Business Law Prof Blog

Call for Papers - Institute For Law & Economics, UPenn Law, Second Annual Junior Faculty Business and Financial Law Workshop

Dear BLPB Readers:

"The Institute for Law & Economics (ILE) at the University of Pennsylvania Carey Law School is pleased to announce its second annual Junior Faculty Business and Financial Law Workshop. The Workshop will be held in person on December 7, 2023 at Penn Carey Law.

The Workshop supports and recognizes the work of untenured legal scholars in the business and financial fields, including accounting, banking, bankruptcy, corporations, economics, finance, tax and securities, while promoting interactions with such scholars, selected tenured faculty and practitioners. By providing a forum for the exchange of creative ideas in these areas, ILE also aims to encourage new and innovative scholarship in the business and financial arena.

Approximately 6-8 papers will be chosen from those submitted for presentation at the Workshop. One or more senior scholars and practitioners will comment on each paper, followed by a general discussion of each paper among all participants. The Workshop audience will include invited untenured scholars, faculty from Penn Carey Law, The Wharton School, and other institutions, practitioners, and invited guests."

The deadline to submit papers for consideration is September 8th, 2023.  The complete call for papers is here.

Suffolk Law is Seeking a Clinical Professor to Lead its Intellectual Property and Entrepreneurship Clinic!

Suffolk University Law School’s nationally ranked Clinical Programs, expects to conduct a search for a tenured or tenure-track Clinical Professor to lead our Intellectual Property and Entrepreneurship Clinic (IPEC), to begin in the 2024-25 school year. IPEC is a full-year in-house clinic, one of Suffolk’s 12 in-house clinics, and an important part of Suffolk Law’s outstanding Clinical Programs. Suffolk’s Clinical Programs have been ranked among the top 20 such programs in U.S. News & World Report for more than a decade. Our Clinical Professors have full tenure and are wholly integrated into our faculty, including having equity in terms of faculty rights, perquisites, and responsibilities. IPEC is also integrated into Suffolk’s recently launched Intellectual Property Center and its Intellectual Property Concentration, which includes a number of highly regarded faculty. Suffolk Law’s intellectual property program is regularly ranked among the nation’s best and was most recently ranked number 31 in the country.

We seek candidates with a commitment to excellence in teaching, scholarship, and service. Candidates must have at least five years of relevant experience in one or more areas of intellectual property, including patent, trademark, and/or copyright practice. Applicants must also be admitted or eligible for admission to the Massachusetts bar within a year of the start of the appointment. Prior experience in clinical education or a demonstrated passion for teaching or mentoring is also required. A record of scholarship or a demonstrated interest in producing scholarship, as well as an intellectual engagement with the subject matter is required. Experience working with diverse communities, clients, and other stakeholders is strongly preferred.

The Clinical Professor will have the opportunity to shape the docket of IPEC to meet students’ needs and align with their expertise and interests. The Clinical Professor will similarly shape the content of the accompanying seminar to educate students on relevant substantive law and lawyering skills, including the ethical dimensions of practice, cross-cultural lawyering, critical reflection, and the formation of a professional identity.

Currently, students enrolled in IPEC represent small and emerging businesses from communities unlikely to have access to legal services. Students work on a variety of intellectual property and entrepreneurial matters, including those related to branding, copyright, patent, trademark, trade secret, and privacy protections. IPEC students also currently counsel entrepreneurs and start-up companies on business law matters, such as incorporation, contract law, and IP strategy. Past clients of IPEC have included artists, authors, designers, filmmakers, musicians, innovators, individual entrepreneurs, small businesses, some established corporations, and nonprofit organizations. IPEC has participated in the USPTO’s Law School Clinic Certification Program. You can read more about IPEC here.

Applicants should submit a cover letter, curriculum vitae, research agenda, description of current scholarship (if any), and teaching evaluations (if any). Applicants are also encouraged to submit a diversity statement that describes previous activities mentoring members of underrepresented groups, how issues relating to diversity and inclusion have been or will be addressed in their teaching and practice, and how their scholarship or service would contribute to building and supporting inclusive communities. Cover letters should be addressed to Professor Ragini Shah, Chair of the Clinical Committee.  We will be reviewing candidates on a rolling basis and encourage early inquiries and applications. 

Suffolk University does not discriminate against any person on the basis of race, color, national origin, ancestry, religious creed, sex, gender identity, sexual orientation, marital status, disability, age, genetic information, or status as a veteran in admission to, access to, treatment in, or employment in its programs, activities, or employment. As an affirmative action, equal opportunity employer, the University is dedicated to the goal of building a diverse and inclusive faculty and staff that reflect the broad range of human experience who contribute to the robust exchange of ideas on campus, and who are committed to teaching and working in a diverse environment. We strongly encourage applications from groups historically marginalized or underrepresented because of race/color, gender, religious creed, disability, national origin, veteran status or LGBTQ status. Suffolk University is especially interested in candidates who, through their training, service and experience, will contribute to the diversity and excellence of the University community.

New Paper: An LLC By Any Other Name Is Still Not A Corporation

It's been little while since I posted here, but long-time readers of theis blog will not be surprised by the topic.  I am happy to say that, after a lot of work with an exceptional co-author who shares my concerns, Professor Samantha Prince from Penn State Dickinson Law, we have an article documenting the problems with mislabeling LLCs and providing a variety of solutions.  I have been writing on this for nearly 15 years, and unfortunately, not a lot has changed. 

The article, An LLC By Any Other Name Is Still Not A Corporation, is now available on SSRN, here, and has been submitted for publication. In the meantime, we welcome thoughts and comments.  

Here is the abstract: 

Business entities have their own unique characteristics. Entrepreneurs and lawyers who represent them select an entity structure based on the business’s current and projected needs. The differing needs of each business span across myriad topics such as capital requirements, taxation, employee benefits, and personal liability protection. These choices present advantages and disadvantages many of which are built into the type of entity chosen.

It is critically important that people, especially lawyers, recognize the difference between entities such as corporations and limited liability companies (LLCs). It is an egregious, nearly unforgivable, error in our view to call an LLC a “limited liability corporation.” In part, this is because lawyers should try to get things right, but it is also because conflating the two entity types can lead to unpredictable outcomes. Perhaps more important, it could lead to incorrect and unjust outcomes. A prime example lies within the veil piercing context.

Lest you think that this is not a prevalent occurrence, there are nearly 9,000 references to the phrase “limited liability corporation” in court cases. Practicing attorneys are not the only people messing this up. Judges, legislators, federal and state agency officials, and media pundits are also getting it wrong. Most recently, Justice Samuel Alito scribed an op-ed that was published in the Wall Street Journal where he misused the term. Even the TV show Jeopardy! allowed as correct the answer, “What is a limited liability corporation?,” during one episode.

