Dear BLPB Readers:

Texas State University invites applications for a full-time, endowed tenured faculty position at the rank of professor. We seek outstanding candidates from all areas of business with a distinctive expertise and focus on business ethics and corporate responsibility. The appointee is expected to have a nationally recognized research record, pursue continuing research and scholarship, and provide disciplinary expertise, innovation, and leadership. The McCoy College is interested in recruiting an individual who can embrace and enhance the vision of a diverse, collegial, and productive academic environment.

Responsibilities:
• Develop a nationally and internationally recognized research program, including extramural grant funded research, that addresses business challenges through the prism of ethics and corporate responsibility.
• Conduct and collaborate on high quality research leading to publications in top-tier journals.
• Develop and teach courses at the undergraduate and graduate levels, including online offerings, that highlight the ethical and social dimensions of business management.
• Enhance the integration of business ethics, sustainability, and corporate social responsibility into the College’s curricular and co-curricular learning experiences.
• Provide thought leadership and share insights through scholarly engagement with diverse groups including faculty, students, and external communities.
• Serve as an excellent faculty role model who inspires, encourages, and mentors colleagues and students.
• Contribute to college and university initiatives by sharing disciplinary expertise.

The complete job posting is here.

I thought I’d essentially copy the idea behind co-blogger Joshua Fershee’s post from yesterday (thanks, Josh!) and share with readers that my new short article, Clearinghouse Shareholders and “No Creditor Worse Off Than in Liquidation” Claims is now available!  Similarly, my article is a combination of a prior post and my presentation at the fourth annual Business Law Prof Blog Symposium.  Here’s its abstract:

Clearinghouses are the centerpiece of global policymakers’ 2009
framework of reforms in the over-the-counter derivative markets in
response to the 2007–08 financial crisis. Dodd-Frank’s Title VII
implemented these reforms in the U.S. More than ten years have now
passed since the establishment of this framework. Yet much work
continues on outstanding issues surrounding the recovery and
resolution of a distressed or insolvent clearinghouse. This Article
examines one of these issues: the possibility of clearinghouse
shareholders raising no creditor worse off than in liquidation claims
in resolution. It argues that such claims are nonsensical and should
be unavailable to clearinghouse shareholders. This would decrease
moral hazard in and promote the rationalization of the global
clearing ecosystem for derivatives.

I also want to encourage BLPB readers to review the perceptive commentary by Professor Thomas E. Plank on my article (here). Finally, I’d like to thank the Transactions law review student editors for their excellent work! 

I recently received the final version of my short article, “The Benefits and Burdens of Limited Liability,” in Transactions: The Tennessee Journal of Business Law.  The article is based on some of my prior blog posts, as well as my presentation as part of the fourth annual Business Law Prof Blog symposium, Connecting the Threads. It was great event, as always, thanks to Joan and the whole crew at Tennessee Law, and it was my pleasure to be part of it.  

Here’s the abstract: 

Law students in business associations and people starting businesses often think the only choice for forming a business entity is a limited liability entity like a corporation or a limited liability company (LLC). Although seeking a limited liability entity is usually justifiable, and usually wise, this Article addresses some of the burdens that come from making that decision. We often focus only on the benefits. This Article ponders limited liability as a default rule for contracts with a named business and considers circumstances when choosing a limited liability entity might not communicate what a business owner intends. The Article notes also that when choosing an entity, you get benefits, like limited liability, but burdens (such as need for counsel or tax consequences) also attach. It’s not a one-way street. The Article closes by urging courts to consider both the benefits and burdens of an entity choice, especially in considering whether to uphold or disregard an entity, to help parties achieve some measure of certainty and equity.

The journal also has thoughtful and insightful commentary from Professor George Kuney (available here) and student Tyler Ring (here). 

 

 

BLPB(MemorialDay2021)Image by Jackie Williamson from Pixabay 

Notwithstanding the sales, barbecues, parades, concerts, and the like, at its true core, Memorial Day is a day of solemn reflection.  Those who enter military service for our country deserve our respect and praise.  Those who die in the line of that service hold a special place in our hearts and minds.

If you are at a loss for how to acknowledge this special holiday and show your regard for those it honors, you may be interested in reading the suggestions posted here.  But your gratitude can be shown in so many ways every day, not just on Memorial Day (although it is good to have the holiday as a reminder).  Remember those who served and died, and give thanks for (and, where possible, to) those who served and lived to tell the tale.  (We’ll celebrate the latter directly later in the year, of course.)

Grading done?  Join in for an engaged, energizing day with fellow business law profs to start the summer.

