Corporate Philanthropy and Financially Distressed Firms: Part II
The fourth installment of the series examines the legal framework that governs charitable donations by financially distressed corporations. It reviews fiduciary duties, case precedent such as *AP Smith Mfg. v. Barlow*, and statutory limits on philanthropy when a firm faces insolvency. The post highlights how courts balance shareholder intent with creditor protection. It concludes with practical guidance for directors navigating charitable commitments during financial distress.
Redditors For Quarterly Reporting
The U.S. Securities and Exchange Commission has issued a proposed rule that would let listed companies choose semi‑annual instead of quarterly financial reporting. The suggestion has drawn sharp criticism from the Reddit community r/wallstreetbets, which argues that quarterly 10‑Qs give...
Memo to Chairman Paul Atkins Re Rule 14a-8 Reform
The memo to Chairman Paul Atkins challenges the efficacy of Rule 14a‑8, arguing that it enables low‑stake activists to clutter proxy statements with proposals that lack economic substance. It highlights that most proposals receive little shareholder support and that there...
Revisiting Citizens United II: The Corporate Governance Implications
The post revisits the landmark Citizens United decision through the lens of the late corporate law scholar Larry Ribstein. It highlights Ribstein’s seminal works, especially his article on the First Amendment and corporate governance, and his book The Rise of...
Looking Back at Citizens United Part 1: The Case
The article revisits the landmark 2010 Supreme Court decision in Citizens United v. Federal Election Commission, outlining the case’s origins, legal arguments, and the Court’s 5‑4 ruling that corporate political spending is protected speech under the First Amendment. It details...
The Appalling State of the Ordinary Business Grounds for Excluding a Shareholder Proposal
In Dinapoli v. BJ’s Wholesale Club Holdings, D. Mass., Judge Leo Sorokin granted an injunction forcing BJ’s to include a New York State Comptroller‑sponsored ESG proposal in its 2026 proxy, despite the company’s reliance on the ordinary‑business exclusion under Rule...
The Economics of Team Production
The piece uses a Wall Street Journal golf supplement as a lens to explore political heterogeneity on corporate boards, treating the board as a team‑production unit. It highlights that board members often span a range of ideologies, which can affect...
A Brief History of Limited Liability Under California Corporate Law
The California Constitution once required each shareholder to be personally liable for a proportion of a corporation’s debts, as outlined in Article XII, § 3. That provision was repealed on November 4, 1930, ushering in limited liability for shareholders. California’s adoption of limited liability...
Caremark and Proxy Fraud Liability for Material Deficiencies in the Board’s Oversight of Management and Internal Controls
Mega Bank Holding Co. settled federal securities‑fraud and banking‑regulation claims for $1.7 billion, admitting that non‑compliant loans were packaged into residential mortgage‑backed securities. Shareholders have combined derivative and class actions alleging the company’s proxy statements falsely claimed the board provided adequate...
Miscellany
Professor Stephen Bainbridge posted a two‑part analysis of the Delaware case Witmer v. Armistice Capital, LLC, examining how insider‑trading claims intersect with state corporate law. Lauren Pringle of The Chancery Daily highlighted the series in her newsletter, noting the omission...
Can Federal Courts Exercise Powers Assigned to the Delaware Chancery Court?
The article examines whether U.S. federal courts sitting in diversity can exercise director‑removal powers typically reserved for state courts, citing the Van Steenwyk decision. The court affirmed that federal equity jurisdiction is bounded by historic principles and cannot be expanded by...
Witmer V. Armistice Capital, LLC: Part 1
The article traces insider‑trading law from its early roots in state corporate fiduciary duties to today’s dominance by the SEC, while noting that state statutes still matter. Delaware boasts the most sophisticated state‑law framework, and the Delaware Supreme Court is...
Divesting University Endowments for Social/Political Reasons: Part 1
Two recent law review articles by Northwestern’s Max Schanzenbach and Harvard’s Robert Sitkoff examine the legal landscape of university endowment divestment driven by non‑financial motives. One paper outlines the legal challenges and potential liabilities of politically motivated divestment, while the...
The Stock Market and AI
Wall Street’s recent AI anxiety sparked a sharp selloff in software stocks, pushing many private tech firms to postpone IPOs as investors anticipate a handful of mega‑offerings to dominate the market. A viral Citrini Research report amplified fears, warning that...
Can Private Litigation Hold Auditors to Account?
The episode examines the rising trend of private litigation as a tool to hold audit firms accountable, sparked by concerns over potential SEC Chairman Paul Atkins' moves to weaken the PCAOB. Host Francine McKenna references her Substack post and discusses...