Enter artificial intelligence. AI relies on information it can find, and therefore AI generators, like ChatGPT, replicate the incorrect term. With a proliferation of users and programs using ChatGPT and other AI, the use of incorrect terminology will balloon and exacerbate the problem. Perhaps one day, AI can be used to correct this problem, but that cannot happen until there is widespread understanding of the distinct nature of LLCs and a commitment to precise language when talking about them.

This article informs of the looming harms of misidentifying and conflating LLCs with corporations. Additionally, it presents a warning together with ideas on how to assist with correcting the use of incorrect terminology in all contexts surrounding LLCs.

Matteo Gatti on Corporate Governing

I am excited to highlight the recent posting by Matteo Gatti of his draft paper entitled Corporate Governing: Promises and Risks of Corporations as Socio-Economic Reformers.  I got a preview of this work at the National Business Law Scholars Conference back in June.  The title of the paper is both descriptive and clever, as the abstract below reveals.

Corporations are involved in public affairs: racial equity, women’s rights, LGBTQIA rights, climate efforts are just a few examples of an increasingly long list of areas in which corporations are active and vocal. One phenomenon is well-known: corporations promote, contrast, or finetune governmental initiatives through political messaging. In addition, corporations perform quasi-governmental functions when the actual government cannot (because of its dysfunction) or does not want to (because of its political credo) perform such functions. Economists, legal scholars, and policymakers are split as to whether corporations should take this role.

This Paper contributes to the literature in several ways. First, it maps various areas of reform by corporations in the socio-economic sphere. Then, it provides legal and policy frameworks for corporate governing by analyzing the underlying conducts under our current laws and by evaluating its multifaceted normative merits: Is there a business case for corporate governing? Is corporate governing strategically wise for corporations? Does it help social advocacy and society at large? Does corporate governing undermine actual government and imperil democratic institutions? Further, this Paper assesses corporate governing by looking into its promises and risks from a corporate and from a societal perspective and singles out two risks. First, corporate governing cannot help society in fields in which corporations have a conflicting interest, like on themes such as antitrust, tax, labor, privacy, financial and corporate reform. Second, with corporations having a greater role in policymaking, citizens may become less accustomed to expecting reform via traditional politics: addressing this risk requires efforts from citizens, civil society, and politicians to preserve democratic values and institutions—corporate governance can help but cannot be the driving force.

The article offers helpful, coherent observations about and analyses of the roles business firms play--and should play--in political governance, as well as the possible effects of those political governance engagements.  I look forward to spending more time with this work!

Illinois Law - Faculty Fellowship

Illinois Academic Fellowship Program

University of Illinois College of Law

The College of Law at the University of Illinois, Urbana-Champaign has an opening for the Illinois Academic Fellowship Program to begin in the 2024-2025 academic year. Fellows are appointed as a visiting assistant professor of law. The full announcement can be found at https://jobs.illinois.edu/.

Fellows spend one or two years in residence at the College of Law researching and writing under the close mentorship of Illinois faculty, teaching one course per semester, and fully participating in the College's rich intellectual environment. By the end of the program, we expect fellows to be competitive for tenure-track positions at leading law schools.

Applications for the Illinois Academic Fellowship Program are invited from law school graduates as well as Ph.D. recipients or candidates in any field who have a sustained academic interest in law's interaction with their discipline. Fellows will be chosen on their potential, with appropriate support and mentoring, to obtain a tenure-track position at a U.S. law school.

Fellows will receive faculty assistance with their research projects; the opportunity to present works in progress to the faculty in a workshop setting; the opportunity to attend and participate in lectures, colloquia, symposia, roundtables, and faculty workshops; faculty advice and assistance in preparing for the academic job market; and, where appropriate, pairing with a faculty mentor. Assisting fellows in preparing a substantial piece of scholarship, with an emphasis on the “job talk” paper, is a primary goal of the Illinois Academic Fellowship Program. More information is available at http://www.law.illinois.edu/faculty/illinois-academic-fellowship-program.

Applicants are strongly encouraged to submit their materials by January 1, 2024. We expect interviews to take place starting in January 2024. No applications will be accepted after January 31, 2024. For assistance with the application process, please email [email protected].

Illinois Law - Search for Tenured/Tenure Track Faculty

Tenured/Tenure Track Professor of Law

University of Illinois College of Law

THE UNIVERSITY OF ILLINOIS COLLEGE OF LAW invites applications for positions on the tenured/tenure-track faculty to begin in August 2024. The College welcomes applications from scholars in all subject areas of the law but has particular interests in hiring in the following areas:  constitutional law; intellectual property law; ethical, legal and social implications of digital transformation; and tax law.

The University of Illinois offers a distinguished and collegial law school community in the setting of a premier research university, affording opportunities for cutting-edge legal scholarship and innovative interdisciplinary work. Champaign-Urbana is a vibrant college town with an exceptional quality of life. 

These positions are full-time, nine-month, tenured or tenure-track positions. The University of Illinois offers an outstanding and comprehensive benefit package. Salary is commensurate with experience. Applicants must have a J.D. or Ph.D. or their equivalent, a strong academic record, and a record of scholarly distinction or great scholarly promise. 

For full consideration, please use the AALS FAR website https://www.aals.org/services/recruitment/far/ or create a candidate profile at https://jobs.illinois.edu  and upload the following required documents: Curriculum Vitae, sample publications, and contact information of four references (name, telephone number and email address).  Applications will be considered on a rolling basis with a firm deadline of October 22, 2023. For assistance with the application process, contact Tish Lehigh at [email protected].

The University of Illinois is an Equal Opportunity, Affirmative Action employer that recruits and hires qualified candidates without regard to race, color, religion, sex, sexual orientation, gender identity, age, national origin, disability or veteran status. For more information, visit http://go.illinois.edu/EEO.

BlackRock and Voting Choice

Last year, I blogged about BlackRock’s proposal to permit pass through voting for institutional investors in its funds.  Well, it began that program and now – undoubtedly due to the anti-ESG backlash – BlackRock and other large asset managers, like Vanguard, are experimenting with extending the program to retail investors.  The way BlackRock’s program works – and it seems like it’s not that different from Vanguard’s – is that investors in certain funds can choose from among several types of general voting policies, and ballots will be cast in accordance with that policy, in proportion to the investor’s pro rata share of the fund.  The policies include BlackRock’s own stewardship policy, and several that are offered by ISS and Glass-Lewis, that they already offer their own clients.  I.e., clients of ISS and Glass-Lewis can choose a “tilt” to their voting and ISS/Glass-Lewis will then make voting recommendations in accordance with that preferred tilt; BlackRock investors in its iShares S&P 500 ETF can now choose to follow those policies, as well.

