The Best Corporate Law Judge of His Generation

Twenty some years before Bill Allen was appointed Chancellor of Delaware, Bayless Manning, a fine corporate law scholar, announced the death of corporate law “as a field of intellectual effort.”  Manning described its focus as “our great empty corporation statutes – towering skyscrapers of rusted girders, internally welded together and containing nothing but wind.”[1]  When Bill became Chancellor in 1985, that wind had become a hurricane and the skyscraper was indeed empty.  The standard duality of corporate law – business judgment or entire fairness – simply could not hold up to the storm that hostile takeovers produced.  Management efforts … Read more

The Sotheby’s Poison Pill Case: The Plate Tectonics of Delaware Corporate Governance

The best part of a Delaware Chancery Court opinion is the first 30 or so pages. In most important cases, the opinion typically starts by telling a story – a detailed account of the people who figure in the dispute, what they did, their motives and personalities, and how this character-driven narrative resulted in the dispute the court must resolve.  Often there is drama: exposition, crisis and denouement.  The recent decision over the validity of a poison pill invoked to disadvantage Third Point’s effort to dislodge Sotheby’s management is a great example.  The interest and importance of the case is … Read more

Proposals to “Reform” the Section 13D Rules: Getting it Precisely Backwards

The current proposals to accelerate the timing of beneficial ownership disclosure under Section 13(d) of the 1934 Securities Exchange Act and to broaden the definition of beneficial ownership to include derivative positions that provide economic exposure to stock price movement but not a right to vote or acquire stock, gets the problem precisely backwards.  The mismatch of problem and solution is apparent when we focus on two dates:  1968, when the Williams Act adding Section 13 was adopted, and 2010, when Section 766 of the Dodd-Frank legislation gave the SEC the authority, but not the obligation, to consider whether derivative … Read more

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Editor's Tweet: Profs. Gilson and Gordon on Proposals to “Reform” the Section 13D Rules: Getting it Precisely Backwards