June 2016

The New York Times ran the article How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions last weekend. It’s an interesting piece that provides a look at Donald Trump’s east coast casino experience.  The article is, as one might expect, critical of his dealings and notes that Trump made money even when his ventures when bankrupt.  

Though I will not defend any of Trump’s dealings, there are few issues raised that I think are worthy of a some discussion and clarification.1  The post that follows suggests how to consider Trump’s business history and place that history in a political context.

This post welcomes Doug (Douglas K.) Moll to the Business Law Prof Blog.  He’ll be posting with us a few times over the next month or so.  

Doug is the Beirne, Maynard & Parsons, L.L.P. Law Center Professor of Law at The University of Houston Law Center.  He teaches a variety of transactional business law courses: Business Organizations, Doing Deals, Business Torts, Secured Financing, and Sales and Leasing.  I have had the pleasure of working with him in other capacities (he is a fellow Tennessee BARBRI instructor and presented with me at the 2015 ABA LLC Institute, for example) and value his observations about transactional business law.  I also know him to be a highly decorated teacher–having won (according to his website bio) six teaching awards since 1998.  I look forward to his posts–and I am sure you will enjoy them!

This past week, I completed the second leg of my June Scholarship and Teaching Tour.  My time at “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills” at Emory University School of Law last week was two days well spent.  I had a great time talking to attendees about my bylaw drafting module for our transaction simulation course, Representing Enterprises, and listening to others talk about their transactional law and skills teaching.  Great stuff.

This week’s portion of my academic tour begins with a teaching whistle-stop at the Nashville School of Law on Friday, continues with attendance (with my husband) at a former student’s wedding in Nashville on Saturday evening, and ends (my husband and I hope) with Sunday brunch out with our son (and his girlfriend if she is available).  Specifically, on Friday, I teach BARBRI for four hours in a live lecture.  The topics?  Well, I drew a short straw on that.  I teach agency, unincorporated business associations (including a bit about both extant limited liability statutes in Tennessee), and personal property–all in four hours.  Ugh.  Although I am paid for the lecture and my expenses are covered, I would not have taken (and would not continue to take) this gig if I…

A colleague sent me a link to a White House blog post focusing on Title III of the Jumpstart Our Business Startups Act (JOBS Act), known as the Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act (CROWDFUND Act).  The main theme of the blog post, entitled The Promise of Crowdfunding and American Innovation, is stated in its summary: ”Crowdfunding’ rule makes it possible for entrepreneurs across the country to raise small-dollar investments from ordinary Americans.”  This much is true.  And the post accurately notes that “previous forms of crowdfunding” also already did this.

But the post goes on to extol the virtues of the CROWDFUND Act, which offers (among other things) a registration exemption for investment (or securities) crowdfunding–a very special type of crowdfunding involving the offer or sale of debt, equity, investment contracts, or other securities.  Or at least the blog post tries to extol the virtues of the CROWDFUND Act.  I am not buying it.  In fact, the post doesn’t come up with much of substance to praise . . . .

The coauthors focus a key paragraph on explaining why the CROWDFUND Act is heavy on investor protection provisions.  But they do not talk…

I have been following Professor Angela Duckworth’s work on grit for well over a year, so I was eager to read her new book, Grit: The Power of Passion and Perseverance. In fact, I can’t remember the last time I bought and read a book within a few weeks of it being published.  

The book is an easy read, written for a for a popular audience, and I was able to finish it in three relatively short sittings.

Below, I reflect on the book, hopefully in a balanced way. 

Thesis. As may be evident from previous posts of mine, I like Duckworth’s thesis – essentially, that passion and perseverance in pursuit of long-term goals are important in achieving success. Duckworth is careful to caveat her thesis, noting at hard work and passion are important, but are not the only factors that matter in achieving success. With this caveat, her thesis seems rather obvious and uninteresting.

Grit Scale. The Grit Scale Duckworth created for her studies seems easy to fake, and to her credit, she admits that it can be faked, like most self-reporting measures. Given the ability to fake the Grit Scale, I am not sure that it would be of much…

Keep reading only if you have 3 minutes that you don’t care about being productive or relating to business law, at least not directly.