Grading not done?  This is sure to be a fun and enlightening distraction–better than house cleaning or laundry!

Not grading at all (you lucky ducky)?  Clear the decks of other impediments and come join us for what always is a super day filled with teaching tips and catalysts for scholarship and service.

+++++

REGISTER NOW! CONFERENCE IS JUNE 4th!

Emory Law’s 7th biennial conference on the teaching of transactional law and skills is just a few days away! Register here and join us on Friday, June 4th. (Note: The Registration Fee for this one-day, online conference is $50.) A copy of the Conference schedule is posted here.

Connect with transactional law and skills educators across the country to ponder our theme – “Emerging from the Crisis: The Future of Law and Skills Education.” You’ll hear illuminating keynote addresses from three leaders in our field – Joan MacLeod Heminway, Marcia Narine Weldon, and Robert J. Rhee. And you’ll participate in exciting presentations and try-this exercises designed to help us all become better teachers.

At day’s end, we’ll hold a Vision Workshop to synthesize our vision for the future. We’ll also announce the winner of the Tina L. Stark Award for Excellence in the Teaching of Transactional Law and Skills, chosen from a group of illustrious nominees.

Special Note: The State Bar of Georgia has approved our conference for four CLE credits. We will provide attendance certificates for other states.

SIU Law is hiring one full-time visiting faculty position to begin on August 16, 2021.  Please see the job announcement below. 

Position Summary: Southern Illinois University School of Law is an outstanding small public law school that provides its students with an optimal mix of theoretical and experiential educational opportunities in a student-centered environment in order to prepare them for a changing legal profession in a global environment. SIU School of Law seeks to fill one full-time visiting faculty position to begin on August 16, 2021. The anticipated term of appointment is two 9-month academic terms. The appointment will be structured as a 9-month academic term, renewable for a second 9-month academic term contingent on satisfactory performance. The successful candidate will teach courses in Torts, Constitutional Law, Family Law, Corporations, and/or Legal Writing, as well as other courses depending on the needs of the School of Law and on the successful candidate’s area of expertise. Academic rank will depend on academic credentials and experience of the selected individual.

Duties and Responsibilities: Classroom instruction and other duties as assigned by the Dean.

Minimum Qualifications: Applicants must possess a Juris Doctor degree from an ABA-accredited law school or its equivalent.

For appointment at the rank of Visiting Assistant Professor, applicants must have an outstanding law school academic record as assessed by rank in class, participation on law review, participation in other co-curricular activities such as moot court, honors received, and other factors relevant to academic performance.

For appointment at the rank of Visiting Associate Professor or Visiting Professor, applicants must have an established track record of teaching and scholarship excellence commensurate with the advanced rank.

Preferred Qualifications: Law teaching experience; outstanding professional record; the ability to further the University’s commitment to inclusive excellence—cultural and professional competency, inclusion, and diversity in the classroom.

General Information: Please use the following link to apply https://jobs.siu.edu/jobdetails?jobid=12030

Deadline to Apply: 6/11/21

SIU Carbondale, member of the SIU System, is an anti-racist community that opposes racism, discrimination and inequity in any form, and embraces diversity, inclusion, equity, and justice for all people. SIU Carbondale is an Affirmative Action/Equal Opportunity Employer of individuals with disabilities and protected veterans that strives to enhance its ability to develop a diverse faculty and staff and to increase its potential to serve a diverse student population. All applications are welcomed and encouraged and will receive consideration.

Please use the following link to apply:  https://jobs.siu.edu/job-details?jobid=12030 

The biggest corporate news this week is about sustainability.  A Dutch court ordered Shell Oil to reduce its carbon emissions by 45% by 2030; 61% of Chevron shareholders voted to ask the company to substantially reduce its Scope 3 greenhouse gas emissions, while 48% voted in favor of greater lobbying disclosure, and disclosure of the effect of net zero by 2050 on its business and finances, and, of course, at Exxon, not only did an activist win at least 2 board seats over sustainability demands, but shareholders also supported proposals calling for greater lobbying disclosure.  And, earlier this month, shareholders at ConocoPhillips and Phillips 66 voted in favor of proposals to set emissions targets.

Unsurprisingly given the outcomes, BlackRock and Vanguard supported some of the Exxon dissident nominees, and also supported the successful Exxon shareholder proposals.  State Street supported some of the Exxon dissidents as well, though I don’t know if it’s reported its stance on the shareholder proposals.  BlackRock also voted in favor of the successful Chevron proposal.

