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Marcia Narine Weldon

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Professor Narine Weldon is the director of the Transactional Skills Program, Faculty Coordinator of the Business Compliance & Sustainability Concentration, Transactional Law Concentration, and a Lecturer in Law.

She earned her law degree, cum laude, from Harvard Law School, and her undergraduate degree, cum laude, in political science and psychology from Columbia University. After graduating, she worked as a law clerk to former Justice Marie Garibaldi of the Supreme Court of New Jersey, a commercial litigator with Cleary, Gottlieb, Steen and Hamilton in New York, an employment lawyer with Morgan, Lewis and Bockius in Miami, and as a Deputy General Counsel, VP of Global Compliance and Business Standards, and Chief Privacy Officer of Ryder, a Fortune 500 Company. In addition to her academic position, she serves as the general counsel of a startup and a nonprofit.  Read More

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Yesterday, the New York Times published what I consider a medicocre criticism of law reviews.  Not that some criticism isn’t valid.  It is.  I just think this one was poorly executed.  Consider, for example, these thoughtful responses from Orin Kerr and Will Baude.

As I have thought about it, one thing that struck me was about the Times article was the opening:

 “Would you want The
New England Journal of Medicine to be edited by medical students?” asked
Richard A. Wise, who teaches psychology at the University of North Dakota. 

Of course not. Then why are law reviews, the primary
repositories of legal scholarship, edited by law students?

I don’t disagree with the premise, but note how limiting it is.  First, it talks about one journal, one that is highly regarded.  I know some people hate all law reviews, but I humbly suggest that most people consider elite journals like the Yale Law Journal a little differently.  (It’s also true that some journals like the Yale Law Journal happen to use some forms of peer review in their process.) 

Second, the implication is that medical journals have it all figured out.  That’s apparently not true, either.  An article from…

I gave a talk
today about sustainable development, where I talked about the challenges of
trying to balance resource development with the need to preserve the
environment and deal with the social issues that come from increased
activity. 

One thing
came to mind: People matter.  Whether you work for EQT or the EPA, you’re a
person who has a job to do, which can have beneficial outcomes.   When we
discuss sustainable development, we also need to recognize the need for sustainable
conversation. Development doesn’t happen without conversation, which can lead to
compromise, which can lead to progress.  

Governments
and corporations are both made up of people.  Isolating either governments
or corporations as inherently evil entities is missing the point.  We can
disagree about the goals of either, but we need to be more careful about who we
vilify.  Negotiations don’t happen against governments or corporations,
they happen with people in governments or in corporations.  And we need to
remember that.

Professor Bainbridge takes issue with my analogy between shareholder activists and Congress.   I am pretty sure he’s missing my point, in part because I have not disagreed with the points he makes.  My point (or at least intended one) is not that shareholder rights should equal a strict democracy.  My point is that shareholder activists, sometimes with less than a majoity, say 20%, try to improperly impose their will on the currently elected (and properly empowered) board.  Further, they are seeking additional powers to further their influence.    

I figure we all agree that if a majority of shareholders agree, they can, at the proper time, make the changes they want.  In contrast, shareholder activists often try to make those changes before they have the votes — votes they may never have to support their views.  I happen to see at least some of the current Republican House in that same vein.  That’s my intended point.  I am sure lots of people disagree with that, too, but I just want to make clear that I am criticizing what I see as the abuse of a powerful minority messing with a regime that was properly elected and exercising that…

So the government shutdown has me troubled.  I think it’s reasonable for the House not
like Obamacare and to do everything they can to repeal the law.  However, it strikes me as different to force a
government shutdown because that’s the only way they can get leverage to make a
change the voters, at least at the last election, did not agree with.  

As Sen. John McCain explained last week:

Many of those who are in opposition right now were not here
at the time and did not take part in that debate. The record is very clear of
one of the most hard fought, fair, in my view, debates that has taken place on
the floor of the Senate. That doesn’t mean that we give up our efforts to try to
replace and repair Obamacare, but it does mean that elections have
consequences. Those elections were clear in a significant majority that a
majority of the American people supported the president of the United States
and renewed his stewardship of this country.

The actions of the House right now remind me a lot of the
arguments put forth against shareholder activism.  That is, the complaints about rent-seeking actions…

Before I
went to law school, I had a career in public relations and brand
management. I had the pleasure of having a client that was among the best when
it comes to brand reputation, Nintendo, where I was responsible (with our
client and a solid team) for product launches like this, this, and this (PDF, p. 3).  A few years ago,
I even wrote an article combining my interest in branding and my interest in
entity law: The North Dakota Publicly
Trade Corporations Act: A Branding Initiative Without a (North Dakota) Brand. 

