaries of publicly held corporations (as Ben & Jerry's Homemade Inc., New Chapter Inc., and Plum, PBC have demonstrated), and corporations certified as B Corps have begun to enter the ranks of publicly held corporations (perhaps Etsy, Inc. being the most well known to date). It likely is only a matter of time before we will see the advent of publicly held U.S. benefit corporations.

With the likely prospect of publicly held U.S. benefit corporations in mind, this article engages in a thought experiment. Specifically, this article views the publicly held U.S. benefit corporation from the perspective of litigation risk. It first situates, in Part I, the U.S. benefit corporation in its structural and governance context as an incorporated business association. Corporate purpose and the attendant managerial authority and fiduciary duties are the key points of reference. Then, in Part II, the article seeks to identify the unique litigation risks associated with publicly held corporations with the structural and governance attributes of a benefit corporation. These include both state and federal causes of action. The reflections in Part III draw conclusions from the synthesis of the observations made in Parts I and II. The closing thoughts in Part III are intended to be of use to policy makers, academic observers, and advisers of corporations, among others.

As Haskell mentioned in an earlier post, he and Anne and I will be together at the Berle VIII event.  What a great way to end my June tour--with my friends and colleagues from the Business Law Prof Blog!  I look forward to it.

June 20, 2016 in Anne Tucker, Business Associations, Conferences, Corporate Governance, Corporations, Haskell Murray, Joan Heminway, Social Enterprise | Permalink | Comments (0)

Thursday, June 16, 2016

8th Annual Berle Symposium - Benefit Corporations and the Firm Commitment Universe - June 27-28, 2016 - Seattle, WA

Three Business Law Prof Blog editors (myself included) are presenting at the upcoming Berle Symposium on June 27-28 in Seattle.

Colin Mayer (Oxford) is the keynote speaker, and I look forward to hearing him present again. I blogged on his book Firm Commitment after I heard him speak at Vanderbilt a few of years ago. The presenters also include former Chancellor Bill Chandler of the Delaware Court of Chancery. Given that Chancellor Chandler's eBay v. Newmark decision is heavily cited in the benefit corporation debates, it will be quite valuable to have him among the contributors. The author of the Model Benefit Corporation Legislation, Bill Clark, will also be presenting; I have been at a number of conferences with Bill Clark and always appreciate his thoughts from the front lines. Finally, the list is packed with professors I know and admire, or have read their work and am looking forward to meeting. 

More information about the conference is available here.

June 16, 2016 in Anne Tucker, Business Associations, Conferences, Corporate Governance, Corporations, CSR, Delaware, Financial Markets, Haskell Murray, Joan Heminway, Law School, Social Enterprise | Permalink | Comments (0)

Monday, June 13, 2016

Introducing Guest Blogger Doug Moll to the BLPB

This post welcomes Doug (Douglas K.) Moll to the Business Law Prof Blog.  He'll be posting with us a few times over the next month or so.  

Doug is the Beirne, Maynard & Parsons, L.L.P. Law Center Professor of Law at The University of Houston Law Center.  He teaches a variety of transactional business law courses: Business Organizations, Doing Deals, Business Torts, Secured Financing, and Sales and Leasing.  I have had the pleasure of working with him in other capacities (he is a fellow Tennessee BARBRI instructor and presented with me at the 2015 ABA LLC Institute, for example) and value his observations about transactional business law.  I also know him to be a highly decorated teacher--having won (according to his website bio) six teaching awards since 1998.  I look forward to his posts--and I am sure you will enjoy them!

June 13, 2016 in Joan Heminway, Weblogs | Permalink | Comments (2)

From The Big Peach to Music City

This past week, I completed the second leg of my June Scholarship and Teaching Tour.  My time at "Method in the Madness: The Art and Science of Teaching Transactional Law and Skills" at Emory University School of Law last week was two days well spent.  I had a great time talking to attendees about my bylaw drafting module for our transaction simulation course, Representing Enterprises, and listening to others talk about their transactional law and skills teaching.  Great stuff.

