Wednesday, September 5, 2007
Posted by Jeff Lipshaw (cross-posted at MoneyLaw)
In the spirit of the late Wayne Barnett, my tax professor at Stanford, whose introductory tax course was subtitled "Great Cases I Have Lost," I have decided to drop one of the cases on the "what is a security issue?" from the Choi & Pritchard Securities Regulation case book, and instead teach Great Lakes Chemical Corp. v. Monsanto, Inc. on the question whether an LLC interest can be a security under the federal securities laws.
This case is of some pedagogical note. It was in the fifth edition of the Klein, Ramseyer, & Bainbridge Business Associations case book, and Choi & Pritchard mention it in their teacher's manual. For me, however, it is something akin to dissecting the recent Appalachian State v. Michigan football game, because I was the general counsel of Great Lakes Chemical at the time the case was filed, and was intimately involved in the decision to file it as a federal securities, rather than a state common law fraud, claim. Indeed, I was involved in the decision to file it as a fraud claim at all, rather than merely a breach of contract case. And, although the case ultimately settled, on this particular issue we took a sound butt-kicking (all the more frustrating because the federal court indicated on the record at the close of argument that he thought there was a well-pled fraud claim if the interest was a security, and later a Delaware chancery judge booted it as a fraud claim under state law based on disclaimer language in the agreement).
So, a little like Tom Sawyer listening to his own eulogy, I can't help wanting now to engage in the objective and academic post-mortem of something that was a very real part of my life.
I am curious, however, about the perspective of those out there who have actually taught their own cases. Is it a good idea? How do the students react? Does it help bridge the theory-practice divide?