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This is the time of year when many people make New Year’s resolutions, and I suppose that law professors do so as well. I’m taking a break from teaching business associations next semester. Instead, I will teach Business and Human Rights as well as Civil Procedure II. I love Civ Pro II because my twenty years of litigation experience comes in handy when we go through discovery. I focus a lot on ethical issues in civil procedure even though my 1Ls haven’t taken professional responsibility because I know that they get a lot of their context from TV shows like Suits, in which a young “lawyer” (who never went to law school) has a photographic memory and is mentored by a very aggressive senior partner whose ethics generally kick in just in the nick of time. It will also be easy to talk about ethical issues in business and human rights. What are the ethical, moral, financial, and societal implications of operating in countries with no regard for human rights and how should that impact a board’s decision to maximize shareholder value? Can socially-responsible investors really make a difference and when and how should they use their influence? Those…

The Pep Boys – Manny, Moe & Jack (NYSE:  PBY) merger triangle with Bridgestone Retail Operations LLC and Icahn Enterprises LP is proving to be an exciting bidding war.  The price and the pace of competing bids has been escalating since the proposed Pep Boys/Bridgestone agreement was announced on October 16, 2015.  Pep Boys stock had been trading around $12/share. Pursuant to the agreement, Bridgestone commenced a tender offer in November for all outstanding shares at $15.  

Icahn Enterprises controls Auto Plus, a competitor of Pep Boys, the nation’s leading automotive aftermarket service and retail chain.  Icahn disclosed an approximately 12% stake in Pep Boys earlier in December and entered into a bidding war with Bridgestone over Pep Boys.  The price climbed to $15.50 on December 11th, then $17.00 on December 24th. Icahn Enterprises holds the current winning bid at $18.50/share, which the Pep Boys Board of Directors determined is a superior offer.  In the SEC filings, Icahn Enterprises indicated a willingness to increase the bid, but not if Pep Boys agreed to Bridgestone’s increased termination fee (from $35M to 39.5M) triggered by actions such as perior proposals by third parties.  Icahn challenged such a fee as a serious threat to…

A quick break from grading for my year-end report on the use of “limited liability corporation” instead of the correct “limited liability company” when referring to LLCs.  Hold on to your hats. 

Since December 31, 2014, Westlaw reports the following using the term “limited liability corporation”:

The most concerning of these, though, is Proposed & Enacted Legislation View all 169.  That’s not just misstating the law; it’s trying to make incorrect law. 

For example, Massachusetts has the following proposed legislation from, Sen. Tarr, Bruce (R), with the following summary: ” An Act relative to limited liability corporation filing fees.”  2015 Massachusetts Senate Bill No. 238, Massachusetts One Hundred Eighty-Ninth General Court. Of course, the proposed change is to the state’s Limited Liability Company Act, Mass. Gen. Laws Ann. ch. 156C, § 12 (West 2015).  

And one proposed change to “limited liability corporations” is not sufficient for that state this year. Rep. Arciero, James (D), similarly proposed “An Act relative to limited liability corporations dealing with children.” 2015 Massachusetts House Bill No. 304, Massachusetts One Hundred Eighty-Ninth General Court. The sponsors of these…

A year ago today, President Obama shocked the world and enraged many in Congress by announcing normalization of relations with Cuba. A lot of the rest of the United States didn’t see this as much of a big deal, but here in Miami, ground zero for the Cuban exile community, this was a cataclysmic event. Now Miami is one of the biggest sources of microfinance for the island.

Regular readers of this blog know that I have been writing about the ethical and governance issues of doing business with the island since my 10-day visit last summer. I return to Cuba today on a second research trip to validate some of my findings for my second article on governance and compliance risks and to begin work on my third article related to rule of law issues, the realities of foreign direct investment and arbitration, what a potential bilateral or multilateral investment agreement might look like, and the role that human rights requirements in these agreements could play.

This is an interesting time to be visiting Cuba. The Venezuelan government, a large source of income for Cuba has suffered a humiliating defeat. Will this lead to another “special period” for the…

Divestment campaigns have been a popular form of corporate activism.  With divestment pensions, institutions, endowments and funds withdraw investments from companies to encourage and promote certain social/political behaviors and policies. 

Erik Hendey in his article Does Divestment Work (in the Harvard Political Review) recounted recent divestment campaigns including: 

“sweatshop labor, use of landmines, and tobacco advertising. But undoubtedly the best known example of divestment occurred in the 1970s and ’80s in response to the apartheid regime of South Africa. Retirement funds, mutual funds, and investment institutions across the country sold off the stocks of companies that did business in South Africa.”

