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Piercing the (Sovereign) Veil: The Role of Limited Liability in State Owned Enterprises
Get PDFSovereign nations own more than ten percent of the world\u27s largest firms and use these ownership stakes to pursue economic, social, and political objectives unrelated to profit maximization. Sovereign nations also have unique powers and attributes that ordinary owners lack. Sovereigns do not need an owner\u27s control rights to direct entity behavior; they have the power to regulate. Sovereigns do not need an owner\u27s economic rights to extract value; they have the power to tax. And sovereigns do not need to hide behind the principle of limited liability, which protects owners of limited liability entities; they have sovereign immunity in both domestic and foreign courts.
Despite these fundamental differences, neither courts nor legal scholars have seriously examined whether organizational law should distinguish sovereigns from other owners. This Article takes up that question, focusing on the law of veil piercing as applied to corporations and other limited liability entities owned by sovereign states. Its first contribution is to demonstrate that the principle of limited liability does different work for sovereign states than for ordinary shareholders. That principle\u27s primary function is to create a partition between the owner\u27s assets and those belonging to the entity. Because the partition yields important economic benefits, veil piercing is reserved for exceptional cases. But foreign states do not need organizational law to realize these benefits. The law of foreign sovereign immunity already protects the state\u27s assets in ways that mimic the protections of organizational law. By contrast, state owned entities rely on organizational law for asset protection. Put differently, in the sovereign context, organizational law mostly protects entities.
In the United States , the law of veil piercing in this context derives from the Supreme Court\u27s seminal Bancec case. The Article s second contribution is to demonstrate that Bancec supports its clarified understanding of the relevance of organizational law. Indeed, Bancec was a reverse veil piercing case in which a creditor of a foreign state asserted a claim against a state owned firm. Bancec\u27s emphasis on the traditional asset protective function of organizational law must be understood in that context. Bancec does not stand for the proposition that foreign states should receive the same protections as ordinary shareholders . The Article closes by exploring implications of this analysis. Perhaps the most important (if counter intuitive) implication is that courts should be more receptive to traditional veil piercing claims, at least in a subset of cases
Corruption in University Admissions and the Administrative Allocation of Scarce Goods
Get PDFThe Varsity Blues investigation uncovered a seamy side of university admissions. Multiple wealthy parents were indicted for securing their children s admission to selective institutions through bribery. Despite the publicity the indictments and guilty pleas received, and the public schadenfreude over the sight of celebrities being arrested, the investigation is most notable for what it did not do: it did not deploy the federal government\u27s arsenal of anti-money laundering and anti-corruption tools against the universities involved. This represents a significant missed opportunity to address the serious problems that arise from rationing access to selective institutions via opaque, easily manipulated admissions processes designed to benefit university constituencies. Without deploying the same tools used routinely against other for- and non-profit organizations, the chances for real reform are significantly reduced. We call for universities and their boards to be held to the standards applied to other institutions with respect to corruption and money laundering in their oversight of admissions programs
Clark Memorandum: Spring 2021
No full textClark Memorandum: Spring 2021 Rooting Out Racism How Do We Practice Our Religion While We Practice? Hope in Hardship The Unity Paradoxhttps://digitalcommons.law.byu.edu/clarkmemo_gallery/1065/thumbnail.jp
