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Friday, June 30, 2017

Summer Reading: The Moviegoer by Walker Percy

By Haskell Murray

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While I am already looking forward to returning to the classroom in the fall, one of the reasons that I love summers is that I get to catch up on reading. It has been an embarrassingly long time since I have finished a fiction book, but I am committed to making fiction an increasing percentage of my reading.  

Percy's Moviegoer won the 1962 National Book Award. I have my brother Will to thank for the recommendation and for the book itself. The novel focuses on the life of a New Orleans area stockbroker "Binx" Bolling, and his search for meaning. I won't ruin the story for those who have not read it, but I was moved by the Binx's struggle against what he called the malaise and everydayness. Binx appears to be a pretty sad character, spending a good bit of time hiding from life in movie theaters and engaging in flings with his secretaries, but he can also inspire the reader to ask serious questions, engage in meaningful relationships, and live more intentionally. 

June 30, 2017 in Books, Haskell Murray, Philosophy, Psychology | Permalink | Comments (0)

Thursday, June 29, 2017

ICYMI: #corpgov SSRN Roundup (June 29, 2017)

By Stefan J. Padfield

June 29, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, June 28, 2017

Imagine a world with no bar exam or ABA standards. What should students learn to be effective lawyers?

By Marcia Narine Weldon

 

Next month, I will speak at a legal conference in Chicago. The invite-only audience will consist of in-house counsel, law firm partners, academics, and legal tech pioneers. The website for the conference has not been updated to reflect my new school or topic, but I have titled my talk “Why Lawyers Need to Demand that Law Schools Innovate or Die.” In the 20 minutes allotted to me, I hope to discuss the state of legal education, the bar passage crisis in so many states, what the bar should test on, the push for “practice-ready” graduates, the effect of the rise of artificial intelligence, and what law schools can and should do differently to educate tomorrow’s lawyers. It’s a good thing I’m a fast talker.

I will be looking at the programs mentioned in this article as well as some innovations mentioned in this article, which mentions my institution, the University of Miami and its LawWithoutWalls program, which I have participated in since its inception in 2011. In fact one of my LWOW mentees, Margaret Hagan, now heads a program at Stanford, which I will highlight.

I have a few questions for the readers, as I prepare my presentation. Assuming (just for a minute) a world with no bar exam and no ABA standards:

  • If you are a practitioner hiring graduates, what would you want law schools to teach more of or less of?
  • If you are a professor, how would you teach differently, especially if you are teaching core or bar classes?
  • Should we be teaching more or fewer courses online?
  • Should we have more clinical courses and experiential learning opportunities or are these “nice to haves”? Do the ABA Standards go too far or do they not go far enough?
  • Do we need 3 years of law school? Or do students barely learn enough in 3 years? See more on this debate here.
  • If you are a recent graduate and are now either self-employed or working with others, what do you wish you learned in law school in the offered courses?
  • If you are a recent graduate, do you think there are classes that law schools should be offering but don’t?
  • In the age of artificial intelligence and ROSS, which can go through 1 million pages of legal text a second to perform legal research, should we be teaching students different research skills? Should students learn more about legal technology? Should they be able to explain both the rule against perpetuities and legal chatbots?
  • How much training/teaching should employers do and how much should law schools do?
  • How can we address the access to justice crisis? Can legal tech help? 

I know that just discussing any one of the questions above could take more than 20 minutes, but I value your thoughts. Please feel free to leave comments below or send me an email at [email protected].

June 28, 2017 | Permalink | Comments (0)

Tuesday, June 27, 2017

The Business of Minor League Baseball: Antitrust Exemption May Be Wrong, But 9th Circuit is Right

By Joshua Fershee

Reuters reports that minor league baseball players lost a claim for artificially low" wages.  The court found, appropriately: "The employment contracts of minor league players relate to the business of providing public baseball games for profit between clubs of professional baseball players."