You can see the list of available voting policies at BlackRock’s website.  And you can click through to ISS and Glass-Lewis for more detail on the policies; BlackRock also offers a detailed comparison here.

I have a lot of questions about the mechanics of all of this – I mean, it’s one thing if ISS/Glass-Lewis offers these choices in private arrangements with institutions who have hired them, but is this really enough disclosure for a retail investor to understand how votes will be cast?  If they chose the Climate Voting Policy, will they find out after-the-fact exactly how their votes came out on specific matters like say-on-pay?  Are these policies only going to make a difference in the context of precatory shareholder proposals, or will they matter for the binding stuff?  Also – and this I mentioned in my post about institutional pass-through voting, but it’s also a concern that’s been raised by Jill Fisch – if BlackRock disperses votes in this way, will it lose leverage with companies, thus diminishing shareholder power overall?  Etc etc.

But actually what fascinates me most are the slates themselves.  BlackRock is the one casting the ballots, even if it is taking feedback from fund investors as to how to do so; therefore, it believes that it remains obligated to comply with fiduciary duties in its voting behavior.  As a result, BlackRock will not give investors a voting policy option that BlackRock believes would violate its duty to act in the best interests of the fund.  Yet included in the voting policy choices are several socially responsible options, including, for example, ISS’s Catholic policy, and its Socially Responsible Investment (SRI) Policy, and Glass-Lewis’s Catholic policy.  These options seem designed to balance wealth maximization against other goals.  For example, here is ISS’s Catholic policy:

ISS’ Catholic Advisory Services division recognizes that faith-based and other socially responsible investors have dual objectives: financial and social. Religious and socially responsible investors invest for economic gain, as do all investors, but they also require that companies in which they invest conduct their business in a socially and environmentally responsible manner.

The dual objectives carry through to proxy voting activity, after the security selection process is completed. In voting their shares, faith-based socially responsible institutional shareholders are concerned not only with sustainable economic returns to shareholders and good corporate governance, but also with the ethical behavior of corporations and the social and environmental impact of their actions. Catholic Advisory Services has, therefore, developed faith-based proxy voting guidelines for Catholic and other Christian religious institutions that are consistent with the objectives of socially responsible shareholders as well as the teachings of Catholicism and Christianity as a whole…

On matters of corporate governance, executive compensation, and corporate structure, these faith-based proxy voting guidelines are based on a commitment to create and preserve economic value and to advance principles of best practice corporate governance and shareholder rights, consistent with responsibilities to society and the environment as a whole.

Here is ISS’s SRI policy:

ISS’ Social Advisory Services division recognizes that socially responsible investors have dual objectives: financial and social. Socially responsible investors invest for economic gain, as do all investors, but they also require that the companies in which they invest conduct their business in a socially and environmentally responsible manner.

These dual objectives carry through to socially responsible investors' proxy voting activity once the security selection process is completed. In voting their shares, socially responsible institutional shareholders are concerned not only with sustainable economic returns to shareholders and good corporate governance but also with the ethical behavior of corporations and the social and environmental impact of their actions.

Social Advisory Services has, therefore, developed proxy voting guidelines that are consistent with the dual objectives of socially responsible shareholders….

On matters of corporate governance, executive compensation, and corporate structure, Social Advisory Services guidelines are based on a commitment to create and preserve economic value and to advance principles of good corporate governance consistent with responsibilities to society as a whole.

And here’s Glass-Lewis’s Catholic policy:

Glass Lewis recognizes that Catholic and other religious institutions are concerned not only with economic returns but with the overall social impact of the companies in which they invest. To this end, Glass Lewis has created the thematic Catholic Policy Guidelines, which is based largely on the principles set forth by the United States Conference of Catholic Bishops (www.usccb.org), and that is directly relevant to the unique fiduciary responsibilities of religious investors. The Catholic Policy was designed for religious investor clients or as a supplemental voting policy for funds designed for religious institutions…

All that’s clearly fine for the institutions that choose to hire ISS and Glass-Lewis, but it’s interesting that BlackRock also does not think it’s a problem for its S&P 500 ETF, which has lots of different investor types with different goals.

And it’s true, technically, the SEC has said that investment company advisors, like all fiduciaries, have a duty to promote their clients’ best interests, not specifically to maximize value.  See, e.g., the SEC’s 1980 Staff Report on Corporate Accountability.  So, theoretically, the “fund” best interest could include following beneficiary preference rather than maximizing wealth.  But the SEC has also tended conflate “best interest” with “wealth maximization.”  See, e.g., Disclosure of Proxy Voting Policies and Proxy Voting Records by Registered Management Investment Companies.   And if these delegated votes turn out to be meaningful – a real question, but let’s assume they are for now – then I wonder what happens when institutions, like private pension funds, who do have a duty to maximize financial value, are co-investors in a fund where a slice of the votes are going for nonwealth maximizing choices.  And would that affect whether such funds could be included in a 401(k) menu?

To be sure, this may all be angels-on-pinheads because even if retail or other fund investors choose the socially-responsible options in significant numbers, it’s still not clear to me that there will be differences enough to actually redirect the behavior of portfolio companies.  But I suppose there could be some impact, if only by muting more wealth-maximizing choices of co-investors in the same fund.  What if there is a real disagreement, for example, on whether to amend the charter to exculpate corporate officers for violations of the duty of care?  It’s an interesting thing to think about.

LSU Law Tenure-Track/Tenured Faculty Search

The LSU Paul M. Hebert Law Center seeks to hire multiple faculty for tenure-track or tenured positions. The Law Center has needs in a wide variety of areas, including but not limited to the following areas: administrative law, legal writing, artificial intelligence and cyber security, business law including contracts as well as upper-level business electives, environmental law, constitutional law, criminal law, criminal procedure, civil procedure, evidence, family law, legislation, professional responsibility, and food and agriculture. Applicants should have a J.D. from an ABA-accredited law school, some practice experience, superior academic credentials and legal scholarship, as well as a commitment to outstanding teaching.

The Law Center embraces Louisiana’s bijural legal system and endeavors to train lawyers ready to practice anywhere in the world. Our faculty have the opportunity to teach internationally including in our summer program in Lyon, France.  LSU is committed to providing equal opportunity for all qualified persons in employment opportunities without regard to race, creed, color, marital status, sexual orientation, gender identity, gender expression, religion, sex, national origin, age, mental or physical disability, or veteran’s status. LSU is committed to diversity and is an equal opportunity/equal access employer. LSU believes diversity, equity, and inclusion enrich the educational experience of our students, faculty, and staff, and are necessary to prepare all people to thrive personally and professionally in a global society. 

