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Ann Lipton

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Ann M. Lipton is a Professor of Law and Laurence W. DeMuth Chair of Business Law at the University of Colorado Law School.  An experienced securities and corporate litigator who has handled class actions involving some of the world’s largest companies, she joined the Tulane Law faculty in 2015 after two years as a visiting assistant professor at Duke University School of Law.

As a scholar, Lipton explores corporate governance, the relationships between corporations and investors, and the role of corporations in society.  Read more.

The Harvard Law School Program on Corporate Governance and Financial Regulation is pleased to announce the availability of positions of Post-Graduate Academic Fellows in the areas of corporate governance and law and finance. Qualified candidates who are interested in working with the Program as Post-Graduate Academic Fellows may apply at any time and the start date is flexible.
Candidates should be interested in spending two to three years at Harvard Law School (longer periods may be possible). Candidates should have a J.D., LL.M., or S.J.D. from a U.S. law school, or a Ph.D. in economics, finance, or related areas by the time they commence their fellowship. Candidates still pursuing an S.J.D. or Ph.D. are eligible so long as they will have completed their program’s coursework requirements by the time they start. During the term of their appointment, Post-Graduate Academic Fellows work on research and corporate governance activities of the Program, depending on their skills, interests, and Program needs. Fellows may also work on their own research and publishing in preparation for a career in academia or policy research. Former Fellows of the Program now teach in leading law schools in the U.S. and abroad.
Interested candidates should submit a CV,

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On Friday, Elisabeth Kempf presented her new paper, co-authored with Oliver Spalt, at Tulane’s Freeman School of Business, Taxing Successful Innovation: The Hidden Cost of Meritless Class Action Lawsuits. Here is the abstract:

Meritless securities class action lawsuits disproportionally target firms with successful innovations.  We establish this fact using data on securities class action lawsuits against U.S. corporations between 1996 and 2011 and the private economic value of a firm’s newly granted patents as a measure of innovative success. Our findings suggest that the U.S. securities class action system imposes a substantial implicit “tax” on highly innovative firms, thereby reducing incentives to innovate ex ante. Changes in investment opportunities and corporate disclosure induced by the innovation appear to make successful innovators attractive litigation targets.

Using dismissal as a proxy for meritless – a point to which I will return – Kempf and Spalt find that firms that are granted valuable patents are more likely to be targeted by a class action lawsuit than other firms in the following year, and that the difference is driven by meritless lawsuits.  The finding persists even controlling for firm size, sales growth, stock price returns, and volatility.  They also find that these lawsuits…

Another week, another Delaware Chancery decision in which a powerful, visionary minority blockholder is deemed to have “control” over a corporate board’s decision to acquire a company in which he has an interest.

In In re Oracle Corporation Derivative Litigation, which I blogged about last week, Larry Ellison’s control was enough to show that demand was excused for the purpose of a derivative lawsuit, while the court avoided the question whether Ellison should be formally deemed a controlling stockholder.

In In re Tesla Motors Stockholder Litigation, however, the question could not be avoided.  That’s because – unlike in Oracle – the remaining stockholders voted in favor of the acquisition, which led the defendants to argue that the entire deal had been cleansed under Corwin v. KKR Financial Holdings LLC.   Since Corwin does not apply to controlling stockholder transactions, Elon Musk’s status became critical.

Briefly, Elon Musk is the Chair, CEO, largest stockholder (22% at the time of the acquisition), and dominant face of Tesla.  He was also one of the founders of SolarCity, along with his cousins.  When SolarCity neared bankruptcy, Tesla acquired SolarCity at a significant premium to its market price.  Though Musk formally recused…

The University of Richmond School of Law, in conjunction with Boston University School of Law, University of Illinois College of Law, and UCLA School of Law, invites submissions for the Sixth Annual Workshop for Corporate & Securities Litigation. This workshop will be held on October 19-20, 2018 at the University of Richmond School of Law in Richmond, Virginia.

Overview

This annual workshop brings together scholars focused on corporate and securities litigation to present their scholarly works. Papers addressing any aspect of corporate and securities litigation or enforcement are eligible, including securities class actions, fiduciary duty litigation, and comparative approaches. We welcome scholars working in a variety of methodologies, as well as both completed papers and works-in-progress.

Authors whose papers are selected will be invited to present their work at a workshop hosted by the University of Richmond.  Hotel costs will be covered.  Participants will pay for their own travel and other expenses.

Submissions

If you are interested in participating, please send the paper you would like to present, or an abstract of the paper, to corpandseclitigation@gmail.com by Friday, May 25, 2018. Please include your name, current position, and contact information in the e-mail accompanying the submission.  Authors of accepted papers…

Job Description Summary:

The Southern University Law Center welcomes applications for the appointment of two to three visiting professors for the 2018-2019 academic year. We welcome applications from all individuals whose backgrounds and experiences will enhance the diversity of our faculty. Our primary curricular needs are as follows: 

Louisiana Civil Law Courses:

We are interested in candidates with experience teaching Sale & Lease, Obligations, and Security Devices. Individuals with a background in the civil law are preferred.

