Monday, November 11, 2019
The above photo honors my father's U.S. Army service and my father-in-law's U.S. Army service, in each case, in the Korean War. I took a pause today to respect what they and so many others have done to serve our country. I hope that all veterans and their families and friends have enjoyed a Happy Veteran's Day.
With veteran legal service projects (some through student organizations, like our award-winning Vols for Vets organization at UT Law, a nonprofit supported by many in our community), including full-fledged law clinics (e.g., here and here and here and here and here), emerging across the country, I wondered whether there was any assistance outside the law school context, specifically for veterans who are entrepreneurs. I did find, through a page on the U.S. Veterans Administration (VA) website, that the Office of Small & Disadvantaged Business Utilization has a program for Veteran-Owned Small Businesses. Under the program, a veteran who owns a small business "may qualify for advantages when bidding on government contracts—along with access to other resources and support—through the Vets First Verification Program." A number of additional entrepreneurship programs exist under the auspices of the same VA office. Many can be found on the website for the Office of Small & Disadvantaged Business Utilization (noted above).
In my web travels, I also found a nifty national veteran's entrepreneurship program at the University of Florida Warrington School of Business. And at one of our sister UT system schools, the The University of Tennessee at Chattanooga, the business school--the Gary W. Rollins College of Business--has a Veterans Entrepreneurship Program. And it seems there is quite a bit more out there in the educational setting.
This all seems like a good start. I am sure with more digging, I could find more. I was admittedly gratified, however, to see that Forbes published a piece on free support programs for veteran entrepreneurs. I was hoping to see a bunch more of that kind of thing . . . . Maybe next year?
Again, I send abundant and heartfelt thanks to all of our veterans for their service.
Monday, November 4, 2019
I approached with some curiosity the Securities and Exchange Commission's recent shareholder proposal guidance in Staff Legal Bulletin No. 14J ("SLB 14J"). My interest in this topic stems from my past life as a full-time lawyer in private practice. During that time, I both wrote shareholder proposals and wrote no-action letters to the Securities and Exchange Commission ("SEC") to keep shareholder proposals out of corporate proxy statements.
In SLB 14J, the SEC clarifies its application of the "ordinary business" exception to the inclusion of a shareholder proposal under Rule 14a-8. Specifically, "[t]he Commission has stated that the policy underlying the 'ordinary business' exception rests on two central considerations. The first relates to the proposal’s subject matter; the second relates to the degree to which the proposal 'micromanages' the company." I want to share the SEC's guidance with you on the latter.
The idea of shareholders micromanaging most public firms is almost laughable. Yet, certain shareholder proposals do get somewhat specific in their direction of the firm and its resources.
In considering arguments for exclusion based on micromanagement, . . . we look to whether the proposal seeks intricate detail or imposes a specific strategy, method, action, outcome or timeline for addressing an issue, thereby supplanting the judgment of management and the board. [A] proposal, regardless of its precatory nature, that prescribes specific timeframes or methods for implementing complex policies, consistent with the Commission’s guidance, may run afoul of micromanagement. In our view, the precatory nature of a proposal does not bear on the degree to which a proposal micromanages. . . .
This makes some sense to me, yet this guidance may not be as easy to apply as the SEC may think. Here is the SEC's example of an excludable proposal:
For example, this past season we agreed that a proposal seeking annual reporting on “short-, medium- and long-term greenhouse gas targets aligned with the greenhouse gas reduction goals established by the Paris Climate Agreement to keep the increase in global average temperature to well below 2 degrees Celsius and to pursue efforts to limit the increase to 1.5 degrees Celsius” was excludable on the basis of micromanagement. In our view, the proposal micromanaged the company by prescribing the method for addressing reduction of greenhouse gas emissions. We viewed the proposal as effectively requiring the adoption of time-bound targets (short, medium and long) that the company would measure itself against and changes in operations to meet those goals, thereby imposing a specific method for implementing a complex policy.
I am note sure how I feel about the characterization of this proposal as excludable. Is the described proposal about reporting or about "prescribing the method for addressing the reduction of addressing reduction of greenhouse gas emissions"? Well, maybe a little of each . . . . What do you think?
During my time in active, full-time law practice, the format and content of Rule 14a-8 changed a number of times. It appears that the SEC may be poised to make another change--one more fundamental than enhanced guidance. According to one recent report, the SEC may announce as early as tomorrow "changes . . . to make it harder for shareholders to file proposals, and harder for proposals to be eligible for re-filing in subsequent years." Stay tuned for that possible announcement.
[Note: All footnote references in the quotations used in this post have been omitted.]
Monday, October 28, 2019
The recent Tennessee Court of Appeals decision in Mulloy v. Mulloy has me thinking. Here is the case synopsis:
Two brothers formed a limited liability company to own and lease a commercial property. When the tenant sought to expand, both brothers sought to find a suitable space for the tenant to lease. The younger of the two brothers found a property that would ideally suit the tenant’s needs, a fact that was communicated to his brother. The older brother purchased the property through a newly created limited liability company without his younger sibling’s involvement. The older brother’s new limited liability company then leased the new property to the tenant. The younger brother brought a derivative suit against his brother and the newly formed limited liability company, claiming usurpation of a corporate opportunity belonging to the limited liability company that the brothers had formed together and tortious interference with business relationships. The younger brother also claimed unjust enrichment. Following a trial, the chancery court found in favor of the older brother and his newly formed limited liability company and dismissed the complaint. After our review of the record, we affirm.
The facts are quite a bit more complex than that. But you get the idea.
