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More Uber miscellany this week:

Last week, I posted about Uber and publicness – namely, that Uber is a private company that nonetheless is conducting itself as though it has public obligations.  Of course, right after I posted things got exponentially more interesting: Uber’s board met in a marathon session to discuss the results of an internal investigation of its corporate culture, resulting in the dismissal of the CEO’s right-hand man and the CEO/founder/powerful shareholder taking an indefinite leave of absence, Uber publicly announced the recommendations generated as a result of the internal investigation, and an Uber director resigned after making a sexist comment at the employee meeting intended to address workplace sexism.

There’s an awful lot to unpack here: Uber, the legendarily valuable startup, is now operating without a CEO, CFO, or COO (Twitter joke:  “I guess this is the closest it’s ever been to a self-driving car company”); the recommendations, which are telling in what they don’t tell (alcohol and controlled substances should not be consumed during business hours, yikes!); the fact that all of this was sparked by a blog post by an ex-employee detailing her sexual harassment and – amazingly…

Matt Levine at Bloomberg continually expresses his view that private markets are the new public markets.  What he means by that is, given the availability of private capital (due to SEC rules and concentrations of private pools of capital in a relatively small number of hands), companies that need capital to expand can access the private markets; they only go for the public markets when private investors are ready to cash out.

Well, as the Case of Uber makes clear, “publicness” can exist in private markets, too.

“Publicness,” a concept first developed by Hillary Sale, refers to the general social obligations a corporation is perceived to have toward the public in terms of transparency and regularity of operations.  Companies that conduct themselves poorly may find themselves pressured to reform by consumers, investors, and regulators, in part because they are viewed as having public obligations almost akin to those of governments.  Prof. Sale explores, for example, the case of JP Morgan Chase and the London Whale scandal.

Uber is a private company, but as its various recent troubles demonstrate (and demonstrate and demonstrate and…),it is increasingly viewed through the lens of publicness – and is responding…

I watched with interest the battle at Exxon over a shareholder proposal requesting that the company provide more detailed disclosures about the risks posed by the Paris climate accord.  Last year, the same proposal won 38.1% of the vote; this year, prior to the vote at Exxon, shareholders at Occidental Petroleum approved a similar proposal.  Moreover, Blackrock and State Street have recently declared that they want to see more corporate disclosures about the impact of climate change.

As a result, things at Exxon were unusually heated.  Reportedly, Exxon was lobbying shareholders in advance of the vote.  The matter presumably was particularly sensitive because Exxon is being investigated by the NY and Mass AGs regarding the accuracy of its climate change disclosures to investors.

As this was going on, of course, it became increasingly clear that Trump was planning to withdraw the United States from the Paris accord.  Now, it’s not obvious what immediate impact that withdrawal has on companies like Exxon – after all, most other countries remain committed, and Exxon does business internationally.  Still, it raised the question:  Would shareholders decide the matter was less important, now that the US had essentially declared a…

    One of my favorite casebook problems involves a general partnership and the interesting question of whether a one-partner “partnership” is possible.  Consider the following:  Polly and Peter are the only partners of a general partnership with an express term of ten years. After two years of operation, Peter notifies the partnership that he is withdrawing as a partner. Is dissolution of the partnership now required? If not, what is the status of the remaining business?

    (A good portion of the below discussion and all of the case citations were taken from the excellent article, Partners Without Partners:  The Legal Status of Single Person Partnerships, 17 Fordham J. Corp. & Fin. L. 449, by Professors Robert W. Hillman and Donald J. Weidner.)

    Is there such a thing as a partnership with only one partner?  Under RUPA, Peter has dissociated by express will under § 601.  It is a term partnership, so dissolution is not required under § 801(1).  Unless Polly wants to dissolve the partnership, dissolution is also not required under § 801(2).  Section 801 states that a partnership is dissolved “only” upon the occurrence of the events listed in § 801; thus, it would appear that a buyout is…

I’m always looking for quirky evidence of market efficiency – or market inefficiency – to share with my students.  For example, there’s the Cuba Beverage thing, and the Trump tweets thing. 

And now, there’s the fake news thing:

As a video circulated that appeared to partially absolve President Donald Trump in the administration’s Russian meddling scandal on trading floors on Thursday, stocks surged for the first time in days on the apparent breaking news.

The video, it turns out, was actually two weeks old, misleadingly edited with the intention of falsely accusing former FBI director James Comey of perjury—and was initially aired by conspiracy website InfoWars on Thursday around noon.

Trump wasn’t cleared. In fact, since the video had been around since May 3rd, nothing had changed at all. But by the time traders found out, the dollar index had spiked anyway.

The fallout of the story is leaving analysts wondering how to absorb information in a market that is suddenly waiting on bated breath for the latest rumors to come out of the White House—even when those rumors are intentionally misleading or untrue.

…

In other words, the news can be fake, but the rally it

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