All applicants must apply through Workday: https://lsu.wd1.myworkdayjobs.com/LSU/job/0448-Hebert-Law-Center/Assistant-Professor-of-Law-Associate-Professor-of-Law-Professor-of-Law_R00084134.

Questions may be directed to Missy Lonegrass, Chair of the Faculty Appointments Committee, [email protected].

LSU Law Transactional Clinic Director Search

The LSU Paul M. Hebert Law Center seeks to hire a faculty member to develop, implement, teach, and serve as director for our new transactional clinic. The clinic will be a new offering in our robust clinical program, and, although focused on transactional lawyering, the specific area of practice and clinic design is yet to be determined. This position is a twelve-month faculty appointment on the Law Center’s Professional Practice faculty track (long-term contract compliant with 405(c)).

Applicants must have a JD or equivalent degree from an accredited institution, at least 5 years of practice and/or teaching experience, and Louisiana Bar admission (or willingness to obtain Bar admission in the first year of appointment). Applications should include a letter of interest and resume including a list of three references.

LSU is committed to providing equal opportunity for all qualified persons in employment opportunities without regard to race, creed, color, marital status, sexual orientation, gender identity, gender expression, religion, sex, national origin, age, mental or physical disability, or veteran’s status. LSU is committed to diversity and is an equal opportunity/equal access employer. LSU believes diversity, equity, and inclusion enrich the educational experience of our students, faculty, and staff, and are necessary to prepare all people to thrive personally and professionally in a global society. 

All applicants must apply through Workday: https://lsu.wd1.myworkdayjobs.com/LSU.

Questions may be directed to Missy Lonegrass, Chair of the Faculty Appointments Committee, [email protected].

Chair in Corporate Governance: Osgoode Hall Law School and Schulich School of Business, York University

Associate or Full Professor and Jarislowsky, Dimma, Mooney (JDM) Chair in Corporate Governance Osgoode Hall Law School and Schulich School of Business, York University

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Osgoode Hall Law School and the Schulich School of Business at York University invites highly qualified applicants for an Associate or Full Professor position for the Jarislowsky, Dimma, Mooney (JDM) Chair in Corporate Governance. The Chair is for a term of five years, with the possibility of renewal for an additional five-year period. The successful applicant is expected to have the necessary qualifications to be appointed as a professorial tenured professor. This is a jointly held Chair in the two faculties with responsibilities at both Osgoode and Schulich. This is a tenure-track appointment to the Professorial Stream to commence July 1, 2024.

The Chair is open to both internal York University and external candidates. External candidates must satisfy the requirements for a tenured appointment at Osgoode Hall Law School in addition to the requirements for appointment to the Chair. At the conclusion of the term of the Chair, where the Chairholder was an external candidate, they will continue to hold a full-time tenured appointment at Osgoode Hall Law School.

Osgoode has been shaping the future of legal education in Canada since 1889. The rich, innovative, and accessible legal education that Osgoode provides empowers our graduates to pursue flexible and challenging futures, to be leaders in the legal profession, and to serve the cause of justice and the public good. Our faculty excels in producing foundational, socially engaged, and world-leading academic scholarship.

In making this appointment, Osgoode will seek to advance the objectives underlying Osgoode’s Strategic Plan 2021-2025. The plan identifies six areas of focus:

• Anticipating Society-Level Crisis
• Law in Local and Global Contexts
• Rigorous Academic Scholarship
• Advancing Reconciliation and Justice
• Student Access and Success
• Innovative and Engaged Legal Education

Candidate Qualifications:

• Degree: All candidates must hold a JD degree and a graduate degree in either law or business or equivalent credentials.
• Scholarship:
  • Candidates must have a profound interest in extending knowledge about the broad area of corporate governance and investor protection in both a practical and theoretical manner.
  • A record of generating innovative, substantive, rigorous, and as appropriate, externally funded research.
  • A record of making influential contributions and demonstrating excellence in the field (recognized international calibre as demonstrated in: the research plan; a record of high quality publications (or forthcoming publications), including with significant journals in the field; presentations at major conferences; awards and achievements; and strong recommendations from referees of high standing).
• Teaching:
  • A record of excellence in teaching and dedication to students (demonstrated in: the teaching dossier; teaching accomplishments and pedagogical innovations including in high priority areas such as experiential education and technology enhanced learning; teaching evaluations; and strong letters of reference).
  • Candidates must be capable of being effective teachers at the undergraduate, graduate and professional levels in business law related to the field of corporate governance. In addition to teaching relevant courses at Osgoode and Schulich, they are also expected to take an active role in the JD/MBA program such as organizing events and supporting student recruitment. Candidates must also be able to take a leadership role in the discussion and debate on significant questions in the field. The latter capacity may be expressed, for example, through comments in the public press or participation in public conferences and colloquia.
  • Candidates are expected to have a record of scholarship sufficient to qualify as a member of the Faculty of Graduate Studies of York University. They should have the capacity to direct the research activities of graduate students and to initiate and raise funds for significant research projects.
  • Candidates must have a demonstrated interest in current and emerging issues in the fields of corporate governance and investor protection and be capable of providing leadership in the study of these issues.
• Additional: More specifically, the teaching dossier should be no more than 15-20 pages and should include teaching evaluations, a statement of teaching philosophy, an account of teaching experiences and related responsibilities (list of courses taught/course outlines, examples of print and digital teaching materials and how they are used), a summary of commitment to professional development (participation in teaching workshops; supervision of masters and doctoral students; mentoring new faculty), and other evidence of teaching effectiveness (student letters of support; teaching awards).

Hiring Policies:

• Salary will be commensurate with qualifications and experience.
• All York University positions are subject to budgetary approval.
• Osgoode Hall Law School is committed to the principles of equality and diversity, and inclusion, broadly understood. We are particularly interested in candidates with diverse backgrounds and especially encourage candidates in equity, diversity and inclusion categories. As a part of this commitment, the Law School’s Employment Equity Plan aims to increase the representation on faculty of members from five groups: women, racialized persons, Indigenous persons, persons with disabilities, and LGBTQ2+ persons. Persons identifying as members of these equity-seeking groups are particularly encouraged to apply.
• York welcomes and employs scholars from all over the world. All qualified candidates are encouraged to apply; however, Canadian citizens, permanent residents and Indigenous peoples of Canada will be given priority.
• York has a policy on Accommodation in Employment for Persons with Disabilities and is committed to working towards a barrier-free workplace and expanding the accessibility of the workplace to persons with disabilities. Applicants who require accommodation are invited to contact François Tanguay-Renaud, Chair of the Faculty Recruitment Committee, at [email protected].

