Photo of Haskell Murray

Haskell Murray

Subscribe to Haskell Murray's Posts

Professor Murray teaches business law, business ethics, and alternative dispute resolution courses to undergraduate and graduate students. Currently, his research focuses on corporate governance, mergers & acquisitions, sports law, and social entrepreneurship law issues.

Professor Murray is the 2018-19 President of the Southeastern Academy of Legal Studies in Business (“SEALSB”) and is a co-editor of the Business Law Professor Blog. His articles have been published in a variety of journals, including the American Business Law Journal, the Delaware Journal of Corporate Law, the Harvard Business Law Review, and the Maryland Law Review. Read More

Last week, the New York Times Dealbook ran a story entitled, Wall Street Shock: Take a Day Off, Even a Sunday.  The story details how Bank of America Merrill Lynch is supposedly encouraging its investment banking analysts and associates to take four days a month off…on the weekends. 

As the authors note, “[s]uch an offer from an employer would sound like punishment for the average worker. But for junior employees of Bank of America Merrill Lynch, that recommendation was intended as a bit of relief.”  The memorandum was probably a relief …if the Merrill Lynch really meant it, and if it will be respected by the various managing directors.

At many large investment banks (and law firms), true rest is largely absent.  Analysts and associates are pushed, and push themselves, to the brink.  Call me cynical, but I doubt Merrill Lynch is doing this primarily for the good of its employees.  Perhaps Merrill Lynch thinks the diminishing returns of working 80+-hour weeks and the high employee turnover are impacting their bottom line. 

While the lack of true rest is glaring on Wall Street, I think any modern employee can suffer from…

Alicia Plerhoples is leading an innovative Social Enterprise and Nonprofit Clinic at Georgetown University Law Center.  She presented her “Representing Social Enterprise” article at AALS in 2013, and her article was recently published by the Clinical Law Review.  I recommend the article to all those interested in social enterprise and/or clinical education.  The article will be helpful to the academic, practitioner, and clinician (perhaps because Professor Plerhoples has experience in all three roles).   “Representing Social Enterprise” includes a deep discussion of the models of social enterprise, thoughtful analysis of the corporate governance issues that are likely to arise when representing social enterprises, and interesting insights into Georgetown’s clinic. 

The abstract is reproduced below and the entire article can be found on SSRN here:

“This article explores the representation of social enterprises — i.e., nonprofit and for-profit organizations whose managers strategically and purposefully work to create social, environmental, and economic value or achieve a social good through business techniques — in the Social Enterprise & Nonprofit Law Clinic at Georgetown University Law Center. The choice to represent social enterprise clients facilitates a curriculum that explicitly focuses on the business models, governance tools, and legal mechanisms that these organizations use…

As the Conglomerate, M&A Law Prof Blog, and WSJ have reported, Chancellor Leo Strine, Jr. has been nominated by Delaware Governor Jack Markell for the Chief Justice of the Delaware Supreme Court position.  The official announcement is here, courtesy of Brian Quinn.

Chancellor Strine’s office was just a few feet from mine when I clerked for former Vice Chancellor Stephen Lamb, and I can confirm that Chancellor Strine is every bit as colorful and witty as his opinions suggest.  Chancellor Strine (then a Vice Chancellor and called “VCS” by the clerks) is also the only judge (other than my own) that I chose to watch in action while in Delaware.  

My former co-clerk wonders, on Twitter, why Chancellor Strine would even want this job, as his current position as Chancellor arguably gives him more direct influence over the course of corporate law.  As Chancellor, he not only gets a more steady dose of corporate cases, but also is the sole author of those cases.  As Chief Justice, he will have to share the pen, and will hear plenty of non-corporate cases.  My guess is that Strine will enjoy having a hand in shaping the controlling precedent handed…

Tonight, I will teach my first negotiation class, to a group of Belmont University MBA students.  Over the past months, I have read a number of books on negotiation and reflected upon the negotiation I did in practice and am still doing in my professional life and personal life.  The more I read and think about the subject, the more I am convinced that law students and lawyers (in addition to business students and business people) need more training in negotiation.

In litigation, I have heard that well over 90% of cases settle before trial, requiring negotiation, and in the transactional context, negotiation is ever-present.    

The late-Roger Fisher of Harvard Law School (and co-author of the perennial best seller Getting to Yes) has a short video clip about negotiation v. litigation posted below. My legal training did a good job sharpening my critical thinking, improving my attention to detail, and preparing me to “win” arguments.  However, I cannot remember much time devoted to joint-problem solving, uncovering underlying interests, and dealing with people problems.  While much of what is written in Getting to Yes and its progeny is common sense, it is easy to stray from its guidelines…

Here, Professor Bainbridge kindly asks for my thoughts on Keith Paul Bishop’s article Would Hobby Lobby Stores, Inc. Have A Stronger Case As A Flexible Purpose Corporation?   

