The following position posting was provided to us via e-mail:

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RUTGERS UNIVERSITY SCHOOL OF LAW (CAMDEN CAMPUS) invites applications from entry-level and lateral candidates for one or more tenure-track or tenured faculty positions. Possible areas of particular interest include, but are not limited to, corporate law, corporate governance, commercial law, securities regulation, and other areas of business law. We will consider candidates with an interest in building upon our newly devised Certificate Program in Corporate/Business Law. All applicants should have a distinguished academic background and either great promise or a record of excellence in both scholarship and teaching. We encourage applications from women, people of color, persons with disabilities, and others whose background, experience, and viewpoints would contribute to the diversity of our faculty. Contact: Professor Arthur Laby, Chair, Faculty Appointments Committee; Rutgers University School of Law; 217 North Fifth Street; Camden, NJ; 08102; alaby@rutgers.edu. Rutgers University is committed to a policy of equal opportunity for all in every aspect of its operations.

Readers of this blog know I am fond of writing about Henry Ford and the Dodge v. Ford case (PDF here).  This summer, I am still working my way through Fordlandia, by Greg Grandin.  It’s a really interesting read.  

Henry Ford had plans to build a town in the Amazon that would run like an ideal American town.  The industry would be rubber for car tires, and he was sure he could make a town that produced rubber AND moral people.  He was wrong.  

The book provides more about Ford than just his Amazon city planning. It highlights all sorts of what I will call “interesting” ideas Ford had (many of the quite appalling), and it provides context for a person who was far more interesting and disruptive than many people appreciate.  A good summary of the book is available from NPR here, where the author explains:

“Ford basically tried to impose mass industrial production on the diversity of the jungle,” Grandin says. But the Amazon is one of the most complex ecological systems in the world — and didn’t fit into Ford’s plan. “Nowhere was this more obvious and more acute than when it came to rubber production,” Grandin says.

Ford was so distrustful of experts that he never even consulted one about rubber trees. If he had, Grandin says, he would have learned that plantation rubber can’t be grown in the Amazon. “The pests and the fungi and the blight that feed off of rubber are native to the Amazon. Basically, when you put trees close together in the Amazon, what you in effect do is create an incubator — but Ford insisted.”

As Grandin explains, Ford’s plans are a lasting disaster: 

[T]he most profound irony is currently on display at the very site of Ford’s most ambitious attempt to realize his pastoralist vision. In the Tapajós valley, three prominent elements of Ford’s vision—lumber, which he hoped to profit from while at the same time finding ways to conserve nature; roads, which he believed would knit small towns together and create sustainable markets; and soybeans, in which he invested millions, hoping that the industrial crop would revive rural life—have become the primary agents of the Amazon’s ruin, not just of its flora and fauna but of many of its communities.

Despite my love of the business judgment rule, it’s hardly surprising that Ford was one of the folks who didn’t get its protection. Stories like this give us some idea why.  

My law school, the University of Nebraska, is hiring. Here are the details:

Entry-Level or Experienced Faculty Position

The UNIVERSITY OF NEBRASKA COLLEGE OF LAW invites applications for entry-level and lateral candidates for one or more tenure-track or tenured faculty positions. Our curricular needs include Business Associations, Evidence, Wills and Trusts, and Civil Procedure. Other needs include courses related to

  • Criminal Law (e.g., Federal Criminal Law or White Collar Crime, Criminal Procedure 2, Post­Conviction Remedies, or Criminal Sentencing);
  • Health Care (e.g., Federal Regulation of Health Care Providers, Health Care Finance, Torts, Administrative Law, Medical Malpractice, Privacy Law, Law and Medicine, Public Health Law, Bioethics and the Law, and the Law of Provider and Patient);
  • Litigation Skills and Related Courses (e.g., Trial Advocacy, Civil Rights Litigation, Pretrial Litigation or other litigation skills courses, Conflicts of Laws);
  • Business Law (e.g., Corporate Finance, Corporate Governance, Insurance Law, Bankruptcy, Corporate Restructuring, Nonprofit Organizations, Risk Management / Compliance, or White Collar Crime);
  • Patent Law and International Intellectual Property;
  • Family Law;
  • Education Law; and
  • Election Law.

