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BUSINESS ORGANIZATIONS II Syllabus & Supplementary Materials

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BUSINESS ORGANIZATIONS II Syllabus & Supplementary Materials BUSINESS ORGANIZATIONS II Syllabus & Supplementary Materials Fall Semester 2015 Professor Kenneth B. Davis, Jr. 262-0962 [email protected] Room 9107; Office Hours – Tuesday, 4:00-5:00 & Wednesday, 4:00-5:00 Course Materials Allen, Kraakman & Subramanian, Commentaries and Cases on the Law of Business Organization (Aspen Casebook Series – 4th ed. 2012) (“AK&S”) Allen, Kraakman & Subramanian, 2012-2013 Statutory Supplement (“Stat. Supp.”) Davis Supplementary Materials (Attached) (“KBD Supp.”) Assignment # OVERVIEW #1. Sources and Structure of Corporate Law a. State Corporation Law; Domestic versus Foreign Corporations – AK&S pp. 81-94; KBD Supp. pp. 1-3; Central Metals Problem ¶¶ 1,2; Model Business Corporation Act (“MBCA”) § 15.05; California Corporation Code § 2115 b. Charter & Bylaws; Exclusive Forum Provisions – AK&S pp. 94-97; KBD Supp. pp. 3-8; Central Metals Problem ¶ 3; Delaware General Corporation Law (“DGCL”) §§ 102, 109, 115; MBCA § 10.20. Also, please look over the Certificate of Incorporation and Bylaws of Twitter, Inc. (KBD Supp. Appendix, following p. 137) #2. Levels of Corporate Decision Making a. Board of Directors – AK&S pp. 102-111; Badger Labs Problem (KBD Supp. pp. 8- 10) ¶¶ 1, 2, 3(a)-(b); DGCL § 141(a)-(c),(f),(g),(i) b. Officers – AK&S pp. 111-114; DGCL § 142; Badger Labs Problem ¶ 3(c) c. Shareholders – KBD Supp. pp. 11-19; DGCL §§ 109; Badger Labs Problem ¶4 SHAREHOLDER VOTING & THE PROXY RULES #3. Issues under State Law a. Shareholder Meetings & Election Contests i. Unfireable CEO Problem – AK&S pp. 158-159; KBD Supp. p. 19; DGCL §§ 109(a), 242(b)(1), 275 ii. Electing & Removing Directors – AK&S pp. 156-160; DGCL §§ 141(d),(k), 214, 223 iii. Shareholder Meetings – AK&S pp. 160-161; DGCL §§ 211, 213(a), 228(a); MBCA §§ 7.02(a), 7.04(a) iv. Proxy Voting, Information Rights & Beneficial Ownership – AK&S pp. 161-162; KBD Supp. p. 20; AK&S pp. 162-165, 166-168; KBD Supp. pp. 20-21; AK&S pp. 189-191; DGCL §§ 113, 212(b)-(e), 220(b) v. Quorum & Voting Requirements – DGCL § 216 b. Share Voting Rights – DGCL §212(a) i. Class Voting – AK&S pp. 165-166; DGCL § 242(b)(2); MBCA § 10.04 ii. Circular Voting – AK&S pp. 168-175; DGCL § 160(c) iii. Vote Buying – AK&S pp. 175-183 iv. Alternative Control Structures (Including Dual-Class Stock) – AK&S pp. 183-186; KBD Supp. pp. 22-23; *NYSE Rule 313(A) (“Stat. Supp. p. 544) #4. Federal Proxy Rules a. Application of the Securities Exchange Act of 1934 (“1934 Act”) – 1934 Act §§ 12(a),(g)(1), 13(a); KBD Supp. pp. 23-26 b. Overview and Scope of the Proxy Rules – AK&S pp. 191-194; 1934 Act § 14(a); 1934 Act Rules 14a-1(f),(l), 14a-2(b)(2) c. Antifraud Rules; Implied Private Rights; Duty of Candor – KBD Supp. pp. 26-27; AK&S pp. 206-215; 1934 Act Rule 14a-9 d. Proxy Advisers; Broker