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No Corwin, No Problem: Chancery Court Discusses Revlon\u27s Role in Analyzing Post-Closing Damages Claims against Target Company Directors
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Too Much Dynamite : Buyer\u27s Fraudulent Inducement Claim Survives Seller\u27s Defense Based on Contractual Limitations on Post-Closing Liability
Get PDFDefusing the [N]uclear [W]eapon of [C]orporate [G]overnance : Chancery Court Enjoins Extreme, Unprecedented Poison Pill Adopted to Defend against Hypothetical Stockholder Activism
Get PDFThe Words Mean What They Say: Chancery Court Adheres to Plain Meaning of Typical Contract Terms
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The Locale and Damages of Fatal Policing
No full textGeorge Floyd and Breonna Taylor\u27s violent deaths sparked global protests condemning police violence. Many agree that reforms to policing are necessary and while some changes have occurred, the structure, cul- ture, and budgeting of policing are largely unchanged. This Article first introduces the term fatal policing to denote incidents in which police actions, such as shootings, result in victims\u27 deaths. This Article next re- views data on fatal policing to corroborate findings that Black people are disproportionate victims of fatal policing, calls for a complete census of fatal policing from independent governmental sources, and analyzes re- gional differences in fatal policing. This Article then considers financial incentives to deter fatal policing and advocates for three damages-related proposals: raising damages amounts after fatal policing, ending qualified immunity to increase access to these damages, and tying financial penal- ties more closely to police department budgets. To understand the nature and extent of the problem of fatal policing, it is essential to have a reliable, complete database that tracks the numbers, locations, trends, and circumstances of fatal policing. No governmental database accurately provides this critical information, leaving the task to independent researchers
Golden Parachutes and the Limits of Shareholder Voting
Get PDFWith the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, Congress attempted to constrain change-in-control payments (also known as “golden parachutes”) by giving shareholders the right to approve or disapprove such payments on an advisory basis. This Essay is the first to empirically examine the experience with the Say-on-Golden-Parachute (“SOGP”) vote. We find that unlike shareholder votes on proposed mergers, there is a significant amount of variation with respect to votes on golden parachutes. Notwithstanding the variation, however, the SOGP voting regime is likely ineffective in controlling golden parachute (“GP”) compensation. First, proxy advisors seem more likely to adopt a one-size-fits-all approach to recommendations on SOGP votes. Second, shareholders are more likely to adhere to advisor recommendations. Finally, the size of golden parachutes appears to be increasing in the years since the adoption of the Dodd-Frank Act in 2010, and the golden parachutes that are amended immediately prior to SOGP votes tend to grow rather than shrink. These findings contrast with the research that has examined Say on Pay (“SOP”), and we suggest that the differences between the two regimes lie in the absence of second-stage, marketbased discipline for SOGP votes. We offer potential avenues for improving SOGP’s ability to shape change-in-control compensation practices, such as making SOGP votes (partially) binding, and making the GP payment and SOGP voting information more readily available to shareholders of corporations where the target directors also serve as directors of acquiring corporations
Dissecting Revlon: Severing the Standard of Conduct from the Standard of Review in Post-Closing Litigation
Get PDFIn Corwin v. KKR Financial Holdings LLC and its progeny, the Delaware courts made clear that a fully informed, uncoerced vote by disinterested stockholders triggers the waste standard. In Corwin, the Delaware Supreme Court also indicated that Revlon was only meant to provide stockholders with an expedited process for obtaining a preliminary injunction before the closing of a transaction. However, more recent cases indicate that Revlon in fact does apply after the closing of a transaction. Unfortunately, the Delaware courts have not been given an opportunity to determine which standard of review should apply at this stage—enhanced scrutiny, waste, or the traditional business judgment rule. This Note argues that both doctrinal evolution and modern corporate governance developments support the application of the traditional business judgment rule. In practice, this means that the plaintiff would need to prove a breach of the duty of loyalty by showing bad faith. This provides an appropriate balance between accountability and authority—courts should not reward corporate defendants with the waste standard in the post-closing context where Corwin obligations have not been met. Applying the bad faith standard to post-closing Revlon claims where Corwin does not apply also reflects the typical process by which corporate actions are reviewed by courts: by separating the standard of conduct from the standard of review. Recognizing Revlon as a standard of conduct—not as a conflation of a standard of conduct with a particular standard of review— highlights the doctrine’s importance in serving as a guide for corporate actors in the M&A context