First, let me make Josh Fershee's point for him: limited liability company (LLC) members cannot usurp "corporate" opportunities, since they are not corporations. Indeed, the court in Mulloy repeatedly refers to the doctrine in that way and cites to corporate law precedent we all know and love. This despite an accurate citation to Tennessee's statutory standard for the usurpation of LLC opportunities: requiring members to hold in trust for the LLC "any property, profit or benefit derived by the member in the conduct . . . of the LLC’s business, or derived from a use by the member of the LLC’s property, including the appropriation of any opportunity of the LLC.” Tenn. Code Ann. § 48-249-403(b)(1).
But the big surprise for me was "we affirm." Why? I just kept thinking of Meinhard v. Salmon. Apart from he fact that this case involves a Tennessee LLC and two brothers, the material facts are substantially similar. Yet, the result is different. The Mulloy court reasons that the property acquisition opportunity at issue was not the LLC's, but rather the older brother's (even though the brothers' jointly owned LLC existed to lease property to a specific tenant--the same tenant to which the older brother rents the new property--property that the younger brother originally identified). The court references facts that do help the older brother here. But something just smells wrong about this. The lack of candor in this situation is particularly disturbing.
So, that set me to wondering if there was a way to get that "punctilio of an honor, the most sensitive" back into the judicial sightline. Immediately, I thought of Anderson v. Wilder--a 2003 Tennessee Court of Appeals case in which the court applies the close corporation shareholder fiduciary duties under Massachusetts corporate law to members in a Tennessee LLC. However, it then occurred to me that Anderson was decided under Tennessee's "old" LLC Act; but the LLC in Mulloy opted into Tennessee's modernized, "new" LLC Act, which became effective on January 1, 2006. The new LLC Act is modeled in part on the Revised Uniform Limited Liability Company Act and provides as follows, in pertinent part (in Tenn. Code Ann. § 48-249-403(a) and (b) (emphasis in italics added)):
- "The only fiduciary duties a member owes to a member-managed LLC and the LLC's other members and holders are the duty of loyalty and the duty of care . . . ."
- "A member's duty of loyalty to a member-managed LLC and the LLC's other members and holders of financial rights is limited to the following: (1) To account to the LLC and to hold as trustee for it any . . . benefit derived by the member in the conduct . . . of the LLC's business, or derived from a use by the member of the LLC's property, including the appropriation of any opportunity of the LLC . . . ."
These statutory provisions would appear to foreclose an argument that members of an LLC organized under the new LLC Act have a fiduciary duty of utmost good faith and loyalty to each other under Anderson (or otherwise at common law). Much as I hate to admit it, that's the way a court should, and likely would, see this.
What do you think? Is my concern about the holding in the appellate court opinion in Mulloy warranted? Or do we treat the Mulloy brothers like "big boys" and agree with the appellate and trial courts? Your views are welcomed. I am looking for some creative arguments here . . . .
Monday, October 21, 2019
Given the number of corporate governance functions that can be conducted using blockchains, it seems appropriate to consider how business lawyers should respond to related challenges. Babson College's Adam Sulkowski and I undertook to begin to address this concern in an article we wrote for the Wayne Law Review's recent symposium, "The Emerging Blockchain and the Law." That article, Blockchains, Corporate Governance, and the Lawyer's Role, was recently released. An abstract follows.
Significant aspects of firm governance can (and, in coming years, likely will) be conducted on blockchains. This transition has already begun in some respects. The actions of early adopters illustrate that moving governance to blockchains will require legal adaptations. These adaptations are likely to be legislative, regulatory, and judicial. Firm management, policy-makers, and judges will turn to legal counsel for education and guidance.
This article describes blockchains and their potentially expansive use in several aspects of the governance of publicly traded corporations and outlines ways in which blockchain technology affects what business lawyers should know and do—now and in the future. Specifically, this article describes the nature of blockchain technology and ways in which the adoption of that technology may impact shareholder record keeping and voting, insider trading, and disclosure-related considerations. The article then reflects on implications for business lawyers and the practice of law in the context of corporate governance.
In the article, Adam and I do a fair amount of visioning. Based on the development of blockchain corporate governance we imagine, we conclude that business lawyers must both focus on understanding technology in the context of their clients' business operations and be proactive in providing legal advice relating to potential uses of the technology. We conclude that,
[i]n representing business clients, counsel have a critical role in thinking through all the implications of moving any governance function or process to a blockchain-based platform. It is especially important to help clients see, consider, and appreciate certain irrevocable consequences and legal risks, as well as potential opportunities. . . .
There is much for us all to learn in this area. A number of legal scholars are engaging in work that may be useful in better informing us. I, for one, try to attend as many of their presentations as possible as a means of better informing myself of what I need to know to teach corporate governance in the blockchain era. (We note in the article that blockchain corporate governance "impacts the job of legal educators and law schools.") I will continue to be on the lookout for additional work on blockchain corporate governance (and lawyering in an increasingly blockchain-driven world) and endeavor to highlight key things I find by posting about them here.
Monday, October 14, 2019
Beate advises that there are a few places left at an upcoming conference on Corporate Sustainability Reforms: Securing Market Actors' Contribution to Global Sustainability. The conference will be held in Oslo, Norway on October 24, 2019 and features contributions from around the world and across disciplines. She promotes the conference as follows:
We know that we need the contribution of all market actors: business, citizens, investors, and the public sector to achieve sustainability. However, a number of barriers, gaps and incoherencies that prevents market actors from contributing has been identified by the SMART Project. At this conference we will discuss how to facilitate the transition to sustainability, with the aim of identifying concrete proposals.
