Guest Appearance

January 22, 2008

In addition to blogging here, I will be guest blogging at Conglomerate  for the next two weeks.  Look for posts on Sarbanes-Oxley, judging and other interesting topics in corporate governance.


oPtion$ Book Club in Progress

December 4, 2007

OptionsTune in to PrawfsBlawg today for a book club discussion of oPtion$, the secret life of steve jobs.  I am joining host Matt Bodie, Michael Dorff, Darian Ibrahim and David Zaring for a discussion of this funny parody of Steve Jobs.  A number of posts are up and the real fake steve jobs (Forbes editor Dan Lyons) will be commenting at the end of the day.

“oPtion$” — the Book Club

November 28, 2007

OptionsTune in next week to PrawfsBlawg for a lively discussion of the new satiric novel oPtion$, by Fake Steve Jobs (aka Forbes reporter, Dan Lyons). 

I will be joining Matt Bodie of PrawfsBlawg who is hosting the book club on Tuesday December 4.  Also posting will be law professors David Zaring, Darian Ibrahim, and Michael Dorff.  Dan Lyons, the real Fake Steve Jobs will respond and answer questions to wrap up the discussion.  Here is the announcement: PrawfsBlawg: Book Club on “oPtion$” by Fake Steve Jobs.

For now, I will only say that oPtion$ is a fun read.  It is a satirical account of Steve Jobs’s excellent adventures as Apple comes under federal investigation for its stock option backdating practices.  It also has a nice shiny cover, a tribute to the  iPod.

Verret on Shareholder Access

October 22, 2007

I invited Jay Verret to respond to comments from Professor Stephen Bainbridge on his recent posting over at Harvard Corporate Governance Blog.  Verret’s HLS blog posting is here.  Professor Bainbridge’s comments on his blog are here and here.

What follows is Jay Verret’s response:

I appreciate Professor Bainbridge’s response on his blog to my posting on the HLS corporate governance blog. Perhaps my characterization of his “ignoring” the Delaware legal implications of his position should be retracted, but I would note that it still seems that he has understated the implications of Delaware’s decision to justify it’s craftsmanship of the business judgment rule on the shareholder franchise.  That a few subsequent decisions seem to have ignored it is not enough. Delaware corporate law has won the franchise race.  And, I think he would agree with me that the corporate world is enriched by its expertise.  That doesn’t mean we should rest its jurisprudence on mere myth.

Bainbridge also noted two counterarguments to my position on hedge fund activism.  First, he argues that hedge funds seek control rather than change. I would cite the anecdotal experiences of the Peltz challenges, through his firm Trian Investment partners.  The latest OECD report provides economic data that the Trian anecdote is a representative story of the activist hedge fund world, showing that hedge funds typically take 5-10% positions in firms. (available here ). 

In addition, Bainbridge cites the Kahan and Rock article for the proposition that the corporate proxy mechanism is not adequately equipped for serious proxy contests.  Granted.  Ed Rock and Marcel Kahan are right.  I saw them present this paper, and was honored to offer some minor comments.  I think that, perhaps, Professor Bainbridge has missed the objective of their analysis.  Rock and Kahan call for reform of the proxy solicitation process as an antecedent to reform of the corporate ballot.  I concede that reform of the problems they highlight should precede my own reform proposal. That does not mean that neither reform should occur.  Additionally, I would join Professors Black and Hu in arguing for regulation of the issue of empty voting, as some hedge funds engage in that activity.  That is largely irrelevant to this analysis, as they are not properly characterized as activist funds, despite the fact that many lump the two groups together.

In Search of . . . Corporate Democracy

October 22, 2007

An interesting debate is brewing in the corporate blogosphere as academics line up on opposite sides in the debate about increasing the shareholder franchise.  Competing SEC proposals on so-called “shareholder access” form the backdrop for the debate.

On one hand are opponents of expanding shareholder voting rights,  notably Stephen Bainbridge, Jonathan Macey and Lynn Stout.  On the other hand are advocates for increasing shareholder power led most fervently by Lucian Bebchuk.  The recent Virginia Law Review colloquy on the question was discussed earlier on this blog.

The current round of volleys seems to have started with Lynn Stout’s op-ed  in the Wall Street Journal entitled “Corporations Should Not Be Democracies” and her blog posting on Harvard’s Corporate Governance Blog.  The Harvard blog posted responses to Stout from Jay Brown of Race to the Bottom and Jay Verret, who recently published a Business Lawyer article on the topic.

Verret’s comments then prompted a response from Professor Bainbridge who took exception to Verret’s characterizations of his views.  To keep the conversation going, I invited Jay Verret to respond to Professor Bainbridge.  His response follows in a separate post.

Announcing the “Legal Scholarship Blog”

September 5, 2007

The University of Pittsburgh School of Law and the University of Washington School of Law have teamed up to create the new Legal Scholarship Blog: http//  The blog features law-related calls for papers, conferences, and workshops — with links to relevant websites and papers as well as an event calendar — along with scholarly resources for Research Deans as well as current and prospective law professors.

Those interested in posting announcements on calls for papers, conferences, and workshop schedules should send requests to legalscholarshipblog|at|