Friday, May 3, 2019

Can Lawyers and Law Students Be (More) Effective Working and Learning Virtually?

I blogged two weeks ago about whether we were teaching law students the wrong things, the wrong way, or both. I’ve been thinking about that as I design my asynchronous summer course on transactional lawyering while grading asset and stock purchase agreements drafted by the students in my spring advanced transactional course. I taught the spring students face to face, had them work in groups, required them to do a a negotiation either in person or online, and am grading them on both individual and group work as well as class participation. When I looked at drafts of their APAs and SPAs last week, I often reminded the students to go back to old PowerPoints or the reading because it seemed as though they missed certain concepts or maybe I went through them too quickly— I’m sure they did all of the reading (ha!).  Now, while designing my online course, I’m trying to marry the best of the in person processes with some of the flipped classroom techniques that worked (and tweaking what didn’t).

Unlike many naysayers, I have no doubt that students and lawyers can learn and work remotely. For the past nine years, I have participated as a mentor in LawWithoutWalls, a mostly virtual experiential learning program started by University of Miami professor Michele DeStefano. Also known as LWOW, the program matches students from around the world with business people and practicing lawyers to develop a project of worth over sixteen weeks. Team members meet in January in person and never see each other in person again until April during a competition that is judged by venture capitalists, lawyers, entrepreneurs, and academics. I mentored a team of students from Bucerius in Germany, Wharton in Pennsylvania, and the University of Miami. Banking behemoth HSBC sponsored our project and staffed it with lawyers from Singapore, Canada, and the UK. Other mentors on the team hailed from Spain and the UK. On any given week, 7-10 people joined Skype calls, chatted in WhatsApp, drafted on Google Docs, and accessed Slack. They attended mandatory webinars weekly via Adobe Connect on developing business plans, pitching to VCs, and working with clients. Seventy percent of the people on the seventeen teams spoke languages other than English as the first language. 

How did this virtual experience work? Extremely well, in my view. After some growing pains, students adjusted quickly as did the business partners, who are used to setting up conference calls and working across borders. Some of the winning teams developed projects that provided virtual reality training on implicit bias for police officers; informed consumers about food freshness to combat food waste; and organized health information for foster care children on a blockchain-powered platform. Humble brag- my team won best overall project by developing a solution to use blockchain and smart contracts in syndicated lending that has the potential to save the bank almost 2 million per year. I also mentored last year’s winner, Team Spotify, with students from Miami, Colombia, and Chile and lawyers housed in Sweden, California, and New York. Each year, teams do almost all of this hard work remotely, across time zones, and with language differences. Students collectively interview hundreds of subject matter experts over 16 weeks, and the vast majority of those interviews take place via phone or video and with people in different countries. Other sponsors for LWOW included Accenture, White and Case, Pinsent Mason, Microsoft,  Cozen O'Connor, LegalZoom, Eversheds Sutherland, LatAm Airlines, and Legal Mosaic-- all companies and law firms that see the benefit of these skill sets.  Significantly, every year, a cohort of teams does all of the work virtually, never meeting in person for a kickoff. That virtual team winner competes in person with the traditional teams each April, and often wins the whole competition. Clearly, these students develop special skills by necessity. I plan to learn from those experiences as I design my course.

My experience with LawWithoutWalls and as a former compliance officer (where we often did training online and via video) makes me optimistic about online learning and working. In my summer course, I will have students work in groups, where they will use the latest virtual teaming tools. I will have live office hours via Skype, Zoom, or FaceTime, and I will require that some of the groups do their meetings via video as well to have a connection outside of email. Students will draft and edit on community bulletin boards. They will post their own video presentations and "webinars" geared toward fictitious business clients. Working collaboratively and creatively are key skills in the real world, and they will be key in my class. 

But there is a lot of resistance in both the legal community and academia regarding the online world. Last week, I attended a seminar at a law firm and met a member of the Florida Board of Bar Examiners. I asked his opinion on the state of students and young lawyers. I was particularly interested in his thoughts because he’s also a partner at a large law firm in our state. Like some quoted in my prior post, he believes that online coursework is a poor substitute for face to face learning. He further opined that when people don’t work in offices, they miss the camaraderie of being around peers and their work suffers. These are valid concerns. Many lawyers are unhappy in general, and the way people hide behind digital devices (even when in the same room/office) can lead to isolation, depression, and poor networking and social skills. 

But these drawbacks should not doom online learning and remote working. Most of my graduating 3Ls will take their bar prep courses online. They claim that it makes no sense to drive to campus “just to watch a video of a professor speaking.” They also like the idea of being able to rewind videos to take notes. The indicated that they will meet up with friends when they want to study together and may even come on campus to watch their online coursework for a sense of community. But significantly, they don’t see the need to learn in the traditional ways. Personally, I love good online courses but I also love the ability to have face to face interaction with teammates- even if that’s via video. Being in the same physical space also allows for chance interactions that can lead to enriching conversations. On the other hand, sometimes there's no choice. Many readers may remember that years ago, in harder economic times, companies cancelled non essential business travel and people got used to video meetings. Many employers now interview candidates by Skype first before bringing them in. Learning and working virtually is no longer a novelty. Some of our students  will work in co-working spaces for firms or companies where everyone works from home. 

Change is coming and in many places, already here. Law professors must prepare students to practice in this new world while not sacrificing pedagogical gains. This requires training on project management and effective communication with team members— all non-substantive topics and that will give many people pause. We also need to make sure that students know how to communicate with clients and employers face to face in business and social settings. Some professors will say- correctly- that they have enough to contend with making sure students understand the law and can pass the bar. But, for those of us interested in online learning, we need to do more. We have to make sure that we prepare students for both the "hard" and "soft" skills.  Most important, we need to make sure that these online courses have the rigor of traditional classes-- US News is watching.

I’m open to suggestions of what has worked for you and what hasn’t so please feel free to comment below or email me at mweldon@law.miami.edu.

May 3, 2019 in Current Affairs, Jobs, Law Firms, Law School, Lawyering, Marcia Narine Weldon, Negotiation, Teaching, Technology, Web/Tech | Permalink | Comments (2)

Monday, April 29, 2019

Trump's Deregulatory Promises and Accomplishments

My essay, "Mr Toad's Wild Ride: Business Deregulation in the Trump Era," was recently published by the Mercer Law Review as part of a volume featuring works from a recent symposium on "Corporate Law in the Trump Era."  The symposium was held back in October and resulted from ideas shared at a discussion group on "Corporate and Financial Reform in the Trump Administration" convened for the 2017 Southeastern Association of Law Schools conference.  A portion of the introduction explaining the overall nature of the essay follows (footnote reference omitted).

This Essay identifies and takes stock of the Trump Administration’s deregulatory efforts as they impact business interests, with the thought that even incomplete or biased information may be useful to transactional business lawyering. What of significance has been done to date? With what articulated policy goals, if any? How may—or how should—the success of the administration’s business deregulatory plans and programs be judged? What observations can be made about those successes? For example, who may win and lose in the revised regulatory framework that may emerge? The Essay approaches these questions from a transactional business law perspective and offers related observations. Spoiler Alert: to date, the deregulatory journey is characterized by haphazardness not unlike the motorcar experience that is the subject of the beloved Disneyland attraction, Mr. Toad’s Wild Ride—a joyride that includes surprises and may sometimes feel like it is taking us “merrily, merrily, merrily, merrily, merrily on our way to nowhere in particular!”

This is the second essay in a pair that I wrote over the past year on deregulation and the presidency.  I posted on the first essay here, with a bit of information about the project as a whole (which had its genesis in BLPB posts by Anne Tucker and me).*  I also posted on this project back in September, here.  Thanks to those of you who responded with ideas in the comments and in private messages in response to these earlier posts.  

Although not all of those comments made it into my work implicitly or explicitly, they were nevertheless helpful as I researched and thought through my theses on these two short reflective pieces.  I do have many more ideas relating to this topic.  No doubt those ideas--and some of yours--will find their way into other work as time moves on.

_____

* In reviewing my prior posts for this post, I noted that the text of  this post has the year of the Southeastern Association of Law Schools discussion group wrong.  It did, in fact, occur in 2017, and it therefore preceded the Association of American Law Schools conference discussion group referenced in the post.  I left a postscript on that page, but I wanted to clarify the matter here also.

April 29, 2019 in Anne Tucker, Current Affairs, Joan Heminway, Lawyering | Permalink | Comments (0)

Friday, April 19, 2019

Are We Teaching Law Students The Wrong Things, The Wrong Way, or Both?

It's that time of year again. Many states have released February 2019  bar passage rates. Thankfully, the rates have risen in some places, but they are still at suboptimal levels. Indeed, the July 2018 MBE results sunk to a 34- year low. A recent article on law.com lists some well-known statistics and theories, explaining, in part:

Kellye Testy, president of the Law School Admission Council . . .  suspects the falling pass rates are the results of a combination of factors, the most obvious being the lower credentials of incoming students. The declining quality of public education—meaning an erosion of the reading and writing foundations children develop in elementary and high schools—may also be a contributor, she said. Moreover, the evolving way that law is taught may explain why today’s law graduates are struggling more on the bar exam, said Testy, whose organization develops the LSAT. Professors now put less emphasis on memorizing rules, and have backed off on some of the high-pressure tactics—like the Socratic method—that historically dominated the classroom. “The way we used to teach wasn’t as good for caring for the student, but it made sure you could take a closed-book exam,” she said. “You knew the doctrine. It was much more like a bar exam, in some ways. Today, when you go into a classroom, it’s all PowerPoint. The teachers give them an outline, the students are on computers. There’s a different student approach and a different faculty approach.” The fact that so many law graduates now take bar preparation courses online rather than in person is another avenue worth examining for a potential correlation to falling pass rates, said Judith Gundersen, president of the National Conference of Bar Examiners. “You used to have to go to a lecture and show up every day,” she said. “Now so much of it is online. People are wondering whether that’s changing how people prepare, because there just isn’t that communal aspect where, ‘I have to prepare in case I get called on.’”

