Business Transactions: Connecting the Threads II

These on-demand CLEs were recorded during a one-day, in-person program at which where lawyers heard from Business Law Professors teaching at various schools across the United States. Each discussion was set up as a panel with the principle speaker engaging with a University of Tennessee College of Law student and professor to discuss developing trends in various areas of business law. The event was designed to cover various topics of current interest in business law. Specifically, it aims to weave the threads of topical business law issues together into a tapestry that engages legal scholarship, law teaching, and law practice.

Available Programs

Panel 1: “Breach of Fiduciary Duty and the Defense of Reliance on Experts” with Douglas Moll

Professor Douglas Moll, of the University of Houston, discusses “Breach of Fiduciary Duty and the Defense of Reliance on Experts.” Many corporate statutes expressly provide that directors in discharging their duties may rely in good faith upon information, opinions, reports, or statements from officers, board committees, employees, or other experts (such as accountants or lawyers). Such statutes often come into play when directors have been charged with breaching their procedural duty of care by making a decision on an inadequately informed basis, but they can be applicable in other contexts as well. In effect, the statutes provide a defense to directors charged with breach of fiduciary duty when their allegedly uninformed or wrongful decisions were based on credible information provided by others with appropriate expertise.Professor Moll will examine these “reliance on experts” statutes and explore a number of questions associated with them. For example, what limitations are baked into the language of these statutes? Do such statutes provide a defense only for duty of care claims, or can they provide a defense for more serious duty of loyalty challenges? Do the statutes immunize a director from fiduciary duty challenges, or is reliance on experts simply a factor that a court can consider in the director’s defense? Do such statutes have salutary effects by encouraging directors to consult experts, or do they simply result in “expert shopping” to set up the statutory defense?

Panel 2: “Fact or Fiction: Flawed Approaches to Evaluating Market Behavior in Securities Litigation” with Ann Lipton

Professor Ann M. Lipton, of Tulane Law School, discusses “Fact or Fiction: Flawed Approaches to Evaluating Market Behavior in Securities Litigation.” Private fraud actions brought under Section 10(b) of the Securities Exchange Act require courts to make determinations regarding market functioning and the economic effects of the alleged misconduct. Over the years, courts have developed a variety of doctrines to guide how these inquiries are to be conducted. Professor Lipton will discuss how these doctrines operate in such an artificial manner that they no longer shed light on the underlying factual inquiry, namely, the actual effect of the alleged fraud on investors. The result is that determinations of market impact and investor loss have become, in a real sense, fictional: the size and effects of the fraud are determined based on ossified precedent rather than any empirical assessment of market behavior. Professor Lipton will further discuss why investors should be awarded statutory damages calculated based on the gravity of the alleged misconduct. Professor Lipton will show that such a scheme would not only be cheaper and faster to administer – conserving both judicial and litigant resources – but would re-align the Section 10 (b) cause of action with its fundamental goals.

Panel 3:  “Lawyering for Social Enterprise” with Joan Heminway

Professor Joan Heminway, of the University of Tennessee College of Law, will focus on salient components of professional responsibility operative in delivering advisory legal services to social enterprises. Social enterprises—businesses that exist to generate financial and social or environmental benefits—have received significant positive public attention in recent years. However, social enterprise and the related concepts of social entrepreneurship and impact investing are neither well defined nor well understood. As a result, entrepreneurs, investors, intermediaries, and agents, as well as their respective advisors, may be operating under different impressions or assumptions about what social enterprise is and have different ideas about how to best build and manage a sustainable social enterprise business. Indeed, the law governing social enterprises also is contentious in respects. In particular, the application of business associations law to specific questions involving social enterprises is unclear. 