Minimum Required Qualifications: J.D Degree or Equivalent, Superior Academic Record, Demonstrated Interest in Relevant Substantive Areas. Title of Asst/Assoc/or Full Professor will be based on qualifications of applicant.  Please fill out the University application, which can be found at http://employment.unl.edu/postings/45473, and upload a CV, a cover letter, and a list of references.  General information about the Law College is available at http://law.unl.edu/. The University of Nebraska-Lincoln is committed to a pluralistic campus community through affirmative action, equal opportunity, work-life balance, and dual careers.  Review of applications will begin on August 20, 2015, and continue until the position is filled. Contact Associate Dean Richard Moberly, Chair, Faculty Appointments Committee, University of Nebraska College of Law, Lincoln, NE 68583-0902, or send an email to lawappointments@unl.edu.

 Civil Clinical Position

The UNIVERSITY OF NEBRASKA COLLEGE OF LAW invites applications for entry-level and lateral candidates for a tenure-track faculty position to teach in its Civil Clinic. The position may also include teaching a classroom law school course on evidence, pretrial litigation, trial advocacy, or related subjects. In Fall 2016, Nebraska Law will open a new, state-of-the-art clinic building to house all of its clinics together.
Minimum Required Qualifications: J.D Degree or Equivalent, Superior Academic Record, Demonstrated Interest in Relevant Substantive Areas. Title of Asst/Assoc/or Full Clinical Professor will be based on qualifications of applicant.  General information about the Law College is available at http://law.unl.edu/. Please fill out the University application, which can be found at http://employment.unl.edu/postings/45475, and upload a CV, a cover letter, and a list of references. The University of Nebraska‑Lincoln is committed to a pluralistic campus community through affirmative action, equal opportunity, work-life balance, and dual careers. Review of applications will begin on August 20, 2015 and continue until the position is filled. Contact Associate Dean Richard Moberly, Chair, Faculty Appointments Committee, University of Nebraska College of Law, Lincoln, NE 68583-0902, or send an email to lawappointments@unl.edu.

 

I’m not on our Appointments Committee, but feel free to contact me if you have any questions, particularly about our business law needs.

Joan Heminway’s post last week about comparative corporate law  got me thinking about international coverage in my own courses. Joan’s post reviewed a book designed for a stand-alone comparative corporate law course, but I’ve been wondering whether we should include more comparative material in the basic business associations and securities regulation courses.

The case for discussing the corporate and securities law of other countries is clear. Capital markets are becoming increasingly global. U.S. companies are selling securities in other countries and U.S. investors are investing in foreign companies. Initially, globalization affected primarily large multinational companies, but with the expanding use of the Internet to sell securities, even the smallest business can offer securities to investors in other countries.

Under the internal affairs rule, it’s the corporate law of the country of incorporation that’s important, no matter where the lawyer is practicing or where the corporation or the shareholder is located. And a company selling securities to investors outside the U.S. needs to consider the effect of other countries’ securities laws. Foreign counsel may be retained to deal with such issues, but shouldn’t the U.S. lawyer have at least a rudimentary understanding of foreign corporate and securities laws and how they differ from U.S. law?

I spend no time on comparative analysis in either my business associations or my securities regulation course.

I could blame the textbook authors. The book I use in Business Associations includes almost nothing about corporate law outside the United States. That’s typical. Franklin Gevurtz has written a wonderful supplement on comparative corporate law, Global Issues in Corporate Law, but business associations casebooks generally ignore comparative issues.

The book I use for Securities Regulation covers the application of U.S. registration requirements and antifraud rules to transactions outside the United States, but it doesn’t discuss foreign securities law. (A prior edition did, but that material was eliminated from the most recent edition.) This book’s approach is also typical. Other securities regulation casebooks cover the extraterritorial application of U.S. law, but offer little or no comparative analysis of the law of other jurisdictions.