I'm not sure how I feel about these assertions. I agree that many students lack some of the key critical thinking and writing skills needed to analyze legal problems. I also see far fewer professors using the strict Socratic method and more allowing computers in class. I allow computers for specific activities but not throughout the class. I also employ more of a modified Socratic method, use powerpoint, and often post it in advance with questions for students to answer prior to class so that we can spend time in class applying what the students have learned. Am I doing a disservice to my students with a flipped classroom? Do we need to go back to rote memorization and cold calling students for the bar passage rates to rise? And if so, will that make our students better lawyers?

I remember how difficult it was to take the Florida bar after three years of law practice in New York. The rote memorization helped me pass the bar exam while working a full time job and caring for an infant as a single mother. But it didn't make me a better lawyer. Having worked for three years, I remember slogging through bar study thinking that what I was learning in bar prep had little to do with what I actually did in practice. When I prepared for the New York and New Jersey bars, I went to classes live but some were in a classroom via video. I'm not even sure that purely online courses were an option back in 1992. When I moved to Florida and studied for that bar, I used tapes in my car (yes, it was 1996). I had tried the live courses for a few days and realized that my time was better spent reciting the rules of evidence to my son in lieu of nursery rhymes. I passed three bars using two different methods but I wonder how well I would have done with an online version, the way most students study for the bar now. 

I no longer teach courses tested on the bar, but when I did, I had the perpetual conflict-- how do I make sure that the students pass the bar while instilling them with the knowledge and skills they will actually need in the real world? I see now how some of my transactional lawyering students dread going to the bar prep classes offered during the semester. But they also consider these classes a necessity to pass the bar even through they will engage in full time bar prep upon graduation. Does the proliferation of these law school bar prep classes mean that the doctrinal professors aren't teaching the students the way we learned? Or does it mean that that the students are no longer learning the way we did? I don't have the answers. 

But these articles do have an effect on how and what I teach. Under ABA Standard 306,  law schools can offer up to one-third of their credits online, including up to ten credits for first-year coursework. As I prepare to teach my contract drafting and negotiation class asynchronously online for the first time this summer, I'm learning about presenting information in short, digestible chunks for the students- no more than 15-20 minutes per video, and preferably even shorter, I'm told. I'm also reviewing the conflicting evidence about whether online courses are a help or a hindrance.

Some of my students have taken many courses online as undergraduates. As a compliance officer, I required employees to take courses online and did live training. Personally, I like taking online courses. But I don't know enough about how well students retain the information and how well they learn to use key skills to serve clients. I'm fortunate, though, to have excellent instructional designers working with me who understand adult learning much better than I do. I'm convinced that more students will seek online courses and more schools will adopt them as a way of earning more revenue through developing programs for working professionals and JD students who need more flexible schedules. This means many more of us may need to prepare for this new way of teaching and learning.

April 19, 2019 in Current Affairs, Law School, Lawyering, Licensing, Marcia Narine Weldon, Teaching | Permalink | Comments (1)

Friday, April 12, 2019

Why Businesses Should Not Ignore the Operation Varsity Blues Scandal

As a former compliance officer who is now an academic, I've been obsessed with the $25 million Varsity Blues college admissions scandal. Compliance officers are always looking for titillating stories for training and illustration purposes, and this one has it all-- bribery, Hollywood stars, a BigLaw partner, Instagram influencers, and big name schools. Over fifty people face charges or have already pled guilty, and the fallout will continue for some time. We've seen bribery in the university setting before but those cases concerned recruitment of actual athletes. 

Although Operation Varsity Blues concerns elite colleges, it provides a wake up call for all universities and an even better cautionary tale for businesses of all types that think of  bribery as something that happens overseas. As former Justice Department compliance counsel, Hui Chen, wrote, "bribery. . .  is not an act confined by geographies. Like most frauds, it is a product of motive, opportunity, and rationalization. Where there are power and benefits to be traded, there would be bribes." 

My former colleague and a rising star in the compliance world, AP Capaldo, has some great insights on the scandal in this podcast. I recommend that you listen to it, but if you don't have time, here are some questions that she would ask if doing a post mortem at the named universities. With some tweaks, compliance officers, legal counsel, and auditors for all businesses should consider: 

1) What kind of training does our staff receive? How often?

2) Does it address the issues that are likely to occur in our industry?

3) When was the last time we spot checked these areas for compliance ? In the context of the universities, were these scholarships or set asides within the scope of routine audits or any other internal controls or reviews?

4) What factors or aspects of the culture could contribute to a scandal like this? What are our red flags and blind spots? Do we have a cultural permissiveness that could lead to this? In the context of the implicated universities, who knew or had reason to know?

5) How can we do a values-based analysis? Do we need to rethink our values or put some teeth behind them?

6) How are our resources deployed?

7) Do we have fundamental gaps in our compliance program implementation? Are we too focused on one area or another?

8) Are integrity and hallmarks of compliant behavior part of our selection/hiring process?

Capaldo recommends that universities tap into their internal resources of law and ethics professors who can staff  multidisciplinary task forces to craft programs and curate cultures to ensure measurable improvements in compliance and a decrease in misconduct. I agree. I would add that as members of the law and business community and as alums of universities, we should ask our alma maters or employers whether they have considered these and other hard questions. Finally, as law and business professors, we should use this scandal in both the classroom and the faculty lounge to reinforce the importance of ethics, internal controls, compliance with law, and shared values.

 

April 12, 2019 in Business School, Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Ethics, Law Firms, Law School, Lawyering, Management, Marcia Narine Weldon, Sports, Teaching | Permalink | Comments (0)

Tuesday, April 9, 2019

Court Says No Successor Liability Attaches When There Was No Entity

A 2017 opinion related to successor liability just posted to Westlaw.  The case is an EEOC claim "against the Hospital of St. Raphael School of Nurse Anesthesia (“HSR School”) and Anesthesia Associates of New Haven (“AANH”), alleging gender discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 . . . ." The plaintiff was seeking to join Yale New Haven Hospital (“YNHH”). MARGARITE CONSOLMAGNO v. HOSPITAL OF ST. RAPHAEL SCHOOL OF NURSE ANESTHESIA and ANESTHESIA ASSOCIATES OF NEW HAVEN, P.C., 3:11CV109 (DJS), 2017 WL 10966446, at *1 (D. Conn. Mar. 27, 2017). 

 
 
Apparently, the HSR School trained nurse anesthetists was owned and run by AANH a Connecticut “professional corporation.”  The plaintiff was in the HSR School for about six months before she was dismissed, she claimed, because of " gender discrimination and retaliation for reporting a staff member’s inappropriate sexual conduct." Id. The plaintiff sought to join YNHH because that entity took over running an anesthesia school that had been, in some form, the HSR school.  
 
The successor liability part is rather interesting, though largely devoid of facts from the transaction.  The court ultimately concludes that even though YNHH resumed a similar school, it was not a successor entity and could not be joined.  
 
A challenging part about the case is that entities are described, but often not clearly and with conflicting entity-type language.  For example, although AANH was a "professional corporation," the court explained that " [t]he AANH anesthesiologists, who were also partners in AANH, were responsible for deciding how the HSR School would operate." Id. at *2. One of the doctors was also referred to as an "ownership partner in AANH." Id. at *3. I suspect that anesthesiologists, like lawyers, traditionally created firms that were partnerships, so the principals often call themselves "partners," regardless of their actual entity type. Still, it would be nice for courts to clarify the actual roles of those involved.  
 
Furthermore, in describing the HSR School, the court states, 
 
There is no evidence that the HSR School had an existence that was independent of AANH. In fact, the HSR School was going to cease operating due to the fact that AANH was going to cease operating. The HSR School was not a limited liability corporation (“LLC”), private corporation (“P.C.”), or other legal entity registered with the Connecticut Secretary of State. (Tr. 141-142). There is no evidence that the HSR School had its own assets, bank account, or tax identification number. There is no evidence that the HSR School itself (as opposed to AANH) ever paid anyone for rendering services to the HSR School. There is no evidence that anyone other than AANH had operated the HSR School. Consequently, the Court finds that the predecessor in interest, for the purpose of assessing successor liability, is AANH.
Id. at *6. Ultimately, it appears the court has determined this was some version of an asset purchase  (even though neither party provided a copy of the asset purchase agreement), so the liability stayed with AANH.  This appears to be correct, but it's hard to know without that document.
 
And it is hard to know what the obligations are when additional relevant possible parties are.  The court further determined that the potential successor entities, "YNHH and Yale University are two separate corporate entities with separate governance structures."  Except there is no statement as to what types of entities they are, where they were formed, or anything else other than a reference to testimony from a witness who said YNHH was a separate entity from Yale University.  It would seem to me that some of the related documentation would be valuable, but the court has spoken.  
 
And fair enough. But I have to correct this: "The HSR School was not a limited liability corporation company (“LLC”), private professional corporation (“P.C.”), or other legal entity."  

