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Benjamin P. Edwards

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Benjamin Edwards joined the faculty of the William S. Boyd School of Law in 2017. He researches and writes about business and securities law, corporate governance, arbitration, and consumer protection.

Prior to teaching, Professor Edwards practiced as a securities litigator in the New York office of Skadden, Arps, Slate, Meagher & Flom LLP. At Skadden, he represented clients in complex civil litigation, including securities class actions arising out of the Madoff Ponzi scheme and litigation arising out of the 2008 financial crisis. Read More

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This picture brings me joy.  It captures the mood among all of us (me, my UT Law emeritus colleague John Sobieski, and a group of UT Law students) after my last UT Law yoga session this past spring.  I need to begin to wrestle with how I will be able to teach yoga at the College of Law this coming semester, since I will be full-time back in the classroom teaching two demanding business law courses (Business Associations and Corporate Finance).  All ideas are welcomed . . . .

My law school yoga teaching came to mind this week not because I am already deep into planning the fall semester (although that comes soon) but because of two independent health/wellness items that hit my radar screen this week.  First, I was reminded that the Knoxville Bar Association (of which I am a member) is offering a full-day continuing legal education program in September entitled “Balancing the Scales of Work and Wellness – Finding Joy through Self-Care Practical Advice & Wellness Strategies”.  Second, I learned today that my UT Law colleague Paula Schaefer penned a nifty post yesterday on the Best Practices for Legal Education blog: Examples of How Law Schools …

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Avid BLPB readers may have noticed that I failed to post on Monday of last week.  I was traveling from Portugal to Spain that day.  I did plan to make this post then, but travel scrambles (thanks to the Porto metro) and delays (thanks to Ryanair) prevented me from getting to a computer with Internet access until late in the day.  By then, I was too exhausted to post.  So, you get last Monday’s post this Monday!  No harm done; this post is not time-sensitive.

Ever heard of Graham’s port?  The Graham’s port lodge was founded by brothers William and John Graham back at the beginning of the 18th century.  Fast-forward 150 years, and the Graham family sells the then-very-successful Graham’s port business to another family.  That second family still runs the Graham’s business today.

But a Graham descendant still wanted to be in the port business.  He thought he had a “better way.”  So, 11 years after the Graham family sold Graham’s, John Graham (not the same one, obviously!) established the Churchill port lodge.  Here’s what the Churchill’s website says about its formation as a business:

Churchill’s was founded in 1981 by John Graham, making it…

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The dark side of entrepreneurial finance

Editors: Arvind Ashta, Olivier Toutain

Theme of the special issue

Whether we are talking about start-ups, more recently “grow up” or more broadly about company creation-takeover, entrepreneurial finance attracts a lot of attention, from the entrepreneurs’ side and from the side of private and public financing organisations and the media. Entrepreneurial finance includes Founder’s equity, Love Money, Business Angel, Venture Capital, LBO Funds, banks, IPOs and various alternative financing treated as shadow banking: micro-credit, loan sharking, leasing, crowdfunding, Initial Coin Offerings, among others (Block, Colombo, Cumming, & Vismara, 2018; Wright, Lumpkin, Zott, & Agarwal, 2016).

Financing is considered as an inherent dimension of the entrepreneurial development process (Panda, 2016; Yunus, 2003). Without financing, there is no investment and, therefore, little chance of starting a business with adequate production tools and an organization capable of absorbing the trials and tribulations of starting and developing entrepreneurial activities. Without funding, the risk of lack of legitimacy is also high: what does it mean in the entrepreneurial ecosystem not to have the support of one or more funding agencies? More so in the start-up world! Is that conceivable? Finally, can the entrepreneur now free himself from financial support, even if he does not really need it to start his business? If the reasoning is pursued further, does the entrepreneur have a choice? In other words, is it possible to create and develop your company without mobilizing the financial resources of the territory? Without entering into a financial system and ecosystem that regulates the creation and takeover of companies in a territory? Or a system that pushes the entrepreneur to finance so much that the system itself collapses by bringing forth a financial crisis (Boddy, 2011; Diamond & Rajan, 2009; Donaldson, 2012; Guérin, Labie, & Servet, 2015; Mishkin, 2011).

