| Table of Cases |
|
xv | |
| Introduction |
|
xix | |
| Chapter 1 The Nature and Purpose of the Corporation |
|
3 | (60) |
|
|
|
3 | (2) |
|
Section 1: The Nature of the Corporation |
|
|
5 | (1) |
|
|
|
5 | (1) |
|
Section 2: The Purpose of the Corporation |
|
|
6 | (22) |
|
|
|
6 | (7) |
|
|
|
13 | (2) |
|
A.P. Smith Mfg. Co. v. Barlow |
|
|
15 | (5) |
|
|
|
20 | (1) |
|
The American Law Institute Principles of Corporate Governance: Analysis and Recommendations |
|
|
21 | (7) |
|
|
|
28 | (1) |
|
Section 3: Who Counts within the Corporation? |
|
|
28 | (17) |
|
Steinway v. Steinway & Sons |
|
|
28 | (3) |
|
|
|
31 | (1) |
|
|
|
32 | (2) |
|
|
|
34 | (1) |
|
Jedwab v. MGM Grand Hotels, Inc. |
|
|
35 | (2) |
|
|
|
37 | (3) |
|
|
|
40 | (1) |
|
Burwell v. Hobby Lobby Stores, Inc. |
|
|
40 | (4) |
|
|
|
44 | (1) |
|
Section 4: The Role of the Corporation in Public Life |
|
|
45 | (9) |
|
Poletown Neighborhood Council v. City of Detroit |
|
|
46 | (1) |
|
Charter Township of Ypsilanti v. General Motors Corporation |
|
|
47 | (6) |
|
|
|
53 | (1) |
|
Section 5: The Legal Structure of the Corporation |
|
|
54 | (3) |
|
Section 6: A Global Perspective |
|
|
57 | (6) |
|
William W. Bratton & Joseph A. McCahery, Comparative Corporate Governance and the Theory of the Firm: The Case Against Global Cross Reference |
|
|
58 | (5) |
| Chapter 2 The Duties of Directors and Officers |
|
63 | (270) |
|
|
|
63 | (1) |
|
Section 1: The Authority of the Board |
|
|
64 | (14) |
|
People ex rel. Manice v. Powell et al. |
|
|
68 | (1) |
|
|
|
69 | (2) |
|
|
|
71 | (7) |
|
|
|
78 | (1) |
|
Section 2: Derivative Litigation |
|
|
78 | (8) |
|
A The Distinction between Derivative and Direct Actions |
|
|
79 | (4) |
|
Eisenberg v. The Flying Tiger Line, Inc. |
|
|
79 | (3) |
|
|
|
82 | (1) |
|
|
|
83 | (3) |
|
Baker v. MacFadden Publications, Inc. |
|
|
83 | (3) |
|
|
|
86 | (1) |
|
Section 3: The Fiduciary Duties of Directors and Officers |
|
|
86 | (140) |
|
|
|
88 | (90) |
|
Kamin v. American Express Company |
|
|
88 | (4) |
|
|
|
92 | (6) |
|
Cede & Co. v. Technicolor, Inc. |
|
|
98 | (9) |
|
|
|
107 | (2) |
|
Francis v. United Jersey Bank |
|
|
109 | (10) |
|
|
|
119 | (1) |
|
Senn v. Northwest Underwriters Inc. |
|
|
120 | (2) |
|
|
|
122 | (1) |
|
|
|
122 | (17) |
|
|
|
139 | (1) |
|
In re Caremark International Inc. Derivative Litigation |
|
|
140 | (12) |
|
|
|
152 | (2) |
|
|
|
154 | (8) |
|
In re the Walt Disney Company Derivative Litigation |
|
|
162 | (16) |
|
|
|
178 | (1) |
|
|
|
178 | (57) |
|
Self-Dealing Transactions |
|
|
180 | (1) |
|
|
|
180 | (7) |
|
|
|
187 | (2) |
|
|
|
189 | (6) |
|
|
|
195 | (1) |
|
Sinclair Oil Corporation v. Levi en |
|
|
196 | (4) |
|
|
|
200 | (1) |
|
|
|
201 | (9) |
|
|
|
210 | (1) |
|
|
|
210 | (6) |
|
|
|
216 | (4) |
|