Samuel Kornhauser, the player's lawyer plan to ask the 9th Circuit to reconsider (probably en banc) or appeal to the U.S. Supreme Court. Kornhasuer, in an interview, stated: 

"Obviously, we think it's wrong, and that the 'business of baseball' is a lot different today than it was in 1922. There is no reason minor leaguers should not have the right to negotiate for a competitive wage."

Kornhauser is certainly correct that things have changed in the last 100 years, though I would argue that the justification for the antitrust exemption was just as unfounded in 1922 as it is today. The origin is the Federal Baseball decision, and it was wrong then, and it is wrong now.  But it is also the law of the land. The 1998 Curt Flood Act, as the court appropriately explains, "made clear [Congress intended] to maintain the baseball exemption for anything related to the employment of minor league players."

There is no question Congress can change the law, and there is no question Congress has not. This is one to be resolved via negotiation or legislation, issue, and not via the courts.  

June 27, 2017 in Current Affairs, Joshua P. Fershee, Legislation, Sports | Permalink | Comments (0)

Monday, June 26, 2017

The Traveling Business Law Prof: Part III - Using What You Pack

By joanheminway

This post follows on my earlier travel posts on prepacking and packing for conference travel.  For last week's post, I used my trip to Mexico City for the Law and Society Association conference as an example.  This week, I assess my packing skills by chronicling briefly what I used and commenting on that assessment.  Bottom line: I did OK but could have left a few items of clothing and my flip flops at home.

For my plane travel to Mexico City a week ago last Sunday, I wore the reversible dance leggings (pattern side facing out), one of the tank tops, the embellished sweatshirt, and the suit jacket wth my sneakers.

BLPBOutfits1

Once I got to the hotel, I determined to take a walk through Chapultepec Park (Mexico's rough equivalent of New York's Central Park).  For the walk (and the rest of the day), I swapped out the sweatshirt and jacket for one of the button-downs I had brought--a medium green insect-repelling shirt I originally had bought to use when I taught in a study abroad program in Brazil.

For Monday, another sightseeing day (but one that I planned to end with an Ashtanga yoga class), I dressed for the day at the outset: reversible yoga shorts (pattern side facing out), light blue tank top, same green button down, and sneakers.

BLPBOutfits2

I noticed during the day that folks in Mexico City do not wear yoga shorts around.  So, I would revisit my decision to wear them all day on that basis.

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June 26, 2017 in Conferences, Joan Heminway, Travel | Permalink | Comments (0)

Sunday, June 25, 2017

ICYMI: #corpgov Tweets From the Week (June 25, 2017)

By Stefan J. Padfield

June 25, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Saturday, June 24, 2017

Saturday Television Blogging – Queen Sugar

By Ann Lipton

The second season premiere of Queen Sugar, a television adaptation of Natalie Baszile’s novel, aired earlier this week, and if you’re the kind of person who likes to catch pop cultural depictions of business issues, this is a nice sleeper to add to your viewing list.  It airs on Oprah Winfrey’s OWN network, and was created by Selma director Ava DuVernay.  (Interestingly, in a departure from most Hollywood productions, every episode is directed by a woman.) 

Queen Sugar is about three black siblings who inherit their father’s ailing sugarcane farm in Louisiana (I admit, there’s a bit of provincialism to my fondness for this show – it takes place just outside of New Orleans), and struggle to turn it into a viable business. 

Nova, an investigative journalist specializing in the racial disparities of the Louisiana criminal justice system, has difficulty reconciling her political commitments and her romantic life.  Ralph Angel, the little brother, was recently released from prison, and his efforts to raise his young son are hobbled by lingering legal limitations and what he perceives as his ongoing infantilization at the hands of his older sisters and his aunt.

Charley, the show’s main focus, is a business woman, and only a half-sibling, who has spent most of her time among the wealthy and powerful (white) Los Angeles elite.  (In a telling detail, Charley is noticeably lighter-skinned than her brother and sister).  Charley’s career until now has been devoted to managing her husband, a successful basketball star.  When the marriage ends – due to a sexual assault scandal – Charley is forced to confront the reality that as a black woman, unmoored from her famous husband, her business savvy and experience carries far less weight.  Charley’s arrogance can be counterproductive, but her anger and frustration at her diminished social status (not unlike the frustration Ralph Angel experiences) are channeled into ambition for the farm.