April 9, 2019 in Business Associations, Corporations, Joshua P. Fershee, Lawyering, LLCs, M&A, Partnership | Permalink | Comments (0)

Saturday, April 6, 2019

Lawyers as Leaders

For the past two days, I had the privilege of attending a leadership conference hosted by UT Law's Institute for Professional Leadership.  I admit to being pretty passionate about leadership literature, training, and cultivation.  Some of that zeal no doubt comes from working with and studying the scholarship of business management.  However, I also have participated in two academic leadership training programs over the past ten years, the Higher Education Resources Service's HERS Institute and the Southeastern Athletics Conference's Academic Leadership Development Program.  Both were true eye-openers for me at a time when I was poised to assume a leadership role as our campus faculty senate president.

The conference this week was on developing leadership in lawyers.  It is part of a series of conferences/symposia that a group of law faculty interested in this topic have been convening for a number of years now.  Articles emanating from prior event proceedings are published here and here.   The authors of many of the articles in those law review books have also authored stand-alone books and other works on leadership in the legal profession published elsewhere.

This week's conference treatments of the topic spanned a wide range, addressing (for instance) the places and methods for training lawyers to be leaders, since lawyers hold a disproportionately high number of leadership positions in the public sector.  I enjoyed it all, but I was particularly inspired by the workshop on integrating well-being into leadership curricula, the roundtable discussions on what is already being done and what law practice needs, and the student/alumni panel on the importance and effectiveness of law school courses on leadership.  There were lots of good ideas shared in these sessions and throughout the conference, and many seeds were sowed for action and further discussion.  I hope to roll some of those ideas out on the BLPB over time.

Btw, the UT Law Institute for Professional Leadership has a blog.  I plan to author some posts for the blog that I will certainly highlight here.  But if you are interested in this topic more broadly, you may want to sign up to follow the blog by email (an option available on the blog site).  Also, feel free to contact me or the Institute's director, Doug Blaze, for more information.

April 6, 2019 in Joan Heminway, Lawyering | Permalink | Comments (0)

Tuesday, April 2, 2019

Still Howling at the Moon: Not All Businesses Are Corporations!

A new case from the Southern District of Texas recently appeared, and it is yet another case in which the entity type descriptions are, well, flawed. The case opens: 

Before the Court is the defendant’s, Arnold Development Group, LLC (the “defendant”) motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) and (3) (Dkt. No. 5), the plaintiff’s, Conesco Industries, LTD.; d/b/a DOKA USA, LTD. (the “plaintiff”) response to the defendant’s motion to dismiss (Dkt. No. 18) and the defendant’s reply in support of its motion (Dkt. No. 20).
 . . . .
The plaintiff is a New Jersey limited partnership doing business in Texas and throughout the United States. The defendant is a Missouri limited liability corporation.
CONESCO INDUSTRIES, LTD. d/b/a DOKA USA, LTD., Pl., v. ARNOLD DEVELOPMENT GROUP, LLC, Def.., 4:18-CV-02851, 2019 WL 1430112, at *1 (S.D. Tex. Mar. 29, 2019) (emphasis added). 
 
Everybody who reads this blog knew that was coming because I am writing about the case. Arnold Development Group, LLC, is not a limited liability corporation. It is a limited liability company.
 
So, fine, this kind of error is not remarkable, given my numerous posts on the subject. But the opinion, in the discussion section, follows with this gem: 
In the case before the Court, the defendant is a Missouri corporation and the plaintiff is a New Jersey corporation
Id. at *2. Nuh-uh.  The opinion had already established that we're dealing with a Missouri LLC and New Jersey limited partnership. Neither entity is a corporation.  
 
Fortunately, entity status here does not seem to have any clear impact on the personal jurisdiction analysis (this about specific jurisdiction), but still. The case was dismissed without prejudice, which means at least some of this language could come to bear in future versions of the litigation.  Here's hoping that the parties, and the next reviewing court (should there be one), are a little more careful with describing the entity types.  

April 2, 2019 in Corporations, Joshua P. Fershee, Lawyering, LLCs, Partnership | Permalink | Comments (0)

Monday, March 25, 2019

Mindful Business Lawyering - Yoga's Role

Yoga(Me-WII)

Colleen's post yesterday--and more specifically the last interview questions she asked ("[H]ow can power yoga be particularly helpful for professors or students?“)--inspired me to write about some work that I have recently done in studying the benefits of mindfulness to lawyers and in lawyering, and more specifically in business lawyering.  Colleen's entrepreneur yogi noted the obvious benefits of power yoga to physical health.  But she also noted what she termed "clarity of mind."  More specifically, she said: "I practice yoga to allow time away from devices and work emails, which in turn creates some distance to clear my mind and create clarity in how I want to interact with my environment."

I do, too.  And I have noticed that it makes a difference in the way I interact with people.  I am not alone.

I recently was challenged by my friends at the Tennessee Bar Association to present an hour of continuing legal education on mindfulness, reflecting on some of what I learned in my yoga instructor training last year and linking it to law practice.  Three of the eight limbs of yoga--asana (poses), pranayama (breath control), and dhyana (object-focused meditation)--are traditional mindfulness practices that I studied in that training program.  Of course, there are many more mindfulness practices in which one may engage.

So, if yoga and other mindfulness practices offer clarity of mind, why?  What's the secret?  And how might mindfulness practices practices affect business lawyers and their work?  I will start by offering a brief definition of mindfulness.

Mindfulness, which is defined here as "the self-regulation of attention with an attitude of curiosity, openness, and acceptance,” involves a focused state of mind that screens out life's distractions and allows one to observe one's sense of being in the here-and-now.  We can practice mindfulness in many everyday situations: speaking and listening, cooking, reading, crafting, etc.  Mindfulness trainers have examples and exercises that they employ to illustrate some of these mindfulness practices.  We also can practice mindfulness through yoga poses, breath work, and meditation.  I showed the Tennessee Bar Association audience some chair yoga, a breathing technique, and positioning for a chair-seated meditation--mindfulness practices that folks can do at their desks in an office setting or at home.

Of course, a clear mind should enable more fluid decision-making in the problem-solving that business lawyers do day-in and day-out.  Overall, communication and drafting should be easier--more efficient and effective.  But there's more.

A 2014 article in Time reported that “scientists have been able to prove that meditation and rigorous mindfulness training can lower cortisol levels and blood pressure, increase immune response and possibly even affect gene expression. Scientific study is also showing that meditation can have an impact on the structure of the brain itself.” In fact, neuroscientists have found (see here) that mindfulness may better enable the brain's gray matter in the frontal cortex to control decision-making rather that allowing the amygdala (the fight-or-flight part of the brain) to control decision-making.

This means that mindfulness practice--including yoga--can impact business law practice by conditioning lawyers to "hit the pause button" and rationally think through contested matters. As a result, tmindfulness practice has the capacity to reduce professional stress and enhance civility and collegiality.  (See Jan Jacobowitz's take on this for the American Bare Association.)  I have seen a lot of lawyers--in practice and in the law academy--whose anger is hair-triggered by stressful situations (especially negotiations or disagreements on process that generate frustration--more on that below).  It seems that scientists have begun to establish that yoga and other mindfulness practice (meditation seems to be the most-studied practice) can help us keep our cool in those situations.

I know that when I am over-caff'ed or over-tired, I am more assertive, more easily angered, and less able to take into account the whole of a situation in approaching requests, responses, negotiations, and other communications.  I also know that if I have just engaged in a focused yoga practice (that's me holding a Warrior II--Virabhadrasana II--pose, with a prop, in the photo above), I am more careful and considerate of others in engaging in those same communications.  Overall, my mind seems less burdened, less cluttered, more able to sort the important from the unimportant.  Business lawyers--and especially transitional business lawyers--cannot afford to squander relationships with clients, colleagues, and opposing counsel (not to mention an opposing counsel's client!) by over-reacting or responding to queries in anger or frustration.  

A personal business law story seems appropriate at this juncture.  In practice, I once participated in an unexpectedly hostile transaction negotiation session in which a mindful colleague was confronted by an over-stressed opposing counsel.  He leaned across the conference room table in an angry manner, with a reddened face and an imposing physical attitude, yelling about open deal items.  A representative of the lawyer's client soon called him off (and took him aside privately outside the room for a bit). I have always been proud that the opposing counsel's client hired my colleague and me to represent it on a subsequent transaction.  The client representative who had been present at that ugly meeting called my colleague personally and asked if she and I would work with the firm on that later transaction.

My friend and Colorado Law professor Peter Huang published a piece in the Houston Law Review about two years ago that expands on much of what I have written here--and more.  The article, entitled "Can Practicing Mindfulness Improve Lawyer Decision-Making, Ethics, and Leadership?," includes information from a fascinating array of sources and, like Peter's work generally, is very readable (even if long).  Peter is an economist and a lawyer.  He teaches business law.  In the article, he notes that "Mindfulness is now a part of business and finance, yet is not part of business law." He's right about that.  But we have the power to make it so, if we believe that mindfulness is important to business law.  In concluding, Peter offers us the link: "Practicing mindfulness offers lawyers an empirically-validated, potentially sustainable process to improve their decision-making, ethical behavior, and leadership. Doing so can improve the lives of lawyers, their clients, and the public."

So be it.  A good note on which to end.

[Editorial note: Footnotes have been omitted from the quotes to Peter Huang's article.  Check out the original for cited sources.]