This week's portion of my academic tour begins with a teaching whistle-stop at the Nashville School of Law on Friday, continues with attendance (with my husband) at a former student's wedding in Nashville on Saturday evening, and ends (my husband and I hope) with Sunday brunch out with our son (and his girlfriend if she is available).  Specifically, on Friday, I teach BARBRI for four hours in a live lecture.  The topics?  Well, I drew a short straw on that.  I teach agency, unincorporated business associations (including a bit about both extant limited liability statutes in Tennessee), and personal property--all in four hours.  Ugh.  Although I am paid for the lecture and my expenses are covered, I would not have taken (and would not continue to take) this gig if I didn't believe that I could be of some help to students.  These topics--especially agency and partnership law, but also personal property--often are tested on the bar exam.  So, on I press.

I also am completing work this week on the draft article that I will present in Chicago and Seattle on the last two stops of my tour.  I will say more about that article in next week's post.  In the mean time, let me know if you have any suggestions (or good jokes) on the law of agency, partnerships, LLCs, or personal property (e.g., tenancies, gifts, bailments, adverse possession, replevin) for my lecture on Friday . . . .  It's so hard to make these speed-lectures somewhat engaging for the students.  [sigh]

June 13, 2016 in Agency, Conferences, Corporations, Joan Heminway, LLCs, Partnership, Personal Property, Teaching, Unincorporated Entities | Permalink | Comments (0)

Saturday, June 11, 2016

The White House and Title III of the JOBS Act: Good Marketing or Overoptimism?

A colleague sent me a link to a White House blog post focusing on Title III of the Jumpstart Our Business Startups Act (JOBS Act), known as the Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act (CROWDFUND Act).  The main theme of the blog post, entitled The Promise of Crowdfunding and American Innovation, is stated in its summary: ''Crowdfunding' rule makes it possible for entrepreneurs across the country to raise small-dollar investments from ordinary Americans."  This much is true.  And the post accurately notes that "previous forms of crowdfunding" also already did this.

But the post goes on to extol the virtues of the CROWDFUND Act, which offers (among other things) a registration exemption for investment (or securities) crowdfunding--a very special type of crowdfunding involving the offer or sale of debt, equity, investment contracts, or other securities.  Or at least the blog post tries to extol the virtues of the CROWDFUND Act.  I am not buying it.  In fact, the post doesn't come up with much of substance to praise . . . .

The coauthors focus a key paragraph on explaining why the CROWDFUND Act is heavy on investor protection provisions.  But they do not talk about the costs of the legislation in relation to its potential benefits, except in the most superficial way--mentioning "risks" without classifying them and outlining the "multiple layers of investor protections."  Although it was written before the final Securities and Exchange Commission rules were adopted under the CROWDFUND Act, my article for the Kentucky Law Journal offers a more detailed picture of benefits and costs and shares my view that the costs are likely to outweigh the benefits for many market participants.

Maybe sensing this (and the possible lack of success of the CROWDFUND Act that may result from this imbalance), the coauthors of the White House blog post offer the following:

One encouraging recent sign is not only the launch of many new regulated crowdfunding platforms, but also the growing ecosystem of “startups helping startups” to provide services for this new marketplace—making it easier for entrepreneurs to fulfill disclosure requirements, verify investor credentials, educate investors, and more. Over time, these new tools may increase transparency and provide strong accountability not only for “the crowd,” but also for the “family and friends” that have long served as entrepreneurs’ first source of seed capital. 

This is a super effect of crowdfunding generally and of securities crowdfunding under the CROWDFUND Act specifically--the emergence of new services and market participants  to support crowdfunding and small capital raising more generally.  I predicted this in my first article on crowdfunding (co-authored with one of my former students) : "Because '[c]rowdfunding is a market of and for the participants,' some traditional financial intermediaries may be shut out of this sector of the capital formation process.  No doubt, however, new support roles for crowdfunding will develop as the industry matures."  [(p. 930, n.263) (citations omitted)]  But these market innovations would be more pronounced, imv, if the CROWDFUND Act provided participants with a more balanced set of costs for the benefits provided.  As the blog post notes, "it’s still a fact that not every entrepreneur has access to needed capital."  More can be done to solve this problem with a registration exemption that allows for small capital raising--funding at well less than the $1 million level set under the CROWDFUND Act--at less cost.

The blog post concludes with more platitudes.  ("America’s entrepreneurs are our engines of economic growth, innovation, and job creation . . . .")  Really, this blog post is a bit of a puff piece--manifesting both good marketing (for those who read and believe it) and overoptimism. 

