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Business Organizations
Wake Forest University School of Law
Materia - Fall 2003

Prof. Alan Palmiter

[ last updated 10-Nov-2003 ]

MATERIA
CONEXUS
DIALECTICA
SYLLABUS
 
Casebook readings Corp E&E
I. CORPORATION FUNDAMENTALS 
1
 CB 1-12
1.1

A. Introduction
2
 CB 13-29
2.3

B. Economics of the firm
     

C. Law of corporations
3
 CB 30-51
1.2, 8.2, 11

      1. Introduction - fiduciary duty, power vs duty
4
 CB 51-66
3.2

      2. Choice of state of incorporation
 
  
 
D. The corporation and the Constitution
5
 CB 67-89
1.3

      1. The First Amendment
6
 CB 89-102
39.4

      2. Regulating corporate internal affairs
 
  
 

E. The corporation and society
7
 CB 103-124
3.3.5 

       1. Social responsibility trends
8
 CB 125- 147
1.1 

       2. Charitable giving
Casebook readings
Corp E&E
II. INCORPORATION
9
 CB 148-168
2.1, 2.2
A. The Choice of Organizational Form
   
 
B. The Incorporation Process
10
 CB 169-187
3.1
      1. Process of incorporation
11
 CB 187-194 
29.1, 29.2
      2. Defective incorporation
Casebook readings Corp E&E
III. CORPORATE FINANCING
12
 CB 195-218 
 
A. Financial accounting
13
 CB 218-236
 
B. Valuing the corporation
 
  
 
C. Regulation of financial structure
14
 CB 237-257
4
      1. Capitalizing the business
15
 CB 257-278
31.2, 31.4
      2. Regulation of legal capital
16
CB 278-294
31.1
      3. Corporate dividend policy
17
 CB 295-317
5.1
D. Regulation of securities issuance
Casebook readings Corp E&E
IV. CREDITOR PROTECTION
 
  
 
A. Exceptions to limited liability
18
 CB 318-341 
28 
      1. Overview and tort creditors
19
 CB 341-352
32.1
      2. Contract creditors
20
 CB 352-365
32.2
      3. Parent-subsidiary dealings / Alternatives
21
 CB 366-391
30.1, 30.2
B. Actions binding corporation
Casebook readings Corp E&E
V.  CORPORATE GOVERNANCE
 
    
A. Shareholder role in corporate governance
     

      1. Shareholder rights in fundamental transactions
22
 CB 392-409
7.1, 7.2
            a. Shareholder voting and veto rights
23
 CB 409-423
7.1, 7.2

            b. Transactions: form over substance

     

      2. Sharheolders' power to initiate
24
 CB 423-437
7.1
            a. Resolutions, bylaws, director removal
25
 CB 437-447
7.1, 7.2

            b. Board responses / Shark repellants
26
 CB 447-455 (skip)
7.1
      3. Shareholders' right of inspection
 
  
 
B. Shareholder role in the public corporation
27
 CB 456-468 (browse)
ch. 6
      1. Theories of the Firm
28
 CB 468-480
6.2, 9.4
      2. Dynamics of shareholder voting / Institutional investors
29
 CB 480-493
 9
      3. Federal proxy regulation
30
 CB 493-512
6.2
      4. Shareholder proposals
 
  
 
C. Role of directors
31
 CB 575-585 (skip)
7.3
      1. How the board works
32
CB 585-606 (skip)
11.3
      2. Do independent directors matter?
Casebook readings Corp E&E
VI. CORPORATE DUTIES
 
  
 
A. Duty of care
     

      1. Standards of care

33
 CB 607-620
12.1
            a. Duty of oversight
34
 CB 620-637  

            b. Monitoring legal compliance

35 
 CB 637-652
 
      2. Business judgment rule
     

      3. Duty to become informed
36
 CB 652-674
12.3
            a. Smith v. Van Gorkom
37
 CB 674-687
12.2, 12.4
            b. Due care and business judgment rule
 
  
 
      4. Avoidance of directors’ liability
38
 CB 687-698
15.1
            a. Statutory exculpation
39
 CB 698-717
15.2
            b. Indemnification and insurance
 
  
 
B. Duty of loyalty
40
 CB 718-740
13.1, 13.2, 13.5
      1. Common law and statutory standards
     

      2. Entire fairness
41
 CB 740-760
13.3
            a. Independent board approval
42
 CB 760-770  

            b. Shareholder ratification

43
 CB 771-781
13.4, 14
      3. Executive compensation
44
 CB 781-803
16
      4. Corporate opportunities
 
  
 

C. Duties of controlling shareholders
45
 CB 804-812
17.1, 17.2
      1. Dealings with subsidiaries
 
  
 
      2. Cash-out mergers
46
 CB 812-839
17.3

            a. Standard of review
47
 CB 839-869
17.3

            b. Fair price and fair price
 
  
 

D. Duty of disclosure to shareholders
48
 CB 513-529
10.1
      1. Implied action / materiality
49
 CB 529-553
10.2
      2. Reliance and causation / Virginia Bankshares
50
 CB 553-562
10.2
      3. Culpability and unfairnes
51
 CB 562-574
10.3
      4. State disclosure requirements
 
  
 
E. Enforcement of duties - shareholder litigation
52
 CB 904-917
11.4
      1. Policy / direct vs. derivative / Counsel's role
53
 CB 917-926
18.1
      2. Shareholder standing
 
  
 
      3. Internal corporate procedures
54
 CB 926-939
18.2, 18.3
            a. Demand on directors
55
 CB 940-960
18.5
            b. Terminating derivative suits
56 
 CB 960-971
 18.3

      4. Judicial supervision / Settlement and attorneys' fees
Casebook readings Corp E&E
VII. SHAREHOLDER LIQUIDITY
   
 
A. Trading on insider information  
57
 CB 972-989
23.1

      1. Securities trading: markets and theory

58
 CB 989-1008
23.2

      2. Common law
 
  
 

      3. Federal regulation:  Rule 10b-5
59
 CB 1008-1025
23.3

            a. Scope
60
 CB 1026-1044
23.3

            b. Duty to "abstain or disclose" / tipping 
61
 CB 1044-1064
23.3

            c. Misappropriation
     

B. Corporate disclosure duties
62
 CB 1064-1080
21

      1. Duties to disclose
63
 CB 1080-1096
22, 23.4

      2. Securities fraud / Insider trading disgorgement
 
  
 

C. Sale of control
64
 CB 8690-883
20

      1. Duties in control transactions
65
 CB 883-903
20

      2. Sharing control premium
 
  
 
D. Protecting control
66
 CB 1097-1117
34, 38, 39.1

      1. Regulatory framework / BJR or loyalty? / auctions
67
 CB 1117-1142
39.2

      2. Contemporary framework / process and substrance
68
 CB 1142-1177
39.2

      3. Unocal or Unitrin or Blasius review?

69
 CB 1177-1195
34, 39.2

      4. Policy debate

Casebook readings Corp E&E
VIII.  SPECIAL CASE - CLOSE CORPORATION
 
  
 

A. Control devices
70
 CB 1196-1213
26 

      1. Restrictions on shareholder voting
71
 CB 1213-1231
26.7

      2. Limits on board discretion
72
 CB 1231-1243
26.8

B. Contractual liquidity rights
 
  
 

C. Judicial intervention
73
 CB 1243-1260
27.1, 27.2

      1. Fiduciary duties
74
 CB 1260-1283
27.2, 27.3

      2. Statutory remedies - oppresion / reasonable expectations