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 (4)

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

800px-US_Flag_Backlit

 

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)

Tuesday, May 10, 2016

Save the Date - Washington & Lee Symposium Honoring Two of Business Law's Greatest Scholars

This is just to give everyone a "heads up" on a symposium being held this fall (Friday, October 21 and Saturday, October 22) to honor Lyman Johnson and David Millon.  The symposium is being sponsored by the Washington & Lee Law Review (which will publish the papers presented), and I am thrilled to be among the invited speakers.  I will have more news on the symposium and my paper for it as the date draws nearer.  But I wanted everyone to know about this event so that folks could plan accordingly if they want to attend.  I understand Lexington, Virginia is lovely in late October . . . .  Actually, it's always been lovely when I have been up there! And the honorees and contributors are a stellar group (present company notwithstanding).  I hope to see some of you there.

May 10, 2016 in Business Associations, Conferences, Corporate Governance, Corporations, Joan Heminway, Unincorporated Entities | Permalink | Comments (0)

Monday, May 9, 2016

Monday Business Law Fun: Goldilocks, Consumer Protection, and Over-Caffeinating

[Please keep in mind as you read this post that my daughter is a Starbucks partner.  Any pro-Starbucks bias in this post is unintended.  But you should factor in my affiliation accordingly.]

Maybe it's just me, but the publicity around the recent suit against Starbucks for putting too much ice in their iced beverages made me think of Goldilocks and her reactions to that porridge, those chairs, and those beds.  First it was McDonald's, where the coffee was too hot.  Now it's Starbucks, where the coffee is too cold--or, more truthfully, is too watered down from frozen water . . . .  (And apparently I missed a Starbucks suit earlier this year on under-filing lattes . . . .)  

Different types of tort suits, I know.  I always felt bad about the injury to the woman in the McDonald's case, although the fault issue was truly questionable.  The recent Starbucks case just seems wrong in so many ways, however.  This is a consumer dispute that is best addressed by other means.  I admit to believing this most recent suit is actually an abuse of our court system.

How might a customer who is truly concerned about a substandard beverage attempt to remedy the wrong?

Continue reading

May 9, 2016 in Commercial Law, Current Affairs, Joan Heminway, Lawyering, Litigation | Permalink | Comments (0)

Friday, May 6, 2016

Institute for Law Teaching and Learning 2016 Summer Conference: Real-World Readiness

The Institute for Law Teaching and Learning 2016 summer conference is focusing on "the many ways that law schools are preparing students to enter the real world of law practice."  The conference is being held at Washburn University School of Law.  The agenda and registration information are available here.

May 6, 2016 in Conferences, Joan Heminway, Law School, Teaching | Permalink | Comments (0)

Wednesday, May 4, 2016

Keynote Speakers Announced for Emory Law Conference on Transactional Law and Skills

I am looking forward to attending and presenting at Emory University School of Law’s upcoming conference (June 10-11) focused on the art and science of teaching transactional law and skills.  I received word yesterday from Sue Payne, the Executive Director of Emory Law's Center for Transactional Law and Practice, that the keynote speakers for the conference are "the dynamic duo of Martin J. Katz and Phoenix Cai will deliver a keynote address entitled – 'Encouraging this Particular Form of (Very Fun) Madness – Roles for Deans and Faculty Members.'" The notice se sent to me on the keynote speakers offers the following information about Professors Katz and Cai and the conference as a whole:

Marty Katz is Dean and Professor of Law at the University of Denver, Sturm College of Law. Under his leadership, Denver Law developed and implemented a major strategic plan that included initiatives in experiential learning and specialization. He is a founding board member of Educating Tomorrow’s Lawyers, a national consortium of law schools that serve as leaders in the experiential education movement. Dean Katz’s recent publications include “Facilitating Better Law Teaching – Now” (Emory Law Journal) and “Understanding the Costs of Experiential Legal Education” (Journal of Experiential Learning).    