Given the stunning success of shareholder environmental activism at the oil giants, then, it comes as a disappointment that it appears the deadline has passed for Congress to undo the SEC’s recent amendments to Rule 14a-8.  Senator Sherrod Brown introduced a resolution to revoke the changes, but no further action was taken.  These amendments to 14a-8 make it much harder for shareholders – especially smaller shareholders – to submit proposals, which is an issue because, though proposals are often supported by institutional investors, it’s retail shareholders who have traditionally taken the laboring oar of introducing and promoting them (although, when it comes to social/environmental proposals, a lot of specialty investors like religious organizations and SRI funds also introduce them).

On this, I have to point out that the Big Three – BlackRock, Vanguard, and State Street – were supporters of the new Rule 14a-8 restrictions.  Vanguard did so openly; BlackRock and State Street tried to play it close to the vest, but, as I explained in my draft chapter on ESG investing (see note 49), the Investment Company Institute supported the amendments, and it’s highly unlikely it would have done so without BlackRock and State Street’s buy-in.  In other words, BlackRock and State Street apparently sought to maintain their “sustainability” bona fides without publicly admitting they wanted to neuter shareholder ESG activism.  And it wouldn’t surprise me if the preferences of BlackRock, Vanguard, and State Street had something to do with Congress’s failure to act on Senator Brown’s resolution calling for the 14a-8 amendments’ repeal.

Point being, despite the headlines about the Big Three’s newfound support for sustainability, their commitments are fragile, and more than anything else, they seem to want to avoid being forced to take public positions on these matters in the first place.

I just returned from my first “in-person” scholarly workshop since the onset of the pandemic. The event, “Introduction to the Economics of Information, Advertising, Privacy, and Data Security,” was hosted by the George Mason University Antonin Scalia Law School’s Law & Economics Center (LEC). The workshop took place at the Omni Amelia Island Resort—just outside of Jacksonville, Florida.

After a warm welcome from the LEC’s Director, Henry N. Butler, the program launched into nine sessions over three days:

  • Introduction to Economics of Information
  • Signaling/Screening/Mandated Disclosures
  • Theories of Advertising, Substantiation, and Optimal Remedies
  • Economics of Privacy
  • Algorithmic Bias
  • Economics of Data Security
  • Big Data, Privacy, and Antitrust
  • First Amendment Issues
  • Social Media and Content Moderation.

The sessions were led by either Prof. Jane Bambauer, Prof. James C. Cooper, or Prof. John M. Yun. I’ve attended LEC workshops in the past, and have found them to be both rigorous and entertaining. This event was no exception. The assigned readings ranged from classic articles by Harold Demsetz and Jack Hirshleifer to contemporary pieces authored by the presenters and other leaders in the field. I learned a great deal and recommend future LEC workshops to anyone who may have the opportunity to participate.

But while I took a number of inspirations for future scholarship away from this workshop, I think I will remember this event most for offering the first opportunity, after a year and a half of “Zooming,” to get together with fellow scholars from around the country in person!

A number of us on the Business Law Prof Blog have written about how the pandemic has led to the discovery of wonderful new teaching and scholarly opportunities through online meeting spaces. The ability to meet “online” has certainly made me more accessible to my students (and vice versa), and I have participated in a number of conferences and panels that I would not have been able to attend even if pandemic-related travel restrictions were not in place. Nevertheless, this in-person event reminded me of the little big things that are gained by meeting in person. To note just a few:

  • New friendships made while waiting in line for a coffee
  • Philosophical discussions about the nature of language and sense perception over a good meal
  • Long walks with old friends along the beach
  • Meeting a fellow scholar at the pool who just happens to be working in the same area, and who would be perfect for the panel you are putting together…..

In sum, as wonderful as online platforms can be, there are many things about in-person meetings that are simply irreplaceable. I am grateful to George Mason and the LEC for offering me the first opportunity since the onset of the pandemic to be reminded of them.

A reminder that Emory’s 2021 conference on transactional law and skills education is next Friday, June 4, 2021. It is virtual and registration is only $50. Register here.

Today, I’m submitting a guest post by Professor Jen Randolph Reise of Mitchell Hamline School of Law.  On Friday the 11th, I’ll post my reflections from the Emory conference. Jen and I have bonded over our mission to bring practical skills into the classroom. Her remarks are  below:

I’m looking forward to hearing from many leaders in transactional legal education, including keynote speakers Joan MacLeod Heminway, Marcia Narine Weldon, and Robert J. Rhee on the theme of “Emerging from the Crisis: Future of Transactional Law and Skills Education.” Marcia will also be talking about her experience launching a transactional program at Miami, joined by three of her adjunct professors.