March 25, 2019 in Joan Heminway, Lawyering, Wellness | Permalink | Comments (2)

Wednesday, March 20, 2019

Clue, LLC Edition: This Time, the Judge (or the Judge's Clerk) Did It

Get this, from a March 15 ruling and order on a motion for summary judgment: 

Greenwich Hotel Limited Partnership [GHLP] is a limited partnership organized under the laws of Connecticut, and is the owner of the Hyatt Regency Greenwich hotel. Answer to First Amended Complaint, dated Dec. 16, 2016 (“Am. Ans.”), ECF NO. 62, at 8. Hyatt Equities, L.L.C. (“Hyatt Equities”) is a limited liability corporation incorporated in Delaware, and is the general partner of Greenwich Hotel Limited Partnership. Id. at 9. The Hyatt Corporation (“Hyatt Corp.”) is a limited liability corporation incorporated in Delaware, and is the agent of Greenwich Hotel Limited Partnership. Id. at 9.

Benavidez v. Greenwich Hotel LP, 3:16-CV-191 (VAB), 2019 WL 1230357, at *1 (D. Conn. Mar. 15, 2019). 
 
Once more, for the people in back: LLCs are "limited liability companies," not "limited liability corporations."As such, LLCs are not "incorporated." LLCs are formed or organized. In addition, corporations are entities that provide shareholders limited liability, but they are generally not referred to as "limited liability corporations" because they might be confused with a separate and distinct entity type, the LLC.  
 
Whenever I read a case with this kind of language, I wonder how it happened.  Sometimes, like today, I go to the docket (thanks, Bloomberg Law) to see if the source of the wrongdoing (evil doing) was the party/lawyer or the judge/judge's clerk.  This time, it's pretty clear the lawyer got it right.  The case made it easy, as the ruling cited to the Answer to First Amended Complaint, which I pulled.  Here's how the lawyer's answer framed these "facts": 

"Upon information and belief, defendant Hyatt Equities is a limited liability company organized under the laws of the State of Delaware, and is the general partner of GHLP.

. . . .

Upon information and belief, defendant Hyatt Corporation is a corporation organized under the laws of the State of Delaware and is the agent of GHLP."

Benavidez v. Greenwich Hotel LP, 3:16-CV-191, Answer to First Amended Complaint, dated Dec. 16, 2016 (“Am. Ans.”), ECF NO. 62, at 9. This is all properly stated, but somehow it didn't translate to the ruling and order.  

Kudos to the filing attorneys on getting it right. I wonder if this is something that can be corrected? One would hope.  Okay, at least I hope so. 

March 20, 2019 in Corporations, Joshua P. Fershee, Lawyering, LLCs, Partnership | Permalink | Comments (0)

Friday, March 1, 2019

Loyola University Chicago School of Law is seeking applications for Co-Director of the Business Law Clinic/ Executive Director of the Business Law Center

The Business Law Clinic (Clinic) is part of a comprehensive curriculum in transactional law that is comprised of the Clinic, the Business Law Center (Center) and certificate and degree conferring programs. The Clinic, established in 1999, offers students a unique opportunity to develop essential lawyering skills in a professional, interactive environment. Loyola seeks a dynamic Clinic Co-Director/Center Executive Director to work collaboratively with the Clinic Co-Director and the Director of the Business Law Center to provide strategic leadership, teach the Clinic class, supervise student work with clients, and to assist the Center Director in the development of the business and transactional law curriculum, scholarly conferences and programming.

The Co-Director/Executive Director will serve as the Randy L. and Melvin R. Berlin Clinical Professor of Law that is a presumptively renewable long-term contract position with voting privileges within the Loyola University Chicago School of Law. Loyola University Chicago School of Law is a student-focused law center inspired by the Jesuit tradition of academic excellence, intellectual openness, and service to others. Our mission is to educate diverse, talented students to be responsible leaders in a rapidly changing, interdependent world, to prepare graduates who will be ethical advocates for justice and the rule of law, and to contribute to a deeper understanding of law and legal institutions through a commitment to research, scholarship and public service.

The Clinic is a focal point of student development of essential lawyering skills in a professional, interactive live-client environment. Students work under the direct supervision of the Co-Directors to represent entrepreneurs and small business owners, as well as individuals who are seeking legal assistance with not-for-profit organizations. The not-for-profit clients represented by the Clinic include organizations that encompass animal welfare, sports clubs, museums, community organizations, religious organizations, etc. The for-profit clients are entrepreneurs, inventors, service providers, and web-based business owners who are involved in a variety of industries. The Clinic Co-Directors work collaboratively to provide supervision and professional oversight of the work completed by law student clinicians in addition to teaching the Clinic classroom component. Business Law Center The Center is the hub for School of Law’s curriculum, research and programming related to business and transactional law. The Center is led by a nationally and internationally renowned Director that is a full-time tenured faculty member along with other esteemed scholars in business law. The Center Director works in close collaboration with the Business Law Clinic to ensure that students have access to a full and wide breadth of educational opportunities and programs.

The Center is a part of larger initiatives across the University, the Quinlan School of Business and the Chicago community that seek to implement Loyola’s social justice mission as it relates to providing access to business ventures and initiatives to underserved and minority communities. The Center includes the Institute for Investor Protection, The Rooftops Project, the JD Certificate in Transactional Law, and the Master of Laws (LLM) in Business Law degree.

Position Essential Duties and Responsibilities: The duties and responsibilities of the Co-Director/Executive Director include, but are not limited to the following: Strategic planning for the future direction of the Clinic for continued growth and development; Serve as the external advocate and collaborator for the Clinic in its work with the Center, the Quinlan School of Business and other community partnerships; Assist in the administration of the Clinic and the development of the Center; Supervision of law students, summer interns, and fellows in skill development and client representation including supervising students in client meetings, drafting contracts and other legal documents, conducting legal research, determining client legal issues, and advising and counseling clients; Teach and assist in the development of curriculum as part of the classroom component for the Clinic, the Transactional Law Certificate and the LLM in Business Law; Mentor and act as faculty advisor to student members of the Business Law Society; Assist the Center Director in organizing conferences, workshops and seminars in business and transactional law; and Engaging in scholarly research (preferred but not required).

Qualifications: The candidate must have the ability to engage successfully and work collaboratively with a diverse group of stakeholders including the Clinic Co-Director, the Center Director, students, clients, administrators, and community members. Excellent judgment, including sensitivity to the needs of clients, cultural nuances and confidential information. A commitment to serving not-for-profit clients and underserved and minority communities. Experience as a clinician or former clinical teaching fellow in a business/transactional law clinic or as a lawyer with significant practice experience in business law. Ability to work independently with minimal supervision and as part of an interprofessional team. Demonstrated commitment to detail and a process-oriented approach to supervision of clinic work. Demonstrated ability to organize and manage conferences, workshops and seminars. Flexible work attitude, ability to work effectively in a fast-paced environment with a small staff and frequent student turnover (due to semester long courses and graduation). Bachelor's degree and a JD from an ABA accredited law school degree required. Admission/eligibility for admission to the Illinois Bar. Adept user of internet, case management systems, e-mail and other office automation systems.

Selection Process: Review of applications will begin March 1, 2019 and continue until the position is filled. The position will begin on July 1, 2019. Applicants are to submit (1) a letter of interest describing the candidate’s reasons for applying for the position, (2) a curriculum vitae, (3) samples of scholarly or other written work if available, and (4) the names and contact information of three individuals prepared to provide professional references. Applications should be submitted through Loyola’s Careers website at https://www.careers.luc.edu/postings/10391. Inquiries should be directed to Professor Steven A. Ramirez, Director of Business Law Center, Loyola University Chicago, 25 E. Pearson, Chicago, IL, 60611, sramirez3@luc.edu.

Loyola University Chicago is an Equal Opportunity/Affirmative Action employer with a strong commitment to hiring for our mission and diversifying our faculty. As a Jesuit Catholic institution of higher education, we seek candidates who will contribute to our strategic plan to deliver a Transformative Education in the Jesuit tradition. To learn more about LUC’s mission, candidates should consult our website at www.luc.edu/mission/. Applications from women, minorities, veterans, and persons with disabilities are especially encouraged and preference will be given to candidates who can mentor female law students and those from communities that are underrepresented in the legal profession. Candidates are encouraged to consult our website to gain a clearer understanding of Loyola's mission at www.luc.edu/mission/index.shtml and our focus on transformative education at www.luc.edu/transformativeed/.

March 1, 2019 in Clinical Education, Jobs, Law School, Lawyering, Teaching | Permalink | Comments (0)

Tuesday, January 15, 2019

Sixth Circuit, Why Can't You Be More Like Your Sister, Eleventh Circuit? #LLCs

I am wading back into a jurisdiction case because when it to LLCs (limited liability companies), I need to. A new case from the United States Court of Appeals for the Sixth Circuit showed up on Westlaw.  Here's how the analysis section begins:

Jurisdiction in this case is found under the diversity statute 28 U.S.C. § 1332. John Kendle is a citizen of Ohio; defendant WHIG Enterprises, LLC is a Florida corporation with its principal place of business in Mississippi; defendant Rx Pro Mississippi is a Mississippi corporation with its principal place of business in Mississippi; defendant Mitchell Chad Barrett is a citizen of Mississippi; defendant Jason Rutland is a citizen of Mississippi. R. 114 (Second Am. Compl. at ¶¶ 3, 5) (Page ID #981–82). Kendle is seeking damages in excess of $75,000. Id. at ¶¶ 50, 54, 58, 64, 71 (Page ID #992–95). The district court issued an order under Rule 54(b) of the Federal Rules of Civil Procedure that granted final judgment in favor of Mitchell Chad Barrett, and so appellate jurisdiction is proper. R. 170 (Rule 54(b) Order) (Page ID #3021).

Kendle v. Whig Enterprises, LLC, No. 18-3574, 2019 WL 148420, at *3 (6th Cir. Jan. 9, 2019).