Phoenix Cai is the founding director of the Roche International Business LLM Program and Associate Professor of Law at the University of Denver, Sturm College of Law. The Roche LLM in International Business Transactions is an intensive and experiential graduate program designed to train both U.S. and foreign lawyers in private transactional law. Prior to joining Denver Law, Professor Cai was a corporate lawyer specializing in both domestic and international mergers and acquisitions, banking, finance, and securities law.

Don’t miss this opportunity to hear Dean Katz and Professor Cai share their thoughts about how deans and faculty members can promote excellence in transactional law and skills education.

For more information about the Conference, including a list of the many other esteemed presenters and the topics they will cover, go to our conference website. If you would like to register for the Conference, please go here.

I hope to see many of you there.  My presentation focuses on teaching the drafting of corporate bylaws.  I will say more on it in this space later.

May 4, 2016 in Conferences, Joan Heminway, Teaching | Permalink | Comments (0)

Tuesday, May 3, 2016

Calling All Secondary Securities Market Aficionados! A Little Help?

What factors generate a healthy secondary market in securities?  That is my question for this week.  I have found myself struggling with this question since I was first called by a reporter writing a story for The Wall Street Journal about a work-in-process written by one of our colleagues, Seth Oranburg (a Visiting Assistant Professor at Chicago-Kent College of Law).  The article came out yesterday (and I was quoted in it--glory be!), but the puzzle remains . . . .

Secondary securities markets have been hot topics for a while now. I followed with interest Usha Rodrigues's work on this paper, for example, which came out in 2013.  Yet, that project focused on markets involving only accredited investors.  

Seth's idea, however, is intended to prime a different kind of secondary market in securities: a trading platform for securities bought by the average Joe (or Joan!) non-accredited investor in a crowdfunded offering (specifically, an offering conducted under the CROWDFUND Act, Title III of the JOBS Act).  [Note: I will not bother to unpack the statutory acronyms used in that last parenthetical expression, since I know most of our readers understand them well.  But please comment below or message me if you need help on that.]  Leaving aside one's view of the need for or desirability of a secondary market for securities acquired through crowdfunding  (which depends, at least to some extent, on the type of issuer, investment instrument, and investor involved in the crowdfunding), the idea of fostering a secondary securities market is intriguing.  What, other than willing buyers and sellers and a facilitating (or at least non-hostile) regulatory environment, makes a trading market in securities?

Continue reading

May 3, 2016 in Corporate Finance, Crowdfunding, Joan Heminway, Securities Regulation | Permalink | Comments (4)

Monday, April 25, 2016

Congratulatons to the Newly Appointed Dean of the J. Reuben Clark Law School at Brigham Young University!

Unknown-193

Although other outlets in the blogosphere (including the blog he founded, The Conglomerate) beat us to the punch by a few weeks (see, e.g., here and here), I want to take time out today to congratulate D. Gordon Smith, currently Glen L Farr Professor of Law at BYU Law, on his appointment as Dean of BYU Law commencing May 1.  (That's this coming Sunday!)

I have had the privilege of working with Gordon a number of times over the years (perhaps most notably in the formation and leadership of the AALS Section on Transactional Law and Skills and with The Conglomerate), and he is a consummate professional.  He represents his institution impeccably as a scholar and servant of the academy and the profession.  He has great judgment and is a kind, considerate soul.  I know that he will be a great leader for BYU Law.

My only regret is that Gordon will likely have to step back from the many leading roles he has had in pushing business transactional law scholarship forward.  His service as a symposium sponsor, conference panel organizer, moderator, discussant, and presenter are so appreciated by me.  [sigh]

Nevertheless, I admit it's great to see another strong business law teacher, scholar, and servant in a law deanship.  I am delighted for him.  And I wish him all the best.

April 25, 2016 in Joan Heminway, Law School | Permalink | Comments (0)

Monday, April 18, 2016

2016 Society of American Law Teachers (SALT) Teaching Conference - Call for Panels and Papers

Call for Panels and Papers


Society of American Law Teachers (SALT) Teaching Conference
in partnership with the
LatCrit-SALT Junior Faculty Development Workshop

SALTlogo

www.saltlaw.org
Friday and Saturday, September 30 and October 1, 2016
The John Marshall Law School, Chicago, Illinois

From the Classroom to the Community: Teaching and Advancing Social Justice

In 2015, law school applications hit a fifteen-year low. The drop reflects a radically changed employment market and a prevailing view that law school is no longer a sound investment. To attract qualified applicants and respond to a changing marketplace, many law schools have embraced experiential learning mandates and other “practice-ready” curricular shifts. The plunge in applications has also prompted law schools to lower admissions standards. In turn, the admission of students with below-average LSAT scores and modest college grade point averages has created new concerns about bar passage, job placement, and prospects for longterm professional success.