The conference is open to students, scholars, policy-makers, practitioners, and journalists. The deadline to register is October 17. There is no registration fee, and a lunch and reception are included for all participants.
Saturday, October 12, 2019
Some of you may remember my post from last year on the American Bar Association's LLC Institute, an annual program at which I have presented and from which I have benefitted. This year's institute is scheduled for November 7 & 8 at the Stetson Tampa Law Center. The registration deadline is October 25. The registration site can be found here.
The program agenda is, as usual, amazing. Baylor Law's Beth Miller will lead off (with others) in presenting updates on relevant decisional law. Additional highlights include panels on "LLC Agreements That Went Wrong, and How to Fix Them: Case Studies and War Stories" and "Re-Imagining the Business Trust as a Sustainable Business Form" (the latter featuring friend and Florida Law prof Lee-Ford Tritt) and an ethics program featuring (among others) Bob Keatinge, who is always illuminating and entertaining. Presentations by other LLC Institute favorites (including Tom Rutledge, whose message to me prompted this post) pepper the program.
On Thursday night, at the annual dinner, Mitchell Hamline School of Law Emeritus Professor Dan Kleinberger will receive the 2019 Martin I. Lubaroff Award. Most business law profs know Dan, who has (among other things) been a tremendous servant of the academy and the bar on unincorporated business entity issues. I have benefitted from that service. I am sad to miss being at the institute this year to see him get that award and congratulate him in person.
The LLC Institute is where the LLC elite meet. If you have not attended this program and research/write in the unincorporated business associations area, I recommend you check it out. Heck, I recommend that you attend anyway. It's a super two days of learning and networking in a lovely part of the country. Continuing legal education credit is available.
Monday, October 7, 2019
When I was a number of years into my law practice, Skadden, Arps, Slate, Meager & Flom LLP, the firm at which I worked, asked me to sign a mandatory arbitration agreement. Signing was voluntary, but the course of conduct indicated that it was strongly suggested. I thought about it and declined to sign.
It was hard for me to imagine bringing a legal claim against my law firm employer. I knew that if I were to sue Skadden, the matter would have to be very big and very serious--a claim for a harm that I would not want compensated through a "compromise recovery," which I understood could be a likely result in arbitration. I also was concerned about the lack of precedential value of an arbitration award for that kind of significant claim--permitting systemic bad employer behavior to be swept under the rug. And finally, I understood and respected the litigation expertise and experience of my colleagues in the firm and their connections to those outside the firm--expertise, experience, and connections that I believed would be more likely to impact negatively the opportunity for success on the merits of my claim in an arbitral setting.
I watched with interest as arbitration clauses caught on in this context, becoming (in many firms) a condition of employment. Other BLPB editors have written about mandatory arbitration in the employment law context in this space in the past, including Ann Lipton here and Marcia Narine Weldon here. The issue also has been raised by other bloggers and in the news media. I remember stories about summer associate mandatory arbitration classes, for example. (See, e.g., here and here from 2018.)
I recently read this article from The American Lawyer, which describes a trend away from these mandatory arbitration clauses in law firm employment. What goes around comes around . . . . I was especially interested to read that some firms are dispensing with the practice because employees/prospective employees disfavor these agreements. I also noted the article's description of key substantive arguments against mandatory arbitration: "[T]he clauses are unfair to workers and can allow large law firms to conceal accusations of racism, sexual harassment and assault." This is consistent with my own reasoning. Moreover, I admit that, as I was contemplating whether to sign Skadden's arbitration clause, sexual misconduct was among the big and very serious claims I determined that I would want to pursue in court--for remedy-related and public disclosure reasons.
Although the firm's leadership may have disapproved of my refusal to sign that agreement way back when, I still think I made the right decision--at least for me. If arbitration is mutually beneficial, one would hope that both parties would recognize that at the outset of their relationship or at the time a dispute arises. Otherwise, power imbalances tend to dominate in this space. Dispute resolution situations also may involve emotional and psychological factors that can impact judgment and strategy. Regardless, I am a "preserve as many options as possible" kind of gal. As a result, taking a position that maintains my rights to sue or participate in a class action claim seems natural and appropriate. I will hold onto those rights, if I can.
Saturday, October 5, 2019
SAVE THE DATE
Emory’s Center for Transactional Law and Practice is excited to announce the date for its seventh biennial conference on the teaching of transactional law and skills. The conference will be held at Emory Law, on Friday, June 5, 2020, and Saturday, June 6, 2020.
More information will be forthcoming on the Call for Proposals, the Call for Nominations for the Tina L. Stark Award for Excellence in the Teaching of Transactional Law and Skills, open registration, and travel accommodations. We are looking forward to seeing all of you on June 5 and 6, 2020!
Monday, September 30, 2019
I want to follow on Colleen's post from yesterday with my own Business Law Prof Blog Symposium commentary. But first, I want to thank Colleen, Ben, Josh, Doug, Haskell, and Stefan for participating with me in the symposium this year. Our continuing legal education attendees, as well as our faculty and students, love this symposium each year. It always turns out to be a wonderful pot pourri of business law topics that literally connect the threads of what we do as business lawyers and business law educators.
