January 2014

As the Conglomerate, M&A Law Prof Blog, and WSJ have reported, Chancellor Leo Strine, Jr. has been nominated by Delaware Governor Jack Markell for the Chief Justice of the Delaware Supreme Court position.  The official announcement is here, courtesy of Brian Quinn.

Chancellor Strine’s office was just a few feet from mine when I clerked for former Vice Chancellor Stephen Lamb, and I can confirm that Chancellor Strine is every bit as colorful and witty as his opinions suggest.  Chancellor Strine (then a Vice Chancellor and called “VCS” by the clerks) is also the only judge (other than my own) that I chose to watch in action while in Delaware.  

My former co-clerk wonders, on Twitter, why Chancellor Strine would even want this job, as his current position as Chancellor arguably gives him more direct influence over the course of corporate law.  As Chancellor, he not only gets a more steady dose of corporate cases, but also is the sole author of those cases.  As Chief Justice, he will have to share the pen, and will hear plenty of non-corporate cases.  My guess is that Strine will enjoy having a hand in shaping the controlling precedent handed…

From the posting:

The Louis D. Brandeis School of Law at the University of Louisville seeks to hire a visitor for the 2014-15 academic year.  Primary areas of curricular need are tax, decedents’ estates and related courses.  Other curricular needs may include commercial law and/or family law.  The visitor will teach four courses during the 2014-15 academic year.  Both entry-level and experienced applicants will be considered.  Salary will be commensurate with experience.

 The University of Louisville is located in Louisville, Kentucky.  Louisville is a city of 1.3 million with vibrant arts, educational, medical and business communities, and was named Lonely Planet’s Top US Travel Destination for 2013.  Information about the law school is available at the school’s website at http://www.law.louisville.edu/.  For further information about the school, or to apply, please contact Associate Dean for Academic Affairs Timothy S. Hall at hallt@louisville.edu or (502) 852-6830.

 The University of Louisville is an equal opportunity institution and does not discriminate against persons on the basis of race, age, religion, sex, disability, color, sexual orientation, national origin or veteran status.  Applications from individuals who will contribute to the diversity of our law school are encouraged.

Tonight, I will teach my first negotiation class, to a group of Belmont University MBA students.  Over the past months, I have read a number of books on negotiation and reflected upon the negotiation I did in practice and am still doing in my professional life and personal life.  The more I read and think about the subject, the more I am convinced that law students and lawyers (in addition to business students and business people) need more training in negotiation.

In litigation, I have heard that well over 90% of cases settle before trial, requiring negotiation, and in the transactional context, negotiation is ever-present.    

The late-Roger Fisher of Harvard Law School (and co-author of the perennial best seller Getting to Yes) has a short video clip about negotiation v. litigation posted below. My legal training did a good job sharpening my critical thinking, improving my attention to detail, and preparing me to “win” arguments.  However, I cannot remember much time devoted to joint-problem solving, uncovering underlying interests, and dealing with people problems.  While much of what is written in Getting to Yes and its progeny is common sense, it is easy to stray from its guidelines…

The following information was shared with me by my friend, Professor Ciara Torres-Spelliscy at Stetson Law.  On February 28, 2014, Stetson Law in Gulfport, FLorida, will host: 

Taking Stock of Citizens United: How the Law Has (and Has Not) Changed Four Years Later.

Panel One: Quantifying the Problem of Money in Politics
Citizens United opened a new avenue for corporations and unions to spend in politics by purchasing political ads. This ability to spend was added to older avenues of political activity such as corporate and union segregated funds (SSFs or PACs), lobbying and direct contributions in certain states. The question of what political spenders get in return for this largess remains an open one.
 
Panel Two: The Risk of Corruption Collides with Free Speech
From a Constitutional law perspective, the courts have long wrestled with the placing political spending into a single paradigm. On one hand, courts have recognized that running for political office is costly and fundraising implicates First Amendment concerns such as the freedom of speech and association. On the other hand, campaign spending can be a corrupting force in the democratic process. Layered on top of this is an impulse by the courts to treat

…

News Release: 

The Federal Energy Regulatory Commission (FERC) and the Commodity Futures Trading Commission (CFTC) have signed two Memoranda of Understanding (MOU) to address circumstances of overlapping jurisdiction and to share information in connection with market surveillance and investigations into potential market manipulation, fraud or abuse. The MOUs allow the agencies to promote effective and efficient regulation to protect energy market competitors and consumers.

Finally, the CFTC and FERC seem to have resolved some serious jurisdictional overlap problems between the agencies related to Dodd-Frank (section 720(a)(1)), which required the agencies to adopt a Memorandum of Understanding (MOU) to resolve several key issues. It’s taken a while to get here.  Recall that settling (or at least improving) jurisdictional questions became especially acute in the wake of the Brian Hunter case, where the CFTC joined the defendant against FERC claiming that the CFTC had exclusive jurisdiction over Hunter’s alleged trading violations.  The DC Circuit agreed with Hunter and the CFTC (opinion pdf). 

