September 2017

This from friend-of-the-BLPB Andrea Boyack, Professor of Law and Co-Director of Business & Transactional Law Center at the Washburn University School of Law:

POSITION ANNOUNCEMENT – DEAN, SCHOOL OF LAW

Washburn University invites applications and nominations for the position of Dean of the Washburn University School of Law. The Law School is recognized for its outstanding teaching and faculty scholarship and its commitment to public service. It has a highly favorable student/faculty ratio, with an excellent student body drawn from a national pool.

One of only two law schools in the state of Kansas, Washburn University School of Law is located in Topeka, the state capital. It was established in 1903 and has built a long tradition and legacy of providing an outstanding legal education. Washburn Law offers a broad-based curriculum in national and international law to students enrolled in the J.D., LL.M., and M.S.L. programs. It features six centers for excellence, nine certificate programs, and four dual degree programs. The thirty-two full-time faculty members, along with a strong cohort of adjunct professors, teach and conduct scholarship across a wide array of legal specializations. The Law School enjoys a dedicated staff and strong support from the community.

For more than a century, Washburn…

No one had a National Compliance Officer Day when I was in the job, but now it’s an official thing courtesy of SAI Global, a compliance consulting company. The mission of this one-year old holiday is to:

  • Raise awareness about the importance of ethics and compliance in business and shine a spotlight on the people responsible for making it a reality.
  • Provide resources to promote the wellness and well-being of ethics and compliance professionals so they can learn how to overcome stress and burnout.
  • Grow the existing ethics and compliance community and help identify and guide the next generation of E&C advocates.

Although some may look at this skeptically as a marketing ploy, I’m all for this made-up holiday given what compliance officers have to deal with today.

Last Saturday, I spoke at the Business Law Professor Blog Conference at the University of Tennessee about corporate governance, compliance, and social responsibility in the Trump/Pence era. During my presentation, I described the ideal audit committee meeting for a company that takes enterprise risk management seriously. My board agenda included: the impact of climate change and how voluntary and mandatory disclosures could change under the current EPA and SEC leadership; compliance…

Friend of the blog and South Texas College of Law (Houston) Professor Joe Leahy sent over the following post he authored. It is cross-posted at UberLaw.Net and Medium. Embarrassingly, I had not heard about Loftium before reading this post, though at least I know of and have used Airbnb. Joe has some interesting thoughts, and I am happy to include his post on this blog. 

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Yesterday, the New York Times trumpeted a new internet company, Loftium, and its interesting, new-economy business model (which, for the time being, operates only in Seattle):

Loftium will provide prospective homebuyers with up to $50,000 for a down payment, as long as they are willing to continuously list an extra bedroom on Airbnb for one to three years and share most of the income with Loftium over that time.

At first glance, the arrangement between Loftium and participating homebuyers might sound like a loan.  (Indeed, the Times even describes it as such in an infographic.)  But upon a closer look, the arrangement that Loftium contemplates with homebuyers clearly is not a loan.  First of all, Loftium says it is not a loan; rather, according to Loftium, the down payment assistance it provides to homebuyers is “a part of a services agreement” lasting 12-36 months.  Second, and more important, the arrangement between Loftium and homebuyers has none of the characteristics of a traditional (term) loan.  There is no “principal” amount that the homebuyer is required to repay in a set period of time, and Loftium does not charge the homeowner any “interest.”  In fact, the homebuyer is not required to make anypayments to Loftium in return for the company’s cash (unless the homeowner breaches the parties’ agreement and stops renting on Airbnb before the term expires).

All the homebuyer must do in exchange for Loftium’s money is (1) list her spare room on Airbnb continuously through the term of her agreement with Loftium, (2) be a decent host (i.e., “not be[] rude to guests”) and (3) split her Airbnb  rental revenue with Loftium (with two-thirds going to the company.)  If, at the end of the term, Loftium has not been repaid its initial investment, the homeowner is not required to repay Loftium’s initial contribution. Hence, if renting out the homeowner’s spare room is not profitable during the term of the parties’ agreement, “Loftium takes full responsibility for that loss.”

Of course, Loftium expects that the total income from renting out a homeowner’s spare room will greatly exceed the amount that it originally provided to the homebuyer, so that both will profit.  If Loftium makes more in rental income than it pays towards the homeowner’s down payment, Loftium will make a profit.

Further, by all appearances, there is no cap on Loftium’s potential profit is its business arrangement with homebuyers.  In fact, Loftium makes clear that it wants to maximize the income that it splits with homebuyers:  Loftium promises that it will work with them “to increase monthly bookings as much as possible, so both sides can benefit from the additional income.”  To that end, Loftium provides homebuyers with some start-up supplies for their spare bedroom (and a keyless entry lock), access to advice and know-how regarding how to rent an Airbnb room, and online tools to help maximize their rental income.

