Corporations And Other Business Associations

by O'Kelley, Charles R. T.

• ISBN13: 9780735557901
• ISBN10: 073555790X
• Edition: 5th
• Format: Hardcover
• Copyright: 2006-06-30
• Publisher: Wolters Kluwer

Summary

Sophisticated, comprehensive, and teachable, CORPORATIONS AND OTHER BUSINESS ASSOCIATIONS: Cases and Materials, Fifth Edition, reflects major developments in the corporate law environment while remaining accessible to students. The authors retain the features that earned the book widespread adoption: a careful balance of theory, cases, and problems allows law and economic theory to enrich -- but not dominate -- the casebook outstanding case selection and editing results in a thoughtful blend of classic and contemporary cases excellent and ample problems at the end of each chapter explore the practical applications of theory in the business world and reinforce the cases and text flexible organization adapts easily to different teaching approaches readable, straightforward writing keeps the book sophisticated, but not intimidating the strongest treatment of LLCs/LLPs and other business associations in any corporations casebook comprehensive Teacher's Manual includes sample syllabi and a transition guide coauthor Robert B. Thompson's website supplies additional materials, illustrations, and documents hyperlinked to cases The Fifth Edition focuses on two major developments in the law: the proliferation of new business entities And The resulting changes in partnership and LLC law the aftermath of Enron, WorldCom, and Sarbanes-Oxley, including detailed coverage of changes in the landscape of corporate governance, particularly federal regulation via securities law, stock exchange listing standards, and state law cases such as Disney Be sure to notice these other changes: additional attention to agency law and setting the stage for contrasting private ordering via contract and law in defining business relationships new, more teachable cases that are especially crisp in presenting basic issues discussion of the menu of governance choices in a post-Enron world broader focus to include the New York Stock Exchange listing standards regarding director duties and key recent Delaware cases like Disney completely updated material on LLCs, including a new subchapter coverage of appraisal versus fiduciary duty for friendly acquisitions, including a new focus on practitioner choices in choosing among tender offers and mergers in a cash-out setting addresses the new importance of disclosure as the leading regulatory vehicle for corporate governance as reflected in new case law on causation under Rule 10b-5 updated chapter on Insider Trading includes recent developments as to Regulation FD