|
|
220 | (6) |
|
|
|
226 | (9) |
|
Section 5: Not for Profits |
|
|
235 | (5) |
|
In re Croton River Club, Inc., Debtor v. Half Moon Bay Homeowners Association, Inc. |
|
|
235 | (5) |
|
Section 6: Corporate Opportunity |
|
|
240 | (19) |
|
Broz v. Cellular Information Systems, Inc. |
|
|
240 | (10) |
|
|
|
250 | (1) |
|
Energy Resources Corporation, Inc. v. Porter |
|
|
251 | (3) |
|
|
|
254 | (1) |
|
In re eBay, Inc. Shareholders Litigation |
|
|
254 | (3) |
|
|
|
257 | (2) |
|
Section 7: Compensation and Waste |
|
|
259 | (26) |
|
|
|
259 | (13) |
|
|
|
272 | (1) |
|
|
|
272 | (12) |
|
|
|
284 | (1) |
|
Section 8: Demand Refusal, Demand Excused and Special Committees in Derivative Litigation |
|
|
285 | (23) |
|
|
|
286 | (7) |
|
|
|
286 | (7) |
|
|
|
293 | (1) |
|
B Demand Excused and Special Committees |
|
|
293 | (15) |
|
|
|
293 | (8) |
|
Zapata Corporation v. Maldonado |
|
|
301 | (7) |
|
|
|
308 | (1) |
|
Section 9: The Sarbanes-Oxley Act of 2002 |
|
|
308 | (7) |
|
|
|
315 | (1) |
|
Section 10: Indemnification |
|
|
315 | (18) |
|
Waltuch v. Conticommodity Services, Inc. |
|
|
315 | (11) |
|
|
|
326 | (1) |
|
Citadel Holding Corporation v. Roven |
|
|
327 | (5) |
|
|
|
332 | (1) |
| Chapter 3 Closely Held Corporations and Related Matters |
|
333 | (198) |
|
Section 1: Preliminary Matters |
|
|
335 | (19) |
|
A A Catalog of Business Forms |
|
|
335 | (9) |
|
|
|
336 | (2) |
|
2 The Forms of Doing Business |
|
|
338 | (6) |
|
|
|
338 | (1) |
|
|
|
339 | (2) |
|
|
|
341 | (1) |
|
d Limited Liability Companies |
|
|
342 | (1) |
|
e Limited Liability Partnerships and Limited Liability Limited Partnerships |
|
|
343 | (1) |
|
|
|
344 | (10) |
|
1 Types of Agency Authority |
|
|
344 | (6) |
|
|
|
344 | (1) |
|
|
|
345 | (1) |
|
|
|
346 | (1) |
|
|
|
347 | (1) |
|
|
|
349 | (1) |
|
|
|
350 | (5) |
|
Clover v. Snowbird Ski Resort |
|
|
350 | (4) |
|
Section 2: The Process of Incorporating |
|
|
354 | (9) |
|
A Promoters, Pre-Incorporation Agreements, and Promoter Liability |
|
|
355 | (3) |
|
|
|
356 | (2) |
|
B Choosing the State of Incorporation |
|
|
358 | (2) |
|
|
|
359 | (1) |
|
C Defective Incorporation |
|
|
360 | (3) |
|
Cranson v. International Business Machines Corp. |
|
|
361 | (2) |
|
|
|
363 | (1) |
|
Section 3: Disregard of Corporate Identity |
|
|
363 | (22) |
|
|
|
364 | (6) |
|
|
|
370 | (1) |
|
Kinney Shoe Corporation v. Polan |
|
|
370 | (4) |
|
|
|
374 | (3) |
|
Notes on Related Concepts |
|
|
377 | (1) |
|
|
|
378 | (1) |
|
|
|
379 | (1) |
|
Sea-Land Services, Inc. v. The Pepper Source |
|
|
379 | (6) |
|
Section 4: The Position of Minority Shareholders in Closely Held Corporations |
|
|
385 | (146) |
|
A Shareholder Voting and Control |
|
|
386 | (2) |
|
B Agreements Among Shareholders |
|
|
388 | (46) |
|
|
|
388 | (2) |