Business Law, Procedure, and Constitutional Law Courses:

We are also interested in candidates with experience teaching Contracts, Commercial Paper, Federal Civil Procedure, Federal Courts & Procedure, Business Entities, and Constitutional Law.

Qualifications:

  • JD degree
  • Experience and demonstrated success in law school teaching
  • Demonstrated ability in mentoring students
  • Commitment to the mission of the Southern University Law Center and its instructional methods and goals

Instructions to Applicants:

Candidates should submit the following to Professor Donald North, chair of the Faculty Appointments Committee, at dnorth@sulc.edu:

  • Resume/CV
  • Cover letter
  • Contact information for three professional references

Benefits: The Southern University Law Center offers a comprehensive benefits package to full-time faculty members that includes health, dental, vision, life insurance, and retirement. Salary will be commensurate with qualifications.…

I am intrigued by VC Glasscock’s recent decision in In re Oracle Corporation Derivative Litigation, where he found that demand was excused with respect to a claim that Larry Ellison breached his fiduciary duties by functionally directing that the company acquire Netsuite, in which he owned a 39% stake. 

First, the treatment of Larry Ellison:  He only owns 27% of Oracle and, though he remains Chair of the Board, he no longer occupies the role of CEO.  Nonetheless, the court was willing to draw the pleading-stage inference that he functionally has control of the company, such that both the outside and inside directors would fear for their positions if they crossed them.  Yet at the same time, the court was unwilling to go so far as to formally designate him as a “controlling shareholder,” with all of the scrutiny that role would attract.  In some ways, this is a welcome recognition that control is not simply an on/off switch: degrees of control may exist along a spectrum, and may compromise (nominally) independent directors’ judgment only so long as the relevant decision is not too extreme.  At the same time, Delaware law tends to treat control status as binary, and…

It’s that time of year again!  Tulane is hosting its 30th Annual Corporate Law Institute, a 2-day conference devoted to developments in corporate law, particularly mergers & acquisitions. 

I was only able to attend some of the panels on the first day, but I very much enjoyed getting a sense of what lawyers – and judges – are thinking about these days.  Below is a summary of some of the highlights that I found most intriguing:

[More after the jump]

I’ve been consumed by the latest twist in Broadcom’s attempt at a hostile takeover of Qualcomm: the dramatic entrance of CFIUS.

For those who haven’t been following the saga, Broadcom, a Singaporean technology company, has been attempting to acquire San Diego-based Qualcomm for months.  After its attempts at a friendly merger were rebuffed, it launched a proxy contest, proposing its own nominees to replace Qualcomm’s existing directors. 

Qualcomm responded with what is apparently becoming de rigueur in contested proxy solicitations: in addition to setting up a website devoted to making its case to shareholders, it also promoted various tweets on the subject.

One intriguing aspect of Qualcomm’s argument has been that – as a leader in research and development – the merger would be bad for innovation and consumers.  This point is reiterated on its website, which fascinates me because it assumes that investors as investors would be persuaded by an argument directed toward consumer wellbeing. 

That may not have been the right tack; according to news reports, at least some large shareholders were poised to vote for Broadcom, giving Broadcom a fighting chance at a hostile takeover.

But the day before the crucial shareholder meeting, Qualcomm won…

George Geis at the University of Virginia has just posted Traceable Shares and Corporate Law, exploring the implications that blockchain technology will have on various aspects of corporate law that – until now – hinged on the presumption that when one person buys a share of stock in the open market, there is no prior owner who can be identified.  The ownership history of a particular share cannot, in other words, be traced.

That lack of traceability has a lot of important effects.  For example, it means that if a company issued stock pursuant to a false registration statement, but also issued additional stock in another manner, plaintiffs may not be able to bring Section 11 claims because they cannot establish that their specific shares were traceable to the deficient registration.  In the context of appraisal, it has led to questions of whether petitioners who obtained their shares after the record date have an obligation to show that the prior owners of the shares did not vote in favor of the merger (an impossible task).  If blockchain technology makes it possible to trace the owners of a share from one transfer to another, these areas of law may be…

At this point, drawing inferences from corporate jet usage is its own mini-genre in the business literature.  There was David Yermack’s famous Flights of Fancy, which found that companies underperform when the CEO makes use of the company jet for personal business (often, apparently, golfing-related business); other studies have found that corporate jet use can enhance firm value, or detract from it, depending on whether the company has weak corporate governance, and that public firms have larger jet fleets than firms owned by private equity funds, suggesting the excessive fleet size is due to agency costs in public firms.

(And these studies, naturally, were conducted before everyone knew about GE’s now-discontinued practice of having its CEO travel with a jet and a spare.)

Now there’s a new contribution to the genre: Corporate Jets and Private Meetings with Investors, by Brian J. Bushee, Joseph J. Gerakos, and Lian Fen Lee. 

The authors begin with the previously-documented phenomenon that when investors have the opportunity to engage in private meetings with corporate management, their trading improves.   Regulation FD prohibits management from providing these investors with nonpublic material information, but somehow – whether through outright violations of…