Qs

Thus, Queen Sugar is a family drama that revolves around the difficulties of running a small business, intersected with issues of race, class, and gender.  As the siblings navigate their interfamily tensions, they must simultaneously contend with various setbacks, including their own farming inexperience, their dwindling financial resources, and an ongoing feud with the wealthy white Landry family, which controls the local sugar mill and uses its monopoly power to squeeze black farmers. 

Queen Sugar’s story unfolds at a leisurely, measured pace that might not be for everyone, and the performances can veer into the stagey.  Nonetheless, it tells a compelling David-and-Goliath story of small business owners versus the larger industry, featuring realistically flawed characters who are devoted to each other as family and united in purpose, but who can’t fully put their differences aside. 

June 24, 2017 in Ann Lipton | Permalink | Comments (0)

Friday, June 23, 2017

Focus Group Experience

By Haskell Murray

Recently, I participated in a focus group on running shoes for Brooks. A few years ago, I did something similar for New Balance. 

Brooks paid each participant $100 for 90 minutes. 

The group was well-facilitated, and the group members stayed incredibly engaged. The 90-minutes flew by.

The research Brooks was conducting on both shoe design and marketing was extremely qualitative. It was essentially a brainstorming session. I do think Brooks could have gotten more out of the time if they would have had everyone privately write down their own ideas first, as there were about three or four of the ten of us who dominated the discussion. 

While this type of focus group was not cheap---$1000 in payment plus renting the room plus travel for two employees from Seattle---it was surely a very small fraction of their production and marketing budget. And I do think Brooks got some valuable ideas. Brooks does this sort of thing all over the country, and their employees said that they do start to hear patterns in the responses. It is those patterns that Brooks acts on, as they can't possibly address every one-off comment. 

This focus group made me think that universities should consider similar focus groups with applicants and with local companies. I know a bit of this happens informally at most places, and perhaps it happens formally at some places, but I do wonder if it is done with the same regularity and intensity as for-profit firms like Brooks. I think the insights would be valuable, and even if the insights are poor, the organizing institution does get to explain itself (and show it really cares) to the focus group participants. 

June 23, 2017 in Business School, Haskell Murray, Law School, Marketing, Psychology, Sports | Permalink | Comments (0)

Thursday, June 22, 2017

ICYMI: #corpgov SSRN Roundup (June 22, 2017)

By Stefan J. Padfield

June 22, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Wednesday, June 21, 2017

Is This the End of Uber's PR Nightmare?

By Marcia Narine Weldon

Yesterday, during a conversation with a law student about whether corporate social responsibility is a mere marketing ploy to fool consumers, the student described her conflict with using Uber. She didn’t like what she had read in the news about Uber’s workplace culture issues, sex harassment allegations, legal battles with its drivers, and leadership vacuum. The student, who is studying for the bar, probably didn’t even know that the company had even more PR nightmares just over the past ten days--- the termination of twenty employees after a harassment investigation; the departure of a number of executives including the CEO’s right hand man; the CEO’s “indefinite” leave of absence to “mourn his mother” following a scathing investigative report by former Attorney General Eric Holder; and the resignation of a board member who made a sexist remark during a board meeting (ironically) about sexism at Uber. She clearly hadn’t read Ann Lipton’s excellent post on Uber on June 17th.

Around 1:00 am EST, the company announced that the CEO had resigned after five of the largest investors in the $70 billion company issued a memo entitled “Moving Uber Forward.” The memo was not available as of the time of this writing. According to the New York Times:

The investors included one of Uber’s biggest shareholders, the venture capital firm Benchmark, which has one of its partners, Bill Gurley, on Uber’s board. The investors made their demand for Mr. Kalanick to step down in a letter delivered to the chief executive while he was in Chicago, said the people with knowledge of the situation.

… the investors wrote to Mr. Kalanick that he must immediately leave and that the company needed a change in leadership. Mr. Kalanick, 40, consulted with at least one Uber board member, and after long discussions with some of the investors, he agreed to step down. He will remain on Uber’s board of directors.