|
|
|
390 | (1) |
|
3 Shareholders Agreements |
|
|
391 | (43) |
|
Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Ringling |
|
|
392 | (7) |
|
|
|
399 | (1) |
|
|
|
399 | (7) |
|
|
|
406 | (1) |
|
Oceanic Exploration Co. v. Grynberg |
|
|
407 | (8) |
|
|
|
415 | (1) |
|
|
|
415 | (6) |
|
|
|
421 | (1) |
|
|
|
421 | (12) |
|
|
|
433 | (1) |
|
C Shareholders' Ability to Bind Directors |
|
|
434 | (18) |
|
|
|
434 | (7) |
|
|
|
441 | (1) |
|
|
|
441 | (3) |
|
|
|
444 | (1) |
|
|
|
444 | (8) |
|
|
|
452 | (1) |
|
Note on Statutory Changes |
|
|
452 | (1) |
|
D Fiduciary Duties of Shareholders in Closely Held Corporations |
|
|
452 | (42) |
|
Donahue v. Rodd Electrotype Company of New England, Inc. |
|
|
454 | (10) |
|
|
|
464 | (1) |
|
Wilkes v. Springside Nursing Home, Inc. |
|
|
465 | (6) |
|
|
|
471 | (1) |
|
|
|
471 | (6) |
|
|
|
477 | (1) |
|
|
|
477 | (3) |
|
|
|
480 | (1) |
|
Ingle v. Glamore Motor Sales, Inc. |
|
|
481 | (7) |
|
|
|
488 | (1) |
|
Note on Jordan v. Duff and Phelps, Inc. |
|
|
488 | (1) |
|
|
|
489 | (1) |
|
Smith v. Atlantic Properties, Inc. |
|
|
489 | (5) |
|
|
|
494 | (1) |
|
E Remedies for Oppression |
|
|
494 | (18) |
|
Matter of Kemp & Beatley, Inc. |
|
|
495 | (5) |
|
|
|
500 | (1) |
|
Alaska Plastics, Inc. v. Coppock |
|
|
500 | (6) |
|
|
|
506 | (1) |
|
In the Matter of the Voluntary Dissolution of Radom & Neidorff, Inc. |
|
|
506 | (4) |
|
|
|
510 | (1) |
|
In the Matter of June Wollman v. Marilyn Littman |
|
|
511 | (1) |
|
|
|
511 | (1) |
|
F Other Shareholder Cases |
|
|
512 | (19) |
|
Anadarko Petroleum Corporation v. Panhandle Eastern Corporation |
|
|
512 | (7) |
|
|
|
519 | (1) |
|
Zahn v. Transamerica Corp. |
|
|
519 | (4) |
|
|
|
523 | (1) |
|
|
|
524 | (5) |
|
|
|
529 | (2) |
| Chapter 4 Basic Issues in Securities Regulation |
|
531 | (164) |
|
Section 1: The Regulation of Transactions in Securities |
|
|
531 | (33) |
|
A Registration of Newly Issued Securities Under the Securities Act of 1933 |
|
|
532 | (1) |
|
B The Meaning of "Security" |
|
|
533 | (21) |
|
Great Lakes Chemical Corp. v. Monsanto Co. |
|
|
533 | (13) |
|
|
|
546 | (1) |
|
|
|
546 | (8) |
|
|
|
554 | (1) |
|
C The Registration Requirement |
|
|
554 | (10) |
|
Securities and Exchange Commission v. Ralston Purina Co. |
|
|
558 | (3) |
|
|
|
561 | (1) |
|
A Short Note on Regulation D, Other Exemptions, and Crowdfunding |
|
|
561 | (3) |
|
Section 2: Antifraud Provisions of the Securities Acts |
|
|
564 | (99) |
|
|
|
565 | (3) |
|
|
|
565 | (3) |
|
|
|
568 | (1) |
|
B Insider Trading under the Securities Exchange Act of 1934 |
|
|
568 | (95) |
|
1 Underpinnings of the Modern Rule |
|
|
569 | (1) |
|
In the Matter of Cady, Roberts & Co. |
|
|
569 | (7) |
|
|
|
576 | (1) |
|
Securities and Exchange Commission v. Texas Gulf Sulphur |
