Corporate & Securities Law

Remedies under Delaware State Law for Breaches of the Duty of Disclosure

Posted on July 02, 2008
The other day, I noted Chancellor William Chandler’s recent decision in Transkaryotic Therapies, in which he granted summary judgment to defendants with respect to a claim arising out of the so-called fiduciary duty of disclosure on grounds that too much time had lapsed since the vote allegedly affected by the disclosure violations: The solicitation of proxies for the shareholder vote...

Classified Boards in Transition

Posted on July 02, 2008
Gordon Smith offers an interesting and, to my mind, correct interpretation of the Delaware code provisions governing the dispute between InBev and Anheuser-Busch over whether the latter’s directors can be removed without cause. He links to posts by others reaching different results...

Has Chancellor Chandler Embraced Director Primacy?

Posted on June 29, 2008
In his recent decision in In re TRANSKARYOTIC THERAPIES, INC., Delaware Chancellor William Chandler offers his court’s latest word on the “somewhat nebulous” “fiduciary duty of disclosure.” Chandler undertakes a lengthy and very helpful review of the development of the law relating to disclosure claims characterzied as arising out of fiduciary obligations rather than...

The Beatles and Me

Posted on June 29, 2008
My blog has been cited in the same number of judicial opinions as Beatles songs. Interesting. [continued on site]

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The CSX Proxy Contest

Posted on June 28, 2008
A Reuters article on the controversial CSX shareholder meeting quotes your truly: U.S. railroad CSX Corp’s unusual decision to postpone releasing results of a shareholder vote looked to some like a desperate attempt to delay the inevitable appointment of several dissident nominees to its board...

Shareholder Activists Undermine National Security

Posted on June 26, 2008
At least that’s what Martin Litpon thinks: At its core, the board-centric model of governance is premised on the notion that boards merit the vote of confidence of shareholders and the public markets, and notwithstanding the strong current of distrust that runs through many corporate-governance reforms, history has proven this vote of confidence to be well deserved...

Help: Second Edition of Mergers & Acquisitions Needs Your Input

Posted on June 26, 2008
I am hard at work on the second edition of my Mergers and Acquisitions treatise. In hopes of boosting sales (I’m a capitalist, after all), the decision has been made to radically rework the book to eliminate most of the economic analysis, especially the analysis that is idiosyncatic to yours truly...

Help: Second Edition of Corporation Law & Econ Needs Your Input

Posted on June 25, 2008
I am hard at work on the second edition of my Corporation Law and Economics text. For various reasons (well, actually to boost sales) the decision has been made to radically rework the book to eliminate most of the economic analysis, especially the analysis that is idiosyncatic to yours truly...

Theophobia

Posted on June 19, 2008
Rick Hills calls it the “irrational fear of, or intense discomfort around, theist and, in particular, Christian, beliefs.” How widespread is theophobia among academics? I cannot say for sure—I’ve only casual anecdotes to guide me—but I suspect that, whatever its prevalence, it is on the decline...

Meinhard v Salmon

Posted on June 19, 2008
In a comment to a post over at CO, Jeff Lipshaw writes: I’ve always thought Judge Andrews dissent in Meinhard v. Salmon was far more sensible (and in accord with common understandings) than Cardozo’s overwrought opinion. He’s got a point...

There Still is Nothing New Under the CSR Sun

Posted on June 19, 2008
Dave Hoffman thinks he’s found something new in the corporate social responsibility debate: Recently, I’ve read several articles and book chapters asserting that corporate law places undue emphasis on Dodge v. Ford. Dodge is traditionally understood to hold that corporations have a exclusive duty to maximize shareholder welfare...

Is Economics Dominated by Chicago?

Posted on June 19, 2008
Jeremy Wright thinks that “the evidence that the economics profession exhibits a pro-market bias is suspect.” My own take is that economic analysis’ association with the right in the mind of legal academics, at least, derives from two sources: (1) many of law and economics most prominent practitioners are to be found on the political right (Posner, Easterbrook, me ); and (2) some...

Gender Differences in Competitive Environments

Posted on June 14, 2008
Here’s a provocative abstract of a new paper by Daniele Paserman of the Boston University - Department of Economics: This paper uses data from nine tennis Grand Slam tournaments played between 2005 and 2007 to assess whether men and women respond differently to competitive pressure in a setting with large monetary rewards...

Speaking of Dead Hand Pills

Posted on June 12, 2008
Apropos my prior post on the law governing dead hand poison pills, here is a new research paper, Is There Power Behind the Dead Hand? An Empirical Investigation of Dead Hand Poison Pills, by KATHERINE GLEASON, University of New Orleans - Department of Economics and Finance, and MARK KLOCK, George Washington University - Department of Finance: Dead hand poison pills prevent potential hostile...

BA Limericks

Posted on June 11, 2008
Jeremy Telman uses the Klein, Ramseyer & Bainbridge Business Associations casebook. He offers up a limerick for the first case in the book, Gorton v Doty: The court made Ms. Doty the heavy When Coach Garst demolished her Chevy. When Soda Springs lost the game, Coach accepted the blame, But the principal pays the tort levy...

Does Yahoo?s Severance Plan = A Dead Hand Pill?