The casebook authors ought to do more, but that’s an inadequate excuse. I include a lot of supplemental material that isn’t in the textbook, especially in Business Associations. It wouldn’t be too hard for me to create supplemental material to add a comparative perspective to my courses.

Perhaps this is just one of those areas where I have fallen into the rut of teaching what my professors taught me. My memory may be faulty, but I don’t recall any international coverage when I took those courses 30+ years ago—which is interesting, because my Corporations professor, Detlev Vagts, was a noted international law scholar.

But it’s mostly an issue of time. At most law schools, corporate and securities law is crammed into a few credit hours, unlike constitutional law other, more favored subjects I won’t name. I, like most corporate law teachers, don’t have the luxury of adding topics. It’s hard enough to cram agency, partnership, limited partnership, limited liability companies, corporations, and some securities law into a single four-hour Business Associations course.

Nevertheless, I’m going to review my coverage carefully and see if I can sneak in more comparative materials. In today’s global environment, even students in Nebraska ought to be exposed to at least some foreign corporate and securities law.

As you may have seen elsewhere already (but just to make it abundantly clear):

THE UNIVERSITY OF TENNESSEE COLLEGE OF LAW invites applications from both entry-level and lateral candidates for as many as two full-time, tenure-track faculty positions to commence in the Fall Semester 2016. The College is particularly interested in the subject areas of business law, including business associations and contracts; gratuitous transfers/trusts and estates; and health law. Other areas of interest include legal writing, torts, and property.

A J.D. or equivalent law degree is required. Successful applicants must have a strong academic background. Significant professional experience is desirable. Candidates also must have a strong commitment to excellence in teaching, scholarship, and service.

In furtherance of the University’s and the College’s fundamental commitment to diversity among our faculty, students body, and staff, we strongly encourage applications from people of color, persons with disabilities, women, and others whose background, experience, and viewpoints would contribute to a diverse law school environment.

The Faculty Appointments Committee will interview applicants who are registered in the 2015 Faculty Appointments Register of the Association of American Law Schools at the AALS Faculty Recruitment Conference in Washington, D.C. Applicants who are not registered in the AALS Faculty Appointments Register are advised to send a letter of interest, resume, and the names and contact information of three references by September 30, 2015 to:

Sean Gunter
On behalf of Becky Jacobs and Michael Higdon
Co-Chairs, Faculty Appointments Committee
The University of Tennessee College of Law
1505 W. Cumberland Avenue
Knoxville, TN 37996-1810

All qualified applicants will receive equal consideration for employment and admissions without regard to race, color, national origin, religion, sex, pregnancy, marital status, sexual orientation, gender identity, age, physical or mental disability, or covered veteran status. Eligibility and other terms and conditions of employment benefits at The University of Tennessee are governed by laws and regulations of the State of Tennessee, and this non-discrimination statement is intended to be consistent with those laws and regulations. In accordance with the requirements of Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act of 1990, The University of Tennessee affirmatively states that it does not discriminate on the basis of race, sex, or disability in its education programs and activities, and this policy extends to employment by the University. Inquiries and charges of violation of Title VI (race, color, and national origin), Title IX (sex), Section 504 (disability), ADA (disability), Age Discrimination in Employment Act (age), sexual orientation, or veteran status should be directed to the Office of Equity and Diversity (OED), 1840 Melrose Avenue, Knoxville, TN 37996-3560, telephone (865) 974-2498. Requests for accommodation of a disability should be directed to the ADA Coordinator at the Office of Equity and Diversity.

I hope a number of our readers will be interested in applying.  Feel free to contact me if you have questions or need more information (although please note that I am not on the Faculty Appointments Committee).

The Halliburton district court finally issued its decision on the plaintiffs’ renewed motion for class certification – and I’m afraid it’s exactly as incoherent as the most pessimistic predictions might have anticipated.  See Erica P. John Fund, Inc. v. Halliburton Co., 309 F.R.D. 251 (N.D. Tex. 2015).

