Merry Chistmas!
How well does the media portray business?
In each of the classes I have taught I have offered extra credit for a reflection paper on how the media portrays the particular subject because most Americans, including law students, form their opinions about legal issues from television and the movies. Sometimes the media does a great job. I’m told by my friends who teach and practice criminal law that The Wire gets it right. Although I have never practiced criminal law, I assume that ABC’s How to Get Away With Murder, in which first-year students skip their other classes to both solve and commit murders, is probably less accurate. I do have some students who now watch CNBC because I show relevant clips in class. After a particularly heated on-air debate, one student called the network “the ESPN for business people.”
I’m looking for new fiction movies or TV shows to suggest to my students next semester. In addition to the standard business movies and documentaries, what makes your list of high-quality business-related shows? Friends, colleagues, and students have suggested the following traditional and nontraditional must-sees:
1) Game of Thrones (one student wrote about it in the partnership context)
2) House of Cards (not purely business, but
Reflections of a former supply chain professional turned academic on business and human rights
In many companies, executives and employees alike will give a blank stare if you discuss “human rights.” They understand the terms “supply chain” and “labor” but don’t always make the leap to the potentially loaded term “human rights.” But business and human rights is all encompassing and leads to a number of uncomfortable questions for firms. When an extractive company wants to get to the coal, the minerals, or the oil, what rights do the indigenous peoples have to their land? If there is a human right to “water” or “food,” do Kellogg’s, Coca Cola, and General Mills have a special duty to protect the environment and safeguard the rights of women, children and human rights defenders? Oxfam’s Behind the Brands Campaign says yes, and provides a scorecard. How should companies operating in dangerous lands provide security for their property and personnel? Are they responsible if the host country’s security forces commit massacres while protecting their corporate property? What actions make companies complicit with state abuses and not merely bystanders? What about the digital domain and state surveillance? What rights should companies protect and how do they balance those with government requests for information?
The disconnect between “business” and “human
Teaching Transactional Skills
I had planned to blog about the UN Forum on Business and Human Rights this week, but my head is overflowing with information about export credits, development financing, a possible international arbitration tribunal, remarks by the CEOs of Nestle and Unilever, and the polite rebuff to the remarks by the Ambassador of Qatar by a human rights activist in the plenary session. Next week, in between exam grading, I promise to blog about some of the new developments that will affect business lawyers and professors. FYI, I apparently was one of the top live tweeters of the Forum (#bizhumanrights #unforumwatch) and gained many valuable contacts and dozens of new followers.
In the meantime, I recommend reading this great piece from the Legal Skills Prof Blog. As I prepare to teach BA for the third time (which I hear is the charm), I plan to refine the techniques I already use and adopt others where appropriate. The link is below.
A Chance at the Top for Boys AND Girls
We want the best for both of our kids, and we are working to help them learn as much as they can about being good people and successful people. We’re fortunate that we have a (relatively) stable life, we’ve had good health, and we’re able to provide our children a lot of opportunities. For my daughter, as I have noted before, I do worry about institutional limits that are placed on her in many contexts.
She’s in first grade, but expectations are already being set. On her homework last week: a little boy in her reading comprehension story builds a tower with sticks and bricks and stones. Next story: a little girl gets fancy bows in her hair instead of her usual ponytails. I wish I were making this up.
This is more pervasive than I think many people appreciate. Take, for example, the Barbie computer science book that had people raising their eyebrows (and cursing). NPR has a report explaining the basic issues here. The basics:
A book called Barbie: I Can Be A Computer Engineer was originally published in 2010. Author and Disney screenwriter Pamela Ribon discovered the book at a friend’s house and was
Good Grief! Courts Can Only Get So Much Right on LLC Law
I’m starting to think that courts are playing the role of Lucy to my Charlie Brown, and proper description of LLCs is the football. In follow up to my post last Friday, I went looking for a case that makes clear that an LLC’s status as a disregarded entity for IRS tax purposes is insufficient to support veil piercing. And I found one. The case explains:
Plaintiff . . . failed to provide any case law supporting his theory of attributing liability to Aegis LLC because of the existence of a pass-through tax structure of a disregarded entity. Pl.’s Opp’n. [50]. Between 2006 and 2008, when 100% of Aegis LLC’s shares were owned by Aegis UK, Aegis LLC was treated as a disregarded entity by the IRS and the taxable income earned by Aegis LLC was reflected in federal and District of Columbia tax returns filed by Aegis UK. Day Decl. Oct. 2012 [48–1] at ¶ 37. In the case of a limited liability corporation with only one owner, the limited liability corporation must be classified as a disregarded entity. 26 C.F.R. § 301.7701–2(c)(2). Instead of filing a separate tax return for the limited liability corporation, the owner would
Wyoming S.C. Makes LLC Veil Piercing Easier, Says LLCs can have “Corporate Assets”
The Supreme Court of Wyoming recently decided to pierce the limited liability veil of a single-member LLC. Green Hunter Wind Energy, LLC (LLC), had a single member: Green Hunter Energy, Inc. (Corp). LLC entered into a services contract with Western Ecosystems Technology, Inc. (Western). The court determined that veil piercing – thus allowing Western to recover LLC’s debts from Corp – was appropriate for several reasons. I think the court got this wrong. The case can be accessed here (pdf).