Applying for funding today is often considered as a difficult adventure: is it really a fighter’s path given the particularly numerous mechanisms in France? But are they also numerous in Europe? In the world? Is the cost of financing transparent or hidden (Attuel-Mendes & Ashta, 2013)? In any case, to adventure is to walk and remove obstacles while following a guide… often at the funder’s request… which is often called coaching or mentoring. Or following the guide, sometimes – or often, depending on the reader’s appreciation – results in respecting rules, imposed steps, in short, to adopt a good conduct… to such an extent that the entrepreneur can lose track of his North Star, or at least part of his project, modified by “pitching” and integrating the comments, suggestions, strong suggestions of potential funders… In other words, if we push the reflection further, the accompanying logic proposed in the form of good intentions by the funders of an ecosystem, are they not likely, by force, to respond to external constraints, to generate effects opposite to expectations: inhibited entrepreneurs, whose project has lost its originality, vitality and excellence through the coaching or mentoring of initially imagined value creation (Collewaert, 2009)? Isn’t the finance injected into the support systems finally a Dr Jekyll and Mr Hyde of entrepreneurship? In other words, if it constitutes an unprecedented measure of support for entrepreneurial growth in the world, does it not at the same time generate “antipreneurial” effects? Normative and highly biased, do financial actors deserve such a place in the creative process? What is it that basically legitimizes their central place? (Bateman, 2010; Sinclair, 2012) What is the hidden face of entrepreneurial finance (Henderson & Pearson, 2011; Krohmer, Lauterbach, & Calanog, 2009; Toe, Hollandts, & Valiorgue, 2017)?

The purpose of this issue is to extract itself from the normative fields and discourses that highlight, in the vast majority of cases, the important role of finance in the development of entrepreneurship, whether purely economic, social or environmental. In other words, we are asking ourselves here about the secondary, even hidden, effects of finance on the emergence and development of new companies in France and around the world.

The proposals will address, among other things, the following topics:

  • What place does finance occupy today in the feeling of success and accomplishment of an entrepreneurial activity?
  • How do entrepreneurs interact with potential funders?
  • How do funders dialogue with each other?
  • How do funders make their investment decisions? Rationality, Short termism, information asymmetry….
  • How do entrepreneurs and funders negotiate? On which elements of the project or company? Are there any losers? What is lost in the process?
  • How does the relationship between entrepreneurs and funders change over time?
  • Can finance harm the value creation produced by entrepreneurial activity? Can it affect entrepreneurial freedom?
  • Is it possible to free oneself from financing circuits? How?

Finally, what is the dark side of entrepreneurial finance?

Timeline:

Submission of texts: By April 30, 2020 at the latest

Publication: March 2021

[I have omitted here the list of references supporting the text citations.  Please contact me by email if you would like a .pdf copy of the call for papers that includes the list.  There is more information after the jump.]

Greetings from sunny Portugal.   I am enjoying some vacation time here after attending and presenting at the European Academy of Management conference in Lisbon this past week.   I will have more to say about that conference in a later post.   But for today, I offer some light thoughts and an Internet “treasure hunt” relating to mergers and acquisitions.

I arrived at my hotel in Sintra earlier today to find a notice in the room stating that “[o]n the 30th June 2019, the Hotel Tivoli Sintra will be changing the legal business entity which will be reflected in future invoices.”  The notice went on to ask that, “to avoid possible delays relating to the billing” each guest pay up his or her bill to date on June 30th “in a partial invoice,” noting that “[t]he remaining services will be invoiced at the departure time with the new entity.”  Apologies were made for “the inconvenience” and thanks were offered for “the understanding.”

Of course, as an M&A practitioner and instructor, I wanted to know what led to this change in “legal business entity.”  I suspected a merger or acquisition transaction.  Was it an asset transaction in which the hotel…

Posted in M&A

One of the things that I obsessed over (alone and together with other new business law prof colleagues) as I began my teaching career was how to teach the first day of classes in my courses.  I was given some great advice by many folks.  Here are a few of the most valuable things people told me–advice that I use all the time, in my first-class sessions and, in some cases, beyond.

Have a solid class plan.  This may go without saying, but my obsession paid off in that I was prepared, and therefore more confident (although my legs were shaking behind the podium anyway . . . ).  I actually typed up my class notes for the first semester’s worth of classes I taught.  (I learned that, while I can read class notes competently, I always extemporaneity anyway . . . .  I no longer read typewritten class notes, but many of my colleagues who are experienced and effective teachers still do.)  But typing up my notes helped to reinforce key parts of the material for me and identify course themes.

Use the first class as an opportunity to introduce the semester’s task, including both substantive law coverage and…

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Today, the 10th annual National Business Law Scholars Conference concluded.  Jill Fisch gave today’s keynote lecture at lunchtime.  She masterfully (really) tied together the scholarship of the far-and-away vast majority of the business law scholars attending the conference by weaving together corporate purpose, private ordering, and choice of entity.  In tying these themes together, she encouraged us all to use our scholarship to serve multiple audiences–including the judiciary, the law practice community, and industry.

