Y’all could have guessed I’d be blogging about this, because it’s like someone created a corporate law honey pot just for me personally.

I’m a bit late to the party on the Ben & Jerry’s structure – I know social enterprise scholars have studied the Unilever/Ben & Jerry’s arrangement for years – but now that there’s a dispute, I am fascinated.

As I understand it, Ben & Jerry’s was a publicly traded company, with a multi-class stock structure that handed control to founders Ben Cohen and Jerry Greenfield.  Cohen and Greenfield were famously committed to the company’s social mission as well as its economic one, but the stock traded at an unimpressive dollar figure, making the company a tempting takeover target.  Eventually, Cohen and Greenfield agreed to sell to Unilever in an all-cash, two-step merger consisting of a tender offer on the front end and a voted merger on the back end.  (On the back end, Unilever had more than 90% of the company’s votes, so I gather the necessity of a voted merger was because Vermont – where the company was (and is) incorporated – either didn’t have a short form process or set the threshold higher…

Jürgen Kühling is the chair of Germany’s Monopolies Commission. The following is a hopefully interesting excerpt from a recent interview he did with ProMarket (here).

When the Federal Cartel Office blocks a merger in Germany, the merging parties can seek an exemption from the minister of economic affairs to clear the merger. And we had a case three years ago where companies argued that the merger would lead to sustainable efficiencies that would benefit the economy as a whole in such magnitude that the efficiencies would outweigh the merger’s adverse effect on competition completely. We had concluded that the alleged environmental public benefits were either not demonstrated or ultimately represented self-serving benefits. In general, we think such sustainable benefits that are in the consumers’ interest can already be addressed under the current competition law. All sustainability aspects that consumers do not value lie outside the scope of competition law, in our view, and require regulation.

Kühling then provided some additional details:

As I mentioned before, there was a merger in 2019 that came under ministerial review, which we advised the ministry of economics on as well. After a substantial assessment, we concluded that the merger would not have

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Over at Law & Liberty (here), John Berlau has posted a comment on Jarkesy v. SEC, in which the Fifth Circuit recently ruled that “(1) the SEC’s in-house adjudication of Petitioners’ case violated their Seventh Amendment right to a jury trial; (2) Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I’s vesting of ‘all’ legislative power in Congress; and (3) statutory removal restrictions on SEC ALJs violate the Take Care Clause of Article II.” Jarkesy v. Sec. & Exch. Comm’n, 34 F.4th 446, 449 (5th Cir. 2022). What follows is a brief excerpt from Berlau’s post, but please go read the whole thing.

Critics and proponents of the ruling by the U.S. Court of Appeals for the Fifth Circuit in Jarkesy v. SEC have called revolutionary the new limits it places on federal regulatory agencies’ use of administrative law judges, a core tool of the administrative state…. Jarkesy is indeed revolutionary—both in the jurisprudence it could usher in limiting the power of the administrative state and in its concern for issues involved in the American Revolution.

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The Delaware Supreme Court just decided an interesting new case, Diep v. Trimaran Pollo Partners et al., on director independence, over the dissent of Justice Valihura. 

El Pollo Loco is a publicly-traded restaurant chain controlled by Trimaran Pollo Partners, a holding company, which itself is controlled by private equity firm Trimaran Capital Partners, founded in part and controlled in part by Dean Kehler.  The plaintiff filed a derivative action alleging that after the IPO, El Pollo Loco received unfavorable news about the effects of certain price increases, and before this news was made public, several officers and directors – and Trimaran Pollo Partners – were permitted to sell stock.  Trimaran in particular did not receive written preclearance, in violation of the company’s insider trading policy.

After a different, earlier derivative action concerning the same events was filed, Kehler invited two new independent directors to join the board, Floyd and Lynton. Kehler had prior relationships with each – especially Lynton, with whom he had longstanding social ties – and when interviewing each, he mentioned the pending litigation.

Once they were on the board, the Diep case was filed, and the earlier derivative action voluntarily dismissed.  The company and the other…

Abortion is obviously one of our most divisive political issues. Thus, when corporate leaders make decisions related to abortion laws, such as moving out of a pro-life state (see, e.g., CEO: Duolingo will move operations should Pennsylvania ban abortion), a specter of political bias is arguably raised. One normative question that then arises is whether such a decision is sufficiently conflict-prone to warrant enhanced scrutiny, as I have argued here. There is certainly a shareholder-wealth-maximization case to be made for moving out of a pro-life state — specifically, the argument that high-value employees demand such action. But this determination should be supported by something more than trending Twitter comments or the personal biases of decision-makers. Corporate fiduciaries are required to consider all material information reasonably available, and where decision-making is sufficiently prone to conflicts of interest the accountability concerns of corporate governance should trump its protection of discretion.

As a perhaps related aside, one may compare the argument against state universities having official positions on whether the Constitution should be read as protecting abortion. As Prof. Leslie Johns noted in an e-mail she sent to the UCLA Chancellor following his related public statement asserting that Dobbs “is antithetical…

In February 2021, Samuel Gregg argued (here) that: “To expect the rest of the world simply to accept whatever stakeholder-corporatist insiders have decided to be the new global consensus on any given topic seems disconcertedly utopian. It also increases the possibility of more populist backlashes on an international level.”

Yesterday, George Will published an op-ed in the Washington Post that appears to capture some more of this sentiment. You should go read the whole thing (here), but here is a brief excerpt:

The New York Times recently interviewed two advocates of ESG investing. One said, in effect, that only such investing fulfills fiduciary obligations because the welfare of those whose money is being used depends on “a planet that is livable.” Meaning: Politically enlightened ESG advocates know what unenlightened investors would want if they were as intelligent and virtuous as the advocates. The other ESG enthusiast the Times interviewed said “social justice investing” is “the deep integration of four areas: racial, gender, economic and climate justice.” And the “single-issue CEO” — the kind focused on maximizing shareholders’ value — is “not the way of the future.” This is often the progressives’ argument-ending declaration: Non-progressives are on

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Joel Slawotsky has published The Impact of Geo-Economic Rivalry on U.S. Economic Governance: Will the United States Incorporate Aspects of China’s State-Centric Governance?, 16 Va. L. & Bus. Rev. 559 (2022). An excerpt:

China’s corporate governance model emphasizes an extensive governmental role in the construction of economic markets. The paradigm consists of an economic-political syndicate of collaborative actors creating profit but whose critical core mission is to advance state objectives as defined by the ruling authority, the CCP. Economic interests thus serve political interests pursuant to a template of state direction and partnership with the private sector encompassing share ownership; industrial policies; governmental representatives embedded in the private sector; and discipline imposed for failing to comply with syndicate rules…. [S]ome in the U.S. political establishment are in favor of more governmental control to prevent corporate abuse …. To a remarkable degree, the dissatisfaction is already being manifested by attempts to engender greater government involvement in U.S. central bank policy by expanding the Federal Reserve’s (“the Fed”) mandate to encompass a wider spectrum of goals to address social justice objectives…. Moreover, efforts to expand the Fed’s mandate to encompass social goals should also be viewed in the context of proposals

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