Application Process:

• Due date for completed applications: September 11, 2023 by 5:00pm EST
• Required materials: 1) current CV; 2) cover letter; 3) copies of law and graduate transcripts; 4) a detailed research plan; 5) a teaching dossier (including teaching evaluations); 6) copies of three (3) academic articles or book chapters authored by the applicant (where published materials are not available, one or more dissertation/ thesis chapter(s) may be submitted in lieu); 7) contact information for of three (3) referees. Candidates may, during the recruitment process, be asked to have their referees provide their letters of reference directly to Osgoode.  All applications will be kept confidential to the Osgoode Faculty Recruitment Committee and Schulich Operating Committee and faculty colleagues who provide reviews of files.
• Provide required information regarding your Canadian work status and optional self-identification for Affirmative Action purposes as part of the online application.
  Direct questions about the position process or applications to François Tanguay-Renaud, Chair of the Faculty Recruitment Committee, at [email protected].
• Submit materials: https://www.surveymonkey.com/r/OSG_JDMChair

Learn More About York:

• York University generates and shares knowledge through our research, teaching and engagement with communities around the world. The 2023-2028 Strategic Research Plan showcases the depth, breadth and ambition of research at York.
• York’s commitments to social justice are laid out in our Decolonizing, Equity, Diversity and Inclusion Strategy, the Framework & Action Plan on Black Inclusion and the Indigenous Framework for York University.
• Follow the activities and accomplishments of York’s faculty, students and staff on YFile.

 

York University acknowledges its presence on the traditional territory of many Indigenous Nations. The area known as Tkaronto has been care taken by the Anishinabek Nation, the Haudenosaunee Confederacy, and the Huron-Wendat. It is now home to many First Nation, Inuit and Métis communities. We acknowledge the current treaty holders, the Mississaugas of the Credit First Nation. This territory is subject of the Dish with One Spoon Wampum Belt Covenant, an agreement to peaceably share and care for the Great Lakes region.

Southwestern Law Faculty Position Announcement

SOUTHWESTERN LAW SCHOOL in Los Angeles invites applications for multiple full-time entry-level and lateral tenure/tenure-track positions to begin in Summer 2024. Our primary curricular needs include Business Associations, Civil Procedure, Criminal Law/Criminal Procedure, Evidence, and Property.

When selecting candidates to interview, we also will consider whether they might also contribute in the following areas: Administrative Law, Contracts, Copyright, Business/Corporate/Entrepreneurship electives; Cyberlaw/Technology/Privacy, Entertainment Law, and Wills & Trusts.

We seek candidates who are passionate about teaching and can demonstrate success in the classroom, love working with students outside the classroom, are committed to producing high-quality scholarship appropriate for their field, and are willing to contribute to the campus community through committee and related service.

Subject to approval from the ABA, we plan to launch a mostly asynchronous online J.D. program (with full-time and part-time options) in Fall 2024, and we hope many faculty we will hire in the coming years will teach in that program.

Founded in 1911, Southwestern is an ABA-accredited, independent law school located in the center of Los Angeles. Our mission includes educating lawyers ready to serve clients, the profession, and our society with excellence, empowering students to reach their potential, cultivating inclusion and belonging, and shaping the law and public policy through teaching, scholarship, and service.

To apply, please send your CV, professional references, research agenda, and preferred areas of teaching via email to [email protected] and put “Faculty Application” in the email subject line. Review of applications will begin in mid-August. Initial interviews will be held via Zoom, and callback interviews will be held in person.

California Western School of Law Hiring Announcement - Contracts

California Western School of Law (CWSL) is seeking applications from entry level or lateral candidates for a tenured or tenure-track position.  We are looking for candidates with strong academic backgrounds, a commitment to excellence in teaching, and demonstrated potential to be productive scholars.  We specifically are interested in an instructor to teach Contracts beginning in Academic Year 2024-25 and would welcome candidates with a secondary interest in law and technology. 

Established in 1924, CWSL is an ABA accredited and AALS member, non-profit law school, and has the distinction of being San Diego's oldest law school. At CWSL we pride ourselves on the diversity of our student body.  This year, around 45% of our incoming students are from diverse cultural and ethnic backgrounds.  We are committed to having a faculty that shares our commitment to diversity and our diverse student body.  CWSL continues to rethink the status quo in legal education – balancing a rigorous practical education with cutting edge scholarship and community service.  As a result, our graduates have a reputation for being uniquely practice-ready.  

CWSL is located in downtown San Diego, literally overlooking the Pacific Ocean.  A city of breathtaking beauty, we boast perfect weather, miles of beaches, and nearby mountains.  We are a family-friendly, diverse city with small city traffic and walkable neighborhoods.  

Application materials should include a cover letter, C.V., research agenda, and a statement that addresses how you will contribute to CWSL's diversity goals. Please direct application materials and questions to the chair of the Appointments Committee, Professor Catherine Hardee, at the following email address: [email protected].  We will begin reviewing applications August 14, 2023.  The salary range for the position is between $130,000 and $180,000, depending on experience.

Colorado Law: Another Business Law Faculty Search

The University of Colorado Law School invites applications from entry-level and lateral candidates for one or more full-time, tenured or tenure-track faculty positions to begin at the start of the 2024-25 academic year. We welcome applications from candidates in all subject areas and at all levels of seniority. However, we have especially strong needs in Business/Commercial Law, Criminal Law, American Indian & Indigenous Peoples Law, Energy Law, Health Law, Intellectual Property, and Administrative Law. We strongly encourage applications from people of color, women, individuals with disabilities, LGBTQ people, veterans, and others whose background, experience, and viewpoints would contribute to the diversity of our faculty. The University of Colorado Boulder is committed to building a culturally diverse community of faculty, staff, and students dedicated to contributing to an inclusive campus environment. We are an Equal Opportunity employer, including veterans and individuals with disabilities. For questions, please contact Professor Scott Skinner-Thompson, Chair, Faculty Appointments Committee, [email protected]. Please note that application materials will not be accepted via email. For consideration, applications must be submitted through CU Boulder Jobs.

LMU Duncan Law Seeking Business Law Faculty

LINCOLN MEMORIAL UNIVERSITY DUNCAN SCHOOL OF LAW invites applications from entry-level and lateral candidates for two full-time, tenure track faculty positions starting in the 2024-2025 academic year. 

We welcome all subject areas, with particular interest in contracts and sales, business associations, criminal law and procedure, and evidence. Nonetheless, as we grow our innovative part-time/hybrid J.D. program, which is approximately two-thirds online, our needs extend across all doctrinal areas. 

