Iconic Cases in Corporate Law » (1st Edition)

Introduction     iii
Lynn Stout, Why We Should Stop Teaching Dodge v. Ford     1
Introduction     1
Dodge v. Ford on Corporate Purpose     2
Dodge v. Ford as Weak Precedent on Corporate Purpose     3
The Lack of Authority for Dodge v. Ford's Positive Vision of Corporate Purpose     4
The Lack of Authority for Dodge v. Ford's Normative Vision of Corporate Purpose     7
On the Puzzling Survival of Dodge v. Ford     9
Conclusion     10
Geoffrey Miller, A Glimpse of Society Via a Case and Cardozo: Meinhard v. Salmon     12
Introduction     12
Background     12
The Players     16
The Deal     19
The Fallout     20
The New York Court of Appeals and Cardozo     21
Post-Decision     24
Conclusion     27
James Cox & Eric Talley, Hope and Despair in the Magic Kingdom: In re Walt Disney Company Derivative Litigation     30
The Paycheck in the Courtroom     31
The Slow Defeat of Substance by Process     31
Demand Requirements and the Alchemy of Layered Process     34
The State Competition Dimension     36
Disney as a Culminating Event     37
The Judicial Windup     38
The Supreme Court Opinion     41
The Aftermath     42
Does Disney Mark a Sea Change for Fiduciary Law?     43
Jill Fisch, The Transamerica Case     46
Background to the Transamerica Case     47
The Transamerica Decision     50
Further Development of the Federal Proxy Rules     53
The Federally Delineated Shareholder Rule in Director Elections     63
Recent Developments in Shareholder Voting Rights     67
The Mechanics of the Voting Process     73
The Long Term Implications of Transamerica     76
Robert Thompson, Mapping Judicial Review: Sinclair v. Levien     79
The Parties and the Case     80
Mapping the Space for Judicial Decisions and Charting the Path That Courts Will Take in a Fiduciary Duty Case     84
How Far Should Parent Shareholders Be Able to Go in Controlling Their Subsidiary Corporations For Selfish Interests?     91
Conclusion     96
Douglas Moll, Protection of Minority Shareholders in Closely-Held Corporations: Donahue v. Rodd Electrotype Co.     98
Introduction     98
The Donahue Decision     101
Analysis and Discussion     104
Recognition of the Minority Shareholder's Plight     105
The Donahue Doctrine     105
The Shareholder-to-Shareholder Fiduciary Duty     105
The Equal Opportunity Rule     111
The Partnership Analogy     113
A Contrary Approach? The Nixon v. Blackwell Decision     115
Conclusion     119
Jonathan Macey, Judicial Review of Corporate Decisions: Kamin v. American Express Company     120
Introduction     120
Kamin v. American Express: Factual Background     121
Qualifying for and Applying the Business Judgment Rule     122
Qualifying for the Business Judgment Rule: A Plaintiff's Perspective     124
The Requirement that the Decision be Exclusively a Matter of the Business Judgment of the Board of Directors     125
The Allegation Issue: Complaints Really are Important     126
The Decision-making Process Employed by the Board     128
The Accounting, Economics and Finance of Kamin v. American Express     130
Digging Deeper: Some Quibbles With the U.S. Approach to Judicial Review of Corporate Decision-Making     135
Conclusion     138
Stephen Bainbridge, The Iconic Insider Trading Cases     139
The Insider Trading Prohibition Emerges     139
The Supreme Court Sets Limits      141
The Misappropriation Theory Emerges     144
Why the SEC Pushed the Misappropriation Theory     145
The Poor Fit Between Insider Trading and Securities Fraud     146
The Policy Basis For Regulating Insider Trading     149
O'Hagan     155
The Holding     156
Status of Central Bank and Santa Fe     157
O'Hagan and the Property Rights Rationale     159
David Skeel, Shareholder Litigation: The Accidental Elegance of Aronson v. Lewis     165
Introduction     165
The Early History of the Derivative Suit     167
Securities Class Actions And The Expanding Scope Of Securities Law     173
Zapata v. Maldonado     176
The Chancery Court Decision     178
Defining Demand Futility: The Supreme Court Decision     181
Do Derivative Suits Still Matter?     185
The Legacy of Aronson     186
The Plaintiff's Attorney Auction     189
Aronson and the Federal Securities Law Reforms     190
Conclusion     191
Vic Khanna, The Growth of the Fiduciary Duty Class Actions for Freeze Out Mergers: Weinberger v. UOP, Inc.     193
Freeze Out Mergers     194
Enter Weinberger v. UOP, Inc.      199
Are the Changes Wrought by Weinberger Desirable?     200
Cases Following Weinberger and Recent Controversies     203
Concluding Thoughts     208
Logan Beirne & Jonathan Macey, Out With the Bathwater: Erosion of Shareholders' Takeover Power     209
The Market For Corporate Control     211
The Emergence of the Tender Offer     212
Management Strikes Back: The Williams Act and Beyond     214
Emergence of the Modern Takeover: The Judiciary Is Next to Take Aim     215
Historical Context: The Barbarians Cometh     216
The Target Companies' Response: The Poison Pill Mechanism     218
The Trilogy Begins: Unocal     220
Unocal and the Prisoner's Dilemma     221
The Battle for Unocal     223
The Attack on the Poison Pill Widens: Moran     224
The Trilogy Capstone: Revlon Duties     225
Conclusion     228
Fred McChesney, The "Trans Union" Case: Smith v. Van Gorkom     231
Leveraged Buyouts     231
The Mechanics of a Leveraged Buyout     232
The Trans Union Leveraged Buyout     235
The Applicable Standard of "Gross Negligence"     239
Where Trans Union Directors Allegedly Went Wrong      240
Procedural Versus Legal Standards Governing the Trans Union Board     241
Expected Effects of Rejecting the Pritzker Offer: A Simple Model     244
Van Gorkom and the Contractual Theory of the Firm     252
Conclusion     256
Donald Langevoort, Investor Protection and the Perils of Corporate Publicity: Basic Inc. v. Levinson     257
Materiality     257
The Litigation     257
Some Questions     264
The Presumption of Reliance     270
Conclusion     276
Hillary Sale, Good Faith's Procedure and Substance: In re Caremark International Inc., Derivative Litigation     278
In re Caremark International, Inc., Derivative Litigation     280
Smith v. Van Gorkom and its Procedural Progeny     286
In re The Walt Disney Co. Derivative Litigation     288
Stone v. Ritter     289
"Red Flags"     292
Conclusion     293