But then again, what did I expect from a blog post put out by White House staff?  I suppose, given the President's support for the CROWDFUND Act (and the JOBS Act overall--which the coauthors also praise more generally in a paragraph of the post), I should expect the White House to promote the use of the CROWDFUND Act through these kinds of public relations messages.  OK.  I get that.  Nevertheless, I admit to being disappointed that more is not being done in the Executive Branch and elsewhere to point out the shortcomings of the CROWDFUND Act and fine tune the regulation of securities crowdfunding so that it can have its maximum positive impact on business and project innovators and investors alike.  Instead, I fear that well intending proponents are over-promoting the CROWDFUND Act, which may ultimately sour folks on securities crowdfunding as a capital raising alternative if few are able to take advantage of the current regulatory exemptions.  We'll see.  I hope I am wrong in worrying about this.  Time will tell.

June 11, 2016 in Corporate Finance, Crowdfunding, Entrepreneurship, Joan Heminway, Legislation, Securities Regulation | Permalink | Comments (0)

Monday, June 6, 2016

From Decatur Street to Hotlanta!

The first part of my June scholarship and teaching tour is now done.  Having just returned from the Law and Society Association conference in New Orleans (about which I will say more in later posts), I now am preparing for my presentation on Friday at "Method in the Madness: The Art and Science of Teaching Transactional Law and Skills," this year's conference hosted by Emory University School of Law's Center for Transactional Law and Practice.  Emory Law convenes these conferences every other year.  The conferences always focus on teaching transactional business law and skills.

Here's the abstract for my presentation:

Drafting Corporate Bylaws: From Alpha to Omega

The archetypal introductory law school course in business associations law characteristically introduces students to corporate bylaws. Typically, course references to corporate bylaws occur in the context of corporate formation and in cases construing corporate bylaws in the context of private ordering, fundamental corporate changes, and the like. Treatment of the subject is necessarily somewhat superficial and episodic. Although students may be exposed to bylaw provisions and even, in some cases, a sample set of corporate bylaws, little time exists in the standard basic Business Associations course to address the optimal drafting process for drafting organic documents (including corporate bylaws).

An advanced business associations offering or a business planning course, however, provides a wonderful opportunity to engage students in this type of activity and give them a deeper appreciation for the governance significance of corporate bylaws. For the past two years, I have taught a module in Representing Enterprises, a transaction simulation course offered to participants in The University of Tennessee College of Law’s Concentration in Business Transactions, that focuses on drafting bylaws for a closely held start-up corporation organized under Tennessee law. The module offers a sequenced approach to the construction of corporate bylaws, starting with an in-depth survey of applicable statutory and decisional law, progressing through the identification of forms and norms, and ending with individual and group drafting exercises. The five class meetings (ten classroom hours in total over a period of two-and-a-half weeks) in the module engage facilitated peer-to-peer teaching and focus on relevant drafting processes (incorporating and reflecting on the students’ approaches to the required course assignments) and resulting outtakes (more precisely, takeaways).

In this presentation, I will share in more detail the content of and pedagogy involved in this course offering. As support, I will supply all participants with the module syllabus and the staged series of assignments that I give to the students to execute on the embodied learning objectives. This presentation should be particularly useful to those offering, planning on offering, or considering offering a business entity planning and drafting opportunity for law students. But it also may be valuable for those teaching introductory doctrinal offerings in business associations law.

If you cannot be at the conference and are interested in the materials supporting or PowerPoint slides for this presentation, please just let me know.  

Also, you may want to note that many (most) presentations at the conference will be memorialized in a forthcoming volume of our student-edited business law journal, Transactions: Tennessee Journal of Business Law.  Transactions has been a partner of Emory Law in its biennial conferences from the start.  The Transactions volumes from the Emory Law conferences typically are quite popular among business law instructors.  I use my copies a fair amount.  So, you may want to get one of these, too.  Just fyi: the book usually comes out in the spring semester following the conference.  Also note that some of the included works are produced from transcripts of the proceedings (very tough to do) and some are papers prepared by the presenters on the topic of their presentation.

Atlanta, here I come!

