The Yale Law Journal

Corporate Law

Note

Reinterpreting Corporate Inversions: Non-Tax Competitions and Frictions

Inho Andrew Mun

Corporate inversions have drawn outrage from all segments of society. In an inversion, a company reincorporates abroad to escape its U.S. tax burden. Regulators and academics have typically sought tax law solutions to curb tax inversions. However, the resulting tax regu…

Forum

Their Bark Is Bigger Than Their Bite: An Essay on Who Bleeds When the Wolves Bite

Jonathan Macey

Delaware Chief Justice Leo Strine is of the view that America is in terrible shape. Specifically, he identifies deep problems in the fabric of American society, which include “growing income inequality, inflated executive pay, job losses, [and] wage stagnation.” Having noted these problems, Strine l…

Forum

Hedge Fund Activism, Short-Termism, and a New Paradigm of Corporate Governance

Steven A. Rosenblum

Chief Justice Strine’s important article, Who Bleeds When the Wolves Bite?, brings a much-needed perspective to the modern corporate governance debate. Chief Justice Strine looks at the corporate governance world through the lens of what he calls the “human investors,” i.e., the ordinary individuals…

Feature

Who Bleeds When the Wolves Bite? A Flesh-and-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System

Leo E. Strine, Jr.

Few topics are sexier among commentators on corporate governance now than whether activist hedge funds are good for, a danger to, or of no real consequence to public corporations and the people who depend upon them. As befits tradition in this space, catchy pejorat…

Article

Corporate Control and Idiosyncratic Vision

Zohar Goshen & Assaf Hamdani

This Article offers a novel theory of corporate control. It does so by shedding new light on corporate-ownership structures and challenging the prevailing model of controlling shareholders as essentially opportunistic actors who seek to reap private benefits at the expense of minor…

Comment

Unpacking Wolf Packs

Carmen X.W. Lu

Wolf-pack activism has surged in the past three years. A wolf pack is composed of a group of activist investors working in unison to gain control of corporate boards.1 These activist investors collectively buy stock in a public company and then leverage their aggregate stake to influence …

Forum

Locked In: The Competitive Disadvantage of Citizen Shareholders

Anne M. Tucker

Introduction Indirect investors—especially mutual fund investors—are often low-dollar, low-incentive, rationally apathetic investors facing enormous information asymmetries and collective action problems. These traits raise difficult corporate governance questions about how indirect i…

Forum

Ritchie v. Rupe and the Future of Shareholder Oppression

James Dawson

In 1988, the Texas Court of Appeals held in Davis v. Sheerin that minority shareholders in close corporations are entitled to a buy-out of their shares if they are “oppressed” by the majority shareholders.1 Davis synthesized other states’ case law in order to arrive at a two-part test …

Comment

The JOBS Act and Middle-Income Investors: Why It Doesn’t Go Far Enough

James J. Williamson


122 Yale L.J. 2069 (2013).

Comment

Corporate Purposes in a Free Enterprise System: A Comment on eBay v. Newmark

David A. Wishnick


121 Yale L.J. 2405 (2012).

Note

Cross-National Patterns in FCPA Enforcement

Nicholas M. McLean


121 Yale L.J. 1970 (2012).

This Note undertakes an empirical examination of U.S. enforcement actions under
the Foreign Corrupt Practices Act (FCPA) in order to explore the cross-national patterns
associated with the United States’ international antibribery enforcement. I investigate a number
of possible…

Note

Common Control and the Delineation of the Taxable Entity

Michael Aikins


121 Yale L.J. 624 (2011).

This Note proposes a solution to what has been one of the most vexing problems in state corporate taxation and in multijurisdictional taxation generally: the delineation of the scope of the entity that an individual jurisdiction is entitled to tax. Starting from the observa…

Forum

Citizens Not United: The Lack of Stockholder Voluntariness in Corporate Political Speech

Elizabeth Pollman

The Yale Law Journal Online is reissuing Elizabeth Pollman's Citizens Not United: The Lack of Stockholder Voluntariness in Corporate Political Speech in light of recent developments at the Supreme Court. With the Supreme Court hearing a new round of oral arguments in Citizens United v. Federal Elec…

Note

Comparative Corporate Criminal Liability: Exploring the Uniquely American Doctrine Through Comparative Criminal Procedure

Edward B. Diskant

118 Yale L.J. 126 (2008).


In the United States, corporations—as entities—can be criminally tried and convicted for crimes committed by individual directors, managers, and even low-level employees. From a comparative perspective, such corporate liability marks the United States as relatively uniqu…