I agree with Bishop’s conclusion that the question is still open.  Both the Flexible Purpose Corporation (“FPC“) and the Benefit Corporation version of social enterprise legal forms are quite new and each became available in California as of January 1, 2012.  The FPC is only available in California (though Washington state’s social purpose corporation is similar in many respects) and the Benefit Corporation legislation has passed in 20 U.S. jurisdictions (19 states and Washington D.C.), starting with Maryland in 2010.  As the name suggests, the FPC allows managers more flexibility in choosing their particular corporate purpose(s), whereas most of the Benefit Corporation statutes require a “general public benefit purpose” to benefit “society and the environment” when “taken as a whole” but also allow additional “specific public benefit purpose(s).”  Delaware’s version of the benefit corporation law (called a “public benefit  corporation”) requires the choosing of one or more specific public benefit purposes.  

Converting to an FPC or a Benefit Corporation, without more, likely would not be much help to…

Thanks to Professor Brian Quinn (Boston College) for passing along the video posted below on “Material Adverse Change” in the M&A Context (Part 1) from law firm Weil Gotshal.  Weil Gotshal has posted a number of similar clips, which I have found useful in the past. 

This past Sunday, Robert B. Schumer (Paul Weiss) authored a related post over at the Harvard Law School Forum on Corporate Governance and Financial Regulation.  His post is entitled “Delaware Court: Missed Sales Forecasts Could be ‘Material Adverse Effect”‘ and opens with the following paragraph:

In Osram Sylvania Inc. v. Townsend Ventures, LLC, the Delaware Court of Chancery (VC Parsons) declined to dismiss claims by Osram Sylvania Inc. that, in connection with OSI’s purchase of stock of Encelium Holdings, Inc. from the company’s other stockholders (the “Sellers”), Encelium’s failure to meet sales forecasts and manipulation of financial results by the Sellers amounted to a material adverse effect (“MAE”). The decision was issued in the context of post-closing indemnity claims asserted by OSI against the Sellers and not a disputed closing condition.

Few, if any, Delaware cases have found a triggering of a MAC/MAE clause, but such cases obviously depend on the…

Posted in M&A

Behavioral economist Dan Ariely (Duke) spoke on Belmont’s campus yesterday on his book Predictably Irrational.  His talk was similar to his TED talk from a few years ago (with a few additions), and I thought some of our readers might find it interesting.  At the very least, he is an entertaining speaker, and I do think his underlying research (mentioned in more detail in the book) might be useful for those of us interested in business law.  Predictably Irrational is an easy read; I read all 325 pages last night and this morning.  The book was published the same year as Nudge and is similar in many respects.  A colleague of mine prefers Professor Ariely’s more recent book, The (Honest) Truth About Dishonesty, which I have not read yet.    

After meeting Colin Mayer (Oxford) and hearing him present at Vanderbilt’s 2013 Law and Business Conference, I purchased and read his recent book, Firm Commitment: Why the Corporation is Failing Us and How to Restore Trust in it.  The book is organized in three parts: (1) how the corporation is failing us; (2) why it is happening; (3) what we should do about it.  While the first two parts contain some helpful background and interesting case studies, I found the third part the most useful.  In the third part, Professor Mayer suggests:

These three straightforward adaptations of current arrangements – establishing corporate values, permitting the creation of a board of trustees to act as their custodians, and allowing for time dependent shares – together solve the fundamental problems of breaches of trust in relation to current and future generations. (pg. 247) 

In discussing corporate values, Professor Mayer writes:

Corporate social responsibility was rightly dismissed as empty rhetoric and jettisoned when recession forced a return to more traditional shareholder value.  Why should I trust an organization that is owned and controlled by anonymous, opportunistic, self-interested wealth seekers?  Without commitment, there is no reason why there should be any trust

…

When teaching on entity formation, my students often ask why so many companies choose Delaware.  Numerous academics have attempted to answer that question, and now the Official Website of the First State [Delaware] lists reasons why it thinks businesses choose Delaware.

The listed reasons are:

  1. The statute
  2. The courts
  3. The case law
  4. The legal tradition
  5. The Delaware Secretary of State

No new claims here, but interesting to see how the state sees (or promotes) its advantages. 

The webpage also includes a blog, entitled “Delaware Corporate and Legal Services Blog,” which only has a few posts so far, but may be worth tracking. 

H/T: Francis Pileggi

Given my interest in social enterprise, many friends and colleagues e-mailed me Professor Steven Davidoff’s recent article in the New York Times DealBook about Make a Stand,  a company founded by then eight-year old Vivienne Harr that sells “all-natural, certified organic, U.S. grown/Fair-Trade, GMO-free” lemonade and donates 5% of gross revenue to organizations focused on ending child slavery. 

As Professor Davidoff mentions, Make a Stand is organized as a social purpose corporation in Washington state.  Social purpose corporations are one of the many “social enterprise” legal forms that have arisen in the U.S. over the past five years, along with benefit corporations, benefit LLCs, flexible purpose corporations, L3Cs, public benefit corporations, and sustainable business corporations. 

While these new legal forms have been grouped under the term “social enterprise,” the term “social enterprise” is not well defined in the literature. 

The Social Enterprise Alliance (the “SEA”) defines “social enterprise” through a tripartite test:

  1. Directly addresses social need;
  2. Commercial activity [not donations] drives revenue; and
  3. Common good is the primary purpose.

The recent “social enterprise” statutes, however, do not expressly require products or services of social enterprises to directly address social need in the way described by the…