For my part, I’ll be presenting a Try-This session sharing how I have used exercises that integrate key technological resources and techniques into teaching doctrinal courses. I’ve written in this blog before in praise of practice problems, especially in the asynchronous or flipped classroom. These exercises take that one step farther by creating a self-paced, guided discovery and low-stakes practice of some skills and resources they will need to be transactional lawyers.

Specifically, participants in the Try-This session will be introduced to, and invited to try, three exercises I have created and used in Business Organizations and M&A:

1) a State Filings Exercise, which facilitates student discovery of their state’s business entity statutes and secretary of state filing site (for example, they learn how to form an LLC, and what information on LLCs is publicly accessible);

2) a Public Company Filings Exercise, which guides students through accessing and understanding the structure of public company SEC filings and how to retrieve pertinent information from EDGAR; and

3) a Working with Definitive Agreements Exercise, which introduces M&A students to drafting based on samples and from a term sheet, and requires them to learn to create a redline using Word’s Compare feature.

I’d love to have you attend on Friday and share your experiences and feedback. Or, feel free to contact me at jen.reise@mitchellhamline.edu or on Twitter @JensJourneyOn anytime for copies or to share ideas. As a transactional in-house lawyer, newly come to the academy, I’m passionate about students getting a foothold in the distinct perspective, skills, and technology they need to become successful transactional lawyers.

If you missed this past Monday’s Regulating Megabanks: A Conference in Honor of Art Wilmarth, don’t worry, it was recorded! I’ll keep BLPB readers posted about when the recorded webinar is available online [now available -see link at bottom of post!].  In the meantime, Professor Wilmarth has just posted a new working paper, Wirecard and Greensill Scandals Confirm Dangers of Mixing Banking and Commerce, to keep you busy until then!  Here’s the abstract:

The pandemic crisis has accelerated the entry of financial technology (“fintech”) firms into the banking industry. Some of the new fintech banks are owned or controlled by commercial enterprises. Affiliations between commercial firms and fintech banks raise fresh concerns about the dangers of mixing banking and commerce. Recent scandals surrounding the failures of Wirecard and Greensill Capital (Greensill) reveal the potential magnitude of those perils.

The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have encouraged commercial enterprises to acquire fintech banks. The FDIC has authorized commercial firms to acquire FDIC-insured industrial banks in reliance on a controversial loophole in the Bank Holding Company Act (BHC Act). The OCC is seeking to charter nondepository fintech national banks, which commercial firms could own under a separate exemption in the BHC Act. The FDIC’s and OCC’s initiatives undermine – and could potentially destroy – the BHC Act’s longstanding policy of separating banking and commerce.

The disasters at Wirecard and Greensill demonstrate the importance of maintaining a strict separation between banking and commerce. Regulators in Germany and other countries allowed banks controlled by Wirecard and Greensill to engage in risky and abusive transactions that benefited their parent companies and other related parties, including commercial firms connected to their major investors. Wirecard Bank provided financial support to its parent company and CEO, and it also made fraudulent transfers of funds to insiders and their controlled entities. Greensill Bank made preferential and unsound loans that benefited its parent company and leading investors. Greensill Bank securitized many of its reckless loans, and Greensill Capital sold the resulting asset-backed securities as “safe” and “liquid” investments to misinformed investors.

Regulators failed to take timely enforcement actions against Wirecard and Greensill because they did not exercise consolidated supervisory authority over the complex international structures created by both firms. In addition, Wirecard and Greensill built extensive networks of influence that produced significant political favors and regulatory forbearance in Germany and the U.K. The collapse of Wirecard and Greensill embarrassed government agencies and inflicted massive losses on investors, creditors, and other stakeholders.

The failures of Wirecard and Greensill provide clear warnings about the dangers of allowing fintechs to offer banking services while evading prudential regulatory requirements and supervisory standards that apply to traditional banks and their corporate owners. Regulators and policymakers should not allow fintechs’ claims of “innovation” to serve as a rationale for regulatory arbitrage and as camouflage for fraud. Both disasters show that high-tech firms engaged in banking and commercial activities are likely to create the same unacceptable hazards as previous banking-and-commercial conglomerates, including toxic conflicts of interest, reckless lending, dangerous concentrations of economic power and political influence, supervisory blind spots, and systemic threats to economic and financial stability.

Revised as of 5/28/2021: the recorded webinar of Regulating Megabanks a Conference in Honor of Art Wilmarth is now available on Youtube.