|
|
577 | (12) |
|
|
|
589 | (1) |
|
2 Limitations on the Applicability of §10(b) |
|
|
590 | (1) |
|
Santa Fe Industries, Inc. v. Green |
|
|
590 | (6) |
|
|
|
596 | (1) |
|
|
|
597 | (12) |
|
|
|
609 | (1) |
|
Halliburton Co. v. Erica P. John Fund, Inc. |
|
|
609 | (8) |
|
|
|
617 | (1) |
|
3 Theoretical Expansion of the Concept of "Insider" |
|
|
617 | (80) |
|
|
|
617 | (1) |
|
Chiarella v. United States |
|
|
618 | (1) |
|
|
|
623 | (1) |
|
|
|
623 | (1) |
|
Dirks v. Securities and Exchange Commission |
|
|
623 | (1) |
|
|
|
632 | (1) |
|
Moss v. Morgan Stanley Inc. |
|
|
632 | (1) |
|
|
|
640 | (1) |
|
|
|
641 | (1) |
|
|
|
646 | (1) |
|
United States v. Chestman |
|
|
647 | (1) |
|
|
|
655 | (1) |
|
|
|
656 | (1) |
|
|
|
656 | (1) |
|
|
|
663 | (1) |
|
Section 3: Short Swing Profits |
|
|
663 | (32) |
|
|
|
665 | (1) |
|
|
|
666 | (3) |
|
|
|
669 | (1) |
|
Reliance Electric Co. v. Emerson Electric Co. |
|
|
669 | (7) |
|
|
|
676 | (1) |
|
Kern County Land Co. v. Occidental Petroleum Corp. |
|
|
676 | (8) |
|
|
|
684 | (1) |
|
Foremost-McKesson, Inc. v. Provident Securities Company |
|
|
684 | (7) |
|
|
|
691 | (1) |
|
Chemical Fund v. Xerox Corp. |
|
|
691 | (3) |
|
|
|
694 | (1) |
| Chapter 5 The Corporation in Modern Society |
|
695 | (150) |
|
Section 1: Protection of Shareholder Voting Participation |
|
|
695 | (62) |
|
A The Solicitation Process |
|
|
696 | (1) |
|
|
|
697 | (9) |
|
Rosenfeld v. Fairchild Engine and Airplane Corp. |
|
|
697 | (9) |
|
|
|
706 | (1) |
|
C Shareholder Rights to Make Proposals for Shareholder Action |
|
|
706 | (23) |
|
|
|
707 | (22) |
|
Medical Committee for Human Rights v. SEC |
|
|
708 | (11) |
|
|
|
719 | (1) |
|
New York City Employees' Retirement System v. Dole Food Co. |
|
|
719 | (6) |
|
|
|
725 | (4) |
|
D Shareholder Right to Inspect |
|
|
729 | (13) |
|
State ex. rel. Pillsbury v. Honeywell, Inc. |
|
|
733 | (4) |
|
|
|
737 | (1) |
|
Parsons v. Jefferson-Pilot Corp. |
|
|
737 | (4) |
|
|
|
741 | (1) |
|
E False or Misleading Proxy Materials |
|
|
742 | (15) |
|
Mills v. Electric Auto-Lite Co. |
|
|
742 | (4) |
|
|
|
746 | (1) |
|
Virginia Bankshares, Inc. v. Sandberg |
|
|
747 | (9) |
|
|
|
756 | (1) |
|
Section 2: Protection of Constituencies Other Than Shareholders |
|
|
757 | (22) |
|
|
|
758 | (1) |
|
A.P. Smith Mfg. Co. v. Barlow |
|
|
758 | (1) |
|
|
|
758 | (1) |
|
|
|
759 | (4) |
|
|
|
762 | (1) |
|
|
|
763 | (16) |
|
Local 1330 United Steel Workers of America v. United States Steel Corp. |
|
|
763 | (12) |
|
|
|
775 | (1) |
|
Shapiro Bros. Shoe Co., Inc. v. Lewiston-Auburn Shoeworkers Protective Ass'n, Inc. |
|
|
776 | (3) |
|
|
|
779 | (1) |
|
Section 3: The Corporation as Political Actor |
|
|
779 | (66) |
|
A Political Contributions and Expenditures |
|
|
781 | (28) |
|