June 6, 2016 in Business Associations, Conferences, Corporations, Joan Heminway, Teaching | Permalink | Comments (0)

Monday, May 30, 2016

Heminway's June Scholarship and Teaching Tour 2016 - Part I

This year, my research and writing season has started off with a bang.  While grading papers and exams earlier this month, I finished writing one symposium piece and first-round-edited another.  Today, I will put the final touches on PowerPoint slides for a presentation I give the second week in June (submission is required today for those) and start working on slides for the presentation I will give Friday.

All of this sets into motion a summer concert conference, Barbri, and symposium tour that (somewhere along the line) got a bit complicated.  Here are the cities and dates:

New Orleans, LA - June 2-5
Atlanta, GA - June 10-11
Nashville, TN - June 17
Chicago, IL - June 23-24
Seattle, WA - June 27

I know some of my co-bloggers are joining me along the way.  I look forward to seeing them.  Each week, I will keep you posted on current events as best I can while managing the research and writing and presentation preparations.  The topics of my summer research and teaching run the gamut from insider trading (through by-law drafting, agency, unincorporated business associations, personal property, and benefit corporations) to crowdfunding.  A nice round lot.

This coming week, I will be at the Law and Society Association annual conference.  My presentation at this conference relates to an early-stage project on U.S. insider trading cases.  The title and abstract for the project and the currently envisioned initial paper (which I would, of course, already change in a number of ways) are as follows:

Continue reading

May 30, 2016 in Business Associations, Conferences, Corporate Finance, Corporate Governance, Corporations, Joan Heminway, Research/Scholarhip, Securities Regulation, Social Enterprise, Teaching, White Collar Crime, Writing | Permalink | Comments (0)

Reflecting: Memorial Day Greetings

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As a former student of modern American History (yes, that was my undergraduate major, along with International Relations), I find Memorial Day both sobering and inspiring.  The number of servicemen and servicewomen, as well as others, that we have lost at war is staggering.  As I may have written in a former post, my dad, my father-in-law, and my secretarial assistant all are veterans.  I am glad they made it out alive.  So, today I will spend some time reflecting on those who didn't emerge victorious in the fight for life at war as well as on those who did emerge victorious from that fight.  I am grateful for them all.

May 30, 2016 in Joan Heminway | Permalink | Comments (0)

Friday, May 27, 2016

Student-Focused Phone Scam

One of our readers (thanks, Tom N.) brought this to my attention earlier today.  I have passed it on to some folks internally here at UT Law.  Scammers who prey on students to extract money from them to pay a "Federal Student Tax" deserve their own special place on the Wall of Shame. 'nough said.

May 27, 2016 in Joan Heminway, Law School | Permalink | Comments (0)

Monday, May 23, 2016

Benefit Corporation M&A - The (In)Sufficiency of Financial Fairness

Well, given that I just spent several hours constructing a somewhat lengthy post that I apparently lost (aargh!), I will keep this relatively short.

This summer, I am working on a benefit corporation project for the Annual Adolf A. Berle Symposium on Corporation, Law and Society (Berle VIII) to be held in Seattle next month.  In that connection, I have been thinking about litigation risk in public benefit corporations, which has led me to consider the specific litigation risks incident to mergers and acquisitions ("M&A").  I find myself wondering whether anyone has yet done a benefit corporation M&A transaction and, if so, whether a checklist might have been created for the transaction that I could look at.  I am especially interested in understanding the board decision-making aspects of a benefit corporation M&A transaction. (Haskell, maybe you know of something on this . . . ?)

Preliminarily, I note that fairness opinions should not carry as much weight in the benefit corporation M&A approval context, since they only speak about fairness "from a financial point of view." Benefit corporation boards of directors must consider not only the pecuniary interests of shareholders in managing the firm, but also the firm's articulated public benefit or benefits (which is/are set forth in its charter).  Will legal counsel pick up the slack and render an opinion that the board's consideration of the public benefit(s) complies with law?  What diligence would be required to give that opinion?  I assume in the absence of interpretive decisional law, any opinion of that kind would have to be qualified.  I also assume that legal counsel will not readily volunteer to give this kind of opinion.