No. No. No. An LLC is not a corporation, for starters.  And for purposes of diversity jurisdiction, "a limited liability company is a citizen of any state of which a member of the company is a citizen." Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004).  As such the where the LLC is formed doesn't matter and the LLC's principal place of business doesn't matter. All that matters is the citizenship of each LLC member.  

In this case, I can tell from the opinion that Kendle and Rutland are "co-owners" of WHIG Enterprises. The opinion suggests there may be other owners (i.e., members).  The opinion refers to the plaintiff suing "WHIG Enterprises, LLC, two of its co-owners, and another affiliated entity." Kendle v. Whig Enterprises, LLC, No. 18-3574, 2019 WL 148420, at *1. The opinion later refers to Rutland as "another WHIG co-owner."  If we want to know whether diversity jurisdiction is proper, though, we'll need to know ALL of WHIG's members.  

Now, it may well be that there is diversity among the parties, but we don't know, and neither, apparently, does the court. That may not be an issue in this case, but if people start modeling their bases for jurisdiction on the Kendle excerpt above, things could get ugly. The Eleventh Circuit, as noted above. A more recent case further reminds us to check diversity for all members in an LLC.  Thermoset Corporation v. Building Materials Corp. of America et al, 2017 WL 816224 (11th Cir., March 2, 2017).

I figured that I should give a shout out to folks getting right, given all my criticism of those getting it wrong.  Come, Sixth Circuit, let's get it together. 

January 15, 2019 in Corporations, Current Affairs, Joshua P. Fershee, Lawyering, LLCs | Permalink | Comments (1)

Saturday, January 5, 2019

How to Be A Happy Lawyer (Or At Least Less Miserable) in 2019.

 

 

It's the  start of a new year and a new semester. As Joan wrote earlier this week, we need to step back and take stock of our mental health. I'm the happiest lawyer I know and have been since I graduated from law school in 1992, but many lawyers and students aren't so lucky. In fact, I probably spend 25-35% of my time on campus calming students down. Some have normal anxiety that fades as they gain more confidence.  I often recommend that those students read Grit or at least listen to the Ted talk. Others tell me (without my asking) about addictions, clinical depression, and other information that I should not know about. I know enough to refer to them to help. Closer to home, my 22-year old son has lost several friends to suicide. Many of those friends went to the best high schools and colleges in the country and seemed to have bright futures. And as we know, the suicide rate for lawyers is climbing.

Thankfully, the American Bar Association has gathered a number of resources for law students here. Practicing lawyers can find valuable tools for lawyer well-being here and a podcast for lawyers in recovery here. Law students can access their own ABA wellness podcast here. To help keep my energy high, I listen to a lot of podcasts of all types. I’ve found that listening to wellness podcasts, meditating, and exercising instead of watching the news has had a dramatic impact on my health. I know for a fact that the wellness stuff works. Due to significant stressors as a caretaker, my blood pressure spiked to a clinically dangerous level last week. This week, with mindfulness exercises and other wellness activities, I was able to lower it to normal levels without my new medication having kicked in yet. This is a big deal for me because despite my professional happiness, I’ve been hospitalized twice in 14 months for medical conditions exacerbated by stress. Being calm and stress free is literally a matter of life and death for me. Some of the podcasts I listen to are probably too “woo woo” to post for this audience but if you’re interested, you can email me privately at mweldon@law.miami.edu. I’ll keep your secret.

Mainstream lawyer/business wellness podcasts include:

The Happy Lawyer Project (“The Happy Lawyer Project is an inspirational podcast for young lawyers looking to find happiness in life with a law degree. Each episode provides you with the tips, advice, encouragement and inspiration you need to craft a life and career you love.")

The Resilient Lawyer (“Practical and actionable information you can use to be a better lawyer. The Resilient Lawyer podcast is inspired by those in the legal profession living with authenticity and courage. Each week, we share tools and strategies for finding more balance, joy, and satisfaction in your professional and personal life! You'll meet lawyers, entrepreneurs, mentors and teachers successfully bridging the gap between their personal and professional lives, connecting the dots between their mental, emotional, physical and spiritual selves.”)

Happy Lawyer, Happy Life ("A knowledge centre for lawyers who want to make the best of their life in and outside of the law.")

The Tim Ferris Show (“Each episode, I deconstruct world-class performers from eclectic areas (investing, sports, business, art, etc.) to extract the tactics, tools, and routines you can use.  This includes favorite books, morning routines, exercise habits, time-management tricks, and much more.”)

The Mindful Lawyer (it's no longer running, but my colleague Scott Rogers pioneered the field and these are short tracks.)

Dina Cataldo Soul Roadmap (“So, you’re a lawyer who doesn’t have it all figured out? Design the life you deserve. Stop killing yourself to achieve success and redefine it instead.”)

You may need more than a podcast to get you through whatever you're going through right now. If you, a student, a colleague, or family member needs immediate help, please get it. I’ve cut and pasted the resources below from our law school’s web page for students.

Key National Referral Services

Suicide Prevention

National Suicide Prevention Lifeline, 1-800-273-TALK (8255), National, Toll-Free, 24 Hours
Dave Nee Foundation, 646-801-7392
Law Lifeline, 1-800-273-TALK (8255)

Chemical Dependency and Self-Help Sites

Addition Recovery Resources for Professionals, 540-815-4214
Alcoholics Anonymous (AA), 212-870-3400
American Medical Association, 800-621-8335
Center for Substance Abuse Treatment (CSAT), 240-276-1660
Cocaine Anonymous (CA), 310-559-5833
CODA Drug Abuse Hotlines, 1-877-446-9087

Crystal Meth Anonymous (CMA), 213-488-4455
Dual Recovery Anonymous (DRA), 913-991-2703
International Lawyers in A.A. (ILAA), 944-566-9040
Marijuana Anonymous (MA), 800-766-6779
Narcotics Anonymous (NA), 818-773-9999
National Clearinghouse for Alcohol and Drug Information(SAMHSA), 1-877-SAMHSA (726-4727)
National Institute on Drug Abuse (NIDA), 301-443-1124
Nicotine Anonymous (NA), 415-750-0328

Compulsive Gambling

Debtors Anonymous (DA), 781-453-2743
Gamblers Anonymous (GA), 213-386-8789

Eating Disorders

Anorexia Nervosa & Associated (Eating) Disorders (ANAD), 630-577-1330
Overeaters Anonymous (OA), 505-891-2664

Family Support

Adult Children of Alcoholics (ACOA), 562-595-7831
Al-Anon/Alateen, 757-563-1600
Nar-Anon Family Groups, 310-534-8188
Co-Dependents Anonymous (CODA), 888-444-2359
Co-Dependents of Sex Addicts (COSA), 763-537-6904

Mental Health Sites

Anxiety Disorders Association of America (ADAA), 240-485-1001
Journal of General Psychiatry (JAMA), 1-800-262-2350
Children and Adults with Attention Deficit/Hyperactivity Disorder(CHADD), 1-800-233-4050
Depression and Bipolor Support Alliance (DBSA), 800-826-3632
Lawyers with Depression
National Alliance on Mental Illness (NAMI), 800-950-6264
National Institute of Mental Health (NIMH), 1-866-615-6464
National Mental Health Association (NMHA), 703-684-7722

Sexual Addiction and Compulsivity

Sex Addicts Anonymous (SAA), 800-477-8191
Sex & Love Addicts Anonymous (SLAA), 210-828-7900
Sexaholics Anonymous (SA) 615-370-6062

I'm sure that I've missed a number of resources. I just finished attending a wellness tea brunch at a French patisserie with fresh baked goods and champagne so I'm incredibly relaxed (#selfcare). If you have more resources to add, please feel free to comment below. Let’s make this the best year yet for our students and for ourselves. If I can ever be an ear for anyone, I’m always available.

 

January 5, 2019 in Current Affairs, Law Firms, Law School, Lawyering, Marcia Narine Weldon, Psychology, Wellness | Permalink | Comments (1)

Tuesday, January 1, 2019

5 Quotes for the New Year

To start the New Year, I found a few thoughtful quotes to help me get in a good state of mind. I thought I’d share. Wishing you health, love, and success for 2019. 

“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” – Henry Ford

“It is difficult, but not impossible, to conduct strictly honest business.” – Mahatma Gandhi

“Don’t bargain yourself down before you get to the table.” – Carol Frohlinger

“Goals are dreams with deadlines.” – Diana Scharf Hunt

“Our goals can only be reached through a vehicle of a plan, in which we must vigorously act. There is no other route to success.” – Stephen A. Brennan

January 1, 2019 in Joshua P. Fershee, Law School, Lawyering, Philosophy | Permalink | Comments (0)

Tuesday, December 18, 2018

There Once was an LLC with a Partnership Agreement Governing the Minority Shareholder's Interest

Sometimes I think courts are just trolling me (and the rest of us who care about basic entity concepts). The following quotes (and my commentary) are related to the newly issued case, Estes v. Hayden, No. 2017-CA-001882-MR, 2018 WL 6600225, at *1 (Ky. Ct. App. Dec. 14, 2018): 

"Estes and Hayden were business partners in several limited liability corporations, one of which was Success Management Team, LLC (hereinafter “Success”)." Maybe they had some corporations and LLCs, but the case only references were to LLCs (limited liability companies).

But wait, it gets worse:  "Hayden was a minority shareholder in, and the parties had no operating agreement regarding, Success."  Recall that Success is an LLC. There should not be shareholders in an LLC. Members owning membership interests, yes. Shareholders, no. 