Rather than being a featured presenter this year, I chose to present panel-style with two of my UT Law colleagues. (That's us, plus our student commentator, Dixon Babb, in the photo above. Thanks for capturing that, Haskell!) The panel was designed to describe different conceptions of mergers based on distinct areas of legal expertise, together with related professional responsibility commentary. I chose my colleagues Don Leatherman and Tom Plank to join me for this session--Don a tax law practitioner and teacher and Tom a property law practitioner and teacher. The reason for these choices was simple: the three of us had covered this issue before in an informal conversation, and I had found it really stimulating. Don and Tom are amazingly good at what they do, are humorous in their own unique ways, and were exceedingly good sports about joining me on Friday and trying to re-create the atmosphere, as well as the content, of our prior discussion.
An edited excerpt (the introduction) from the abstract for our panel is included below. I may have more to say about this panel in a later post. A transcript of the full panel discussion and Q&A will be published in the spring 2020 issue of Transactions: The Tennessee Journal of Business Law. I will try to remember to post a link after that book is published. (Last year's symposium volume can be found here, by the way.)
Anyway, here is our introduction. This panel discussion was so much fun to do, as you might imagine. I can only hope others enjoyed it as much as the three of us did!
This contribution to “Connecting the Threads III,” the third annual Business Law Prof Blog symposium, involves a conversation between and among three law professors with diverse law practice backgrounds—a corporate finance lawyer, a tax lawyer, and a property lawyer who has served as bankruptcy counsel and Uniform Commercial Code sales and securitization counsel. About ten years ago, these three lawyers, all professors at The University of Tennessee College of Law, found themselves by a water cooler talking about mergers, equity sales, and assets sales. As the corporate finance lawyer recalls, the conversation moved into high gear when the property lawyer questioned her classroom depiction of merger transactions as creatures of statutory magic . . . .
In their conversation that day, the three law professors began to scope out various conceptions of mergers and acquisitions (in common parlance, M&A transactions or business combinations) based on the distinct perspectives provided by their professional backgrounds, their scholarship, and the courses they teach that intersect with M&A transactions. The conversation emanates from the distinct policy objectives (and resulting broad, conceptual substantive focuses) of different legal regimes. The observations each made—both as to their own areas of expertise and those of their colleagues—together offered an appropriately complex picture of these intricate transactions, which often are executed using a team of lawyers representing various areas of practice. As the colleagues parted company that day, one of them made mental note that the conversation should have been recorded—for her own benefit and for the benefit of students who, depending on their upper-division course selections, may not get exposure to this more complete and rich portrayal of business combinations.
At “Connecting the Threads III,” these three law professors . . . attempt to recreate and expand on the content of their impromptu water-cooler conversation. While the precise discussion cannot, after all of these years, be faithfully replicated, its overall nature—updated to reflect current legal doctrine, policy, theory, and norms—can be reconstructed. The discussion addresses a series of broad questions, the threshold one being what a merger is, from the standpoint of each professor’s area of practice, scholarship, and teaching.
Call for Proposals – Feminist Judgments: Rewritten Corporate Law
DEADLINE: Friday November 1, 2019
The U.S. Feminist Judgments Project seeks contributors of rewritten judicial opinions and private contracts, and commentaries on rewritten opinions and contracts, for an edited collection tentatively titled Feminist Judgments: Rewritten Corporate Law. This edited volume is part of a collaboration among law professors and others to rewrite, from a feminist perspective, key judicial decisions in the United States. The initial volume, Feminist Judgments: Rewritten Opinions of the United States Supreme Court, edited by Kathryn M. Stanchi, Linda L. Berger, and Bridget J. Crawford, was published in 2016 by Cambridge University Press. Cambridge University Press has approved a series of Feminist Judgments books. In 2017, Cambridge University Press published the tax volume titled Feminist Judgments: Rewritten Tax Opinions. Other volumes in the pipeline include rewritten opinions in the areas of reproductive justice, family law, torts, employment discrimination, trusts and estates, and health law. More information about the project can be found at https://law.unlv.edu/us-feminist-judgments.
Corporate law volume editors are Anne Choike, Usha R. Rodrigues and Kelli Alces Williams. The corporate law volume’s advisory panel is comprised of Alina Ball; Lisa Fairfax; Theresa Gabaldon; Joan MacLeod Heminway; Kristin Johnson; Elizabeth Pollman; Poonam Puri; Darren Rosenblum; Cindy Schipani; Kellye Testy; Cheryl Wade; and Cindy Williams.
With the guidance of the advisory panel, the editors have selected cases that have not appeared in other Feminist Judgments volumes, doctrinally significant cases, and cases that raised issues of particular salience to women’s lives. This volume also seeks to include a rewritten “contract,” given corporate law’s emphasis upon default law and the precedent-setting power of privately negotiated arrangements. Potential authors are welcome to suggest other opinions or contracts that they would like to address, but the overall number of cases and contracts finally included in the volume must remain limited.
Interested prospective contributors should submit a proposal to either: 1) rewrite an opinion or contract (subject to a 10,000 word limit), or 2) comment on a rewritten opinion (4,000 word limit). Rewritten opinions may be majority opinions, concurrences, dissents, or private contracts.
Authors of rewritten opinions or contracts will be bound by the law and precedent in effect at the time of the original decision. Commentators will explain the original court decision or contract and its context, how the feminist opinion or contract differs from the original, and the impact that the rewritten feminist opinion or contract might have made. The volume editors conceive of feminism as a broad movement and welcome proposalsthat bring into focus intersectional concerns beyond gender, such as race, class, disability, gender identity, age, sexual orientation, national origin, and immigration status.