This has shades of the American Apparel controversy with ousted CEO Dov Charney that I have blogged about in the past. Charney also perpetuated a "bro culture" that seemed unseemly for a CEO, but isn't all that uncommon among young founders. The main difference here is that the investors, not the Board, made the decision to fire the CEO. As Ann noted in her post this weekend, there is a lot to unpack here. I’m not teaching Business Associations in the Fall, but I hope that many of you will find a way to use this as a case study on corporate governance, particularly Kalanick’s continuation as a board member. That could be awkward, to put it mildly. I plan to discuss it in my Corporate Compliance and Social Responsibility course later today. As I have told the students and written in the past, I am skeptical of consumers and their ability to change corporate culture. Sometimes, as in the case of Uber, it comes down to the investors holding the power of the purse.

June 21, 2017 in Ann Lipton, Compliance, Corporate Governance, Corporate Personality, CSR, Current Affairs, Marcia Narine Weldon, Teaching | Permalink | Comments (0)

Tuesday, June 20, 2017

Summer "Work" Reading: Straight Man, by Richard Russo

By Joshua Fershee

A friend who is a member of a university faculty (non-law) some years ago recommended that I read Straight Man, by Richard Russo. I am forever thankful.  The book is a novel set in a small town in Pennsylvania and follows the trials and tribulations of an English-department faculty member at a college besieged by budget challenges, a dysfunctional department, and his own lack of motivation.   

The book is funny -- sometimes laugh-out-loud funny -- and for anyone on a faculty, I am willing to wager that, despite occasional absurdity, this faculty will feel like it could be yours.  The main character is sympathetic, to a point, but he is also part of the problem.  It is a fast read, and it's one I come back to every couple years.  Perhaps it is just a guilty pleasure, but the universality of the characters and the bit of hope that emerges are things I find to be comforting in some way. It may be that the book serves as a reminder that we're not alone in our craziness.  Everyone who has taught for a while knows a Hank, a Finny, a Gracie DuBois, Jacob Rose, a Billy Quigley.  

The book also a good reminder of traps we, as faculty (and administrators), can fall into, and hopefully, help us avoid them. If you need a break from research and heavy reading, I highly recommend you put this in the rotation. 

Here's the Amazon.com Review: 

First Jane Smiley came out of the comedy closet with Moo, a campus satire par excellence, and now Richard Russo has gotten in on the groves-of-academe game. Straight Man is hilarious sport, with a serious side. William Henry Devereaux Jr., is almost 50 and stuck forever as chair of English at West Central Pennsylvania University. It is April and fear of layoffs--even among the tenured--has reached mock-epic proportions; Hank has yet to receive his department budget and finds himself increasingly offering comments such as "Always understate necrophilia" to his writing students. Then there are his possible prostate problems and the prospect of his father's arrival. Devereaux Sr., "then and now, an academic opportunist," has always been a high-profile professor and a low-profile parent.

Though Hank tries to apply William of Occam's rational approach (choose simplicity) to each increasingly absurd situation, and even has a dog named after the philosopher, he does seem to cause most of his own enormous difficulties. Not least when he grabs a goose and threatens to off a duck (sic) a day until he gets his budget. The fact that he is also wearing a fake nose and glasses and doing so in front of a TV camera complicates matters even further. Hank tries to explain to one class that comedy and tragedy don't go together, but finds the argument "runs contrary to their experience. Indeed it may run contrary to my own." It runs decidedly against Richard Russo's approach in Straight Man, and the result is a hilarious and touching novel.