The Federal Election Committee issued a proposed draft of an advisory opinion on a question brought by Huckabee for President,  Inc.–the committee responsible for the 2016 presidential campaign of  former Arkansas Governor Mike Huckabee.  The Committee wanted to know if it can use part of a legal defense fund to pay a settlement. The FEC says yes.  This isn’t an election law blog, so I won’t go into the details.  The litigation arose over the campaign’s use of the song “Eye of the Tiger“.  The FEC,  feeling quite cheeky writes the following: 

The complaint, seeking injunctive relief and monetary damages, alleged that 21 the Committee had violated federal copyright law by playing the song “Eye of the Tiger” at a campaign event on September 8, 2015. The Committee, rising up to the challenge of its rival, incurred attorneys’ fees and other expenses in defending itself in that litigation. After briefly relishing the thrill of the fight, the parties settled the lawsuit for an undisclosed amount.

Has the political circus of the 2016…

I attended my first Law and Society meeting this year (made easier by the fact that it was held in New Orleans, my newly-adopted city!)   And as Joan indicated in a prior post, she gave a presentation on her most recent project, tentatively titled “Pillow Talk, The Parent Trap, Sibling Rivalries, Kissing Cousins, and Other Personal Relationships in U.S. Insider Trading Cases.”  And very shortly after she concluded, a news story dropped in my inbox about SEC v. Maciocio, involving two longtime friends charged in an insider trading scheme that lasted for several years. 

The reason the case interests me is that I assume the SEC (and the DOJ in a parallel criminal complaint) are teeing it up in light of the pending Supreme Court case of Salman v. United States. 

According to the SEC’s allegations, Maciocio worked for a pharmaceutical company that engaged in business dealings with several other companies.  Hobson was his longtime childhood friend.  The details of their relationship are described in the SEC’s complaint, including their days of Little League baseball, and daily phone calls and emails.

Hobson, as it turns out, was a securities broker.  So, Maciocio tipped off Hobson…

If you’ve been slamming away on a writing deadline then perhaps you’ve missed the opportunity (like me) to dive into the recent Chancery Court of Delaware Dell appraisal rights opinion (downloadable here).  Have no fear, your summary is here.

Vice Chancellor Laster valued Dell’s common stock at $17.62 per share, reflecting a 28% premium above the $13.75 merger price that was paid to Dell shareholders in October 2014 in a going private transaction lead by company-founder Michael Dell. Dell’s going private transaction was opposed by Carl Icahn and this juicy, contentious transaction has its own required reading list.  When conceding defeat, Carl Icahn sent the following letter to Dell Shareholders:

New York, New York, September 9, 2013 

Dear Fellow Dell Inc. Stockholders:

I continue to believe that the price being paid by Michael Dell/Silver Lake to purchase our company greatly undervalues it, among other things, because:

1. Dell is paying a price approximately 70% below its ten-year high of $42.38; and

2. The bid freezes stockholders out of any possibility of realizing Dell’s great potential.

Fast forward nearly 3 years later and it seems Vice Chancellor Laster agrees.  VC Laster reached his undervaluation decision despite no finding of significant…

I read an article this morning that resonated with me.  It was odd, because it was about a University of Michigan sports coach. As a dedicated Spartan, that’s not always easy to reconcile. 

Michigan’s softball team lost in the College World Series, and there was understandable disappointment.  I thought coach Carol Hutchins message, though, was spot on: 

“One thing I learned after the national championship, it definitely doesn’t define you,” she said. “If winning defines you, you’re not focused on the right things. I’m defined by all the women that I’ve been able to help grow up and who have impacted my life equally. I define myself by that.

“We’ve won a lot of games here, we’ve lost a lot of games here. It’s a sport. We do the best we can every day.”

Yes. You can’t control who you play.  You control how you prepare, and how you try, and how you care.  Sometimes, you can control how you play, but not always who you play against or the tools you have at your disposal.

This is true as a lawyer, too.  You may have bad facts. Or a bad client. Or a whole host of other hurdles.