To facilitate collaboration among contributors across the entire volume, the editors tentatively plan to host a gathering at the Law & Society Annual Meeting on May 28–31, 2020 in Denver, Colorado. All contributors are invited, but not required, to participate in the workshop. Contributors attending the gathering must cover their own travel, lodging and meal expenses.
The editors will notify accepted authors and commentators by Saturday, November 30, 2019. Abstracts of rewritten opinions or contracts will be due on April 30, 2020 for circulation to fellow authors. Abstracts of commentaries will be due on May 15, 2020 for circulation to fellow authors. First drafts of rewritten opinions will be due on Wednesday, July 15, 2020. First drafts of commentaries will be due on Tuesday, September 15, 2020. The target date for submission of the completed, compiled manuscript for publication is February 2021.
To submit a proposal for rewriting an opinion or contract or providing commentary, please e-mail the following information to the volume co-editors, Anne Choike, email@example.com, Usha R. Rodrigues, firstname.lastname@example.org, and Kelli Alces Williams, email@example.com by Friday, November 1, 2019:
- Your CV, your areas of corporate law interest or expertise, and why you are interested in and well suited to participate in this project. The Feminist Judgments Project and the Corporate Law volume editors are committed to including authors from diverse backgrounds. If you feel an aspect of your personal identity is important to your participation, please feel free to include that in your expression of interest.
- Your top two or three preferences of cases or contracts to write about from the list below. Alternatively, if you have another case or contract that you feel strongly should be included instead of one of the selected cases or contracts and that you would like to write about, provide a summary of the case or contract (no more than 250 words), a copy of the full text of the case or contract, and a brief summary (no more than 250 words) of the reasons that you think it should be included. Contributors who wish to co-author a rewritten opinion, rewritten contract or commentary, or work together on a rewritten opinion or contract and the commentary thereupon, are welcome to indicate that in the application.
- Your preference for contributing a rewritten opinion or contract, or a commentary.
- Any time constraints and other obligations that may impact your ability to meet the submission deadlines.
- Your willingness and ability to attend the tentatively planned gathering at the Law & Society Annual Meeting in Denver, Colorado in May 2020. Selection of contributors does not depend on their ability or willingness to attend this gathering.
This list of cases and contracts that the editors have selected for consideration to be included in the volume Feminist Judgments: Rewritten Corporate Law, is as follows:
Legal Personality, Identity, and Limited Liability of Corporate Entities:
- Citizens United (rights of corporate “persons” and nature of corporate personality)
- Walkovszky v. Carlton (limited liability/veil piercing)
Role and Purpose of the Corporation and Corporate Combinations in Society
- Dodge v. Ford (shareholder primacy)
- Merriam v. Demoulas Super Mkts. (stakeholder responsibility in family-owned business)
- Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. (directors’ duty to maximize share price in corporate takeover)
Fiduciary Duties in Corporate Governance
- Meinhard v. Salmon (duty of loyalty)
- Smith v. Van Gorkom (duty of care and business judgment rule)
- Francis v. United Jersey Bank (duty of care to understand business)
- In re Walt Disney Derivative Litigation (duty of care regarding executive compensation)
- Harvey Weinstein Employment Agreement (duty of care to monitor compliance)
Closely Held Businesses and Other Considerations Regarding the Composition of Boards, Management, and Owners
- Ringling Bros.--Barnum & Bailey Combined Shows, Inc. v. Ringling (dispute over board seats)
- Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart (legitimacy of board member personal relationships)
- Donohue v. Rodd Electrotype (close corporations and minority shareholder oppression)
Protecting Vulnerable Investors and Potential Investors in Corporations
- Jordan v. Duff & Phelps (duty to disclose material information)
- SEC v. Howey (definition of investment contract)
- US v. Chestman (culpability for insider trading based on personal relationships)
Sunday, September 29, 2019
Friend-of-the-BLPB Seth Oranburg informs me that the call for papers is now open for the #Futurelaw 4.0 Junior Faculty Workshop, offering newer scholars the opportunity to present and respond to research and writing in law-and-technology areas of endeavor. Details (including how to apply for inclusion) are available at www.duq.edu/future-law-4. The workshop is to be held on November 22, 2019. Submissions are due on October 14, and complete drafts are due on November 8.
Please spread the word quickly! This sounds like an exciting opportunity, but there is a short fuse on applications.
Monday, September 23, 2019
The University of Idaho College of Law seeks to fill a tenure-track or tenured faculty position beginning in the Fall of 2020 in the area of Commercial Law for its Moscow location. Both entry-level and lateral candidates are encouraged to apply. In addition to courses in Sales and Property Security, the faculty member will be expected to teach two additional courses – which may include Bankruptcy, Payment Systems, Real Estate Transactions, and/or State Debtor-Creditor Law – according to the interest of the faculty member and the needs of the College of Law. Candidates must have (1) a J.D. from an ABA-accredited school or the equivalent; (2) a distinguished academic record; (3) a record or the promise of teaching excellence; (4) a record or the promise of scholarly productivity; and (5) a record or the promise of expertise in the area of Commercial Law. Preference will be given to candidates with (1) post-J.D. practice, clerking, or teaching experience; and (2) post-J.D. experience related to Commercial Law and other courses listed above. Situated in the beautiful Pacific Northwest, the University of Idaho is a comprehensive research institution. Information about the College of Law is available on its website at https://www.uidaho.edu/law. Interested candidates should apply online athttps://uidaho.peopleadmin.com/postings/27297. Questions about the position should be directed to David Pimentel, Chair of the Faculty Appointments Committee, at firstname.lastname@example.org. The University of Idaho is an affirmative action, equal opportunity employer.
