Almost exactly one year ago, I blogged about an unusual books and records lawsuit involving Facebook.  The plaintiffs were seeking documents pertaining to Facebook’s $5 billion settlement with the FTC, on the theory that Facebook had improperly agreed to pay larger fines in order to protect Mark Zuckerberg, personally, from liability.  That, the plaintiffs claimed, was an interested transaction involving a controlling shareholder, subject to entire fairness review if not cleansed using MFW procedures.

As I said at the time, the reason this struck me as novel was because the entire lawsuit depended on Delaware’s slow evolution of thinking surrounding controlling shareholder transactions, and highlighted the box Delaware has put itself in.  Is it true that any controlling shareholder transaction gets entire fairness review absent MFW procedures?  Because if the controlling shareholder involved in day-to-day operations, that’s a very broad rule, and if that’s not the rule, what kinds of transactions qualify?

Anyhoo, VC Slights just issued his opinion in the 220 action and the remarkable thing about it is that it says … nothing.

I mean, it says something, obviously, it holds that (1) plaintiffs may obtained non-privileged electronic communications pertaining to the settlement and (2) plaintiffs…

Holger Fleischer has posted Corporate Purpose: A Management Concept and its Implications for Company Law on SSRN (here).  I like the idea of distinguishing (1) a “management concept” of identifying a corporate purpose “beyond mere profit” from (2) a corporate law conception of the for-profit corporation as a profit-maximizing entity.  Here is the abstract:

Many companies have recently been following the so-called corporate purpose concept that is recommended by leading management scholars. To this end, they identify a raison d’être for their enterprise that goes beyond mere profit making and they anchor it in the entire value chain. This paper puts the corporate purpose concept in perspective by linking it to the larger debate on corporate social responsibility and by outlining its theoretical foundations and practical application. It then goes on by explaining how this management concept fits into the company law framework, looking to France and the UK as well as to the US and Germany. Finally, this paper assesses various policy proposals made by leading purpose proponents, ranging from mandatory purpose clauses in the articles of association to say-on-purpose shareholder voting and dual-purpose business organisations.

Nevada legislators recently introduced legislation to create a statutory exemption from licensure for the investment advisers for certain qualifying private funds.  The language appears nearly identical to the model regulation released by the North American Securities Administrators Association (NASAA). Notably, NASSA explained that its regulatory approach would be “contingent in many respects on how the SEC moves forward on implementation in this area. Consequently, if the SEC makes significant alterations to its proposals NASAA may be required to reevaluate the provisions in any proposed model rule or rules.”  Nevada’s own Securities Division also recently released a proposed regulatory update which includes NASAA’s model regulatory exemption.

There are really two questions here.  The first is whether an appropriately tailored exemption from licensing requirements should exist for certain private funds.  Nevada’s own securities regulators support the exemption and included it in their draft regulations. As it stands, putting the exemption into place does not require the Nevada Legislature to do anything.  The exemption appears highly likely to be embodied in the final regulatory code at the conclusion of the ordinary regulatory process.  I filed a comment letter on this with the Nevada legislature and have reviewed the letters filed by supporters of…