First National Bank of Boston v. Bellotti |
|
|
781 | (9) |
|
|
|
790 | (1) |
|
Citizens United v. Federal Election Commission |
|
|
791 | (18) |
|
|
|
809 | (1) |
|
B Limitations Based on Government Grant |
|
|
809 | (3) |
|
Regan v. Taxation With Representation |
|
|
809 | (3) |
|
|
|
812 | (1) |
|
C The Blurring of the Public/Private Distinction |
|
|
812 | (36) |
|
|
|
813 | (6) |
|
|
|
819 | (1) |
|
Lloyd Corporation, Ltd v. Tanner |
|
|
820 | (10) |
|
|
|
830 | (1) |
|
New Jersey Coalition Against War in the Middle East v. J.M.B. Realty Corporation |
|
|
831 | (11) |
|
|
|
842 | (3) |
| Chapter 6 Fundamental Transactions and Corporate Debt |
|
845 | (236) |
|
Section 1: Basic Accounting |
|
|
845 | (3) |
|
Section 2: Sales of Assets |
|
|
848 | (5) |
|
|
|
851 | (2) |
|
|
|
853 | (1) |
|
|
|
853 | (12) |
|
A Some Historical Background |
|
|
853 | (3) |
|
|
|
856 | (9) |
|
Farris v. Glen Alden Corporation |
|
|
858 | (6) |
|
|
|
864 | (1) |
|
Section 4: Parent-Subsidiary Mergers |
|
|
865 | (46) |
|
|
|
865 | (5) |
|
|
|
865 | (1) |
|
Cede & Co. v. Technicolor |
|
|
866 | (4) |
|
|
|
870 | (1) |
|
|
|
870 | (41) |
|
Rabkin v. Hunt Chemical Corporation |
|
|
870 | (5) |
|
|
|
875 | (1) |
|
In re Siliconix Incorporated Shareholders Litigation |
|
|
876 | (7) |
|
|
|
883 | (1) |
|
Glassman v. Unocal Exploration Corp. |
|
|
884 | (2) |
|
|
|
886 | (1) |
|
Coggins v. New England Patriots Football Club, Inc. |
|
|
886 | (6) |
|
|
|
892 | (1) |
|
|
|
893 | (4) |
|
|
|
897 | (1) |
|
ACE Ltd. v. Capital Re Corp. |
|
|
898 | (13) |
|
|
|
911 | (136) |
|
|
|
913 | (7) |
|
|
|
920 | (1) |
|
Unocal Corporation v. Mesa Petroleum Co. |
|
|
920 | (9) |
|
|
|
929 | (2) |
|
Moran v. Household International, Inc. |
|
|
931 | (5) |
|
|
|
936 | (2) |
|
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. |
|
|
938 | (10) |
|
|
|
948 | (1) |
|
Paramount Communications, Inc. v. Time Incorporated |
|
|
949 | (14) |
|
|
|
963 | (1) |
|
Paramount Communications Inc. v. QVC Network Inc. |
|
|
964 | (22) |
|
|
|
986 | (1) |
|
Air Products and Chemicals, Inc. v. Airgas, Inc. |
|
|
986 | (13) |
|
|
|
999 | (1) |
|
Unitrin, Inc. v. American General Corp. |
|
|
1000 | (18) |
|
|
|
1018 | (1) |
|
Omnicare, Inc. v. NCS Healthcare, Inc. |
|
|
1019 | (21) |
|
|
|
1040 | (2) |
|
|
|
1042 | (4) |
|
|
|
1046 | (1) |
|
Section 6: Corporate Debt |
|
|
1047 | (34) |
|
A Some Basics of Corporate Debt |
|
|
1047 | (1) |
|
B The Meaning of the Indenture |
|
|
1048 | (33) |
|
Metropolitan Life Insurance Company v. RJR Nabisco, Inc. |
|
|
1048 | (12) |
|
|
|
1060 | (1) |
|
Morgan Stanley v. Archer Daniels Midland |
|
|
1060 | (10) |
|
|
|
1070 | (1) |
|
Sharon Steel Corporation v. Chase Manhattan Bank |
|
|
1071 | (8) |
|
|
|
1079 | (2) |
| Glossary |
|
1081 | (12) |
| Index |
|
1093 | |