The district court recognized that, after Halliburton I, it was prohibited from making loss causation determinations as part of the class certification inquiry.  However the district court did hold that if there is no price movement in response to an alleged disclosure (and there is also no price movement when the misstatement is first made), that fact establishes there was no artificial inflation originally. 

In other words, the court believed that the absence of affirmative evidence of price inflation is evidence of absence, and sufficient to carry the defendants’ burden to prove that any misstatements had no effect on prices.  (To be fair, from the opinion, it appears the plaintiffs themselves urged this position).

The court went on to find that the Halliburton defendants had shown there was no price movement on almost all of the alleged corrective disclosure dates – and so class certification would be denied as to those dates.  However, because there was price movement for one disclosure date – December 7, 2001, the last day of the proposed class period – class certification would be granted as to that date.

The problem is, the plaintiffs were seeking class certification for all persons who purchased Halliburton stock from the start of the fraud until the end of the fraud.  The court’s ultimate determination – that one disclosure date was sufficient and others were not – tells the reader nothing about what class can be certified, as though the court had forgotten the entire purpose of the exercise.  I suppose we’ll find out the class definition if an order follows, but for now, the opinion sheds almost no light on that subject.

[More under the jump]

Continue Reading Halliburton – have we learned nothing?

Mozaffar Khan, George Serafeim, and Aaron Yoon of Harvard Business School have posted an interesting working paper entitled Corporate Sustainability: First Evidence on Materiality. The abstract follows:

An increasing number of companies make sustainability investments, and an increasing number of investors integrate sustainability performance data in their capital allocation decisions. To date however, the prior academic literature has not distinguished between investments in material versus immaterial sustainability issues. We develop a novel dataset by hand-mapping data on sustainability investments classified as material for each industry into firm-specific performance data on a variety of sustainability investments. This allows us to present new evidence on the value implications of sustainability investments. Using calendar-time portfolio stock return regressions we find that firms with good performance on material sustainability issues significantly outperform firms with poor performance on these issues, suggesting that investments in sustainability issues are shareholder-value enhancing. Further, firms with good performance on sustainability issues not classified as material do not underperform firms with poor performance on these same issues, suggesting investments in sustainability issues are at a minimum not value-destroying. Finally, firms with good performance on material issues and concurrently poor performance on immaterial issues perform the best. These results speak to the efficiency of firms’ sustainability investments, and also have implications for asset managers who have committed to the integration of sustainability factors in their capital allocation decisions.

The authors’ materiality determination is based on industry-specific guidance from the Sustainability Accounting Standards Board (SASB). I have been following SASB’s work for some time now, but would still like to learn more about the organization if any of our readers have more detail than is available online. 

Last week I attended a panel discussion with angel investors and venture capitalists hosted by Refresh Miami. Almost two hundred entrepreneurs and tech professionals attended the summer startup series to learn the inside scoop on fundraising from panelists Ed Boland, Principal Scout Ventures; Stony Baptiste, Co-Founder & Principal, Urban.Us, Venture Fund; Brad Liff, Founder & CEO, Fitting Room Social, Private Equity Expert; and (the smartest person under 30 I have ever met) Herwig Konings, Co-Founder & CEO of Accredify, Crowd Funding Expert. Because I was typing so fast on my iPhone, I didn’t have time to attribute my notes to the speakers. Therefore, in no particular order, here are the nuggets I managed to glean from the panel.

1) In the seed stage, it’s more than an idea but less than a business. If it’s before true market validation you are in the seed round. At the early stage, there has been some form of validation, but the business is not yet sustainable. Everything else beyond that is the growth stage.

2) The friend and family round is typically the first $50-75,000. Angels come in the early stage and typically invest up to $500,000.

3) The seed rounds often overlap with angels and businesses can raise from $500,000 to $1,000,000. If you have a validated part of a business model but are not self funding then you are at Series A investment stage.  You still need outside capital despite validation. The Series A round often nets between $3-5 million and then there are subsequent rounds for growth until the liquidity event which is either the IPO or acquisition.

4) Venture capitalists are investing their LPs’ money and often the LP will co-invest with the VC. Their ultimate goal is for the company to get acquired or go public.