However, even in the absence of an opinion, legal counsel will have to offer advice on the matter, since the board of a benefit corporation has the legal obligation to manage the firm consistent with its public benefit(s) in any case.  Moreover, M&A agreements typically include representations (on transactional consents, approvals, and governance/legal compliance) affirming that the requisite consents and approvals for the transaction have been obtained and that the agreement and consummation of the transactions contemplated by it do not violate the firm's charter or applicable law.  Legal counsel will be responsible for counseling the client on these contractual provisions.

At first blush, the embedded issues strike me as somewhat complex and fact-dependent.  Important facts in this context include the precise language of the applicable statutory requirements, the nature of the firm's public benefit or benefits, the type of M&A transaction at issue and the structure of the transaction (including which entity survives in a merger), and the identity of the other party or parties to the transaction (especially whether, e.g., a merger partner is organized as a public benefit corporation or another form of entity).  As I continue to ponder these and related matters in the benefit corporation M&A setting, I invite your comments on any of this--or on broader aspects of litigation risk in the public benefit corporation environment. 

May 23, 2016 in Corporate Finance, Corporations, Haskell Murray, Joan Heminway, M&A, Social Enterprise | Permalink | Comments (2)

Monday, May 16, 2016

Title III Crowdfunding is LIVE!

OK.  I count 17 Form C filings (not including a few amended filings, two of which are noted below) on "Day 1" of U.S securities crowdfunding.  Not a bad showing for the first day out, in my view.

First in line? Bloomery Investment Holdings, LLC with an offering of LLC interests on StartEngine Capital LLC.  The firm filed its Form C a bit after 6:30 AM.   Early risers!  Eager beavers!  (Maybe too eager, since an amendment was filed less than two hours later--apparently because the attendant Form C .pdf was rejected in the initial filing.)  The firm's subsidiary is a moonshine-based liqueur producer.  At this writing, $11,700 of the target threshold funding of $300,000 (1000 units at $300 per unit) has been committed--$288,300 to go!  ($600 came in while I was typing this post.)  And it looks like the base of operations is in West Virginia, Josh!  Do you know these folks?  (Slogan: "Take a Shot on Us.")

StarEngine also is hosting another crowdfunded offering filed today.  The issuer on this offering, GameTree PBC (yes, Haskell, a public benefit corporation!), a social network for gamers based in Solana Beach, California.  GameTree is selling common stock at $2 per share and has set a threshold funding target of $100,000.  As of this writing, the firm had raised $8,360--$91,640 to go.  The Form C filing for this offering also was amended.  The reason? "Needed to re-upload campaign screen shots. First upload did not work."  So, it seems there may be some glitches--or at least propensities for operator error.

This is pure spectator sport for me right now.  I am interested to see that issuers are actually fling and that offerings are attracting some financing commitments.  But some of what I am reading is pretty funny stuff.  I don't have time to do a play-by-play on any of these filings (too busy a week this week).  I must admit that I am especially amused by this "financial risk factor" in the GameTree materials:

Management has no experience managing companies with publicly traded securities.

The legal issues related to public securities are Byzantine and myriad. While it is our intention to follow the law as we understand it and seek the advice necessary to follow best practices, we recognize that mistakes with negative financial results to investors can occur. Crowdfunding is a new method for raising capital and laws are quickly changing and evolving. Changes in securities law may void and/or alter equity arrangements with shareholders.

I just had to quote that one here . . . .  I nearly fell off my chair laughing.  And here is the GameTree risk factor on benefit corporation status, so Haskell can have something to look at and consider:

GameTree is a public benefit corporation and thus may engage in activities in pursuit of its public benefit at the expense of financial gain.

Unlike traditional corporations in which operations and business goals are tied exclusively to the pursuit of profit, GameTree may also take actions in alignment with its stated public benefit at the expense of profit maximization. It is still a for­profit corporation in distinction from a charitable non­profit which has a benefit as its sole purpose.

These disclosures are not what I would've drafted in either case.  But neither disclosure is inaccurate, in my view.  And each is relatively simple.  

It will be interesting to continue to look at some of the SEC filings and related online disclosures as time passes.  I hope to be able to devote additional time to that after I have finished grading exams and papers.  In the mean time, I would enjoy reading your reactions here.

May 16, 2016 in Agency, Crowdfunding, Joan Heminway | Permalink | Comments (4)