Anyway, when I
recently received my version of ERN Economics of Networks eJournal, (Vol. 5 No.
68), I took note of the paper, Corporate
Reputation and Social Media: A Game Theory Approach, which is available
here.  The paper states in the abstract,
“Corporate reputation is more and more the most valuable asset for a firm. In
this day and age, corporate reputation, although an intangible asset, is and
will grow as the most essential asset to publicize and also protect.”  My first thought:  as a general matter, can that possibly be
true? 

It appears not,
though it is obvious that reputation…

Over at the New York Times Dealbook,  the man responsible for a $6 billion hedge funds says just that in an article by Alexandra Stevenson: 

Mr. Spitznagel, the founder of Universa Investments, which has around $6 billion in assets under management, says the stock market is going to fall by at least 40 percent in one great market “purge.” Until then, he is paying for the option to short the market at just that point, losing money each time he does.

….

Mr. Spitznagel’s approach is unusual approach for a money manager: To invest with him, you’ve got to believe in a philosophy that is grounded in the Austrian school of economics (which originated in the early 20th century in Vienna). The Austrians don’t like government to meddle with any part of the economy and when it does, they argue, market distortions abound, creating opportunities for investors who can see them.

When those distortions are present, Austrian investors will position themselves to wait out any artificial effect on the market, ready to take advantage when prices readjust.

Apparently his primary reason for this coming purge, which he says is needed, is that the Fed will have to readjust its monetary…

Okay, so maybe I am overstating that a bit, but it’s only a
bit.  This is not exactly timely, as the
following case was decided in the December 2012, but I was recently reviewing
it as I taught these cases and helped update Unincorporated Business Entities (Ribstein, Lipshaw, Miller, and Fershee, 5th ed., LexisNexis). (semi-shameless plug).  Despite the passage of time, this case has, apparently, gotten me riled up
again.  So here we go . . .    

Synectic Ventures I, LLC v. EVI Corp., 294 P.3d 478 (Or.
2012):  several investment funds organized as LLCs (the Synectic LLCs or
LLCs).  The LLCs made a loan to the
defendant corporation, EVI Corp. The loan agreement was secured by EVI’s
assets, and provided that EVI would pay back $3 million in loans, plus 8%
interest by December 31, 2004.  The loan
agreement provided that if EVI obtained $1 million in additional financing by
December 31, 2004, the loan amount would be converted into equity (i.e., EVI
shares) and the security interest would be eliminated. If the money were not
raised by the deadline, the LLCs could foreclose on EVI’s assets (mostly IP in
medical devices). 

To make things interesting, the LLCs appointed Berkman the
manager of the LLCs (thus, they were manager-managed LLCs). “At all relevant
times, Berkman—the managing member of plaintiffs—was also the chairman of the
board and treasurer of defendant [EVI].” 
In mid-2003, the Synectic LLCs’ members sought to have Berkman removed, and Berkman signed
an agreement not to enter into new obligations for the LLCs without getting
member approval. 

For those who have followed
the shareholder activism debate between Harvard Professor Lucian Bebchuk
(see a recent op-ed
piece here), corporate lawyer Martin Lipton from Wachtell, Professor
Stephen Bainbridge of UCLA  (see here for
example) and others, a new article provides some additional data
points.  In their article,
Professors Paul Rose of Ohio State and Bernard Sharfman of Case Western use the
work of Kenneth Arrow as a basis to discuss offensive shareholder activism. The
abstract is below:

Under an Arrowian
framework, centralized authority and management provides for optimal decision
making in large organizations. However, Arrow also recognized that other
elements within the organization, outside the central authority, occasionally
may have superior information or decision making skills. In such cases, such
elements may act as a corrective mechanism within the organization. In the
context of public companies, this article finds that such a corrective
mechanism comes in the form of hedge fund activism, or more accurately,
offensive shareholder activism. 

Offensive shareholder activism exists in the market for corporate influence,
not control. Consistent with a theoretical framework where the value of
centralized authority must be protected and a legal framework in which
fiduciary responsibility rests with the board…

I’m the newest member to the Business Law Prof Blog and also
the newest member of the team to academia. 
In my past life, I spent several years as outside counsel doing
commercial litigation and labor and employment work and then twelve years as
in-house counsel, leaving corporate life as a deputy general counsel, chief
privacy officer, and compliance and ethics officer.  That experience guides my scholarly and
teaching interests, which include corporate governance, regulatory compliance,
corporate social responsibility, business and human rights, legal ethics, legal
issues related to social enterprises and social entrepreneurship; and how
legislation affects and motivates corporate behavior.

To that end I have written on (1)  the need for
an affirmative defense to corporate criminal liability for an effective
compliance program, using the FCPA as a pilot;  (2) the potential
unintended consequences of the Dodd-Frank conflict minerals provision,
which requires US issuers to disclose whether they source minerals from the
Democratic Republic of Congo and relies on the SEC for execution of this human
rights law; and (3) how the government can incentivize corporations to move beyond
voluntary initiatives and industry standards for human rights due diligence in
the wake of  the 2011…