So, if the business arrangement between Loftium and homeowners is not a loan, what is it?  It is almost certainly a general partnership for a term (i.e., a “joint venture”).

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A recent New Republic article states: 

The Community Law Center, a local legal services group, launched an investigation into 1906 Boone and hundreds of other vacant properties around Baltimore. The hunt took more than a year. In many cases, the identity of a property owner was hidden behind a maze of shell companies; an operation called Baltimore Return Fund LLC, for example, had purchased 1906 Boone at a city tax sale for $5,452. Eventually, the investigation revealed a Texas-based web of nearly a dozen LLCs—limited liability corporations, a form of legal tax shelter—that controlled more than 300 properties in Baltimore. Nearly all had been purchased at tax sales, often online, between 2001 and 2010. Most sold for less than $5,000. Many were vacant and in bad shape.

Okay, so we all know LLCs are not limited liability corporations (right?). But the entity form is a “legal tax shelter?”  As a pass-through entity?  What does this word salad mean?  Would this be less of a scourge if some guy owned them instead of the magical LLC?  I don’t understand what the entity form has to do with any such concerns at all.  

Suppose they did the research and found out…

Yale Law School invites applications for an inaugural, full time faculty director for its new Entrepreneurship Clinic. The position, which will be at the rank of Clinical Associate Professor or Clinical Professor of Law, will begin on July 1, 2018.

A key ambition of Yale University is “to provide an unsurpassed campus learning environment that cultivates innovators, leaders, pioneers, creators, and entrepreneurs in all fields and for all sectors of society.” Yale Law School is contributing to that goal by forming a new Entrepreneurship Clinic, which will provide transactional services and related legal advice to individuals or entities seeking to start or expand their own ventures. The Entrepreneurship Clinic is expected to become a central component of the Yale University student innovation ecosystem, which encompasses both curricular programs (such as the Yale School of Management Programs on Entrepreneurship and Social Enterprise), as well as independent, cross disciplinary centers (such as the Tsai Center for Innovative Thinking at Yale). Although it is envisioned that clients for the Entrepreneurship Clinic will come primarily from these programs, there may be opportunities for creating partnerships with the Office of Cooperative Research (which focuses on faculty ventures) and with the greater New Haven entrepreneurial community.…

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As I earlier reported, on Saturday, The University of Tennessee College of Law hosted “Business Law: Connecting the Threads”, a conference and continuing legal education program featuring most of us here at the BLPB–Josh, me, Ann, Doug, Haskell, Stefan, and Marcia.  These stalwart bloggers, law profs, and scholars survived two hurricanes (Harvey for Doug and Irma for Marcia) and put aside their personal and private lives for a day or two to travel to Knoxville to share their work and their winning personalities with my faculty and bar colleagues and our students.  It was truly wonderful for me to see so many of my favorite people in one place together enjoying and learning from each other.

Interestingly (although maybe not surprisingly), in many of the presentations (and likely the essays and articles that come from them), we cite to each other’s work.  I think that’s wonderful.  Who would have known that all of this would come from our decision over time to blog together here?  But we have learned a lot more about each other and each other’s work by editing this blog together over the past few years.  As a result, the whole conference was pure joy for…

Here at BLPB, Joan Heminway has written a couple of posts discussing comparisons between norms in corporate theory, and norms in democratic theory.   A few months ago, she discussed the potential conflicts between Donald Trump’s private business interests, and his role as a “fiduciary” for the United States.  As she pointed out, in corporate law, we have procedures to address potential conflicts, which include fully informed approval by the principal or unconflicted fiduciaries, and external review to determine fairness.  But there is no similar procedure to address conflicts in the political realm.

Well, it appears that Joan’s not the only one thinking along these lines.  I read with interest this amicus brief submitted in the Supreme Court case of Gill v. Whitford, posted by Professor D. Theodore Rave at the University of Houston.  The case itself is about political redistricting, but Prof. Rave makes the intriguing argument that redistricting should be addressed the same way we address conflicts of interest in business law.  Specifically – and drawing on his earlier article in the Harvard Law Review, Politicians as Fiduciaries – he proposes that districts drawn by independent commissions receive a lower level of scrutiny than districts drawn by…

From August 31 to September 10, I participated in an excellent 6-week online boot camp called Miler Method. The camp is led by 2x Olympic medalist in the 1500m, Nick Willis, and his wife Sierra. The camp led up to the New Balance 5th Avenue Mile in NYC. 

As I have posted about before, I have enjoyed taking some massive open online courses (MOOCs), and I think all educators should familiarize themselves with this form, as the online world is already impacting even the most traditional courses.

The Miler Method, like MOOCs, taught me not only valuable substantive information, but also further instructed me on the art of online education. Below are a few reflections on the pros and cons of the online format as applied to the Miler Method running training camp. My thoughts follow below the page break.