Forum

Oops! Racism as Mistake: Lessons from Corporate Law

Richard Delgado

In Minorities, Shareholder and Otherwise, Anupam Chander points out that the law treats discrimination by corporate insiders against minority shareholders with suspicion. Yet discrimination against ordinary minorities, in buying or selling a house or applying for a job, for example, receives increas…

Forum

There Is No Affirmative Action for Minorities, Shareholder and Otherwise, in Corporate Law

Stephen M. Bainbridge

In Minorities, Shareholder and Otherwise, Anupam Chander argues that, unlike constitutional law, “corporate law places minorities at the heart of its endeavor.” Central to his project is an empirical claim that corporate law has an “elaborate framework” for “protecting minority interests i…

Forum

Minorities, Immigrant and Otherwise

Kevin R. Johnson

Anupam Chander’s article Minorities, Shareholder and Otherwise brilliantly offers a “conservative” justification for a U.S. constitutional law truly dedicated to fairness and justice for all. It does so by counterintuitively looking to the bottom-line-oriented world of corporate law. This comm…

Forum

Response: Corporate Law’s Distributive Design

Anupam Chander

Minorities, Shareholder and Otherwise makes two novel claims: that corporate law places protection of minority shareholders at the heart of its endeavor; and that this minority-mindfulness should have even greater purchase in constitutional contexts. My retelling of the corporate law narrative coupl…

Note

Profits as Commercial Success

Andrew Blair-Stanek

117 Yale L.J. 642 (2008).

Courts often use the extent of a patented invention’s commercial success as crucial nontechnical proof of the patent’s validity. Relying on misguided economic reasoning, most courts use revenue as the primary yardstick for commercial success. This Note argues that courts i…

Review

Wealth Without Markets?

Lior Jacob Strahilevitz

116 Yale L.J. 1472 (2007) 

The Wealth of Networks: How Social Production Transforms Markets and Freedom

BY YOCHAI BENKLER

NEW HAVEN: YALE UNIVERSITY PRESS, 2006. PP. 528. $40.00

Forum

The Organizational Guidelines: R.I.P.?

Peter J. Henning

In a recent issue of this Journal, Timothy A. Johnson argues that Congress may not make the Federal Sentencing Guidelines provisions on the sentencing of organizations (the “Organizational Guidelines”) mandatory because United States v. Booker guarantees the constitutional right of corporations…

Forum

The Power of the Corporate Charging Decision over Corporate Conduct

Christopher A. Wray & Robert K. Hur

 

Forum

Executives Do Not Need Waivers and Companies Should Not Offer Them: A Response to Mark Kressel

Victor J. Rocco

Although Mark Kressel’s proposal is novel, provocative, and even enticing, it is ultimately unnecessary and unworkable to suggest that a corporation and its high-level executives should agree, at the very commencement of their relationship, to waive the corporation’s attorney-client privilege wh…

Article

The Corporate Origins of Judicial Review

Mary Sarah Bilder

116 Yale L.J. 502 (2006)

This Article argues that the origins of judicial review lie in corporate law. Diverging from standard historical accounts that locate the origins in theories of fundamental law or in the American structure of government, the Article argues that judicial review was the continu…

Note

Contractual Waiver of Corporate Attorney-Client Privilege

Mark A. Kressel

116 Yale L.J. 412 (2006)

A corporate director, sued in her individual capacity in connection with corporate malfeasance, often seeks to raise the defense that she relied on the advice of the corporation's counsel that the proposed course of conduct was legal. A litigation impasse may arise, however, …

Essay

Quasipublic Executives

K.A.D. Camara & Paul Gowder

115 Yale L.J. 2254 (2006)

In this Essay, we first observe the rise of what we call "quasipublic executives": both "nominally private executives," that is, private executives in charge of public functions such as corrections, education, and national defense; and "nominally public executives," that is,…

Note

For-Profit and Nonprofit Charter Schools: An Agency Costs Approach

John Morley

115 Yale L.J. 1782 (2006)

This Note applies agency costs theory to explain charter schools' use of for-profit and nonprofit forms, and to suggest ways to make charter school regulation more sensitive to the differences between these forms. Borrowing from Henry Hansmann's "contract failure" theory of …