Requirements include a J.D. or equivalent law degree and an unwavering commitment to educating successful lawyers and leaders. The perfect candidate will embody collaborative effort, with an outstanding academic background and firm dedication to teaching, scholarship, and service. Practical legal experience and prior teaching are highly valued, although not mandatory. We are seeking candidates with the potential to grow into excellent legal educators and scholars.

This role will operate under a twelve-month contract, with teaching duties every alternate summer. Rest assured, we consider this schedule while formulating our scholarship requirements.

In line with our commitment to diversity, we strongly encourage applications from people of color, women, individuals with disabilities, LGBTQIA+ individuals, veterans, and others who can enhance our faculty, curricular, and program diversity through unique life experiences, viewpoints, or philosophies.

As faculty, your primary duty is teaching and mentoring students. We recognize this role's importance in accomplishing our mission: providing a top-notch legal education to address the needs of the underserved. Join us in shaping the future of the legal profession.

Our law school is located in the heart of Knoxville, Tennessee, a city that offers a fusion of vibrant city life, stunning natural beauty, and a rich historical and cultural scene, complemented by the backdrop of the Great Smoky Mountains.

Interested applicants should contact Professor Syd Beckman, Chair of the Faculty Recruitment Committee, at [email protected].

Is Your Law School Ready for Generative AI? Fifteen Questions You Should Consider

Greetings from SEALS, where I've just left a packed room of law professors grappling with some thorny issues related to ChatGPT4, Claude 2, Copilot, and other forms of generative AI. I don't have answers to the questions below and some are well above my pay grade, but I am taking them into account as I prepare to teach courses in transactional skills; compliance, corporate governance, and sustainability; and ethics and technology this Fall.

In no particular order, here are some of the questions/points raised during the three-hour session. I'll have more thoughts on using AI in the classroom in a future post.

1. AI detectors that schools rely on have high false positives for nonnative speakers and neurodivergent students and they are easy to evade. How can you reliably ensure that students aren't using AI tools such as ChatGPT if you've prohibited it?
2. If we allow the use of AI in classrooms, how do we change how we assess students?
3. If our goal is to teach the mastery of legal skills, what are the legal skills we should teach related to the use of AI? How will our students learn critical thinking skills if they can rely on generative AI?
4. How should we keep up with the rapid pace of change?
5. How will adjuncts use AI with our students if they are already integrating it into their practice? Alternatively, will adjuncts see the use of AI as cheating?
6. If students use papers as writing samples, should there be attestations indicating that they are AI free? Same question for journals/law reviews.
7. Can clinicians and others use generative AI to help with access to justice? If so, how can we ensure that the information is reliable and not a hallucination??
8. How should schools assess faculty coming up for promotion and tenure? Will junior faculty feel pressured to rely on AI to be more productive?
9. Can generative AI be helpful with students with disabilities and neurodivergent students? AI tools can help with creating study schedules, note taking (organizing by topic), time management, summarizing large articles, staying on task, academic support tool, ascertaining how long will tasks take, planning meals and more. If a policy prohibits the use of generative AI in the classroom, should its use be a reasonable accommodation?
10. Do we as faculty members have the growth mindset to deal with this change? Or will we teach the way we always do, which may do a disservice to our students. How do we prepare our students to deal with generative AI in practice?
11. Do you need a uniform policy or should each professor have their own policy? Should the default policy be that students cannot use it for work that gets academic credit unless the professor has specifically opted in?
12. Should we embrace AI especially for students who can’t write? Is using ChatGPT any different from using a calculator? Is it any different from asking a partner for a template so you don't have to start from scratch?
13. Should we use more in-class exams? Should they be closed book? Do we need more oral presentations? How might this affect space planning at exam time?
14. Should class participation count for more than it already does?
15. If you're not familiar with generative AI tools, where should you start?

How many of these questions have  you asked yourself, your colleagues, or your dean? If you have some best practices or thoughts, please share them in the comments. 

 

 

 

 

 

 

 

 

 

 

 

Wyoming Law Seeks Entry-Level/Lateral Business Law Faculty

The University of Wyoming

College of Law

Qualifications and Duties: The University of Wyoming College of Law invites applications for a tenure-track position with duties commencing in the fall of 2024. We will consider entry-level and/or lateral professors with expertise and interest generally in the areas of Business Law and/or Commercial Law. Specific curricular needs include, without limitation, Accounting for Lawyers, Bankruptcy Law, Business Organizations, Consumer Protection, Contract Law, Corporate Finance, Law & Technology, Payment Systems, Secured Transactions, and Securities Regulation. 

We welcome applications from candidates who would enhance the diversity of our faculty.  Applicants for these positions should hold a J.D. degree from an accredited law school, have distinguished academic credentials, relevant legal experience, and a demonstrated commitment to outstanding teaching, research, and scholarship.  

The University: The University of Wyoming is located in Laramie, a town of 31,000 in the heart of the Rocky Mountain West. The University has proven itself a leader in academics, research, inter-disciplinary study, and outreach. The university also boasts many advantages usually found only in larger university systems, including state-of-the-art facilities and nationally recognized energy and engineering programs. In addition, while small, Laramie is known in the State for its cultural, political, and ethnic diversity. Located in a high mountain valley near the Colorado border, Laramie offers both outstanding recreational opportunities and close proximity to Colorado’s Front Range, a bustling group of metropolitan cities including Denver, Boulder, and Fort Collins. This beautiful mountain landscape offers outdoor enjoyment in all seasons, with over 300 days of sunshine annually. For more information about the region, please visit http://visitlaramie.org/.

Hiring Statement:  UW is an Affirmative Action/Equal Opportunity Educator and Employer. We are committed to a multicultural environment and strongly encourage applications from women, minorities, veterans and persons with disabilities.  

In compliance with the ADA Amendments Act (ADAAA), if you have a disability and would like to request an accommodation to apply for a position, please call 307-766-2377 or email [email protected].

To Apply: Candidates should submit: a.) a cover letter—including sections on teaching philosophy and research agenda, b.) a complete CV, c.) the names and contact information for four work related references. All of the above should be submitted through the University of Wyoming online application system at this link: Asst Professor - College of Law Deans Office - UW Candidate Experience Careers (oraclecloud.com). Questions about the position or the hiring process may be directed to Professor Jim Delaney, Chair, Faculty Appointments Committee, University of Wyoming College of Law, Dept. 3035, 1000 E. University Ave., Laramie, WY 82071, chair of the search committee, at [email protected]. Review of applications will begin immediately, with new applications considered until the position is filled. However, to be assured of full consideration, candidates should submit materials by December 1, 2023.