[Hat tip to Aliza Plener Cover, Associate Professor at the University of Idaho College of Law, for highlighting this opportunity.]
Monday, September 16, 2019
I am pleased to announce that The University of Tennessee College of Law is again hosting editors of this blog for a symposium focusing on current topics in business law. The website for the symposium, which is sponsored by UT Law's Clayton Center for Entrepreneurial Law, is here. Faculty and students from UT Law will comment on presentations given by my fellow BLPB bloggers. Participating editors of the BLPB in this year's program include Colleen Baker, Ben Edwards, Josh Fershee, me, Doug Moll, Haskell Murray, and Stefan Padfield. The lunchtime panel features me and two of my UT Law colleagues exploring the legal meaning and understanding of mergers and other business combinations from various perspectives, including business associations law, bankruptcy and UCC law, and federal income tax law. That, alone, is surely worth the price of entry!
If you live in or near Knoxville, please come and join us. Continuing legal education credit is available to members of the Tennessee bar. If you cannot make it to the symposium, however, a video recording of the proceedings will later be available on UT Law's website, with an expected option for online continuing legal education credits. (Last year's program is available here with a continuing legal education credit option.) In addition, the written proceedings of the symposium are scheduled to be published in the spring volume of Transactions: The Tennessee Journal of Business Law.
I am looking forward to having many of my BLPB co-editors in town for this program. It's always a special time when we are together.
Monday, September 9, 2019
Call for Papers for Section on Law & the Social Sciences Program at the AALS Annual Meeting
The Section on Law & Social Sciences is pleased to announce a Call for Papers from which one or two additional presenters may be selected for the section’s program panel to be held during the AALS 2020 Annual Meeting in Washington, D.C. The panel is entitled “Empirical Research in Business Law: Works in Progress,” and the panelists will summarize the methods and/or results of their current qualitative or quantitative empirical research projects as works in progress.
Form and Length of Submission:
The Section welcomes relevant submissions in the form of research proposals, preliminary pilot studies, or even nearly completed projects with results. Junior scholars are particularly encouraged to submit. Submissions should incorporate at least a brief (3-5 page) summary or abstract of the project.
Submission Method and Due Date:
Papers should be submitted electronically to David Kwok (email@example.com). The due date for submission is September, 20, 2019. Authors selected will be notified by September 27, 2019. The Call for Papers presenters will be responsible for paying their registration fee and hotel and travel expenses.
Inquiries or Questions:
Any inquiries about the Call for Papers should be submitted to David Kwok (firstname.lastname@example.org).
The following comes to us from friend of the BLPB George S. Georgiev at Emory Law:
Emory University School of Law seeks a lateral hire for a tenured position in business law to begin in the 2020-2021 academic year. Candidates should be already tenured at an ABA-approved law school.
Candidates must have a J.D., Ph.D., or equivalent degree, a distinguished academic record, and a demonstrated potential to produce outstanding scholarship. Candidates should complete the online application here, and submit a cover letter, a current CV, a published or unpublished academic article, a brief research agenda, and an indication of teaching interests (if not listed on the CV) to the chair of the Faculty Appointments Committee: Polly J. Price, Asa Griggs Candler Professor of Law, at email@example.com.
Emory Law strives for a world in which law provides a common framework for courageous leaders to engage our most complex social and economic challenges and to achieve positive social transformation by advancing the rule of law. Emory University is dedicated to providing equal opportunities and equal access to all individuals regardless of race, color, religion, ethnic or national origin, gender, genetic information, age, disability, sexual orientation, gender identity, gender expression, and veteran's status.
Monday, September 2, 2019
Today marks the 125th anniversary of our celebration of Labor Day as a U.S. national holiday. As the U.S. Department of Labor reminds us:
Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country. . . .
The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pays tribute on Labor Day to the creator of so much of the nation's strength, freedom, and leadership – the American worker.
Certainly, there remains much to celebrate. Yet, an online piece written two years ago that focuses in on the history in a more detailed way offers words of caution:
The original holiday was meant to handle a problem of long working hours and no time off. Although the battle over these issues would seem to have been won long ago, this issue is starting to come back with a vengeance, not for manufacturing workers but for highly skilled white-collar workers, many of whom are constantly connected to work.
[Note: I have been accused of being constantly connected to work--or the equivalent. Sometimes rightly so.] The article goes on to urge taking a day off and enjoying time at a barbecue. I want to offer an additional idea: consider adding mindfulness to your tool kit (and more specifically a simple practice).
Yes, I have extolled the virtues of mindfulness practices before, including here and here. Marcia has, too. I want to incorporate by reference here all that we have collectively said in that regard. But I also want to emphasize in today's post a new application of the concept--one that I learned in a series of beginner meditation classes that I completed yesterday.
All of us have thoughts relating to our work (and our personal lives) that niggle at us over time or disrupt our flow in the moment. They may involve, for example, a grudge against a colleague or anger at an administrator or anxiety about a student or upcoming project or event. These ongoing meddlesome thoughts interfere with our work and our lives outside work. Specifically, they distract us and make us unhappy, inefficient, and unproductive. They can lengthen our work days and extend the work week into weekends. They can ruin our time with family--even at a Labor Day barbecue.
There are ways of managing this kind of stress in our work lives. The instructor in my meditation class offered the technique (labeled, apropos of today's holiday, "The Work") suggested and promoted in Loving What Is: Four Questions That Can Change Your Life, by Byron Katie and Stephen Mitchell. As the title of the book suggests, the approach consists of four questions. They are:
- Is it true?