Voting – KBD Supp. pp. 27-33; 1934 Act Rule 14a- 2(b)(3); *Dodd-Frank Act of 2010 (“Dodd-Frank”) § 957 (Stat. Supp. p. 576) - 2 - e. Shareholder Proposals – AK&S pp. 195-196; 1934 Act Rule 14a-8 i. Social Responsibility Proposals – AK&S pp. 203-205 ii. Corporate Governance Proposals 1. TarPERS Problem – AK&S pp.194-195; KBD Supp. pp 33-34 2. Communications with Shareholders – 1934 Act Rules 14a- 1(l)(2)(iv), 14a-2(b)(1), 14a-6 (g), 14a-12 3. Withhold Campaigns; Majority Voting – AK&S pp. 196-200; 1934 Act Rule 14a-4(b)(2); DGCL §§ 141(b), 216(3), last ¶; MBCA §§ 7.28(a), 8.05(b),(e), 10.22 4. Short-Slate Proxy Contests – KBD Supp. p. 35; 1934 Act Rules 14a-3, 14a-4(d), 14a-6(a),(b), 14a-7(a),(b),(e); DGCL 220(b) 5. Proxy Access – KBD Supp. pp. 36-41; AK&S pp. 202-203; 1934 Act Rule 14a-8(i)(8); DGCL § 112 DUTIES & LIABILITY OF DIRECTORS #5. Duty of Care – Business Judgment Rule a. AKS pp. 217-220, 227-232 b. AKS pp. 232-234, 532-539; DGCL § 141(e) c. AKS pp. 265-268 #6. Duty of Loyalty – Self-Dealing a. Disclosure & Fairness – AKS pp. 276-281; DGCL § 144; *ALI Principles of Corporate Governance (“ALI”) § 5.02 (Stat. Supp. p. 346); *Regulation S-K, Item 404(a) (Stat. Supp. p. 490) b. Approval by Disinterested Directors or Shareholders – AKS pp. 281-295; KBD Supp. pp. 41-42; DGCL § 144 c. Recent Developments – KBD Supp. pp. 42-45; MBCA §§ 8.60-8.63; #7. Duty of Loyalty – Corporate Opportunities – AKS pp. 313-316; KBD Supp. pp. 45-51; DGCL § 122(17); *ALI § 5.05 #8. Duty of Care – Oversight – AKS pp. 236-265 #9. Indemnification, Insurance and Statutory Immunity – AKS pp. 221-227, 234-236; KBD Supp. p. 51; DGCL §§ 102(b)(7), 145 - 3 - #10. Good Faith – AKS pp. 356-365; DGCL § 102(b)(7) SHAREHOLDER LAWSUITS #11. Overview – AKS pp. 367; *Federal Rule of Civil Procedure 23.1 (Stat. Supp. p. 364) a. Attorneys’ Fees – AKS pp. 370-375 b. Policy Debate – AKS pp. 375-379, 414-415; KBD Supp. pp. 52-54; Federal Rule of Civil Procedure 23.1; c. Direct vs. Derivative Suits – AKS pp. 367-370; *ALI § 7.01(d) #12. Special Litigation Committees (“SLCs”) – AKS pp. 392-410; MBCA § 7.44 #13. Pre-Suit Demand – KBD Supp. pp. 54-58; AKS pp. 379-392; MBCA §§ 7.42, 7.43; *ALI § 7.03 #14. Settlement – AKS pp. 410-414 EXECUTIVE COMPENSATION #15. Background & Policy Debate – AKS pp. 329-333; KBD Supp. pp. 59-63; AKS pp. 339-343 #16. Judicial Review – AKS pp. 343-356; *Sarbanes-Oxley Act of 2002 § 402 (Stat. Supp. p. 529) #17. Compensation Discussion & Analysis (“CD&A”); Say on Pay – Dodd-Frank §§ 951, 953, 956; *Regulation S-K, Item 402; KBD Supp. p. 63 #18. Director Compensation – KBD Supp. pp. 64-69 TRANSACTIONS IN CONTROL #19. Duties of Controlling Shareholders – AKS pp. 295-300; *ALI § 5.10 #20. Sale of Control Blocks – AKS pp. 417-430 #21. Sale of Office; Looting – KBD Supp. pp. 69-71; AKS pp. 439-443 #22. Variations on the Theme – AKS pp. 432-439; KBD Supp. pp. 71-75 #23. Federal Law Considerations a. Tender Offers & the Williams Act – AKS pp. 443-445, KBD Supp. pp 75-90, AKS