June 20, 2017 in Books, Joshua P. Fershee, Law School, Social Enterprise, Teaching | Permalink | Comments (0)

Monday, June 19, 2017

Thinking Ahead to Next June: Georgia on My Mind - Save the Dates for Emory Law and NBLS in 2018

By joanheminway

As I am traveling and conferencing, my thoughts already have turned to next summer's conference schedule.  It seems like a good time to get two important business law conferences on the agenda for next year.  Those two conferences are: the sixth biennial conference on teaching transactional law and skills, “To Teach is to Learn Twice: Fostering Excellence in Transactional Law and Skills Education,” which will be held on June 1 - 2, 2018, at Emory Law in Atlanta, GA and the National Business Law scholars conference, which will be held at the University of Georgia School of Law in Athens, GA on June 21-22, 2018.  Emory Law's "Save the Date" notice hit my in box this morning and appears below, FYI.

*          *          *

SAVE THE DATE

Emory’s Center for Transactional Law and Practice cordially invites you to attend its sixth biennial conference on the teaching of transactional law and skills. The conference, entitled “To Teach is to Learn Twice: Fostering Excellence in Transactional Law and Skills Education,” will be held at Emory Law, beginning at 1:00 p.m. on Friday, June 1, 2018, and ending at 3:45 p.m. on Saturday, June 2, 2018.

We welcome you to share your experiences teaching any aspect of transactional law and skills, focused primarily on what general approaches, teaching methods, and specific exercises have been the most effective. Additionally, we want to know how you have implemented the ABA’s standards on learning outcomes and assessment and whether your teaching has changed as a result.

A formal request for proposals will be distributed in the fall.

Note: For this Sixth Biennial Conference, we will be offering a discounted registration rate for new teachers as well as for adjunct professors. Please encourage your colleagues to attend.

Looking forward to seeing all of you in June of 2018!

Sue Payne                                                                                                                                Katherine Koops
Executive Director                                                                                                                  Assistant Director
[email protected]                                                                                                         [email protected]

June 19, 2017 in Conferences, Joan Heminway, Research/Scholarhip, Teaching, Travel | Permalink | Comments (2)

The Traveling Business Law Prof: Part II - What and How to Pack

By joanheminway

Hola de la Ciudad de Mexico.  I arrived in Mexico City for the Law and Society Association conference yesterday to get acclimated and take some personal time to see the city.  Today, I carry forward the theme I posted on last week: packing for conference travel.  Last week, I shared my prepacking strategy.  This week, I will offer some parameters for packing for the actual trip, using the trip I am on now as an example.  This is what I was working toward (and achieved).

BLPBPacking4

I noted in my post last week that I almost always travel with one carry on duffle-like bag (soft-sider) and one tote bag that holds, among other things, my handbag for the trip.  That is what I chose for this trip!  The main advantage is that I do not have to check bags.  I had a tight connection yesterday in Atlanta, and my grab-and-go luggage helped me to make that connection with time to spare.

To quote the Talking Heads, " . . . you may ask yourself, well, how did I get here?"

Let's begin with the things I packed in the blue soft-sider.  I started by considering what I plan do on the trip.  For this trip, I have four days of conference proceedings (for which I will dress up) and three days of walking/sight-seeing.  I also plan to attend at least two yoga classes and have to teach Barbri in Nashville on my way home.  I next consider the climate.  I am in one place almost the whole time, and the weather is forecasted to be pretty consistent--mid-eighties (Fahrenheit) during the day and mid-fifties in the evenings.  Chances of rain are slim most days, but higher at the end of the week.  Here's what I chose to pack:

A three-piece coordinated suit set: skirt, cropped trousers, and jacket
9 shirts/blouses (6 tank tops--3 with shelf bras--and 3 wrinkle-resistant long-sleeved button-downs)
1 pair of reversible yoga shorts
1 pair of reversible dance/yoga leggings
PJs (undershirt tank top and boxers)
1 light rain jacket
1 French terrycloth embellished sweatshirt
Appropriate underwear items (gals, you can PM me for details, if you'd like)
2 extra pairs of earrings
1 necklace
1 pair of pumps
1 pair of fold-up flats
1 pair of sneakers
1 pair of flip-flops
1 traveling yoga mat

[Addendum:  I forgot to add that I also packed a printed silk scarf and a printed cotton bandana scarf!  I almost always travel with a scarf or two to accessorize outfits and make them look different when I am reusing the same basic suit pieces.]