Not All Securities Arbitration Is The Same

Last month, the SEC released a report on Mandatory Arbitration Among SEC-Registered Advisers.  The report tackles a basic dispute resolution problem.  For context, investors with a problem with a financial adviser will likely have to go to arbitration.  If their financial adviser is an associated person for a FINRA-registered brokerage firm, the dispute will likely go through FINRA arbitration.  While the FINRA system isn't perfect, it's often much better than any other alternative out there.  FINRA has made improvements to its arbitration process over the years resulting in a forum that has become fairer for investors.

But many financial advisers are not brokers.  They are registered investment advisers.  They usually charge fees on an assets under management basis.  Where do disputes against these RIA firms go?  It depends on what kind of pre-dispute arbitration agreement exists between the adviser and the investor.  The SEC report details the current options available to investors.

Here's the short version, far too many RIAs have put in place arbitration agreements that effectively frustrate an investor's ability to resolve a complaint.  Most of these agreements force investors to resolve their disputes through AAA--the American Arbitration Association.  Within that forum, Advisers generally elect to apply the commercial arbitration rules.  The fees for commercial arbitration can be hefty and enough to deter many investors from even filing a claim.

PIABA, the Public Investor Advocate Bar Association, recently put out its view to follow on the SEC's report.  It allowed one investor to explain the impact of the arbitration provision on her ability to seek a recovery:

Marykay Dragovich, the conservator for her cousin Rita Berardelli, described the process of forced arbitration after their trusted RIA lost over $228,000 in principal investments, money that Berardelli had saved as a registered nurse before suffering two life-altering brain aneurisms that left her incapacitated.  When Dragovich investigated recovering the losses for her cousin, she learned it would cost up to $202,000 to pay the upfront costs of an arbitration hearing.  So even if Berardelli got all her money back, she would have to pay as much as 90% of it to the arbitrators as prescribed by the overlooked forced arbitration clause in the agreement with her RIA.

Congress or the SEC will need to act to ensure that investors, who are now locked out of courts by arbitration agreements, will not also be locked out of arbitration by excessive fees.

 

** Disclosure -- I am a member of PIABA.

Syndicated Loans and Also AMC

Two quick hits this week.

First, I posted over at FT Alphaville on the Kirschner v. JP Morgan case, pending before the Second Circuit.  The court is being asked to decide whether syndicated loans are securities, and my post addresses what's at stake for the parties.  Help yourself.

Second, VC Zurn rejected the first attempt at a settlement of the AMC class action over the creation of the APE preferred shares.  As I'm sure any reader of this blog knows, after AMC became a meme stock, it sought to sell more shares, but it needed a charter amendment to authorize an increase.  Retail holders of AMC stock refused to vote in favor - likely because retail simply doesn't vote at all.  AMC thought it had a clever way around that, through the issuance of a new form of preferred shares, called APEs, that could vote alongside the common and would convert into common once additional common shares were authorized.  Many APEs were publicly traded, but some were placed with a hedge fund, Antara Capital, that was contractually obligated to vote in favor of the charter amendment.  As a practical matter, then, the issuance of the APE shares assured there would be sufficient votes to pass the charter amendment authorizing additional common shares that the common shareholders had rejected.  The AMC common shareholders sued, and the parties proposed to settle by issuing new shares to the common holders, which would mitigate the dilutive effect of the APE issuance.

VC Zurn rejected the settlement because it proposed to release all claims held by the common shareholders, not only relating to any breaches of duty with respect to the common, but also with respect to any breaches of duty to the APE holders, to the extent that any common shareholders also held APEs.  I.e., if you held only APE shares, you weren't covered by the settlement, but if you held both common and APE, the settlement purported to release any claims concerning both holdings.  VC Zurn thought the release of APE claims was a bridge too far, but her reasoning was fascinating.

As I understand it, she offered two rationales.  The first was relatively mundane, and essentially was about due process in the class action context.  The claims asserted in the action were only about breaches of duty to common shareholders, not to APE shareholders.  The class reps were not appointed as representatives of the APE shareholders, and because the settlement itself - a share issuance that was dilutive to APEs - would be adverse to APE holders, class members might be differently situated with respect to APE shares (i.e., some might hold more APEs relatively to their common shares, some might hold fewer).  Under these circumstances, she held the claims alleged in the complaint were too distant from the claims being settled.

The second rationale was more interesting.  Here is what she said:

APE direct claims require not only proof of different facts than the claims asserted on behalf of the class of common stockholders: APE direct claims are appurtenant to a different security than common stock. APE direct claims can be brought only by APE unitholders. The class of common stockholders cannot release APE claims.

Under Delaware law, direct claims for violating voting rights associated with stock ownership are appurtenant to the share of stock that carries the voting power; they are not personal rights belonging to the stockholder who happens to own the shares....Any direct claims arising out of the rights appurtenant to the APE units are property rights associated with the APE units. They are not personal rights of the unitholder...

Get it? The rights attach to the shares.  The fact that a particular investor at a particular time may be holding those shares does not make them the investor's rights; the rights are share rights.  The investor is the human avatar for the real object of interest, the shares.  Therefore, a class action of common shareholders can release claims associated with those shares, but not claims associated with another security, even if held by the same investors, because that other security is not in fact before the court.  It has not made an appearance, through its human host, in the courtroom.

That idea - where the rights of the shares are abstracted away from the actual for real investors who hold them, to the point where the desires of the human investors have no role to play - has been a sub rosa theme in corporate case law for a while.  In Revlon, for example, the directors were deemed to have violated their fiduciary duties to the common stockholders by seeking a sale that would protect the value of corporate notes - even though, as Daniel Greenwood has pointed out, many of the noteholders were in fact stockholders and very possibly would have wanted a sale that balanced the value of those two securities.  But, I think more recently, Delaware's rhetoric on this has become more overt - which, by the way, is something I talk about in my paper, Every Billionaire is a Policy Failure, addressing with Elon Musk's takeover of Twitter.  (See what I did there? With the plug?). 

Anyway, none of that bodes particularly well for the claims in McRitchie v. Zuckerberg, which is a putative class action in which Meta shareholders claim that the Board violated its fiduciary duties by maximizing Facebook's wealth while externalizing costs on to the rest of society, to the detriment of diversified holders of Meta stock. But we'll see what VC Laster has to say. 

The University of Tennessee College of Law is Looking for Faculty!

POSITION NOTICE

FACULTY POSITIONS
THE UNIVERSITY OF TENNESSEE COLLEGE OF LAW

THE UNIVERSITY OF TENNESSEE COLLEGE OF LAW invites applications from both entry-level and lateral candidates for up to three full-time, tenure-track faculty positions to begin at the start of the 2024-25 academic year. The College is primarily interested in candidates with scholarly aptitude and experience in one or more of the following curricular areas: criminal law (both substantive and procedural), environmental law (including energy law), and health law. Secondary interests include business law (including bankruptcy, real estate, or secured transactions) and estate planning (including tax-related courses).