Panel 4: “Beyond Bitcoin: Leveraging Blockchain for Corporate Governance, Corporate Social Responsibility, and Enterprise Risk Management” with Professor Marcia Narine Weldon 

Professor Marcia Narine Weldon, of the University of Miami School of Law, discusses “Beyond Bitcoin: Leveraging Blockchain for Corporate Governance, Corporate Social Responsibility, and Enterprise Risk Management.” Although many people equate blockchain with bitcoin, cryptocurrency, and smart contracts, Professor Weldon will discuss how the technology also has the potential to transform the way companies look at governance and enterprise risk management. Companies and stock exchanges are using blockchain for shareholder communications, managing supply chains, internal audit, and cyber security. Professor Weldon will focus on one of the more promising uses of the technology— eliminating barriers to transparency in the human rights arena. Professor Weldon’s discussion will provide an overview of blockchain technology and how state and nonstate actors use the technology outside of the realm of cryptocurrency.

Panel 5: “Crafting State Corporate Law for Research and Review” with Benjamin Edwards

Professor Benjamin Edwards, of the University of Las Vegas Nevada William S. Boyd School of Law, discusses “Crafting State Corporate Law for Research and Review.” Specifically, Professor Edwards addresses how states can implement changes in state corporate law with an eye toward putting in place provisions and measures to make it easier for policymakers to retrospectively review changes to state law to discern whether legislation accomplished its stated goals. State legislatures often enact and amend their business corporation laws without considering how to review and evaluate their effectiveness and impact. This inattention means that state legislatures quickly lose sight of whether the changes actually generate the benefits desired at the time off passage. It also means that state legislatures may not observe stock price reactions or other market reactions to legislation. Our federal system allows states to serve as the laboratories of democracy. The controversy over fee-shifting bylaws and corporate charter provisions offers an opportunity for state legislatures to intelligently design changes in corporate law to achieve multiple state and regulatory objectives.

Panel 6: “An Overt Disclosure Requirement for Eliminating the Duty of Loyalty” with Joshua Fershee

Professor Joshua Fershee, associate dean for faculty research and development at West Virginia University, discusses “An Overt Disclosure Requirement for Eliminating the Duty of Loyalty.” When Delaware law allowed parties to eliminate the duty of loyalty for LLCs, more than a few people were appalled. Concerns about eliminating the duty of loyalty are not surprising given traditional business law fiduciary duty doctrine. However, as business agreements evolved, and became more sophisticated, freedom of contract has become more common, and attractive. How to reconcile this tradition with the emerging trend? Professor Fershée will discuss why we need to bring a partnership principle to LLCs to help.

Panel 7: “Does Corporate Personhood Matter? A Review of We the Corporations” with Professor Stefan Padfield

Professor Stefan Padfield, of the University of Akron School of Law, discusses “Does Corporate Personhood Matter? A Review of We the Corporations.” Professor Padfield examines a book written by UCLA Law Professor Adam Winkler, “We the Corporations: How American Businesses Won Their Civil Rights” which “reveals the secret history of one of America’s most successful yet least-known ‘civil rights movements’ – the centuries-long struggle for equal rights for corporations.” The book has been highly praised by some of the greatest minds in corporate and constitutional law, and the praise is well-deserved. However, the book is not without its controversial assertions, particularly when it comes to its characterizations of some of the key components of corporate personhood and corporate personality theory. Professor Padfield’s review will focus on unpacking some of these assertions, hopefully ensuring that advocates who rely on the book will be informed as to alternative approaches to key issues.

Directions

  1. View the lecture(s)
  2. Download, print, and complete the quiz associated with each one
  3. Answer the questions
  4. Download, print, and complete the associated affidavit form
  5. Mail the quiz and affidavit, along with a check for the appropriate amount made payable to “the University of Tennessee,” to the address on the affidavit
  6. In order to receive CLE credit you must obtain at least a 90% correct score on each quiz. If you do not pass the test, the quiz, your application, and your check will be returned to you and no CLE credit will be recorded.

If you have questions about any of these programs or CLE credit, please contact Micki Fox at 865 974-8601 or MFox2@utk.edu.