Apparently, Success was anything but, with Hayden and Estes being sued multiple times related to residential home construction where fraudulent conduct was alleged. Hayden sued Estes to dissolve and wind down all the parties’ business entities claiming a pattern of fraudulent conduct by Estes. Ultimately, the two entered a settlement agreement related to (among other things) back taxes, including an escrow account, which was (naturally) insufficient to cover the tax liability.  This case followed, with Estes seeking contribution from Hayden, while Hayden claimed he had been released. 

Estes paid the excess tax liability and filed a complaint against Hayden, "arguing Hayden’s breach of the Success partnership agreement and that Estes never agreed to assume one hundred percent of any remaining tax liabilities of Success." Now there is a partnership agreement?  Related to the minority shareholder's obligations to an LLC?  [Banging head on desk.] 

The entity structures to these business arrangements are a mess, and it makes the opinion kind of a mess, though I would suggest the court could have at least tried to straighten it out a bit.  It even appears that the court got a little turned around, as it states, "While Estes may have at one time been liable for a portion of Success’s tax liabilities incurred from 2006 to 2010, once the parties signed the Settlement Agreement, his liability ended pursuant to the release provisions contained therein."  I think they meant that Hayden may have been liable but no longer was following the release, especially given that the court affirmed the grant of summary judgment to Hayden.  

For what it's worth, it appears that the court analyzed the release correctly, so the resolution on the merits is likely proper. Still, blindly adopting the careless entity-related language of the litigants is frustrating, at a minimum.  But it does give me something else to write about. As long as these case keeping showing up, and they will keep showing up, Prof. Bainbridge need not wonder, "Is legal blogging dead?"  Not for me, and I don't think for those of us here at BLPB, anyway. 
 



 

December 18, 2018 in Contracts, Corporations, Joshua P. Fershee, Lawyering, Litigation, LLCs, Partnership | Permalink | Comments (0)

Friday, December 7, 2018

Delaware Supreme Court Affirms Triggering of MAE Clause

In Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 965 A.2d 715, 730 (Del. Ch. 2008) – a case I worked on as a judicial clerk – the court wrote, “[m]any commentators have noted that Delaware courts have never found a material adverse effect to have occurred in the context of a merger agreement.”

That statement is no longer true.

Today--in a 3 page opinion--the Delaware Supreme Court affirmed the 240+ page opinion by Vice Chancellor Travis Laster in Akorn, Inc. v. Fresenius Kabi, AG, et al., which held that Akorn triggered the Material Adverse Effect ("MAE") clause of the merger agreement at issue.

As the Chancery Daily reports, and as is clear looking at the recent opinions, the Delaware Supreme Court opinion does not provide much reasoning for its decision to affirm, but the Court of Chancery opinion does provide plenty of guidance. In the first few pages, the Court of Chancery notes that Akorn experienced a "dramatic, unexpected, and company-specific downturn in...business that began in the quarter after signing." The Court of Chancery also notes the importance of whistleblower letters and issues with Akron and the FDA. 

Also of interest, the court notes that this was an expedited case -- a real benefit of the Delaware Court of Chancery. The parties only had 11 weeks leading up to the trial. At the five day trial, there were 54 depositions transcripts lodged, 1,892 exhibits introduced into evidence, and 16 live witnesses (including 7 experts). Those poor lawyers -- and judicial clerks! 

December 7, 2018 in Business Associations, Contracts, Delaware, Haskell Murray, Lawyering, M&A | Permalink | Comments (0)

Tuesday, October 9, 2018

Bang Head Here: California and the LLC as a "Corporation"

California drives me nuts with lazy references to LLCs -- "limited liability companies" -- as" limited liability corporations." See, e.g., Dear California: LLCs are Not Corporations. Or Are They?

A 2010 case recently posted to Westlaw provides another example, this time from the local rules for the United States District Court for the Central District of California.  The case deals with an attorney withdrawing as counsel for an LLC, which requires the withdrawing attorney to provide notice to soon-to-be former client YPA, that as

a limited liability company that cannot proceed pro se, its failure to have new counsel file a timely notice of appearance will result in the dismissal of its complaint for failure to prosecute and of the entry of its default on the cross-complaint.

YOUR PERSONAL ASSISTANT, LLC, a Nevada limited liability company, Plaintiff, v. T-MOBILE USA, INC., a Delaware Corp., & DOES 1-100, inclusive. Defendants., No. CV1000783MMMRCX, 2010 WL 11598037, at *3 (C.D. Cal. Apr. 23, 2010)

This is fairly typical, as entities are generally not allowed to appear pro se -- that is reserved as an option for natural persons. However, because of poor drafting, the local rules keep open the possibility that an LLC could appear pro se.  As the court notes in footnote 9, the rules provide:

9. See CA CD L.R. 83-2.10.1 (“[a] corporation including a limited liability corporation, a partnership including a limited liability partnership, an unincorporated association, or a trust may not appear in any action or proceeding pro se.”)

Id. at *3 n.9 (C.D. Cal. Apr. 23, 2010).  The language here refers to an LLC a type of corporation, which, as a general matter, it is not.  A limited liability partnership is a type of partnership (with gaps often filled by partnership law), but corporations and LLCs are, most of the time, separate and distinct entities.
 
image from www.thefrugalhumanist.com
None of this is new, coming from me.  But I'm not giving up, even if I that tree I keep banging my head on is a Redwood. 

October 9, 2018 in Corporations, Joshua P. Fershee, Lawyering, LLCs | Permalink | Comments (0)

Monday, September 17, 2018

Helping Business Law Students Develop Judgment, Wisdom . . .

I am still basking in the warm glow of having hosted a number of my fellow Business Law Prof Blog editors in Knoxville last week for our second annual "Connecting the Threads" event.  What a great day we had on Friday.  I could listen to these folks talk about business law until the cows come home (so to speak--no actual cows here!).

As BLPB readers may recall, the title of my paper for the 2018 "Connecting the Threads II" symposium is Lawyering for Social Enterprise.  I am sure that I will blog more on that topic in this space later--when my paper from the symposium has been published--but I want to offer here the three paragraphs of conclusion to the handout I prepared for the continuing legal education materials for the program, which focus on the need of judgment, discretion, and even wisdom.

Advising entrepreneurs, founders, promoters, and directors of social enterprises can be both satisfying and frustrating. The satisfaction most often comes from helping these businesses achieve financial success while also serving the public good. The frustration comes from the difficulty of the task in providing the necessary counsel—both in selecting the optimal legal form for the firm and in advising management as the business operates over time. These legal advisory contexts involving social enterprises are richly textured and immerse legal counsel in multi-level decision-making that impacts both internal and external business constituencies. The overall advisory environment implicates, among other things, hortatory text in the Preamble to the Model Rules of Professional Conduct providing that “[a] lawyer should strive to attain the highest level of skill, to improve the law and the legal profession and to exemplify the legal profession's ideals of public service.” In lawyering for social enterprise, the legal advisor’s skill and public service responsibilities interact meaningfully.

Said another way, the complex decision-making involved in lawyering for social enterprise presents obvious challenges for business venturers and their legal counsel that involve not only baseline professional responsibility matters of competence (comprising doctrinal knowledge and solid, rational legal analysis), diligence (by offering patient and perceptive insights in helping the client to choose from among available alternatives), and communication (with the goal of ensuring informed client decision-making), but also the exercise of appropriate discretion and professionalism that require the savvy built from doctrinal, theoretical, and practical experience and leadership capabilities. As Professor Jeff Lipshaw has written in his intriguing and engaging book Beyond Legal Reasoning: A Critique of Pure Lawyering, “I am firmly convinced that great lawyers . . . bring something more than keen analytical skills to the table. They bring some kind of wisdom—a metaphorical creativity—that transcends disciplinary boundaries, both within the law and without.” That brand of wisdom is especially important in the kinds of questions that arise in lawyering for social enterprise.

Accordingly, as lawyers representing social enterprises, we need to develop knowledge of a complex set of laws and well-practiced, contextual legal reasoning skills. But that, while necessary, is insufficient to the task. We also must impose judgment borne of a deep understanding of the nature of social enterprise and of our clients and their representatives working in that space. Only then can we fulfill our professional promise as legal advisors: to provide clients with both “an informed understanding of . . . legal rights and obligations” and an explanation of “their practical implications.”

(footnotes omitted; hypertext links added).

Agree?  Disagree?  Can we help students (and inexperienced members of the bar) develop complex decision-making rubrics that incorporate judgment and wisdom?  Can we teach judgment, wisdom, and the like to law students?  Forever the optimist, I have an intuition that we can.

And with that thought in mind, I close with a picture of a UT Law student who gives me that hope.  He commented on my draft paper at the symposium on Friday.  He has been in my classroom for two semesters now (taking Advanced Business Associations, Corporate Finance, and Mergers & Acquisitions).  He spoke about why limited liability companies may be a better legal option for organizing social enterprise firms than corporations.  Proud moment for him and for me.  He aced it.

TransactionsBLPB2018(Adgent)

 

September 17, 2018 in Joan Heminway, Lawyering, Social Enterprise, Teaching | Permalink | Comments (0)

Sunday, September 16, 2018

How I Became (Semi) Literate About Distributed Ledger and Blockchain Technology

I knew it would be impossible. There was no way to relay my excitement about the potential of blockchain technology in a concise way to lawyers and law students last Friday at the Connecting the Threads symposium at the University of Tennessee School of Law. I didn't discuss cryptocurrency or Bitcoin other than to say that I wasn't planning to discuss it. Still, there wasn't nearly enough time for me to discuss all of the potential use cases. I did try to make it clear that it's not a fad if IBM has 1500 people working on it, BITA has hundreds of logistics and freight companies signed up to explore possibilities, and the World Bank, OECD, and United Nations have studies and pilot programs devoted to it. As a former supply chain person, compliance officer, and chief privacy officer, I'm giddy with excitement about everything related to distributed ledger technology other than cryptocurrency. You can see why when you read my law review article in a few months in Transactions.