pp. 445-449; 1934 Act §§ 13(d), 14(d),(e); 1934 Act Rules 13d-1(a)-(c), 14d-3, 14d- 4(a), 14d-7, 14d-8, 14d-9, 14d-10, 14e-1, 14e-2, 14e-5 b. Hart-Scott-Rodino – AKS pp. 449-451 - 4 - MERGERS & ACQUISITIONS #24. Background – AKS pp. 453-462 #25. Transaction Structure a. Asset Sales – AKS pp. 462-467; DGCL §§ 271, 272; MBCA § 12.02(a) b. Stock Sales; Share Exchanges & Short-From Mergers – AKS pp. 467-468; DGCL § 253; MBCA § 11.03 c. Mergers – AKS pp. 469-480; DGCL § 251; KBD Supp. 90-92; MBCA §§ 6.21(f), 10.04, 11.04(f),(g); New York Stock Exchange Listed Company Manual § 312.03 #26. Protecting Minority Shareholders a. Appraisal – AKS pp. 480-487, 300-308; KBD Supp. pp. 92-97; DGCL § 262; MBCA §§ 13.01, 13.02 b. De Facto Mergers – AKS pp. 487-491 c. Fairness Review – AKS pp. 491-495 i. From Kahn to M&F Worldwide – KBD Supp. pp. 97-98; AKS pp. 496- 500; KBD Supp. pp. 98-106 ii. Two-Step Tender Offers – AKS pp. 502-510 d. 1934 Act Issues – AKS pp. 630-636; 1934 Act Rules 10b-5, 13e-3 CONTESTS FOR CONTROL #27. Takeovers & Defenses a. Defensive Tactics – AKS pp. 511-532, 275-276; Pennsylvania Business Corporation Law of 1988 § 1715 [KBD Supp. pp. 106-107] b. State Anti-Takeover Statutes – AKS pp. 587-594; KBD Supp. 107-112; AKS pp. 431-432; DGCL § 203 c. Recent Developments – AKS pp. 601-605; KBD Supp. pp. 112-115 #28. The Revlon Doctrine & Deal Protection a. Van Gorkom & Revlon – AKS pp. 532-545 b. Time-Warner – AKS pp. 545-553 c. QVC – AKS pp. 533-567; KBD Supp. p. 116 d. Lyondell – AKS pp. 567-574 - 5 - e. Deal Protection – AKS pp. 574-587 f. C&J Energy Services – KBD Supp. pp. 116-122 #29. Proxy Contests – AKS pp. 594-605; KBD Supp. pp. 122-123 INSIDER TRADING #30. State Law – AKS pp. 607-618 #31. Short-Swing Profits – AKS pp. 618-621; 1934 Act § 16(a),(b) #32. Policy Debate – AKS pp. 679-684; KBD Supp. pp. 123-124 #33. Rule 10b-5 – 1934 Act Rule 10b-5 a. “Classical” Insider Trading – AKS pp. 621-630 b. Tippees – AKS pp. 636-650; KBD Supp. pp. 124-130 c. Misappropriation – AKS pp. 650-662, 667-668; KBD Supp. pp. 130-131; 1934 Act Rules 10b5-1, 10b5-2, 14e-3; Regulation FD d. Private Recovery; Elements of Liability; – AKS pp. 662-669; KBD Supp. pp. 131- 137; AKS pp. 674-679 - 6 - SUPPLEMENTARY MATERIALS FOREIGN CORPORATIONS PROBLEM – CENTRAL METALS PROCESSING CORP. Central Metals Processing Corp. is a Delaware corporation with its headquarters and factory facilities located in Wisconsin. The majority of its shareholders reside in Wisconsin, Chicago or the Twin Cities. ¶ 1. Does Delaware of Wisconsin law govern the following? (Assume that in each case Delaware imposes fewer restrictions than Wisconsin.) a) Voting rights of Central’s shareholders. b) Fiduciary duty of Central’s directors. c) Air quality standards applicable to Central’s factory. d) Employment rights of Central’s workers. ¶ 2. Would the answers to any of these issues differ if Central is located in California rather than Wisconsin? ¶ 3.
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