I attended the BLPB “Connecting the Threads” symposium last week at the University of Tennessee and, as per usual, had an excellent time with the students, staff, and faculty associated with the Transactions journal.  Upon asking the regular bloggers in this space, I was assured that it was acceptable to “toot my own horn” about publications.  To that end, please allow me to mention that my article on Contracting Out of Partnership has (finally) come out in the most recent issue of the Journal of Corporation Law.  If interested, the abstract is as follows:

Can parties contract out of the general partnership form of business organization, even if their conduct would otherwise establish a partnership? Although a recent judicial decision suggests that they can, treating contractual disclaimers of partnership as dispositive is inconsistent with modern statutes. More importantly, permitting parties to contract out of partnership imposes substantial costs by undermining the protections of fiduciary duty, creating uncertainty about the operating rules for the business, and threatening to deny the rights of third parties. These costs outweigh the benefits of promoting freedom of contract and providing certainty on the partnership formation question, particularly because such benefits can largely be captured within…

At our wonderful BLPB conference a week ago (details here), I presented “An Introduction to Anti-ESG Legislation.” Thus, news that Louisiana Treasurer John Schroder plans to liquidate all BlackRock investments within three months over Blackrock’s ESG policies caught my eye. Here are some notable excerpts from the FOXBusiness article (here) on the news:

Louisiana Treasurer John Schroder penned a letter to BlackRock CEO Larry Fink, explaining the state would liquidate all BlackRock investments within three months and, over a period of time, divest nearly $800 million from the bank’s money market funds, mutual funds or exchange-traded funds. The state treasurer blasted Fink’s pursuit of so-called environmental, social and governance (ESG) standards that promote green energy over traditional fossil fuels. “Your blatantly anti-fossil fuel policies would destroy Louisiana’s economy,” Schroder wrote to Fink in the letter …. “Consumers’ Research applauds Treasurer Schroder’s commendable decision to withdraw the state’s assets from BlackRock’s misuse,” Will Hild, the executive director of Consumer’s Research, told FOX Business in a statement. “As noted in his letter, BlackRock is using the people of Louisiana’s money to advance a destructive agenda that raises costs for consumers in the state and across the country. The seeds

…

Last week, the Second Circuit issued an interesting decision on the scope of Section 10(b) standing in Menora Mivtachem Insurance v. Furtarom, 2022 WL 4587488 (2d Cir. Sept. 30, 2022).  IFF is a U.S. publicly traded company that purchased Frutarom, which also traded publicly but outside the U.S..  Frutarom lied about its business, and these lies were incorporated into IFF’s S-4 issued in connection with the merger.  The truth came out, and IFF’s stock price fell.  Stockholders of IFF tried to sue Frutarom, now a wholly-owned IFF subsidiary, for making false statements in connection with IFF’s stock.  The Second Circuit held that under Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975), the plaintiffs had no standing because they did not buy stock in the precise company being lied about.  As the Second Circuit put it:

Under Plaintiffs’ “direct relationship” test, standing would be a “shifting and highly fact-oriented” inquiry, requiring courts to determine whether there was a sufficiently direct link…Section 10(b) standing does not depend on the significance or directness of the relationship between two companies.

Rather, the question is whether the plaintiff bought or sold shares of the company about which the misstatements were made…The

…