Table of Contents

Preface	xxv
Acknowledgments	xxix
Economic and Legal Aspects of the Firm	1	(42)
Some Basic Concepts and Terminology	1	(1)
What Is a ``Firm''?	1	(1)
What Is the Difference Between a Sole Proprietorship and a Business Association?	2	(1)
Organizing the Firm: Selecting a Value-Maximizing Governance Structure	2	(12)
Business Planning: The Role of the Corporate Lawyer in Organizing a Firm	2	(1)
The Goal of Informed Rational Choice Between Competing Investment Options	3	(1)
Comparative Search for Best Investment	3	(1)
Risk and Return	4	(2)
Transaction Costs and Choice of Organizational Form	6	(1)
Introduction	6	(1)
Transaction Cost Factors	6	(2)
Discrete and Relational Contracting	8	(1)
Deciding to Organize as a Firm	8	(1)
State-Provided Governance Structures	9	(1)
Entity and Employment Law as Standard Form Contracts	9	(1)
Default Versus Immutable Rules	9	(1)
Tailored, Majoritarian, and Penalty Default Rules	10	(1)
Non-Judicial Mechanisms That Supplement and Reinforce Private Ordering	11	(1)
The Governance Role of Markets	11	(1)
The Role of Trust	12	(1)
The Role of Norms	13	(1)
The Firm and the Law of Agency	14	(29)
Introduction	14	(1)
Agency Law and the Choice of Sole Proprietorship Form	14	(1)
Fiduciary Limits on Agent's Right of Action	15	(1)
Community Counselling Service, Inc. v. Reilly	16	(3)
Hamburger v. Hamburger	19	(2)
Notes and Questions	21	(1)
Limits on the Firm's Right to Discharge an Employee at Will	22	(1)
Foley v. Interactive Data Corp.	23	(7)
Notes and Questions	30	(2)
Agency Law and Relations with Creditors	32	(1)
Blackburn v. Witter	33	(3)
Sennott v. Rodman & Renshaw	36	(7)
Partnerships	43	(98)
Introduction	43	(24)
Traditional Noncorporate Business Associations	43	(1)
The General Partnership	43	(2)
Joint Ventures	45	(1)
The Limited Partnership	45	(1)
Emergence of Additional Limited Liability Entities as the Norm	46	(1)
Impetus for New Forms	46	(1)
The Limited Liability Company	47	(1)
The Limited Liability Partnership	48	(1)
Determining the Legal Nature of the Relationship	48	(1)
Byker v. Mannes	49	(4)
Hynansky v. Vietri	53	(5)
Notes and Questions	58	(2)
Problem 2-1	60	(1)
Problem 2-2	60	(1)
Sharing Profits and Losses	61	(1)
Kovacik v. Reed	61	(2)
Shamloo v. Ladd	63	(3)
Notes and Questions	66	(1)
Problem 2-3	67	(1)
Problem 2-4	67	(1)
The Partner as Fiduciary	67	(23)
The Common Law Duty of Loyalty	67	(1)
Meinhard v. Salmon	68	(5)
Notes and Questions	73	(1)
Problem 2-5	74	(1)
Self-Dealing	75	(1)
Vigneau v. Storch Engineers	75	(4)
Fiduciary Duty and Management of the Partnership's	79	(1)
Business and Affairs Covalt v. High	79	(3)
Contracting for Absolute Discretion	82	(1)
Starr v. Fordham	82	(4)
Notes and Questions	86	(1)
The Duty of Care	86	(2)
Ferguson v. Williams	88	(1)
Notes and Questions	89	(1)
Problem 2-6	89	(1)
Dissolution and Dissociation	90	(35)
The Basic Framework	90	(1)
McCormick v. Brevig	91	(6)
Notes and Questions	97	(1)
Problem 2-7	98	(1)
Problem 2-8	99	(1)
Wrongful Dissociation	100	(1)
Drashner v. Sorenson	100	(3)
McCormick v. Brevig	103	(1)
Notes and Questions	104	(1)
Problem 2-9	105	(1)
Fiduciary Limits on Dissolution ``At-Will''	105	(1)
Page v. Page	105	(3)
Notes and Questions	108	(1)
Problem 2-10	109	(1)
Fiduciary Limits on Expulsion of Unwanted Partners	110	(1)
Bohatch v. Butler & Binion	110	(6)
Problem 2-11	116	(1)
Contracting to Prevent Opportunistic Withdrawal: The	116	(1)
Fiduciary Duties Owed by Withdrawing Partners Meehan v. Shaughnessy	116	(7)
Notes and Questions	123	(1)
Problem 2-12	124	(1)
Partners as Agents---Allocating the Risk of Loss in Transactions with Third Parties	125	(16)
Partner's Apparent and Inherent Authority	125	(1)
P.A. Properties, Inc. v. B.S. Moss' Criterion Center Corp.	125	(4)
Haymond v. Lundy	129	(2)
Note: Authority of Joint Ventures	131	(1)
Problem 2-13	132	(1)
Problem 2-14	132	(1)
Partnership Authority and the Limited Liability Partnership	132	(1)
Dow v. Jones	133	(8)
The Corporate Form and the Specialized Roles of Shareholders, Directors, and Officers	141	(94)
The Corporate Form	141	(6)
Overview	141	(1)
Directors	142	(1)
Officers	143	(1)
Shareholders	144	(2)
Problem 3-1	146	(1)
Problem 3-2	146	(1)
The Formation of the Corporation and the Governance Expectations of the Initial Participants	147	(52)
Where to Incorporate: State Corporation Laws as Competing Sets of Standard Form Rules	147	(1)
Notes on the Development of American Corporate Law	148	(2)
Formation: The Articles of Incorporation	150	(1)
Problem 3-3	150	(1)
Determining Shares to Issue	151	(1)
Problem 3-4	151	(2)
Determining Voting Rights: Using Articles and Bylaws to Change Legal Norms	153	(1)
Overview of Normal Rules of Shareholder Voting for Election of Directors: Straight Voting	153	(1)
Cumulative Voting	154	(1)
Problem 3-5	155	(1)
Class Voting, Including Dual-Class Voting Schemes	155	(1)
Problem 3-6	156	(1)
A Classified Board with Staggered Terms---Adaptability Versus Stability	156	(1)
Problem 3-7	157	(1)
Looking Ahead: Shareholder Action After Electing Directors	157	(1)
The Annual Meeting and Other Forums for Shareholder Action	157	(1)
