Showing archive for: “Corporate Governance”
More on getting rid of LLC fiduciary duties
I have frequently discussed the ongoing jurisprudential drama in Delaware on how firms can avoid fiduciary duties. The basic setup here is that Delaware allows LLCs and other unincorporated firms to completely eliminate fiduciary duties. But they have to do it carefully. Here’s my most recent discussion of the state of play on what that ... More on getting rid of LLC fiduciary duties
The unexpected expected consequences of financial reform
The LA Times expresses surprise that Goldman Sachs will come out quite well from financial reform. Who did they think was calling the shots in Congress? Consumers? Investors? How badly were accountants, the culprits in the last financial meltdown, hurt by Sarbanes-Oxley? Most notably, the LA Times is shocked Goldman is not actually going to ... The unexpected expected consequences of financial reform
Union-boss compensation
There are hundreds and hundreds of academic articles in law, finance, economics, business, and other social sciences discussing the issue of executive compensation broadly and down to the smallest detail. There are none — actually, one working paper in draft form on one issue — that I can find on the issue of how much ... Union-boss compensation
Will an m & a boom save Big Law?
John Carney thinks a recent notable move of prominent banking partners from Latham to Milbank might signal that “debt financing for takeovers is about to take off,” just as it did when the same team moved from Skadden to Latham in 2004. This would also be consistent “with corporate cash piling up to record levels.” ... Will an m & a boom save Big Law?
Market constraints on corporate speech
In the wake of the Citizens United decision I responded to the argument that empowering corporation would distort political debate in part by noting that “[f]or-profit firms are limited in their ability to invest in politics for the simple reason that they can’t stay in business over the long run if they lose money.” As ... Market constraints on corporate speech
HP: the adventure continues
When I last discussed HP, I reflected on the spectacular failure of independent board governance associated with pretexting-gate. That, you might recall, was Patricia Dunn’s highly questionable covert-op that epitomized the general board dysfunction that can accompany independent director governance of modern corporations. Now we have news (from the NYT) that HP’s most recent CEO, ... HP: the adventure continues
A corporation is not a partnership
Peter Mahler discusses a recent NY close corporation case, Pappas v. Fotinas which he describes as “a thoughtful, well-reasoned decision that sets forth the competing factual narratives and operative legal principles.” I defer to Mr. Mahler’s overall assessment of the opinion, and refer the reader to his detailed discussion of the case. But in one respect ... A corporation is not a partnership
Citigroup and federal fiduciary law
The SEC has reached another peculiar settlement, this time $75 million from Citigroup, plus fines against executives. As with the Goldman settlement, Citigroup didn’t admit fraud, or even, as in that case, a mistake. Citigroup was accused of misleading investors about its exposure to subprime. The bank knew it was exposed to the housing market, ... Citigroup and federal fiduciary law
Ribstein & Lipshaw 2010 Supplement and thoughts on curriculum
The latest supplement to Ribstein & Lipshaw Unincorporated Business Entities (4th Edition, 2009) is available online at my website. There you can also find the Supplement to the Teacher’s Manual. This edition of my long-running casebook and its exhaustive teacher’s manual have been well-received. Ultimately I hope and expect this course will replace the current ... Ribstein & Lipshaw 2010 Supplement and thoughts on curriculum
Capitalism as a solution for poverty
SKS Microfinance, India’s largest microfinance lender, did a $354 million IPO Wednesday. This may encourage others to do likewise. The result would be much more money for very small loans. Sounds good, but it’s meeting objections: A publicly traded company’s traditional obligation is to make money for its shareholders, while the mission of microfinance — ... Capitalism as a solution for poverty
Microsoft LLC
Holman Jenkins, writing in today’s WSJ, criticizes Steve Ballmer’s management failures that have left its investors with a decade of “dead money.” At bottom, this is a corporate governance problem. Manifestly, the solution is not to let management keep stepping up to the plate with shareholder money and promising home runs that never materialize. Nor ... Microsoft LLC
The shareholder maximization canard
Al Franken buys the old idea that corporate managers have a duty to maximize shareholder value. Todd Henderson appropriately sets Franken (and others ignorant of corporate law) straight. Todd reminds them that the business judgment rule gives managers the flexibility to do pretty much what they want, including help society, as long as they don’t ... The shareholder maximization canard
