February 2017

I don’t know if it’s the time of year or if I am just a little off, but I am generally grumpy today. So, I am going to vent a bit.  

First, a regular irritation that is no shock to regular readers is the “limited liability corporation.” I probably should have stopped the Westlaw alert for that terms, which comes through nearly every single day with multiple cases and news items.  A new case from the U.S. District Court in Kansas, Pipeline Prods., Inc. v. Horsepower Entm’t, No. CV 15-4890-KHV, 2017 WL 698504, at *1 (D. Kan. Feb. 22, 2017), is typical.  The court states: 

Pipeline Productions, Inc. is a Kansas corporation with its principal place of business in Lawrence, Kansas. Backwood Enterprises, LLC is an Arkansas limited liability corporation with its principal place of business in Lawrence, Kansas. . . . 
The Madison Companies, LLC is a Delaware limited liability company with its principal place of business in Greenwood Village, Colorado. Horsepower Entertainment, a Delaware limited liability company, is a wholly-owned subsidiary of Madison with its principal place of business in Greenwood Village, Colorado.

Irritation 1: Arkansas does not have an entity called a “limited liability…

Later this week, I will head to Indiana to present at and attend a social enterprise law conference at The Law School at the University of Notre Dame.  The conference includes presentations by participating authors in the forthcoming Cambridge Handbook of Social Enterprise Law, edited by Ben Means and Joe Yockey.  The range of presentations/chapters is impressive.  Fellow BLPB editors Haskell Murray and Anne Tucker also are conference presenters and book contributors.

Interestingly (at least for me), my chapter relates to Haskell’s post from last Friday.  The title of my chapter is “Financing Social Enterprise: Is the Crowd the Answer?”  Set forth below is the précis I submitted for distribution to the conference participants.

Crowdfunding is an open call for financial backing: the solicitation of funding from, and the provision of funding by, an undifferentiated, unrestricted mass of individuals (the “crowd”), commonly over the Internet. Crowdfunding in its various forms (e.g., donative, reward, presale, and securities crowdfunding) may implicate many different areas of law and intersects in the business setting with choice of entity as well as business finance (comprising funding, restructuring, and investment exit considerations, including mergers and acquisitions). In operation, crowdfunding uses technology to transform…

I have updated my business law professor jobs list here. 

While many of the schools on this list, which was originally posted this past summer, have likely now filled those positions, there are a few new postions posted in the last month or so.

Those new position postings include two in law schools: NYU (a law & social enterprise fellowship) and Victoria University (New Zealand). And five new postings are legal studies positions in business schools: Appalachian State University, Minnesota State University, Morgan State University, St. Peter’s University, and Warner University.

It’s Mardi Gras season here in NOLA, so I’m afraid I’ve been a little distracted.  It’s hard to concentrate when this is what’s going on a block away ….

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So, for this Saturday, I offer you a game: The Unicorn Startup Simulator.  The goal is to reach a billion dollar valuation while keeping your employees happy – it took me a few tries, but I managed it.   Good luck!

The following comes to us from Professor Stephen Diamond, Santa Clara University School of Law.

The Santa Clara University School of Law, the Leavey School of Business at Santa Clara University, the University of Washington School of Law, the NYU Stern Center for Business and Human Rights, the Rutgers Center for Corporate Law and Governance and the Business and Human Rights Journal announce the Third Business and Human Rights Scholars Conference, to be held September 15-16, 2017 at Santa Clara University in Santa Clara, California. Conference participants will present and discuss scholarship at the intersection of business and human rights issues. Upon request, participants’ papers may be considered for publication in the Business and Human Rights Journal (BHRJ), published by Cambridge University Press.

The Conference is interdisciplinary: scholars from all disciplines are invited to apply, including law, business, human rights, and global affairs. The papers must be unpublished at the time of presentation. Each participant will present his/her own paper and be asked to comment on at least one other paper during the workshop. Participants will be expected to have read other papers and to participate actively in discussion and analysis of the various works in progress.