- Can you absolutely know that it's true?
- How do you react, what happens, when you believe that thought?
- Who would you be without that thought?
In addition to the book, a website offers guidance, including a series of videos. The same coauthors have written a follow-on book, A Mind at Home with Itself: Finding Freedom in a World of Suffering. (Byron Katie apparently has two other books--one also coauthored with Stephen Mitchell, here and here. They also may be helpful but may not be as central to using The Work.) I have not read any of the books, but I plan to practice the use of the four questions.
Why would I invest in this? If used properly and successfully, what can these four questions do for me? Here's what I have learned so far.
The four questions and the way in which they are used in The Work invite us to compartmentalize a thought that troubles us, allowing us to explore its contours and question it and ourselves. In the process, we can reduce the suffering it causes us and slow down any reaction process that we determine is needed. Ultimately, this method of addressing troubling thoughts has the capacity to free us from the drag that our niggling thoughts have on our working and personal lives. The Work also may enable us to take required action to address true concerns in the workplace and at home in a manner that is more compassionate and less driven by the exigencies of the moment.
I offer this new mindfulness process for what it may be worth to you, in the spirit of personal wellness, institutional health, and Labor Day--to allow you more "time off" from work (among other things). Regardless of the appeal--or lack thereof--The Work may hold for you, I wish you all a happy and restful Labor Day. I am making a special brunch that I will enjoy with my husband and daughter. No family or neighborhood barbecue is planned, but who knows? My hubby and I may just make our own . . . .
Tuesday, August 27, 2019
Back in April, I posted on a leadership conference focusing on lawyers and legal education, sponsored by and held at UT Law. I also posted earlier this summer on the second annual Women's Leadership in Legal Academia conference. I admit that I have developed a passion for leadership literature and practices through my prior leadership training and experiences in law practice and in the legal academy.
Because lawyers often become leaders in and through their practice (both at work and their other communities) and because leadership principles interact with firm governance, I want to make a pitch that we all, but especially all of us teaching business associations (or a similar course), focus some attention on leadership in our teaching. It is a nice adjunct to governance. For example, management and control issues, especially director/officer processes in corporations, are a logical place to discuss leadership. Who are the managers and the rank-and-file employees inspired by in managing and sustaining the firm? Who is able to persuade the board to take action? Is it because of that person's authority, or does that person hold a trust relationship with others that motivates them to follow? And speaking of trust, it is an element of both leadership and fiduciary duty . . . .
As you consider my teaching suggestion, I offer you my latest blog post on our Leading as Lawyers blog. It involves the importance of process to effective leadership. The bottom line?
One can have a promising vision and strategy that emanate from the best of all intentions and ideas. But without engaging a process that includes effectual communication and input from, candid interchanges with, expressions of appreciation for, and buy-in from the relevant affected populations, those worthy intentions may be misinterpreted and those good ideas may die on the vine or not be implemented effectively.
We have all seen this happen in business governance. Let's let our students in on the role that leadership plays in the practical application of business law. It is bound to inform both their law practice and their lives.
Monday, August 19, 2019
Apropos of my post last week on female founders and leaders of beauty unicorns (and women-founded unicorns more generally), I want to highlight this recent piece from our local paper here in Knoxville. The women featured in the article range from high school students to holders of advanced degrees in their respective fields. Their businesses are all technology driven and have received significant start-up funds through competition awards and grants. None may become unicorns. Their growth and exit strategies may not take them there. Regardless, their ideas have apparent traction and their businesses are experiencing early-stage success. I found each woman and her ideas totally inspiring.
Speaking of inspiring, I also will note that a day earlier, the same news outlet published an article that focused on women-led businesses in our community--and more specifically, on advice that local female CEOs desired to offer to others who are starting or managing their own businesses. Their counsel (which includes, among many other things, encouragement to step away from business operations to achieve greater business success, as well as life balance) is priceless. So are some of the observations these businesswomen make along the way. Here are a few of my favorite quotes, each of which is a great lesson in leadership:
- “I want everybody to be continual learners, and to continue to grow and take chances and do things they didn’t think they could do . . . .”
- “Never underestimate the power of sheer determination . . . ."
- "If you take a group of subject matter experts in whatever they do, that are mission focused, put their egos out the door and they're really interested in solving whatever the problem is, whatever the situation is in front of them, that you are going to come up with more innovative, robust, diverse, comprehensive solutions because of that diversity, because you're coming together as a team . . . ."
Knoxville hosts a lot of business formation and development activity. UT Law's business and trademark law clinics engages with some of the related legal services work. As someone who practiced in BigLaw and worked predominantly with publicly held and larger privately owned firms, I have found my work in the Knoxville community over the past nineteen academic years to be a welcome change and, overall, very rewarding. As I enter my twentieth year of law teaching this week, I plan use all of the goodwill that work has generated (as well as the inspiration offered by the two articles I link to above) to motivate my teaching. I look forward to a happy and productive semester! And if you are a law teacher (or a teacher of any kind, for that matter), I wish you the same.
Tuesday, August 13, 2019
Call for Papers
AALS Section on Securities Regulation—2020 AALS Annual Meeting
Emerging Voices in Securities Regulation
January 2-5, 2020
The AALS Securities Regulation section invites proposals for its "Emerging Voices in Securities Regulation” works-in-progress workshop at the 2020 AALS Annual Meeting. The workshop will bring together junior and senior securities regulation scholars for the purpose of giving junior scholars feedback on their scholarship and helping them prepare their work for the spring law review submission cycle. A junior scholar is any untenured full-time faculty member as of January 2, 2020.