I've watched over 100 YouTube videos (many of them crappy) and read dozens of articles. I go to Meetups and actually understand what the coders and developers are saying (most of the time). A few students and practitioners asked me how I learned about DLT/blockchain. First, see herehere, here, and here for my prior posts listing resources and making the case for learning the basics of the technology. What I list below adds to what I've posted in the past.

Here are some of the podcasts I listen to (there are others, of course):

1) The Decrypting Crypto Podcast 

2) Block that Chain

3) Block and Roll

4) Blockchain Innovation

Here are some of the videos that I watched (that I haven't already linked to in past posts):

1) Using Blockchains for Supply Chains

2) IBM and Maersk demo: Cross-border supply chain solution on blockchain

3) How to Activate a Blockchain with IBM (Demo)

4) Examples of Blockchain Changing Every Day Life

5) 19 Industries The Blockchain Will Disrupt

6) Vitalek Buterin Explains Ethereum

7) In Conversation with Vitalik Buterin, Justin Drake and Karl Floersch (Ethereum Foundation)

8) Fireside Chat With Vitalek Buterin

9) Blockchain and Food Safety With IBM and Walmart

10) Applying Blockchain Technology to Customs Declarations

11) Your 31st Human Right Guaranteed by Blockchain

12) How Blockchain Can Transform India

13) Blockchain, A Tool for Social Good

14) Blockchain for Social Impact

15) Bitcoin, Blockchain, and the Law

16) Blockchain and the Law: What Lawyers (And their Clients) Need to Know

17) Blockchain and the Law: The Rule of Code

18) The Blockchain: A Revolution You Need to Understand

19) Vitalik Buterin on Ethereum, Bitcoin, and Scaling

20) Exploring Blockchain Use Cases: Microsoft Azure

21) How the Blockchain is Changing Money and Business

22) Blockchain and Corporate Law

23) Blockchain Innovation in Law and Corporate Governance

24) Changing the Legal Game With Blockchain

25) Blockchain and Smart Contracts

26) Code is Not the Law: Blockchain and Artificial Intelligence

27) Linklaters Blockchain Legal & Regulation Panel

28) How Do You Square Blockchain with Privacy Laws

29) Jeff Jonas on GDPR and Integrating IBM Blockchain with Senzing at IBM Think 2018

30) CPDP 2018: BLOCKCHAIN AND DATA PROTECTION: CHALLENGES AND OPPORTUNITIES

31) John McAfee: about blockchain, bitcoins and cyber security

There are dozens more, but this should be enough to get you started. Remember, none of these videos or podcasts will get you rich from cryptocurrency. But they will help you become competent to know whether you can advise clients on these issues. 

 

September 16, 2018 in Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Financial Markets, Human Rights, Law Firms, Law Reviews, Law School, Lawyering, Marcia Narine Weldon | Permalink | Comments (1)

Saturday, September 1, 2018

Should Corporate Lawyers and Business Law Professors Be Talking About DAOs?

Did I lose you with the title to this post? Do you have no idea what a DAO is? In its simplest terms, a DAO is a decentralized autonomous organization, whose decisions are made electronically by a written computer code or through the vote of its members. In theory, it eliminates the need for traditional documentation and people for governance. This post won't explain any more about DAOs or the infamous hack of the Slock.it DAO in 2016. I chose this provocative title to inspire you to read an article entitled Legal Education in the Blockchain Revolution.

The authors Mark Fenwick, Wulf A. Kaal, and Erik P. M. Vermeulen discuss how technological innovations, including artificial intelligence and blockchain will change how we teach and practice law related to real property, IP, privacy, contracts, and employment law. If you're a practicing lawyer, you have a duty of competence. You need to know what you don't know so that you avoid advising on areas outside of your level of expertise. It may be exciting to advise a company on tax, IP, securities law or other legal issues related to cryptocurrency or blockchain, but you could subject yourself to discipline for doing so without the requisite background. If you teach law, you will have students clamoring for information on innovative technology and how the law applies. Cornell University now offers 28 courses on blockchain, and a professor at NYU's Stern School of Business has 235 people in his class. Other schools are scrambling to find professors qualified to teach on the subject. 

To understand the hype, read the article on the future of legal education. The abstract is below:

The legal profession is one of the most disrupted sectors of the consulting industry today. The rise of Legal Tech, artificial intelligence, big data, machine learning, and, most importantly, blockchain technology is changing the practice of law. The sharing economy and platform companies challenge many of the traditional assumptions, doctrines, and concepts of law and governance, requiring litigators, judges, and regulators to adapt. Lawyers need to be equipped with the necessary skillsets to operate effectively in the new world of disruptive innovation in law. A more creative and innovative approach to educating lawyers for the 21st century is needed.

For more on how blockchain is changing business and corporate governance, come by my talk at the University of Tennessee on September 14th where you will also hear from my co-bloggers. In case you have no interest in my topic, it's worth the drive/flight to hear from the others. The descriptions of the sessions are below:

Session 1: Breach of Fiduciary Duty and the Defense of Reliance on Experts

Many corporate statutes expressly provide that directors in discharging their duties may rely in good faith upon information, opinions, reports, or statements from officers, board committees, employees, or other experts (such as accountants or lawyers). Such statutes often come into play when directors have been charged with breaching their procedural duty of care by making an inadequately informed decision, but they can be applicable in other contexts as well. In effect, the statutes provide a defense to directors charged with breach of fiduciary duty when their allegedly uninformed or wrongful decisions were based on credible information provided by others with appropriate expertise. Professor Douglas Moll will examine these “reliance on experts” statutes and explore a number of questions associated with them.

Session 2: Fact or Fiction: Flawed Approaches to Evaluating Market Behavior in Securities Litigation

Private fraud actions brought under Section 10(b) of the Securities Exchange Act require courts to make a variety of determinations regarding market functioning and the economic effects of the alleged misconduct. Over the years, courts have developed a variety of doctrines to guide how these inquiries are to be conducted. For example, courts look to a series of specific, pre-defined factors to determine whether a market is “efficient” and thus responsive to new information. Courts also rely on a variety of doctrines to determine whether and for how long publicly-available information has exerted an influence on security prices. Courts’ judgments on these matters dictate whether cases will proceed to summary judgment and trial, whether classes will be certified and the scope of such classes, and the damages that investors are entitled to collect. Professor Ann M. Lipton will discuss how these doctrines operate in such an artificial manner that they no longer shed light on the underlying factual inquiry, namely, the actual effect of the alleged fraud on investors.

Session 3: Lawyering for Social Enterprise

Professor Joan Heminway will focus on salient components of professional responsibility operative in delivering advisory legal services to social enterprises. Social enterprises—businesses that exist to generate financial and social or environmental benefits—have received significant positive public attention in recent years. However, social enterprise and the related concepts of social entrepreneurship and impact investing are neither well defined nor well understood. As a result, entrepreneurs, investors, intermediaries, and agents, as well as their respective advisors, may be operating under different impressions or assumptions about what social enterprise is and have different ideas about how to best build and manage a sustainable social enterprise business. Professor Heminway will discuss how these legal uncertainties have the capacity to generate transaction costs around entity formation and management decision making and the pertinent professional responsibilities implicated in an attorney’s representation of such social enterprises.

Session 4: Beyond Bitcoin: Leveraging Blockchain for Corporate Governance, Corporate Social Responsibility, and Enterprise Risk Management

Although many people equate blockchain with bitcoin, cryptocurrency, and smart contracts, Professor Marcia Narine Weldon will discuss how the technology also has the potential to transform the way companies look at governance and enterprise risk management. Companies and stock exchanges are using blockchain for shareholder communications, managing supply chains, internal audit, and cybersecurity. Professor Weldon will focus on eliminating barriers to transparency in the human rights arena. Professor Weldon’s discussion will provide an overview of blockchain technology and how state and nonstate actors use the technology outside of the realm of cryptocurrency.

Session 5: Crafting State Corporate Law for Research and Review

Professor Benjamin Edwards will discuss how states can implement changes in state corporate law with an eye toward putting in place provisions and measures to make it easier for policymakers to retrospectively review changes to state law to discern whether legislation accomplished its stated goals. State legislatures often enact and amend their business corporation laws without considering how to review and evaluate their effectiveness and impact. This inattention means that state legislatures quickly lose sight of whether the changes actually generate the benefits desired at the time off passage. It also means that state legislatures may not observe stock price reactions or other market reactions to legislation. Our federal system allows states to serve as the laboratories of democracy. The controversy over fee-shifting bylaws and corporate charter provisions offers an opportunity for state legislatures to intelligently design changes in corporate law to achieve multiple state and regulatory objectives. Professor Edwards will discuss how well-crafted legislation would: (i) allow states to compete effectively in the market for corporate charters; and (ii) generate useful information for evaluating whether particular bylaws or charter provisions enhance shareholder wealth.

Session 6: An Overt Disclosure Requirement for Eliminating the Duty of Loyalty

When Delaware law allowed parties to eliminate the duty of loyalty for LLCs, more than a few people were appalled. Concerns about eliminating the duty of loyalty are not surprising given traditional business law fiduciary duty doctrine. However, as business agreements evolved, and became more sophisticated, freedom of contract has become more common, and attractive. How to reconcile this tradition with the emerging trend? Professor Joshua Fershée will discuss why we need to bring a partnership principle to LLCs to help. In partnerships, the default rule is that changes to the partnership agreement or acts outside the ordinary course of business require a unanimous vote. See UPA § 18(h) & RUPA § 401(j). As such, the duty of loyalty should have the same requirement, and perhaps that even the rule should be mandatory, not just default. The duty of loyalty norm is sufficiently ingrained that more active notice (and more explicit consent) is necessary, and eliminating the duty of loyalty is sufficiently unique that it warrants unique treatment if it is to be eliminated.