To apply…

One of the many questions surrounding benefit corporations is whether their choice of legal entity form will scare away investors.

As previously reported, we now have our first publicly traded benefit corporation. And in this week’s news certified B corp and benefit corporation Data.world announced a 18.7 million dollar raise. This raise ranks in the top-ten largest raises by a benefit corporation, according to the information I have seen on benefit corporations. I compiled the publicly available information I was able to uncover on social enterprise raises (including by benefit corporations) in a forthcoming symposium article for the Seattle University Law Review. It is quite possible that there are raises that have been kept quiet and that I have not seen. This Data.world news was announced days after final edits and will not be in my article.

As is often the case in social enterprise news, this news could be seen as encouraging or discouraging for supporters of the benefit corporation form.

On one hand, this is a fairly sizeable raise and a bit of evidence that not all serious investors are scared away by a legal form that mandates a general public benefit purpose.

On the other hand, the mere fact…

A few weeks ago I blogged about the spate of boycotts and buycotts responding to President Trump’s travel ban. Since that time, the #grabyourwallet campaign has taken credit for a number of stores dropping Ivanka Trump’s merchandise. In response, celebrities and others flocked to Nordstrom after criticism by the President’s surrogates about the retailer’s decision to drop the products, even though Nordstrom cited falling sales. Within days, news outlets reported that her perfume was a top seller on Amazon, and that many reviewers indicated that they had bought the product to show support for the President. 

Yesterday, NPR reported that the United Auto Workers will revive its 1980s Buy American campaign, which will not only promote American-made products but will also encourage the boycott of cars made by American companies overseas. I’ve argued in the past that boycotts don’t work, and the NPR story provided some support from a professor who noted, “these campaigns, even with catchy song lyrics, almost never work. For instance, garment work essentially left the U.S. almost completely a few years after [the look for the union label ad] ran, and after the last UAW campaign, the American car companies continued to lose market share.” The…

Christopher Bruner has posted Center-Left Politics and Corporate Governance: What Is the ‘Progressive’ Agenda? on SSRN. You can download the paper here.  Here is the abstract:

For as long as corporations have existed, debates have persisted among scholars, judges, and policymakers regarding how best to describe their form and function as a positive matter, and how best to organize relations among their various stakeholders as a normative matter. This is hardly surprising given the economic and political stakes involved with control over vast and growing “corporate” resources, and it has become commonplace to speak of various approaches to corporate law in decidedly political terms. In particular, on the fundamental normative issue of the aims to which corporate decision-making ought to be directed, shareholder-centric conceptions of the corporation have long been described as politically right-leaning while stakeholder-oriented conceptions have conversely been described as politically left-leaning. When the frame of reference for this normative debate shifts away from state corporate law, however, a curious reversal occurs. Notably, when the debate shifts to federal political and judicial contexts, one often finds actors associated with the political left championing expansion of shareholders’ corporate governance powers, and those associated with the political right advancing…

Here is a rundown of recent business news headlines:

The Yahoo/Verizon deal takes a $350M haircut to compensate for Yahoo data security breaches in 2013 and 2014.

The Snapchat parent company, SNAP, scheduled blockbuster IPO ($20-23B) is plagued with news that it lost  $514.6 million in 2016, there are questions about the sustainability of its user base, and, for the governance folks out there, there is NO VOTING STOCK being offered.

In what is being called a “whopper” of a deal, Restaurant Brands, the owner of Burger King and Tim Hortons, announced earlier this week a deal to acquire Popeye’s Louisiana Kitchen, the fried chicken restaurant chain, for $1.8 billion in cash. 

Kraft withdrew its $143B takeover offer for Unilever less than 48 hours after the announcement amid political concerns over the merger.  While Unilever evaluates its next steps, Kraft is perhaps feeling the effects of its controversial takeover of Britain’s beloved Cadbury. 

A final item to note, for me personally, is that today is my last regular contribution to the Business Law Professor Blog. I will remain as a contributing editor, but will miss the ritual of a weekly post–a habit now nearly…