The court provides the following rule for piercing the veil of a limited liability company, providing three basic factors 1) fraud; 2) undercapitalization; and 3) “intermingling the business and finances of the company and the member to such an extent that there is no distinction between them.” The court noted that the failure to following company formalities was recently dropped as a factor by changes to the state LLC statute.
Here’s where the court goes wrong:
(1) As to undercapitalization, the court completely ignores the fact that Western freely contracted with the LLC with little to no cash. If Western wanted the parent Corp to be a guarantor, it could have required that. If Western thought LLC was acting
Better Teaching Idea: Try to Notice When the Wind Is at Your Back
About four years ago, despite decades of actively avoiding the idea, I started running. I am no Forrest Gump, but I run 3.5 miles on a reasonably regular basis– usually four or five times a week, sometimes more, and rarely less. My primary running locations, North Dakota and then along the Monongahela River in West Virginia, are both quite windy. The North Dakota winds so are significant, that they can mimic hills, which is what allowed cyclist Andy Hampsten to train for hills in “one of the flattest areas in the world.”
I do a lot of out-and-back runs – out 1.75 miles and back along the same route. During such runs, I often notice a similar phenomenon: I may not have any idea it’s windy if the wind is at my back when I start running. When I get to my turnaround, though, I find a stiff wind in my face. This happens enough that I should probably figure out it is windy before I get to the turnaround, especially since it can lead to a faster pace on the way out, but I still rarely notice. I just think I’m having a good pace day.
In contrast, it’s pretty hard to miss when the wind is in your face. Everything feels hard. Everything feels sluggish and slow. And it feels like, all of a sudden, you have barriers in your way.
During these runs, it often makes me think about how many other places (in the figurative sense) this happens. We all have our challenges, and we often have much to overcome. But some have more challenges than others. Because our individual challenges are real, it can be easy to miss that we may have fewer challenges than other people have.
The things that are barriers to our goals are sometimes obvious to us. For example, as those in the current job hunt for a law professorship likely know, a lack of a top-14 law degree can be a significant limit on the number of options one might have entering the legal academy. It certainly felt like a barrier to certain jobs when I was on the market, anyway.
Because of that, it would be easy to discount other benefits I have because of who I am. I grew up in a safe neighborhood with good schools. I am a white male, which means people have expectations for me that are different than others. There is a level of presumed competence. And, comparatively, presumed authority and ability. If there’s no more text visible, please click below to read the whole post.
Election Impact: Capital Allocation, Corporate Investments, and Stock Prices
Back in 2010, Art Durnev published a short paper, The Real Effects of Political Uncertainty: Elections and Investment Sensitivity to Stock Prices, available here. The article studies the interaction between national elections and corporate investment. Today is not a national election — we get two more years before we have to choose our next president — but it’s still seems like an apt day to think about the role of elections on corporate activity.
The most interesting part of the article, to me anyway, is the test of the relationship between political uncertainty and firm performance. As the article explains,
If prices reflect future profitability of investment projects, investment-to-price sensitivity can be interpreted as a measure of the quality of capital allocation. This is because if capital is allocated efficiently, capital is withdrawn from sectors with poor prospects and invested in profitable sectors. Thus, if political uncertainty reduces investment efficiency, firm performance is likely to suffer. Consistent with this argument, we show that firms that experience a drop in investment-to-price sensitivity during election years perform worse over the two years following elections.
The conclusion: this signifies that political uncertainty significantly impacts real economic outcomes. Therefore, “political uncertainty can deteriorate company performance because
Dean Search: WVU College of Law
The West Virginia University College of Law is seeking applications and nominations to replace our former dean, Joyce McConnell, who is now the provost of the University. The College of Law just completed the addition of a new wing (part of a $26 million infrastructure project), and has made significant and exciting progress. We’re seeking a dean who can help continue that trend.
Sunrise at WVU College of Law
Admitting my bias, WVU is a great place to be. It’s beautiful, especially in the fall, and we have access to much more than many people recognize. In addition to a solid opportunities to enjoy music and the arts in Morgantown, we’re a lot closer to other areas of interest, if big city access is desired. We’re 75 miles to Pittsburgh; about 3 hours and 15 minutes to Baltimore, Washington, DC, and Cleveland, OH; 6 hours to New York City; a little less to Niagara Falls; 5 hours to Philadelphia, PA, and Lexington, KY. You get the idea.
Sunset at the WVU College of Law
The posting is below. Please apply if you are interested, and please share this with anyone else you think might be interested. And, of course, please feel free to contact me directly with any questions.
The full posting is available at the link above or just click the button below.