Posted on June 11, 2008
That’s the argument plaintiffs are making, as reported by Karen Donovan: Two Detroit pension plans, which sued Yahoo in March in the Delaware Chancery Court, are now requesting a trial to take place before Yahoo’s August 1 annual meeting, when Yahoo management will face a proxy battle with Icahn, who has put up a slate of directors...

And they say Student-Edited Law Reviews Suck

Posted on June 09, 2008
I just got home from my annual trip to Napa to find the following series of emails from a faculty-edited law review in re my essay Reflections on Twenty Years of Law Teaching: Remarks at the Rutter Award Ceremony. Feel free to try to guess which journal did it: EMAIL # 1: Dear Professor Bainbridge-- [redacted name of chief editor] has assigned me the pleasant task of doing the initial...

Federalist Society Corporate Practice Group

Posted on June 07, 2008
I am now the Chairman of the Federalist Society’s Corporations Practice Group. Our Group includes corporate governance, securities regulation, and antitrust. We’ve got programs coming on FTC merger enforcement, consumer credit, and shareholder access to the proxy statement...

Can a Target Just Say No?

Posted on June 04, 2008
In a fine column analyzing Yahoo’s tin parachute, the NY Times’ Deal Professor (a.k.a. Steven Davidoff) opines that: … the Yahoo board here is permitted under Delaware law to reject Microsoft’s bid and just say no. I’m a long-time skeptic that the just say no defense is really viable or authorized under Delaware law...

Yahoo?s Tin Parachute

Posted on June 02, 2008
Gordon Smith on the latest developments in the Yahoo takeover fight: Even as Yahoo and Microsoft try to hammer out a deal over a round of golf and Carl Icahn clears the way to acquire more shares, the Yahoo shareholders litigation plows forward in Delaware...

Weiss gets 30 Months

Posted on June 02, 2008
From the Law Blog: Melyvn Weiss, the plaintiffs’ lawyer who pioneered a controversial and lucrative area of law suing corporations on behalf of shareholders, was sentenced today in federal court in Los Angeles to 30 months in prison. Weiss pleaded guilty in March to racketeering conspiracy...

Using 14a-8 to Micromanage

Posted on May 30, 2008
Dale Oesterle posts on the Exxon shareholder meeting: Everyone is claiming victory after three notable shareholder resolutions failed at the spring Exxon annual shareholder meeting.  The shareholder’s, supported by Rockefeller heirs, attracted close to 40 percent of the votes cast...

Oesterle?s Take on Say on Pay

Posted on May 30, 2008
Dale Oesterle: Pundits have spent years, years, trying to get a shareholder vote on executive pay packages.  Be careful what you wish for.  First, shareholders have voted for some time on parts of executive pay packages (most option programs) and overwhelmingly supported them...

Finance Big Wig Busted

Posted on May 30, 2008
From the NY Times: John F. Marshall spent decades teaching at business schools and watching his students parlay his lessons into fortunes on Wall Street. But when he and another professor reached for some of those riches themselves, events took a startling turn, the authorities say...

Rotunda to Chapman and the Impact One Guy Can Have

Posted on May 27, 2008
Brian Leiter reports that my friend and former UCLA law colleague Ron Rotunda is moving from George Mason to Chapman. It’s interesting to see the impact one incredibly prolific and highly regarded scholar can have: Without Rotunda--who was the most cited member of the George Mason law faculty--George Mason would have dropped from a mean 190 cites per faculty member, to 150 in last...

Shareholder 14a-8 Proposals relating to Universal Health Care

Posted on May 27, 2008
Back in March, RiskMetrics reported: This is the second year that activist shareholders have waged a campaign for universal health care. In 2007, a coalition of church groups and the Nathan Cummings Foundation, with advice from the AFL-CIO, proposed a resolution asking seven companies to report on “the implications of rising health care expenses and how it is positioning itself to address...

UCLAW Gets Big Gift for Merit Scholarships

Posted on May 23, 2008
UCLA School of Law announced: Prominent New York business leader Michael T. Masin has agreed to contribute $6 million to promote academic excellence at UCLA School of Law. The gift, which will include merit scholarships, represents the largest commitment by a living alumnus to the school and is part of UCLA’s recently announced $100-million law school endowment campaign...

Update on my The New Corporate Governance in Theory and Practice: Great blurbs!

Posted on May 22, 2008
Oxford Press has put up a detailed announcement for my forthcoming book The New Corporate Governance in Theory and Practice: Forty years ago, managerialism dominated corporate governance. In both theory and practice, a team of senior managers ran the corporation with little or no interference from other stakeholders...

The Top 10 Corporate/Securities Articles of 2007

Posted on May 20, 2008
The results via Leiter: Baker, Tom and Sean J. Griffith.  The Missing Monitor in Corporate Governance: The Directors’ & Officers’ Liability Insurer.  95 Geo. L.J. 1795-1842 (2007). Bebchuk, Lucian A.  The Myth of the Shareholder Franchise...

Director Primacy and Bylaws

Posted on May 20, 2008
In reviewing my work on director primacy, a friend recently noted that I haven’t had much to say about bylaws. This may eventually be article-worthy, but at the moment it’s at least blog worthy. Bylaws are the rules a corporation adopts to govern its internal affairs...

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