Showing archive for: “Corporate Governance”
Predatory Output Reduction?
The conventional predation claim involves a monopolist reducing price and increasing output. Here’s a creative theory involving a claim that a decision to close down factories injures competition: A federal judge in Texas is hearing testimony from farmers who contend that poultry producer Pilgrim’s Pride closed plants and ran them out of business to manipulate ... Predatory Output Reduction?
Corporate jets: the new backdating?
Looks like a new scandal is brewing. A WSJ article co-written by one of the backdating reporters (Mark Maremont) looks through FAA flight records to find that dozens of jets operated by publicly traded corporations made 30% or more of their trips to or from resort destinations, sometimes more than 50%. Often, these were places ... Corporate jets: the new backdating?
LLCs are not corporations
Nor are they the redundant fictional entity, “limited liability corporations.” This is a lesson that courts and commentators are finally, slowly, learning. I highlighted this point last fall in discussing CML V, LLC v. Bax, 6 A.3d 238 (Del. Ch. Nov. 3, 2010), where VC Laster denied a creditor standing to sue derivatively for an LLC, ... LLCs are not corporations
Making a statement under 10b-5
Janus Investment Fund’s (JIF) prospectus included a misstatement about market timing. Its investment adviser and administrator is Janus Capital Management (JCM). Plaintiff shareholders in the parent company, Janus Capital Group (JCG) argue in the Supreme Court that JCM should be liable as JIF’s manager for “mak[ing] an[] untrue statement of a material fact” in violation ... Making a statement under 10b-5
The taste for insider trading law
Steve Bainbridge responds to my post about insider trading as compensation with a suggestion that rules against insider trading are an example of a case “where mandatory rules are appropriate.” I was about to sputter about laws against insider trading are really about property rights, and surely property should be alienable — right? And about ... The taste for insider trading law
In Defense of Delaware’s Business Judgment Rule
In a recent Dealbook post, Steven M. Davidoff complains that Delaware’s business judgment rule is too lenient. Davidoff contends that “[a] Delaware court is not going to find [directors] liable no matter how stupid their decisions are. Instead, a Delaware court will find them liable only if they intentionally acted wrongfully or were so oblivious ... In Defense of Delaware’s Business Judgment Rule
Levin and Goldman
Pandering and scapegoating are not new activities for politicians, but Carl Levin has perfected these dark arts. Most recently the Senator’s game has been to demonize Goldman, culminating in accusations that its ceo, Lloyd Blankfein, engaged in criminal behavior. Per WaPo last April, Levin said federal prosecutors should review whether to bring perjury charges against ... Levin and Goldman
Securities class actions in state court
I’ve previously written about the increasingly unruly market for corporate law, in which many cases involving the governance Delaware corporations are being brought outside of Delaware. Now Jennifer Johnson writes about Securities Class Actions in State Court. Here’s the abstract: Over the past two decades, Congress has gradually usurped the power of state regulators to ... Securities class actions in state court
The Supreme Court teaches a securities lesson
In Erica P. John Fund vs. Halliburton the Court held that the Fifth Circuit erred when it required loss causation for class certification. The Court taught the lower courts the distinction among various elements of securities cases. In order to get Basic’s presumption of reliance you have to prove, e.g., that the alleged misrepresentations were ... The Supreme Court teaches a securities lesson
Say on pay as Arab Spring
Did you know that shareholders in US corporations are like oppressed citizens of corrupt governments? Or that “say on pay” is their Arab Spring? If not, you haven’t been reading Gretchen Morgenson. Better that you read Christine Hurt’s excellent critique of Morgenson’s latest screed.
Gretchen Morgenson’s latest scandal
Gretchen Morgenson (with Louise Story), in today’s front-page NYT “newsatorial” reports on and complains about the fact that the SEC’s civil case against Goldman’s Fabrice Tourre (“Fabulous Fab”) in connection with the Abacus deal has not been accompanied by other civil and criminal prosecutions. The story notes that Tourre worked closely with others at Goldman ... Gretchen Morgenson’s latest scandal
The uncorporate solution to corporate cash hoarding
Jason Zweig wrote Saturday in the WSJ about how companies are hoarding their cash. Microsoft, Cisco, Google, Apple and J & J “added $15 billion in cash and marketable securities to their balance sheets. Microsoft alone packed away roughly $9 billion, or $100 million a day. All told, the companies in the Standard & Poor’s ... The uncorporate solution to corporate cash hoarding