FORMAT: The program will involve multiple simultaneous roundtables, with one junior scholar, one or two senior scholars, and interested observers at each table. Junior scholars’ presentations of their drafts will be followed by oral comments from senior scholars and further discussion, as time permits.
SUBMISSION PROCEDURE: Junior scholars who are interested in participating in the program should send an abstract (or longer summary) or draft-in-progress to Professor Eric C. Chaffee, Chair of the AALS Securities Regulation Section, at Eric.Chaffee@utoledo.edu, on or before September 16, 2019. The cover email should state the junior scholar’s institution, tenure status, number of years in his or her current position, and any previous positions in academia. The subject line of the email should read: “Submission—Sec Reg WIP Program.”
Junior scholars whose papers are selected for the program will need to submit their presentation drafts to Professor Chaffee by December 13, 2019, in order that the assigned commenters will have sufficient time to read the drafts prior to the Annual Meeting.
ELIGIBILITY: Junior scholars at AALS member law schools are eligible to submit proposals. Pursuant to AALS rules, faculty at fee-paid law schools, foreign faculty, adjunct and visiting faculty (without a full-time position at an AALS member law school), graduate students, fellows, and non-law school faculty are not eligible to submit. Please note that all presenters at the program are responsible for paying their own annual meeting registration fees and travel expenses.
Monday, August 12, 2019
We hear a lot about unicorns in technology, finance, and the sharing economy. But many of us do not realize that a number of unicorns are owned by women and a number of those focus on make-up and skin care--products geared to a female audience. Female-owned beauty unicorns are all around us . . . .
Why should we care? Well for one thing, female-owned businesses have historically been somewhat rare. (In 1972, women-owned businesses accounted for only 4.6% of all firms, e.g.) And for another, it has been noted that women often have a tough time financing their businesses. (See this 2014 U.S. Senate Committee report and other sources cited below for some details.) Also, it may be interesting to some (it is to me) that a business in such a traditional space can succeed so well in private capital markets given the competitive dominance of major conglomerates (most of which are publicly traded). Also, as I note in closing below (for those teaching in the business law area), the facts and trends in this space may be fodder for great exercises and exam questions.
Women-owned businesses are beginning to catch up in the race for space in commercial and capital markets. The National Association of Women Business Owners (NAWBO) represents on its website (based on data from an American Express report, updated here) that "[w]omen-owned firms (51% or more) account for 39% of all privately held firms and contribute 8% of employment and 4.2% of revenues." The Women's Business Enterprise National Council (WBENC) notes that "From 2007 – 2018, total employment by women-owned businesses rose 21%, while employment for all businesses declined by 0.8%." Women Owned, a WBENC initiative and WEConnect International, asserts that "[o]ver the past 20 years, the number of Women Owned businesses has grown 114 percent compared to the overall national growth rate of 44 percent for all businesses." More relevant to the matter of female-led unicorns, however, the NAWBO reports that "[o]ne in five firms with revenue of $1 million or more is woman-owned" and that "4.2% of all women-owned firms have revenues of 1 million or more."
Yet, unicorns owned by women are the exception rather than the rule in women-owned businesses. Overall, according to the WBENC, the revenues generated by businesses owned by women contribute only 4.3% of the total revenues of private sector firms, despite the fact that they constitute almost 4 of every 10 privately held businesses. WBENC also reports that "88% of women-owned businesses generate less than $100,000 in revenue," noting that "[t]his group is growing at a rate that is faster than the growth rate for larger women-owned companies." So, women still have some work to do in producing gender equity through the creation of large, independent, private firms--whether in the beauty industry or another sector.
“A category that is mostly acceptable price points with high margins and consumable products—that’s a pretty good business setup,” says Green, who was the first person to back Glossier. Green points out that the momentum women like Weiss and Soare [Anastasia Soare, founder of Anastasia Beverly Hills, a leader in eyebrow products, including its famously popular Brow Wiz®] have created has forced investors to reevaluate what has historically been considered a niche women’s space but is on track to grow to $750 billion by 2024. It has also unleashed a harras of unicorn foals—entrepreneurial hopefuls working to emulate this kind of megawatt success in the cosmetics industry and beyond. “Beauty companies have never been considered companies that are changing the world,” says Weiss. But they are changing the dynamics of who’s in the boardroom.
Venture firms go where the money is, and it appears the beauty market is not yet saturated. One needs only note the soaring popularity of Korean beauty products in the United States to understand that this is a big market. Women are credible business leaders in this industry as key, long-term consumers of beauty products.
There is much more data out there on various aspects of women-owned businesses and unicorns. I plan to poke at these topics more from time to time in this space. Information about these types of firms--as part of a growth economy--may be useful to both law academics and legal practitioners--especially those working with, or engaged with issues relating to, entrepreneurs, start-ups, or small businesses.
The mainstream business news media already has taken note. Witness this article on Glossier in Forbes and this one in Business Insider on Anastasia Beverly Hills, the two firms mentioned above. And, of course, the fashion retail media and blogosphere are awash with information on these firms. That's where I learned about these beauty unicorns in the first place. Some super exercises and exams questions may come out of this space. I already base an experiential exercise on Urban Decay, which once was a privately held female-owned beauty business. See this case for details. Other ideas for how to use the information and trends presented here are, of course, invited. Leave a comment to share yours.