All positions require a J.D. or equivalent law degree. Successful applicants should have an impressive academic background. Candidates also must have a strong commitment to excellence in teaching, scholarship, and service. Significant professional experience is desirable.

In furtherance of the University’s and the College’s fundamental commitment to diversity, we strongly encourage applications from people of color, women, individuals with disabilities, LGBTQ+ people, veterans, and others whose background, life experiences, viewpoints, or philosophy would contribute to the diversity of our faculty, curriculum, and programs.

The University of Tennessee, Knoxville, is an R1, land-grant university located in Knoxville, Tennessee. The City of Knoxville is a hidden gem with a beautiful and walkable downtown, varied nightlife, active neighborhoods, and eclectic shopping and restaurants. UT is located within easy driving distance to Asheville, Nashville, Atlanta, and the Great Smoky Mountains. Applications must be submitted through https://apply.interfolio.com/127752.

Applicants should submit a letter of interest, including the subjects the candidate is interested in teaching, a CV, and the names and contact information for three references. While applications will be considered on a rolling basis, applicants should submit their materials no later than August 18, 2023 for best consideration. For questions, please contact Professor Zack Buck, Chair of the Faculty Appointments Committee, at [email protected].

All qualified applicants will receive equal consideration for employment and admission without regard to race, color, national origin, religion, sex, pregnancy, marital status, sexual orientation, gender identity, age, physical or mental disability, genetic information, veteran status, and parental status, or any other characteristic protected by federal or state law. In accordance with the requirements of Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act of 1990, the University of Tennessee affirmatively states that it does not discriminate on the basis of race, sex, or disability in its education programs and activities, and this policy extends to employment by the university. Inquiries and charges of violation of Title VI (race, color, and national origin), Title IX (sex), Section 504 (disability), the ADA (disability), the Age Discrimination in Employment Act (age), sexual orientation, or veteran status should be directed to the Office of Equity and Diversity, 1840 Melrose Avenue, Knoxville, TN 37996-3560, telephone 865-974-2498. Requests for accommodation of a disability should be directed to the ADA Coordinator at the Office of Equity and Diversity.

The One Where They Castrated Calves Together

John Malone and Gregory Maffei are repeat players before the Delaware courts.  They often occupy complementary positions within Delaware companies, and are frequently accused of abusing their combined positions to muscle through interested transactions.  Here’s a footnote from the complaint in Atallah v. Malone, which is the subject of today’s blog post:

Malone and Maffei have been sued numerous other times for engaging in self-dealing to the detriment of public stockholders. See, e.g., New Orleans Empls. Ret. Sys. v. The DIRECTV Group, Inc., C.A. No. 4606-VCP (Del. Ch. 2009) (Malone accused of orchestrating transaction, with Maffei’s approval, to obtain supervoting shares dilutive to the minority stockholders and receiving disproportionate tax benefits); Blackthorn Partners LP vs John C Malone, et al., C.A. No. 5260-CS (Del. Ch. 2010) (Malone accused of receiving premium for high-vote shares, with Maffei’s approval, that public shareholders did not receive, with class ultimately receiving $10 million settlement); In re Sirius XM S’holder Litig., Consol. C.A. No. 7800-CS (Del. Ch. 2012) (Maffei and rest of Board accused of failing to employ anti-takeover measures thus allowing Malone affiliate to improperly obtain majority control); In re Starz S’holder Litig., C.A. No. 12584-VCG (Del. Ch. 2016) (Malone accused of structuring transaction, with Maffei’s approval, such that he received different and more valuable consideration than public stockholders regardless of stockholder vote); Tornetta vs. Gregory B. Maffei, et al., C.A. No. 2019-0649-KSJM (Del. Ch.) (Board of directors including Maffei accused of ignoring standstill agreements and relying on Malone-affiliated banker to steer sale of company to Malone affiliate rather than sell at higher value to third party); Vladimir Fishel v. Liberty Media Corp., et al., Docket No. 2021-0820-KSJM (Del. Ch.) (Board of directors including Maffei accused of using company coffers to help Malone affiliate squeeze out minority stockholders).

Not included on this list, I don’t think, is Sciabacucchi v. Liberty Broadband, 2023 WL 4157103 (Del. Ch. June 22, 2023), in which Malone and Maffei settled claims involving related party transactions at Charter Communications,

Maffei has been the subject of so many shareholder lawsuits that he’s now seeking to reincorporate two of his companies from Delaware to Nevada, apparently for the explicit purpose of engaging in interested transactions with less oversight – which reincorporation is itself the subject of another shareholder lawsuit.

So that’s the background for Atallah v. Malone, where VC Glasscock found that derivative claims were properly pled against Malone and Maffei for a conflicted transaction, and refused to dismiss the complaint.

The set up: Qurate is a publicly traded company, of which Malone held high vote shares.  These were not by themselves enough to confer hard control at the 50% level, but were controlling enough that he had – and was compensated for – a call right held by Qurate.  If a third party were to offer for his high vote shares, and he was willing to accept, Qurate could call the shares for the lower of the third party offer, or a price equal to a 10% premium over the common, publicly traded shares.

Maffei was Executive Chair at Qurate, and also had an employment agreement to the effect that if Qurate changed control, he’d be entitled to resign from Qurate and win change in control benefits.

Given the close relationship between Malone and Maffei, then, as Matt Levine might put it, there was an opportunity for a Good Trade.

Maffei could “offer” to buy Malone’s shares; that would trigger the call right by Qurate, which would buy Malone’s shares at a premium above market.  Once Malone no longer held high vote shares, that would trigger a change in control at Qurate, which would entitle Maffei to severance.

And so that’s exactly what they did.  Except, of course, neither wanted to really leave Qurate, so Malone accepted for his high vote shares payment in common stock instead of cash, at a 10% premium to market price.

Meanwhile, Maffei said, “Yes, I could resign and take my severance, but I would be willing to stay on for a renegotiated compensation package” – which Qurate did, which included granting him high vote shares.

I haven’t done the math regarding the exact number of shares involved, but in many ways, the transaction appears to be designed to transfer Malone’s high vote shares to Maffei, while simultaneously giving Malone a premium and possibly Maffei a bit of a premium in stock awards, all out of Qurate’s pocket.

So of course, shareholders sued, claiming this entire series of transactions was undertaken by a controlling shareholder group – Malone and Maffei coordinating – to benefit them both.

What’s interesting here?

[More under the cut]

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