Wednesday, August 26, 2015
Yesterday, my husband and I celebrated our 30th wedding anniversary. I am married to the best husband and dad in the entire world. (Sorry to slight all of my many male family members and friends who are spouses or fathers, but I am knowingly and seriously playing favorites here!) My husband and I bought the anniversary memento pictured below a few years ago, and it just seems to be getting closer and closer to the reality of us as a couple (somewhat endearing, but aging) as time passes . . . .
Of course, our wedding was not the only important event in 1985. There's so much more to celebrate about that year! In fact, it was a banner year in business law. Here are a few of the significant happenings, in no particular order. Most relate to M&A doctrine and practice. I am not sure whether the list is slanted that way because I (a dyed-in-the-wool M&A/Securities lawyer) created it or whether the M&A heyday of the 1980s just spawned a lot of key activity in 1985.
- Smith v. Van Gorkom was decided. It was my 3L year at NYU Law. I remember the opinion being faxed to my Mergers & Acquisitions instructor during our class and being delivered--a big stack of those goofy curly thermal fax paper sheets--to the table in the seminar room where we met. Cool stuff. As I entered practice, business transactional lawyers were altering their advisory practices and their board scripts to take account of the decision.
- Unocal v. Mesa Petroleum was decided. The Delaware Supreme Court established its now famous two-part standard of review for takeover defenses, finding that "there was directorial power to oppose the Mesa tender offer, and to undertake a selective stock exchange made in good faith and upon a reasonable investigation pursuant to a clear duty to protect the corporate enterprise. Further, the selective stock repurchase plan chosen by Unocal is reasonable in relation to the threat that the board rationally and reasonably believed was posed." (The italics were added by me.) More changes to transactional practice . . . .
- Moran v. Household International was decided. As a result, I spent a large part of my first five years of law practice promoting and writing poison pills that innovated off the anti-takeover tool validated in this case. The firm I worked for was on the losing side of the Moran case, so we determined to build a better legal mousetrap, which then became the gold standard.
- The Revised Uniform Limited Partnership Act (RULPA) was amended by the Uniform Law Commission. Among the 1985 changes was an evolution of the rules relating to the liability of limited partners for partnership obligations. The 2001 version of the RULPA took those evolutions to their logical end point, allowing limited partners to enjoy limited liability for partnership obligations even if the limited partners exercise management authority over the partnership.
- Landreth Timber Co. v. Landreth was decided. Stock is a security under the Securities Act of 1933, as amended, unless the context otherwise requires. The Court determined that instruments labeled stock that have the essential attributes of stock should be treated as stock in an offering context, even when the stock is transferred to sell a business. Bye-bye "sale of business" doctrine . . . .
That's enough on 30th anniversaries for this post. I am sure you all will think of more 30th anniversaries in business law that we can celebrate in 2015. Feel free to leave those additional 1985 memories in the comments.