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June 19, 2017 in Conferences, Joan Heminway, Travel | Permalink | Comments (4)

Sunday, June 18, 2017

ICYMI: #corpgov Tweets From the Week (June 18, 2017)

By Stefan J. Padfield

June 18, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Saturday, June 17, 2017

Uber, a reprise

By Ann Lipton

More Uber miscellany this week:

Last week, I posted about Uber and publicness – namely, that Uber is a private company that nonetheless is conducting itself as though it has public obligations.  Of course, right after I posted things got exponentially more interesting: Uber’s board met in a marathon session to discuss the results of an internal investigation of its corporate culture, resulting in the dismissal of the CEO’s right-hand man and the CEO/founder/powerful shareholder taking an indefinite leave of absence, Uber publicly announced the recommendations generated as a result of the internal investigation, and an Uber director resigned after making a sexist comment at the employee meeting intended to address workplace sexism.

There’s an awful lot to unpack here: Uber, the legendarily valuable startup, is now operating without a CEO, CFO, or COO (Twitter joke:  “I guess this is the closest it’s ever been to a self-driving car company”); the recommendations, which are telling in what they don’t tell (alcohol and controlled substances should not be consumed during business hours, yikes!); the fact that all of this was sparked by a blog post by an ex-employee detailing her sexual harassment and – amazingly enough – she was believed (one Forbes writer even recommended her for a Pulitzer); sexism that cannot be contained for the length of one employee meeting; the fact that Uber apparently is hemorrhaging talent and can’t hire more –

But mostly, just to reiterate the point I made last week, to me the truly extraordinary thing is that all of this is happening at a private company - and one that still provides an exceptionally popular service.  Nonetheless, Uber felt obligated to publicize the results of an internal investigation regarding its corporate culture, and regularly updates the news media on its governance structure.  Ordinarily, the whole point of staying private, roughly speaking, is to avoid this level of public scrutiny.  Yet as companies stay private longer – and attract more and more capital, often from “public” investors (large mutual funds, pension funds, etc) – apparently, they are feeling the obligations of publicness.  Or Uber is; we’ll see how much of a precedent it sets.

The other issue I wanted to discuss concerns this article in the New York Times, describing Uber’s, umm, unusual employee buyback plan.  Uber has begun offering to buy back certain employee shares, because – in the absence of an IPO – employees have no other way to cash out.  As I understand it from the article, for some employees, Uber requires that if the employees sell any portion of his/her shares back to the company, the employee must also agree to sign over the voting rights of all of his/her remaining shares to Travis Kalanick (the CEO/founder) personally.

Now, with all appropriate disclaimers about how I haven’t read the employee agreements, and I’m relying solely on one news article that lacks specifics, I say – huh?

Uber is using corporate resources to allocate additional votes to the founder personally?  Which – presumably – he can then use to vote to advance his personal interests?  After all, outside of specific fiduciary duties for controllers, shareholders are free to cast their votes for their own idiosyncratic reasons; for example, Kalanick could vote against a merger proposal merely because he wanted to keep control, even if the proposal would be in the best interests of Uber shareholders generally.

It's not like I expect to see any fiduciary duty lawsuits - for one thing, the amounts involved may be minimal, and I assume Uber has somewhat close relationships with its stockholders - but it's fairly textbook that corporate resources cannot be used to buy more power for the personal use of the controllers.  The fact that this was (apparently) permitted seems to be another data point suggesting that Uber has deep governance issues it needs to address.

June 17, 2017 in Ann Lipton | Permalink | Comments (5)

Friday, June 16, 2017

Building Brand Value through Building Community

By Haskell Murray

Next week, I will write about my focus group experience with Brooks Running.

Last week, on Global Running Day, Brooks announced “the biggest athlete endorsement deal in sports history” saying that they want to endorse everyone who runs….with $1 and a chance to win Brooks running gear.

This would have made a decent April Fools Day joke, but as a serious attempt at building brand value, it is pretty weak.