5) At the early stages some VCs will show a deal to other investors if it looks good. Later stage VCs will become more competitive and will keep the information and good deals to themselves.

6) It’s important to find a lead investor or lead angel to champion your idea.

7) Not all funding is helpful. Some panelists discussed the concepts of “fallen angels” or “devils,” which were once helpful but now are not providing value but still take up time and energy that could be better spent focusing on building the business. “False angels” are those who could never have been helpful in the first place.

8) You don’t want to be the first or the last check the angel is writing. You want to get references on the angel investor and see where they have invested and what their plan is for you.

9) There is smart money and dumb money. Smart money gives money and additional resources or value. Dumb money just gives money and nothing else. It’s passive and doesn’t jump into the business (note the panelists disagreed as to whether this was a good or bad thing). Another panelist noted the distinction between helpful and harmful money. Harmful people think they are helpful and give advice when they don’t have a lot to add but take up a lot of time. Sometimes helpful money just gives a check and then gets out of the way. It’s the people in between that can cause the problems.

10) VCs and angels invest in teams as well as ideas. They look for the right fit and a mix of veteran entrepreneurs, a team/product fit, a mix of technical and nontechnical people, professionals whose reputations and resumes can be verified. They want to know whether the people they are investing in have been in a competitive environment and have learned from success or failure.

11) Crowdfunding can be complicated because investors don’t meet the entrepreneurs. They see everything on the web so the reputation and the need for a good team is even more important.

12) Convertible notes are the “gold standard” according to one speaker and it’s the workhorse for funding. There was some discussion of safe notes, but most panelists didn’t have a lot of experience with them and that was echoed this week by attorney David Salmon, who advises small businesses and holds his own monthly meetups. One panelist said that the sole purpose of safe notes was to avoid landmines that can blow up the company. Another panelist indicated that from an investor standpoint it’s like a blackhole because it’s so new and people don’t know what happens if something goes wrong.

13) The panelists indicated that businesses need to watch out for: the maturity date for their debt (how long is the runway); when can the investors call the note and possibly bankrupt the company; how will quirky covenants affect the next round of financing and where later investors will fall in line; and covenants that are easy to violate.

14) There was very little discussion of Regulation A+ but it did raise some interest and the possibility to raise even more funds from non-accredited investors. Only 3% of the eight million who can invest through crowdfunding actually do, so Reg A+ may help with that.

16) All of the panelists agreed that entities may start out as LLCs but they will have to convert to a C Corp to get any VC funding.

There was a lot more discussion but this post is already too long. Because I’ve never been an angel nor sought such funding, I don’t plan to provide any analysis on what I’ve typed above. My goal in attending this and the other monthly events like this was to learn from the questions that entrepreneurs ask and how the investors answer. Admittedly, most of my students won’t be dealing with these kind of issues, but I still introduce them to these concepts so they are at least familiar with the parlance if not all of the nuances.

My friend and corporate law colleague Marco Ventoruzzo (Penn State Law and Bocconi University) recently let me know that he and several others–Pierre-Henri Conac, Gen Goto, Sebastian Mock, Mario Notari, and Arad Reisberg–have published a coauthored teaching text entitled (and focused on) Comparative Corporate Law.  As someone who has taught that subject (as well as comparative and cross-border mergers and acquisitions) in the past, I have been very interested in taking a look at the book–the first of its kind, as far as I know.  Luckily, I was able to grab a review copy from the publisher, West Academic Publishing (American Casebook Series), at the Southeastern Association of Law Schools (SEALS) conference, which I am attending this week.  This post shares a bit about the book (based on a relatively quick examination–peeking more closely into some chapters than others) and my ideas for teaching from it.  

I recommend the book and would use it in a course I would teach on the subject matter.  The content is really wonderful.  Nearly everything I need as a foundation for a course in comparative or cross-border corporate law is included.  However, I have a few general criticisms, primarily based on my personal teaching perspective, that I will note in this post.

Continue Reading Comparative Corporate Law – Important New Teaching Text