March 2019

At the 2018 Annual Conference of the Academy of Legal Studies in Business, I spoke on a panel, New Developments in Corporate Governance, with Vincent S.J. Buccola, Gideon Mark, Josephine Sandler Nelson, and David Zaring, the organizer (thanks again, David!). 

Buccola discussed governance aspects of corporate bankruptcy law in the modern economy.  I was particularly intrigued by his argument that “Bankruptcy law is potentially valuable…insofar as it can toggle from property to liability rule in domains where legal or practical impediments prevent investors from arranging their own, “tailored” toggles.” 

I’ve taught Corporate Bankruptcy, and in my research at the time, I was analogizing bargaining processes in the context of the recovery and resolution of clearinghouses to bargaining processes in private restructurings and formal bankruptcy filings.  I wondered about the potential application of Buccola’s work within the clearinghouse context, and have been eagerly awaiting his article.  I’m excited to share with readers that the wait is over!  Bankruptcy’s Cathedral: Property Rules, Liability Rules, and Distress, an impressive and significant new work, is forthcoming in the Northwestern University Law Review, and also now available on SSRN.  Here’s its abstract:            

What justifies corporate bankruptcy…

Earlier this week, the Supreme Court issued its opinion in Lorenzo v. SEC, and the thing that strikes me the most about it is that the dissenters do more to undermine Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011), than the majority does.

I previously posted about Lorenzo here; the remainder of this post assumes you’re familiar with the problem posed by Lorenzo and its relationship to the earlier Janus decision.

[More under the jump]

 
This Michael Avenatti extortion case is fascinating to me. I am not really sure why, other than it seems so absurd.  You may recall Avenatti as the lawyer who represented Stormy Daniels in her lawsuits against President Trump. He is a big personality and known for being outlandish at times.  
 
According to federal prosecutors, Avenatti tried to extort Nike for millions of dollars because he claimed to have evidence that Nike employees were illegally paying people to help recruit college basketball players.  Apparently, Avenatti believed he would be able to get Nike to pay him millions of dollars in exchange for the evidence. Instead, he ended up with the FBI. 
 
The New York Time reports:
According to people with knowledge of the cases, once Nike heard Mr. Avenatti’s claims, it acted to inform federal officials of the allegation that the company’s employees were paying players. The nature of the discussion with Mr. Avenatti raised the possibility that extortion was taking place.
That is, as soon as Nike was on notice of a potential problem right to the authorities.  How very Allis-Chalmers of them.  I am a fan of that old business judgment rule case, which

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Yoga(Me-WII)

Colleen’s post yesterday–and more specifically the last interview questions she asked (“[H]ow can power yoga be particularly helpful for professors or students?“)–inspired me to write about some work that I have recently done in studying the benefits of mindfulness to lawyers and in lawyering, and more specifically in business lawyering.  Colleen’s entrepreneur yogi noted the obvious benefits of power yoga to physical health.  But she also noted what she termed “clarity of mind.”  More specifically, she said: “I practice yoga to allow time away from devices and work emails, which in turn creates some distance to clear my mind and create clarity in how I want to interact with my environment.”

I do, too.  And I have noticed that it makes a difference in the way I interact with people.  I am not alone.

I recently was challenged by my friends at the Tennessee Bar Association to present an hour of continuing legal education on mindfulness, reflecting on some of what I learned in my yoga instructor training last year and linking it to law practice.  Three of the eight limbs of yoga–asana (poses), pranayama (breath control), and dhyana (object-focused meditation)–are traditional mindfulness practices that I studied in that…

Entrepreneurs and entrepreneurism have always fascinated me.  Hence, I was thrilled to see that in a recent TCU Neeley Institute for Entrepreneurship and Innovation ranking that “tracks research articles in premier entrepreneurship journals for the past five years,” my colleagues in the University of Oklahoma’s Price College of Business Tom Love Division of Entrepreneurship and Economic Development, directed by Professor Tom Lumpkin, were 7th in the WORLD!  Boomer Sooner!

And since coming to OU, I’ve had the good fortune to meet an inspirational, 4th generation Oklahoma entrepreneur, Merideth VanSant, in attending 405 Yoga OKC, the 2018 Best Yoga Studio in OKC, and one of four studios owned by VanSant.  The U.S. has more than 6000 yoga studios, so VanSant’s success is no small feat.  Yoga is big business: Americans spend about $16 billion a year on classes, clothes, and related equipment.  In fact, America is now a “Nation of Yoga Pants.” 

VanSant has long made extensive use of her entrepreneurial and leadership abilities, whether in running award-winning yoga studios, supporting various federal agencies in the transportation and aviation areas (and receiving the 2014 National Senior Consultant of the Year…

A few months ago, I read John Carreyrou’s Bad Blood: Secrets and Lies in a Silicon Valley Startup about Elizabeth Holmes and the Theranos fraud, and I was very curious to see how the same story would play out in the new documentary The Inventor: Out for Blood in Silicon Valley.  (Sidebar: I am truly on the edge of my seat for the forthcoming Adam McKay adaptation starring Jennifer Lawrence – but that’s a whole ‘nother thing).  In general, I preferred the book: it has far more detail, and the documentary has little new information to contribute. That said, there was power in the immediacy of actually watching Elizabeth Holmes, hearing her speak, and seeing how people reacted to her.  So, below are some of my general thoughts.

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Get this, from a March 15 ruling and order on a motion for summary judgment: 

Greenwich Hotel Limited Partnership [GHLP] is a limited partnership organized under the laws of Connecticut, and is the owner of the Hyatt Regency Greenwich hotel. Answer to First Amended Complaint, dated Dec. 16, 2016 (“Am. Ans.”), ECF NO. 62, at 8. Hyatt Equities, L.L.C. (“Hyatt Equities”) is a limited liability corporation incorporated in Delaware, and is the general partner of Greenwich Hotel Limited Partnership. Id. at 9. The Hyatt Corporation (“Hyatt Corp.”) is a limited liability corporation incorporated in Delaware, and is the agent of Greenwich Hotel Limited Partnership. Id. at 9.

Benavidez v. Greenwich Hotel LP, 3:16-CV-191 (VAB), 2019 WL 1230357, at *1 (D. Conn. Mar. 15, 2019). 
 
Once more, for the people in back: LLCs are “limited liability companies,” not “limited liability corporations.”As such, LLCs are not “incorporated.” LLCs are formed or organized. In addition, corporations are entities that provide shareholders limited liability, but they are generally not referred to as “limited liability corporations” because they might be confused with a separate and distinct entity type, the LLC.  
 
Whenever I read a case with this kind of language,

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OK.  So, the title of this post is clickbait of sorts.  I am not writing about Monty Python, sorry to say.  But I am writing about something completely different for me–very outside my norm.  In fact, this past year, I have been researching and writing a bit outside my norm . . . .  

It all started with two blog posts here on the BLPB–here and here.  My posts, focusing on Trump’s deregulatory promises and early pronouncements, followed an earlier one written by Anne Tucker.  Anne and I then organized an discussion group at the 2018 Association of American Law Schools Annual Meeting focusing on regulation in the Trump Era: “A New Era for Business Regulation?”  I then presented some of my research on business deregulation at the National Business Law Scholars (“NBLS”) conference in June 2018.  A related Southeastern Association of Law Schools (“SEALS”) discussion group followed later in the summer of 2018.

As I began to accumulate observations and information from these academic encounters, I came to vision a series of two papers that would enable me to engage in related research and make some observations.  (I first shared my conception for the two-paper series in…