Comment

Student Derivative Lawsuits

Adam Kyle Kaufman

115 Yale L.J. 1471 (2006)

In this Comment, I argue that states could help avert financial scandals like the one at American University by adopting rules less protective of university boards. Specifically, I propose that states subject all nonprofit university boards to the same fiduciary standards as…

Note

Bridging the Book-Tax Accounting Gap

Celia Whitaker

115 Yale L.J. 680 (2005)

The book-tax accounting gap allows corporations to minimize their earnings for tax purposes while maximizing them in reports to investors, all within the letter of the law. Although the U.S. Treasury has reported the rising divergence between book and taxable income with alar…

Article

Fixing Freezeouts

Guhan Subramanian

115 Yale L.J. 2 (2005)

Freezeout transactions, in which a controlling shareholder buys out the minority shareholders, have occurred more frequently since the stock market downturn of 2000 and the Sarbanes-Oxley Act of 2002. While freezeouts were historically executed as statutory mergers, recent Dela…

Article

The Sarbanes-Oxley Act and the Making of Quack Corporate Governance

Roberta Romano

114 Yale L.J. 1521 (2005)

This Article provides an evaluation of the substantive corporate governance mandates of the Sarbanes-Oxley Act (SOX) of 2002 that is informed by the relevant empirical accounting and finance literature, and of the political dynamics that produced the mandates. The empirical …

Essay

Bargaining in the Shadow of Takeover Defenses

Guhan Subramanian

113 Yale L.J. 621 (2003)

For decades, practitioners and academic commentators who believe that target boards should have broad discretion to resist hostile takeover attempts have put forward the "bargaining power hypothesis" to support their view. This hypothesis states that a target with strong tak…

Article

How To Fix Wall Street: A Voucher Financing Proposal for Securities Intermediaries

Stephen J. Choi & Jill E. Fisch

113 Yale L.J. 269 (2003)

Securities market intermediaries reduce the collective action problem facing investors in the capital markets. Analysts provide securities research. Proxy advisory firms assist investors in determining how to vote their shares. Even shareholders bringing proxy contests can be…

Essay

Minorities, Shareholder and Otherwise

Anupam Chander

113 Yale L.J. 119 (2003)

"[M]en are described as I think they are," Adolf Berle writes of his work, "rather than as they think they are." He continues: "Some will be shocked. The businessman will find that he is a politician and a commissar--perhaps even a revolutionary one. The liberal finds himsel…

Review

The Politics of Corporate Governance Regulation

Peter A. Gourevitch

112 Yale L.J. 1829 (2003)

Why do corporate governance systems differ quite substantially around the world? The American model supervises managers through a board representing a diffuse mass of external shareholders whose rights are defended by a variety of institutional rules (such as those governing…

Article

Coase's Penguin, or, Linux and The Nature of the Firm

Yochai Benkler

112 Yale L.J. 369 (2002)

For decades our common understanding of the organization of economic production has been that individuals order their productive activities in one of two ways: either as employees in firms, following the directions of managers, or as individuals in markets, following price si…

Essay

Vigorous Race or Leisurely Walk: Reconsidering the Competition over Corporate Charters

Lucian Arye Bebchuk & Assaf Hamdani

112 Yale L.J. 553 (2002)

Does American corporate law work effectively to enhance shareholder value? The recent corporate governance crisis makes this time as good as any for reexamining the basic structure of this body of law. This Essay provides such a reconsideration of a defining feature of U.S. c…

Article

A Dilution Mechanism for Valuing Corporations in Bankruptcy

Barry E. Adler & Ian Ayres

111 Yale L.J. 83 (2001)

This Article proposes a new mechanism for valuing firms in bankruptcy. Under the "senior dilution" mechanism, a court would dilute the reorganized stock issued to senior claimants by issuing additional shares to junior claimants until there was no excess demand for the stock a…

Article

The Rise of Dispersed Ownership The Roles of Law and the State in the Separation of Ownership and Control

John C. Coffee Jr.

111 Yale L.J. 1 (2001)

Deep and liquid securities markets appear to be an exception to a worldwide pattern in which concentrated ownership dominates dispersed ownership. Recent commentary has argued that a dispersed shareholder base is unlikely to develop in civil-law countries and transitional econo…

Article

The Essential Role of Organizational Law

Henry Hansmann & Reinier Kraakman

110 Yale L.J. 387 (2000)

In every developed market economy, the law provides for a set of standard-form legal entities. In the United States, these entities include, among others, the business corporation, the cooperative corporation, the nonprofit corporation, the municipal corporation, the limited …