A current divestment campaign is focused on guns.  In the wake of the San Bernardino, California mass shooting, this issue is poised to gain momentum.  The widespread investment in gun manufacturers will also make this campaign relevant to many investors. Andrew Ross Sorkin at the NYT DealBook writes in Guns in Your 401(k)? The Push to Divest Grows:

“If you own any of the broad index funds or even a target-date retirement fund, you’ve got a stake in the gun industry. Investments in gun makers, at least over the past five years, have performed well. Shares of Smith & Wesson

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If you use Facebook, Twitter, Instagram, or just the internet, you are probably aware of the concept of clickbait.  What is “clickbait?” Well, Merriam Webster dictionary defines it as follows: 

something (such as a headline) designed to make readers want to click on a hyperlink especially when the link leads to content of dubious value or interest <It is difficult to remember a time when you could scroll through the social media outlet of your choice and not be bombarded with: You’ll never believe what happened when … This is the cutest thing ever … This is the biggest mistake you can make … Take this quiz to see which character you are on … They are all classic clickbait models. And they are irritating as hell. There’s no singular way to craft clickbait, but the essence is clear: Lure—no trick—readers to your site. — Emily Shire, Daily Beast, 14 July 2014> < … “clickbait,” those seductive Huffington Post-esque headlines that suck up your attention but don’t deliver what they promise? — Oliver Burkeman, The Guardian (London), 10 Aug. 2013> < … there’s an incentive to combine clickbait, to get people in, with strong content

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Earlier this month, the DC Circuit denied a petition for rehearing on the conflict minerals disclosure, meaning the SEC needs to appeal to the Supreme Court or the case goes back to the District Court for further proceedings. At issue is whether the Dodd-Frank requirement that issuers who source minerals from the Democratic Republic of Congo label their products as “DRC-conflict free” (or not) violates the First Amendment. I have argued in various blog posts and an amicus brief that this corporate governance disclosure is problematic for other reasons, including the fact that it won’t work and that the requirement would hurt the miners that it’s meant to protect. Congress, thankfully, recently held hearings on the law.

I’ve written more extensively on conflict minerals and the failure of disclosures in general in two recent publications. The first is my chapter entitled, Living in a material world – from naming and shaming to knowing and showing: will new disclosure regimes finally drive corporate accountability for human rights? in a new book that we launched two weeks ago at the UN Forum on Business and Human Rights in Geneva. You’ll have to buy the book The Business and Human Rights Landscape: Moving…

Facebook (not surprisingly) and other social media blew up when Facebook CEO, Mark Zuckerberg, and his wife, Dr. Priscilla Chan, released an open letter to their new baby daughter, Max. (Congratulations to all, by the way.) The Chan Zuckerberg family announced that they would be giving a ton of money to support important causes, which caused people to get excited, get skeptical, and get mad.

One big complaint has been that the family chose a limited liability company (LLC), which is not a corporation (more on that later), rather than a not-for-profit entity to do the work.  Some say this makes it a scam.  I say hooey.  Even if it were a scam, it’s not because they chose an LLC. 

  1. First, without knowing the LLCs members or structure, there’s no reason to say the LLC cannot be a 501(c)(3). But, more important, the Letter to Max never says they will give money to charity.  Never. 

The letter says: 

As you begin the next generation of the Chan Zuckerberg family, we also begin the Chan Zuckerberg Initiative to join people across the world to advance human potential and promote equality for all children in the next generation. Our initial areas

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No, I am not really going too deep into the crowdfunding legal world. I am mostly venting. My co-bloggers, especially Steve Bradford, Joan Heminway, and Haskell Murray, are far more knowledgable than I am on the actual legal regime. 

Kickstarter and other sites have done some creative things to help people start their businesses, and I am fine with that. There are travel jackets and luggage, as well as other things like potato salad and gadgets that someone thinks someone else needs.  That’s all good.  But some of the ideas just seem dumb to me.  Case in point: the PicoBrew, about which one outlet noted: Seattle company develops ‘Keurig for beer.’ 

So, the deal is that you can make your own beer recipes (or borrow from others), and make beer at home.  Fast(ish).  KOMO News explained: 

Depending on the recipe, users add grain to the main compartment of the step filter and add hops into the appropriate hop cages inside the unit. The entire canister slides into the Zymatic and the brewing begins.

The brewing takes about four hours, leaving the unfermented beer in the keg that originally held the water. Add the

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