Brooks would have done much better to follow the lead of Oiselle, a women's athletic apparel company that I have spoken and written about before in regard to their multi-level team of professional, semi-pro, and recreational athletes. The main differences between Brooks and Oiselle is that Oiselle provides value to the team members and creates shared experiences. Oiselle athletes get team gear (even though the recreational runners pay for the gear), and they get invited to numerous group events. Oiselle has state team leaders and helps connect the team members for training and races. The “birds”, as they call themselves, really seem to support each other.

Now, the Oiselle method is definitely more complicated, and it probably comes with various legal risks. For example, what if one the team leaders turns violent or what if a team member gets hit by a car on a run led by a team leader or what if someone gets a bit out of control at one of their camps or parties? (I am sure Oiselle has everyone sign waivers, but as we know, waivers don't always prevent costly litigation and liability). There is also a fair bit temporal and financial costs involved in creating the team singlet, sending out newsletters, updating social media, planning events, etc. But building real community and brand value is almost never easy. (And Oiselle is far from perfect and has its critics, but I applaud Oiselle's effort. That said, if they are still requiring the recreational athletes to both pay and only post photos of themselves on social media in Oiselle gear, that seems overly restrictive. If they are going for authentic, they should provide suggestions instead of mandates. With sponsored athletes, I better understand the restrictions, though even with sponsored athletes you can usually tell a difference between organic and forced marketing posts.)

Sadly, Brooks' “endorsement” isn’t about building community, rather it is a pretty transparent attempt to buy your e-mail address and lure potential customers for $1. (Also, I uncovered in the fine print that they limited the $1 payment to the first 20,000; they have over twice that many signed up already).

As I will write next week, I was impressed with the people running the Brooks focus group, but they didn’t ask us about this “endorsement” idea, and if they asked others about it, I think they got bad advice. Brooks might get a bit of press, and they will probably even get a fair number of email addresses from curious people, but I doubt they will get much of lasting value. 

[I wonder how many people who signed up read the fine print. For example, there is a Code of Conduct that will be sent to participants. Also, see the clause below the break seemed incredibly broad.]

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June 16, 2017 in Business Associations, Haskell Murray, Marketing, Sports | Permalink | Comments (0)

Thursday, June 15, 2017

ICYMI: #corpgov Law Review & SSRN Roundup (June 15, 2017)

By Stefan J. Padfield

June 15, 2017 in Stefan J. Padfield | Permalink | Comments (0)

Tuesday, June 13, 2017

My Favorite Business Law Cases, Round 1: Sinclair Oil Corp. v. Levien (Del. 1971)

By Joshua Fershee

I am such a fan of Sinclair Oil Corp. v. Levien,  280 A.2d 717 (Del. 1971), that I use the case in both Business Organizations and in Energy Law. The case does a great job of giving a basic overview of parent-subsidiary relationships, some of the basic fiduciary duties owed in such contexts, and it sets up the discussion of why companies use subsidiaries in the first place. 

On fiduciary duties and when the intrinsic (entire) fairness test applies: 

A parent does indeed owe a fiduciary duty to its subsidiary when there are parent-subsidiary dealings. However, this alone will not evoke the intrinsic fairness standard. This standard will be applied only when the fiduciary duty is accompanied by self-dealing — the situation when a parent is on both sides of a transaction with its subsidiary. Self-dealing occurs when the parent, by virtue of its domination of the subsidiary, causes the subsidiary to act in such a way that the parent receives something from the subsidiary to the exclusion of, and detriment to, the minority stockholders of the subsidiary

On what test to apply to parent-subsidiary dividends: 

We do not accept the argument that the intrinsic fairness test can never be applied to a dividend declaration by a dominated board, although a dividend declaration by a dominated board will not inevitably demand the application of the intrinsic fairness standard. Moskowitz v. Bantrell, 41 Del.Ch. 177, 190 A.2d 749 (Del.Supr. 1963). If such a dividend is in essence self-dealing by the parent, then the intrinsic fairness standard is the proper standard. For example, suppose a parent dominates a subsidiary and its board of directors. The subsidiary has outstanding two classes of stock, X and Y. Class X is owned by the parent and Class Y is owned by minority stockholders of the subsidiary. If the subsidiary, at the direction of the parent, declares a dividend on its Class X stock only, this might well be self-dealing by the parent. It would be receiving something from the subsidiary to the exclusion of and detrimental to its minority stockholders. This self-dealing, coupled with the parent's fiduciary duty, would make intrinsic fairness the proper standard by which to evaluate the dividend payments.