In this environment, the legal academy is faced with unprecedented challenges. On one hand, pressure exists to ensure that students are adequately prepared to navigate a courtroom, draft legal documents, and exhibit other “practice-ready” skills upon graduation. At the same time, law professors are urged to cover a wide spectrum of theory, rules, and doctrine to increase prospects for bar passage. In the struggle to achieve both goals, the critical need to integrate social justice teaching into the curriculum is often overlooked, rejected as extraneous, or abandoned in light of time constraints.

To the contrary, social justice teaching plays an essential role in improving legal analysis, enhancing practical skills, and cultivating professional development. Moreover, social justice teaching can help instill passion, commitment, and focus into students burdened with debt and facing an uncertain job market. Most important, as the legal marketplace contracts, access to counsel for lower- and middle-income people continues to grow -- creating a pressing need for effective and committed pro bono lawyers.

In response to new educational and professional challenges, law schools and the legal profession must join in a concerted effort to integrate social justice teaching into the classroom and expand social justice throughout the community. This conference will provide opportunities to engage in broad, substantive, and supportive discussions about the role of legal education and the legal profession in teaching students to become effective social justice advocates and the ways faculty can set an example through their own activism.

Suggested topics include, but are not limited to:

1. Innovative methods to incorporate social justice concepts into the law school curriculum.
2. Strategies to encourage students to become more engaged in academic and community activism.
3. Collaborative efforts between law schools and the legal profession to respond to the need for greater
access to legal services.
4. Techniques to help law students and new lawyers develop resilience, stamina, and “grit” to face the
enduring challenges of social justice advocacy.
5. Responses to the ever-increasing cost of legal education and its impact on social justice and access
to justice.

We welcome other related topics and encourage a variety of session formats. You may submit a proposal as an individual speaker, as a panel, or group. Whatever your topic and format, please use the required format as provided below for your proposal.

Please send your proposals to Hugh Mundy (hmundy@jmls.edu) by June 15, 2016.

Other members of the SALT Teaching Conference Committee include Margaret Barry (mbarry@vermontlaw.edu), Emily Benfer (ebenfer@luc.edu), Davida Finger (dfinger@loyno.edu), Allyson Gold (agold@luc.edu), and Aníbal Rosario Lebrón (anibal.rosario.lebron@gmail.com). Please share information about
the Teaching Conference with your colleagues, particularly new and junior faculty, who are not yet members of SALT. Visit www.saltlaw.org for additional details.

Required Format for Proposed Presentations

Please submit all proposals by using the bolded headings set forth below.

1. Title of proposed presentation

2. Presenter name and contact information

Submit contact information for each individual who will participate in the presentation; however, you must identify one person to serve as the primary contact person. The contact person is responsible for receiving and transmitting information about the SALT conference to the other members of the panel.

Contact person:

Presenter’s school (as listed in the AALS Directory) and mailing address
E-mail
Office phone number
Mobile phone number
Fax number

Other panel members (if applicable):

Presenter’s school (as listed in the AALS Directory)
E-mail

3. Summary of the proposed presentation.

The description or narrative portion of the proposal should accurately and succinctly describe the content, format, and anticipated duration of the presentation. The ideal length of the summary is approximately one page of double-spaced text.

4. Related papers or documents (if applicable).

We do not expect all submissions to include related scholarship or documents- especially at this early point in the process; however, if you have any related documents that help to support or illustrate your proposed presentation, feel free to attach them to your submission.

April 18, 2016 in Call for Papers, Conferences, Joan Heminway, Research/Scholarhip, Teaching | Permalink | Comments (0)