Session 7: Does Corporate Personhood Matter? A Review of We the Corporations

Professor Stefan Padfield will discuss a book written by UCLA Law Professor Adam Winkler, “We the Corporations: How American Businesses Won Their Civil Rights.” The highly-praised book “reveals the secret history of one of America’s most successful yet least-known ‘civil rights movements’ – the centuries-long struggle for equal rights for corporations.” However, the book is not without its controversial assertions, particularly when it comes to its characterizations of some of the key components of corporate personhood and corporate personality theory. This discussion will unpack some of these assertions, hopefully ensuring that advocates who rely on the book will be informed as to alternative approaches to key issues.

 

September 1, 2018 in Ann Lipton, Compliance, Conferences, Contracts, Corporate Governance, Corporate Personality, Corporations, Current Affairs, Employment Law, Human Rights, Intellectual Property, International Business, Joan Heminway, Joshua P. Fershee, Law School, Lawyering, LLCs, Marcia Narine Weldon, Real Property, Shareholders, Social Enterprise, Stefan J. Padfield, Teaching, Technology, Web/Tech | Permalink | Comments (0)

Sunday, August 12, 2018

Why Lawyers, Law Professors, and Judges Should Care About Blockchain

We’re a month away from our second annual Business Law Professor Blog CLE, hosted at the University of Tennessee on Friday, September 14, 2018. We’ll discuss our latest research and receive comments from UT faculty and students. I’ve entitled my talk Beyond Bitcoin: Leveraging Blockchain for Corporate Governance, Corporate Social Responsibility, and Enterprise Risk Management, and will blog more about that after I finish the article. This is a really long post, but it’s chock full of helpful links for novices and experts alike and highlights some really interesting work from our colleagues at other law schools.

Two weeks ago, I posted some resources to help familiarize you with blockchain. Here’s a relatively simple definition from John Giordani at Forbes:

Blockchain is a public register in which transactions between two users belonging to the same network are stored in a secure, verifiable and permanent way. The data relating to the exchanges are saved inside cryptographic blocks, connected in a hierarchical manner to each other. This creates an endless chain of data blocks -- hence the name blockchain -- that allows you to trace and verify all the transactions you have ever made. The primary function of a blockchain is, therefore, to certify transactions between people. In the case of Bitcoin, the blockchain serves to verify the exchange of cryptocurrency between two users, but it is only one of the many possible uses of this technological structure. In other sectors, the blockchain can certify the exchange of shares and stocks, operate as if it were a notary and "validate" a contract or make the votes cast in online voting secure and impossible to alter. One of the greatest advantages of the blockchain is the high degree of security it guarantees. In fact, once a transaction is certified and saved within one of the chain blocks, it can no longer be modified or tampered with. Each block consists of a pointer that connects it to the previous block, a timestamp that certifies the time at which the event actually took place and the transaction data.

These three elements ensure that each element of the blockchain is unique and immutable -- any request to modify the timestamp or the content of the block would change all subsequent blocks. This is because the pointer is created based on the data in the previous block, triggering a real chain reaction. In order for any alterations to happen, it would be necessary for the 50%-plus-one of the network to approve the change: a possible but hardly feasible operation since the blockchain is distributed worldwide between millions of users.

In case that wasn’t clear enough, here are links to a few of my favorite videos for novices. These will help you understand the rest of this blog post.

To help prepare for my own talk in Tennessee, I attended a fascinating discussion at SEALS on Thursday moderated by Dean Jon Garon of Nova Southeastern University Shepard Broad College of Law called Blockchain Technology and the Law.

For those of you who don’t know how blockchain technology can relate to your practice or teaching, I thought I would provide a few questions raised by some of the speakers. I’ve inserted some (oversimplified)links for definitions. The speakers did not include these links, so if I have used one that you believe is incomplete or inaccurate, do not attribute it to them.

Professor Del Wright, University of Missouri-Kansas City School of Law;

Del started the session by talking about the legal issues in blockchain consensus models. He described consensus models as the backbones for users because they: 1) allow users to interact with each other in a trustless manner; 2) ensure the integrity of the ledger in both normal and adversarial situations; and 3) create a “novel variety of networks with extraordinary potential” if implemented correctly. He discussed both permissioned (e.g. Ripple) and permissionless (Bitcoin) systems and how they differ. He then explained Proof of Work blockchains supported by miners (who solve problems to add blocks to the blockchain) and masternodes (who provide the backbone support to the blockchain). He pointed out how blockchains can reduce agency costs and problems of asymmetrical information and then focused on their utility in financial markets, securities regulation, and corporate governance. Del compared the issues related to off-chain governance, where decisionmaking first takes place on a social level and is then actively encoded into the protocol by the developers (used by Bitcoin and Ethereum) to on-chain governance, where developers broadcast their improvement protocols on-chain and then, once approved, those improvements are implemented into the code. He closed by listing a number of “big unanswered issues” related to regulatory guidance, liability for the performance of the technology and choice of consensus, global issues, and GDPR and other data privacy issues.

Professor Catherine Christopher, Texas Tech University School of Law;

Catherine wants to help judges think about smart contracts. She asked, among other things, how judges should address remedies, what counts as substantial performance, and how smart contract audits would work. She questioned whether judges should use a consumer protection approach or instead follow a draconian approach by embracing automation and enforcing smart contracts as drafted to discourage their adoption by those who are not sophisticated enough to understand how they work.

Professor Tonya Evans, University of New Hampshire School of Law (follow her on Twitter; see her blog on blockchain here);

Tonya focuses on blockchain and intellectual property. Her talked raised the issues of non-fungible tokens generated through smart contracts and the internet of value. She used the example of cryptokitties, where players have the chance to collect and breed digital cats. She also raised the question of what kind of technology can avoid infringement. For more on how blockchain can disrupt copyright law, read her post here.

Professor Rebecca Bratspies, CUNY School of Law;

In case you didn’t have enough trust issues with blockchain and cryptocurrency, Rebecca’s presentation focused on the “halo of immutability” and asked a few central questions: 1) why should we trust the miners not to collude for a 51% attack 2) why should we trust wallets, which aren’t as secure as people think; and 3) why should we trust the consensus mechanism? In response, some members of the audience noted that blockchain appeals to a libertarian element because of the removal of the government from the conversation.

Professor Carla Reyes, Michigan State University College of Law- follow her on Twitter at Carla Reyes (@Prof_CarlaReyes);

Carla talked about crypto corporate governance and the potential fiduciary duties that come out of thinking of blockchains as public trusts or corporations. She explained that governance happens on and off of the blockchain mechanisms through social media outlets such as Redditt. She further noted that many of those who call themselves “passive economic participants” are actually involved in governance because they comment on improvement processes. She also noted the paradox that off chain governance doesn’t always work very well because participants don’t always agree, but when they do agree, it often leads to controversial results like hard forks. Her upcoming article will outline potential fiduciaries (miner and masternode operators for example), their duties, and when they apply. She also asked the provocative question of whether a hard fork is like a Revlon event.

Professor Charlotte Tschider, William Mitchell College of Law (follow her on Twitter);

As a former chief privacy officer, I have to confess a bias toward Charlotte’s presentation. She talked about blockchain in healthcare focusing on these questions: will gains in cybersecurity protection outweigh specific issues for privacy or other legal issues (data ownership); what are the practical implications of implementing a private blockchain (consortium, patient-initiated, regulatory-approved); can this apply to other needed uses, including medical device applications; how might this technology work over geographically diverse regulatory structures; and are there better applications for this technology (e.g. connected health devices)? She posited that blockchain could work in healthcare because it is decentralized, has increased security, improves access controls, is more impervious to unauthorized change, could support availability goals for ransomware attacks and other issues, is potentially interoperable, could be less expensive, and could be controlled by regulatory branch, consortium, and the patient. She closed by raising potential legal issues related to broad data sharing, unanswered questions about private implementations, privacy requirements relating to the obligation of data deletion and correction (GDPR in the EU, China’s cybersecurity law, etc); and questions of data ownership in a contract.

Professor Eric Chason, William & Mary Marshall-Wythe School of Law;

Eric closed by discussing the potential tax issue for hard forks. He explained that after a hard fork, a new coin is created, and asked whether that creates income because the owner had one entitlement and now has two pieces of ownership. He then asked whether hard forks are more like corporate reorganizations or spinoffs (which already have statutory taxation provisions) or rather analogous to a change of wealth. Finally, he asked whether we should think about these transactions like a contingent right to do something in the future and how that should be valued.

Stay tuned for more on these and other projects related to blockchain. I will be sure to post them when they are done. But, ignore blockchain at your peril. There’s a reason that IBM, Microsoft, and the State Department are spending money on this technology. If you come to UT on September 15th, I’ll explain how other companies, the UN, NASDAQ, and nation states are using blockchain beyond the cryptocurrency arena.

 

August 12, 2018 in Commercial Law, Compliance, Conferences, Contracts, Corporate Governance, Corporations, Current Affairs, Entrepreneurship, Human Rights, Law School, Lawyering, Legislation, Marcia Narine Weldon, Research/Scholarhip, Securities Regulation, Shareholders, Teaching, Technology, Writing | Permalink | Comments (0)