. . . . The dividends resulted in great sums of money being transferred from Sinven to Sinclair. However, a proportionate share of this money was received by the minority shareholders of Sinven. Sinclair received nothing from Sinven to the exclusion of its [722] minority stockholders. As such, these dividends were not self-dealing. We hold therefore that the Chancellor erred in applying the intrinsic fairness test as to these dividend payments. The business judgment standard should have been applied. 

On whether shareholder of one subsidiary should be allowed to participate in ventures pursued by other subsidiaries: 

The plaintiff proved no business opportunities which came to Sinven independently and which Sinclair either took to itself or denied to Sinven. As a matter of fact, with two minor exceptions which resulted in losses, all of Sinven's operations have been conducted in Venezuela, and Sinclair had a policy of exploiting its oil properties located in different countries by subsidiaries located in the particular countries.

It makes sense for companies, often, to use subsidiaries to keep certain businesses well organized and to protect assets for shareholder.  That is, I might only want to invest in a subsidiary doing business in Mexico because I trust that the assets there are secure.  I may not want to participate in work in Venezuela, which I might deemed riskier.  And it's not just shareholders who might feel that way.  Creditors, too, may view such investments very differently and may only be willing to participate in ventures where the risks can be more easily assessed. 

June 13, 2017 in Case Law, Corporations, Joshua P. Fershee, Lawyering, Management, Venture Capital | Permalink | Comments (1)

Monday, June 12, 2017

The Traveling Business Law Prof: Part I - Prepacking

By joanheminway

It's conference season, yet again.  It seems like just yesterday that I was embarking on my June Scholarship and Teaching Tour 2016.  In fact, it was over a year ago.  My, how time flies . . . .

This year, I am doing the "City" tour for the first part of the summer season.  I have already been to Kansas City, MO (Midwest Symposium on Social Entrepreneurship), New York City, NY (Legal Issues in Social Entrepreneurship and Impact Investing: In the US and Beyond), and Salt Lake City, UT (National Business Law Scholars Conference).  Next week, I will be in Mexico City, Mexico for the Law and Society Association's International Meeting on Law and Society.  Not fitting into the "City" theme is my teaching day for Barbri in Nashville, TN and the Southeastern Association of Law Schools conference in Boca Raton, FL at the end of the summer.

Because of my travel schedule throughout the year, I often am asked about packing for my conference trips, which typically include some personal elements (e.g., touring, yoga, walking, or other exercise, etc.).  So, I decided to do a few posts on some packing tips and hacks that I use.  

Today, I focus on having a prepacked bag.  Given that I am a woman and choose to dress up for conferences, men and those who dress more casually will have to make significant modifications to my system.  Nevertheless, I hope that by sharing my conventions, I am offering something new to think about (at the very least). 

First things first: the generalities of my luggage (such as it is).  Unless I am teaching in a study abroad program (which I have not done since 2010), I pack in a soft-sided carryall and a tote large enough to fit my handbag (usually a small cross-body bag).  This combination works well for me.  (I am sure, however, that my doctor doesn't approve and would like me to use a wheelie bag, given the cervical and thoracic issues that I have in my neck and back.)  I do not like to have to lift wheelie bags into the overhead bins. The carryall lifts easily and typically fits nicely, even in the overhead bins on the small puddle-jumper planes that I sometimes must take from my beloved TYS (Knoxville's McGee-Tyson Airport). 

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June 12, 2017 in Conferences, Joan Heminway, Travel | Permalink | Comments (6)

Sunday, June 11, 2017

ICYMI: #corpgov Tweets From the Week (June 11, 2017)

By Stefan J. Padfield

June 11, 2017 in Stefan J. Padfield | Permalink | Comments (0)

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