Jonathan Macey and Joshua Mitts have a new article, The Three Justifications for Piercing the Corporate Veil, forthcoming in the Cornell Law Review.  The article smartly employs empirical research of judicial opinions to shed light on the long-convoluted and “mysterious” doctrine of corporate veil piercing.  According to the abstract, the article:

[D]evelop[s] a new theoretical taxonomy which postulates that veil-piercing decisions fall into three categories: (1) achieving the purpose of a statutory or regulatory scheme, (2) preventing shareholders from obtaining credit by misrepresentation, and (3) promoting the bankruptcy values of achieving the orderly, efficient resolution of a bankrupt’s estate. We analyze the facts of several veil-piercing cases to show how the outcomes are explained by the three theories we put forth and show that undercapitalization is rarely, if ever, an independent grounds for piercing the corporate veil. In addition, we employ modern quantitative machine learning methods ….to analyze the full text of 9,380 judicial opinions. We demonstrate that our theories systematically predict veil-piercing outcomes, the widely-invoked rationale of “undercapitalization” of the business poorly explains these cases, and our theories most closely reflect the textual structure of the opinions.

-Anne Tucker

Emory is hosting its Teaching Transactional Law and Skills Conference on June 6-7th.  The theme is “Educating the Transactional Lawyer of Tomorrow.”  Proposals are being accepted through March 17th, and additional information about the conference is available here:  Download 2014.Emory.Conf.CFP. 

I attended this conference about 18 months ago and found it to be an incredibly rich dialogue about teaching business related courses.  I walked away with aspirational ideas for  future development as well as concrete elements to implement in Contracts, Corporations and Unincorporated Business Associations (our small business planning class).

-Anne Tucker

On Wednesday, the Supreme Court heard oral arguments in Halliburton Co. v. Erica P. John Fund, Inc., 13-317 (Halliburton II), where it was being urged to overturn, or curtail, the fraud on the market presumption approved in Basic, Inc. v. Levinson (1988).  Judging by the transcript, and as numerous reports indicated, it seems as though the Justices were attracted to the idea of tweaking Basic to require that plaintiffs prove the “market impact” of a particular false statement.  Most surprisingly, although this was the fallback position urged by the defendants, it was also endorsed by Malcolm Stewart of the Solicitor General’s office, who was nominally arguing on the plaintiff’s side.  Though one can never tell what will happen in the end, it does seem like this may be the direction in which the Court is headed – and if so, it could have significant implications for fraud-on-the-market cases in the future.

[More under the cut]

I previously mentioned a conference on crowdfunding being held at the University of Cincinnati on March 28, and promised to provide a link to the conference announcement when it became available. It’s here.

This should be an interesting conference; some of the leading experts on securities crowdfunding are going to be speaking. And it’s not just academics; the list of speakers includes practitioners, regulators, and people from the crowdfunding industry. (I’m speaking, but you can take a coffee break to avoid that.)

If you can’t make it to Cincinnati, the conference will also be webcast. Of course, you’ll miss out on that weird chili and spaghetti concoction that people in Cincinnati eat.

The University of St. Thomas Law Journal hosts its spring symposium on April 11, 2014 on the issue of Sustainable Financial Regulation.  Registration is available here, and the the list of speakers is top-notch including Roberta Romano, Steven Schwarcz, Eric Gerding, Richard Painter, Claire Hill and Jennifer Taub.  Kudos to Wulf Kaal, a fellow corporate law professor at St. Thomas,  for putting together a very promising panel on experts.

-Anne Tucker

On Sunday, the Boston Globe published a cogent, concise and compelling op-ed by Kent Greenfield  on the issue of religious exemptions for corporations as raised in the Hobby Lobby case.

Professor Greenfield argues that corporations can have a conscious, but that corporations should not use religion to avoid regulations — and thus gain a competitive advantage — “claims of religious conscience could liberate companies to become bad actors in the economy and society at large. Instead of sacrifice, corporate conscience could devolve to sacrilege.”

In last week’s post, I took a similar position in my post on Hobby Lobby, “More or Less?”.

-Anne Tucker

On Wednesday, the Supreme Court decided 7-2 that the victims of Allen Stanford’s Ponzi scheme could pursue state law class action claims against those who allegedly aided and abetted him (.pdf) – most notably, the law firms of Chadbourne & Park and Proskauer Rose.  But the opinion still leaves several questions unanswered, and it’s impossible not to read Troice without trying to tea leaf the Justices’ inclinations in Halliburton.

[Read more after the jump]