At long last, there are two MOUs, one related to jurisdiction (pdf) and the other related to information sharing (pdf). According to the FERC news release, the jurisdiction MOU provides a process the…

Stephen Bainbridge has an excellent post on the need for academics to disclose conflicts of interest–specifically, who’s funding their research. I agree with Steve 100%. If someone’s paying an academic for research or for consulting related to the research, I want to know about it.

A conflict of interest does not mean the research is unreliable. (I’m sick of both the left and the right dismissing research out of hand because it was funded by the right-wing [Fill-in-the-blank] Foundation or the left wing [Fill-in-the-blank] Institute.) But, if someone’s paying an author for the work, I am going to pay much closer attention to the methodology and the analysis, even if the author otherwise has a good reputation.

Adi Osovsky, an S.J.D. candidate at Harvard Law School, has posted an interesting new article on SSRN, The Curious Case of the Secondary Market with Respect to Investor Protection.

Here’s the abstract:

The primary mission of the U.S. Securities and Exchange Commission is to protect investors. However, current securities regulation clearly separates between public markets and private markets with respect to investor protection. While the federal securities laws impose strict and costly disclosure and anti-fraud requirements on issuers that offer their securities to the public, they exempt private offerings from such rigid regime. The liberal approach toward private offerings is based on the assumption that investors in private markets are sophisticated and thus can “fend for themselves”.

This Article explores the validity of such traditional dichotomy between the public market and the private market in a relatively new, organized secondary market for ownership interests in private companies with retail investor access (the “Secondary Market”). The Secondary Market provides investors and employees with an opportunity to sell their holdings even before the first exit event. It also allows greater flexibility in capital formation, which may enhance productivity and job growth. However, the Secondary Market raises serious problems with regard to…

I am currently taking a break from the day-long AALS Section on Socio-Economics program.  The last session before lunch was entitled “Socio-Economics: Changing the Debate – Perspectives on Growth and Distribution.” During that session, Robert Ashford mentioned his paper “Binary Economics: The Economic Theory that Gave Rise to ESOPs,” and I thought I’d pass on the abstract to our readers:

Many people know about Employee Stock Ownership Plans (ESOPs) which, along with profit-sharing and pension plans, are treated as deferred compensation plans under Section 401 and related sections of the Internal Revenue Code. ESOPs have been established by thousands of American corporations, including some of the largest, and cover millions of employees. There is a national trade association (The ESOP Association), that is now celebrating its 50th year in existence, and other organizations established to support employee ownership, including the Ohio Center for Employee Ownership that first published this article in its publication entitled Owners At Work (2006/2007)

Most people aware of ESOPs, however, do not realize that ESOPs are part of a broader approach to expanded capital ownership, broader prosperity, and economic justice known as binary economics. Binary economics was first advanced by…

I am writing this while on a break at the AALS Annual Meeting, having just attended the panel discussion organized by the AALS Section on Agency, Partnership, LLCs, and Unincorporated Associations: Effective Methods for Teaching LLCs and Unincorporated Business Arrangements.  The presentations were excellent, including one by BLPB co-blogger Anne Tucker.  Here are a couple of items I took from Robert Rhee’s presentation that I thought might be of interest to our readers:

1.  Robert J. Rhee, Case Study of the Bank of America and Merrill Lynch Merger

This is a case study of the Bank of America and Merrill Lynch merger. It is based on the article, Fiduciary Exemption for Public Necessity: Shareholder Profit, Public Good, and the Hobson’s Choice during a National Crisis, 17 Geo. Mason L. Rev. 661 (2010). The case study analyzes the controversial events occurring between the merger signing and closing. It reviews in depth the circumstances under the federal government threatened to fire the board and management of Bank of America unless it consummated the Merrill Lynch acquisition. Among other issues, this case study raises the questions: (1) what is the role of a private firm during a public…

Yesterday, I attended the Annual Meeting of the Society of Socio-Economists.  Unfortunately, I was only able to participate in the second half of the program due to flight delays, but the discussions I did participate in were fantastic and I hope to publish a number of posts passing on some key points.  Today, I’d like to start by highlighting the book “The Citizen’s Share: Putting Ownership Back into Democracy” by Joseph R. Blasi, Richard B. Freeman, and Douglas L. Kruse (I understand Joseph Blasi was one of the presenters at the meeting–though I was chairing a concurrent plenary session at the time).  Here is a description from the Yale University Press:

The idea of workers owning the businesses where they work is not new.  In America’s early years, Washington, Adams, Jefferson, and Madison believed that the best economic plan for the Republic was for citizens to have some ownership stake in the land, which was the main form of productive capital. This book traces the development of that share idea in American history and brings its message to today’s economy, where business capital has replaced land as the source of wealth creation.   Based on…