This talk resonated with me from start to finish.  I was riveted.  I knew Jill was talking directly to me and so many others in the room who have plumbed the core of corporate governance and tried to address multiple audiences with our work.  She validated, and encouraged us to continue (and expand), our work in these somewhat unsettled (and sometimes unsettling!) areas of business law.

Take me for example (since I know myself best . . . ).  As Jill talked about corporate purpose, I heard her to be validating part of my article on Corporate Purpose and Litigation Risk in Publicly Held U.S. Benefit Corporations.  When she addressed private ordering, I understood her to be endorsing my observations on that subject (as…

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Earlier this month, I attended and presented at the 2019 Legal Issues in Social Entrepreneurship and Impact Investing–in the US and Beyond conference co-organized by the Impact Investing Legal Working Group and the Grunin Center for Law and Social Entrepreneurship at the NYU School of Law.  My friends Deb Burand and Helen Scott (also my Corporations and Securities Regulation professor when I was at NYU Law) co-direct the Grunin Center.  They organized a super conference this year.  Each year, the conference draws more folks–and with good reason.

I presented as part of a panel that compared and contrasted the use of different forms of entity for social enterprise businesses.  My role was (perhaps predictably, given that I wrote this piece) to defend the use of traditional for-profit corporations for this purpose.  I got some love from the panel and the audience, but so did others with different views . . . .

One of the nifty features of this conference is the use of lunchtime slots for “table talks” (roundtable discussions) and workshops.  I attended a table talk entitled “Gender Lens Investing: A Year in Review and A Look Ahead” and a workshop on “Re-Designing Legal Education for Lawyers, Social…

With the thought that more than a few of you reading this post may be starting off in a law teaching job for the first time in just a few short months, several of us on the BLPB have decided to offer some tips and general advice to you as you prepare.  Since I have recently spoken to a few new folks who are still in the process of choosing textbooks, I will start there.  

Set forth below are my reflections on important matters related to choosing an appropriate textbook.  If anything I say here does not make sense to you (or, of course, if you have additional or different thoughts), please leave a comment.  And if you already have ordered your textbook and started planning your course, please don’t rethink everything because of this post!

First and foremost, it is important to know the institutional teaching objectives at your law school.  How does the business law course you are teaching contribute to the school’s program of legal education?  What attributes of your course may help build the law school’s infrastructure for institutional success?

Then, consider the learning objectives you have for your students—taking care to meet institutional objectives…

I do plan to write a bit about the Law and Society Association and Grunin Center conferences that I attended over the past two weeks.  But today, I am compelled to briefly post about a newly decided U.S. Supreme Court case and a recent blog post.  The connection?  Both reference in relevant part postal delivery services, public and private.

I was alerted to the Supreme Court opinion (in Return Mail v. U.S. Postal Service) by Tom Norris, one of our fabulous BLPB readers in Nashville.  The subject of the case is the U.S. government’s attempt to assert patent invalidity as a defense to a claim of infringement.  The Court finds that the government is not a “person” for purposes of the relevant provisions of the U.S.  Patent and Trademark Act.  The National Law Journal article to which Tom pointed me offers a nice summary.  I really enjoy legal actions that focus on the “person” definitions in statutes and decisional law.  This one offers some interesting policy arguments (as do most)–in both the opinion of the Court and the dissent.

The blog post (Modern Mailmen) is coauthored by Leonid Sirota and Akshaya Kamalnath, the latter of whom I…

At the 2019 Law and Society Association Annual Meeting last week, Geeyoung Min presented her paper Governance by Dividends.  In the paper, she focuses attention on stock dividends.  Near the end of her presentation, Geeyoung trod over ground on which so many of us also have trod–relating to judicial standards of review in fiduciary duty actions.  As familiar as the story was, she helped me to see something I had not seen before.  Perhaps many of you already have identified this.  If so, I am sorry to bore you with my new insight.

Essentially, what I came to realize during her talk–and develop with her and members of the audience in the ensuing discussion–was that Delaware’s judiciary may have (and I may be quoting Geeyoung or someone else who was there, since I wrote this down long-form in my contemporaneous notes) muddied the waters by seeking clarity.  What do I mean by that?  Well, by addressing relatively clearly the circumstances in which the business judgment rule, on the one hand, or entire fairness, on the other, govern the judicial review of corporate fiduciary duty allegations, the Delaware judiciary has effectively made the interstitial space between the two–intermediate tier scrutiny–less…