Hoschett v. TSI International Software, Ltd.	158	(4)
Removal of Directors and Other Midstream Private Ordering	162	(3)
Murray v. Conseco, Inc.	165	(5)
Adlerstein v. Wertheimer	170	(11)
Problem 3-8	181	(1)
Protecting Changes Made to the Statutory Default Rules	181	(1)
Centaur Partners, IV v. National Intergroup, Inc.	182	(5)
Initial Issuance of Securities	187	(1)
The Securities Act of 1933 and Its Requirement of Extensive Disclosure	187	(1)
Securities and Exchange Commission, About the SEC	188	(1)
Notes	189	(3)
What Transactions Are Covered?	192	(1)
Securities and Exchange Commission v. Edwards	192	(3)
Exemption from Registration	195	(1)
Securities and Exchange Commission v. Ralston Purina Co.	195	(3)
Note: Exemptions	198	(1)
Shareholder Investment and Governance in Publicly Held Corporations and the Impact of Federal Law	199	(9)
How Publicly Held Corporations Are Different	199	(1)
The National Market System and the Efficient Market Hypothesis	199	(6)
Problem 3-9	205	(1)
The Shareholder Census---The Emergence of Institutional Investors	205	(2)
Proxy Voting	207	(1)
The Role of Federal Law for Publicly Held Corporations	208	(27)
Disclosure as the Dominant Approach	208	(1)
Periodic Reporting: Disclosure Required Outside of Shareholder Voting or Outside of Stock Transactions with the Corporation	209	(1)
Problem 3-10	210	(1)
Disclosure and Other Regulation Triggered by the Proxy Solicitation Process and Shareholder Voting	211	(2)
Problem 3-11	213	(3)
Lovenheim v. Iroquois Brands, Ltd.	216	(4)
Problem 3-12	220	(1)
U.S. Bancorp, Request for ``No Action'' Letter	221	(1)
Part 1 Shareholder Letter to U.S. Bancorp	221	(2)
Part 2 U.S. Bancorp Letter to SEC	223	(4)
Part 3 SEC Letter	227	(1)
Problem 3-13	227	(1)
Shareholder Access to Corporate Records and Shareholder Lists: An Intersection of Federal and State Law	227	(1)
Conservative Caucus v. Chevron Corp.	228	(3)
Notes	231	(2)
Problem 3-14	233	(2)
Fiduciary Duty, Shareholder Litigation, and the Business Judgment Rule	235	(172)
Introduction to the Role of Fiduciary Duty and the Business Judgment Rule	235	(11)
Overview	235	(3)
Discretion to Determine General Business Policies	238	(1)
Shlensky v. Wrigley	238	(3)
Discretion to Consider Interests of Non-Shareholder Constituencies	241	(1)
Dodge v. Ford Motor Co.	242	(3)
Notes and Questions	245	(1)
Problem 4-1	246	(1)
The Fiduciary Duty of Loyalty	246	(53)
Introduction	246	(1)
The Corporate Opportunity Doctrine	247	(1)
The American Law Institute Approach	247	(1)
Northeast Harbor Golf Club, Inc. v. Harris	247	(7)
Note: Fairness and the Doctrine of Waste	254	(1)
Notes and Questions	255	(1)
Problem 4-2	256	(1)
The Delaware Approach Broz v. Cellular Information Systems, Inc.	257	(10)
Notes and Questions	267	(2)
Problem 4-3	269	(1)
Conflicting Interest Transactions	270	(1)
At Common Law	270	(1)
Globe Woolen Co. v. Utica Gas & Electric Co.	271	(3)
Transactions with a Controlling Shareholder or Director	274	(1)
Sinclair Oil Corp. v. Levien	275	(4)
Notes and Questions	279	(1)
The Intersection of the Common Law and Conflicting Interest Statutes	280	(1)
Shapiro v. Greenfield	281	(8)
Notes and Questions	289	(1)
Problem 4-4	290	(1)
Problem 4-5	290	(1)
The Special Problem of Director's ``Self-Compensation''	291	(1)
Byrne v. Lord	292	(7)
The Fiduciary Duties of Care and Good Faith	299	(68)
Policy Arguments for Limiting the Reach of the Duty of Care	299	(1)
Joy v. North	300	(2)
Notes and Questions	302	(1)
Duty of Care in the Decisional Setting	303	(1)
Smith v. Van Gorkom	304	(16)
Notes and Questions	320	(2)
Problem 4-6	322	(1)
Statutory Exculpation Provisions	323	(1)
Malpiede v. Townson	324	(5)
Notes and Questions	329	(1)
The Intersection of the Fiduciary Duties of Care and Good Faith	330	(1)
Director's Oversight Responsibilities	330	(1)
In re Caremark International, Inc. Derivative Litigation	331	(12)
Notes and Questions	343	(2)
Problem 4-7	345	(1)
Good Faith as an Equal Partner in the Triad of Fiduciary Duties	346	(2)
Brehm v. Eisner	348	(9)
In re the Walt Disney Company Derivative Litigation	357	(3)
In re the Walt Disney Company Derivative Litigation	360	(2)
Notes and Questions	362	(1)
Problem 4-8	363	(1)
Officer's Oversight and Reporting Duties	363	(1)
Miller v. U.S. Foodservice, Inc.	363	(3)
Notes and Questions	366	(1)
Special Aspects of Derivative and Direct Litigation	367	(31)
Derivative Litigation and the Demand Requirement	367	(2)
Aronson v. Lewis	369	(8)
Notes and Questions	377	(4)
Fiduciary Duty and Aronson's First Prong	381	(1)
In re The Limited, Inc. Shareholders Litigation	381	(11)
Problem 4-9	392	(1)
Dismissal of Derivative Litigation at the Request of an Independent Litigation Committee of the Board	392	(1)
Zapata Corp. v. Maldonado	393	(4)
Notes and Questions	397	(1)
Problem 4-10	398	(1)
Indemnification and Insurance	398	(9)
Owens Corning v. National Fire Insurance Co.	400	(4)
Notes and Questions	404	(1)
Problem 4-11	405	(1)
Problem 4-12	405	(1)
Problem 4-13	406	(1)
Protecting Participants' Expectations in a Closely Held Business: Corporations and LLCs	407	(120)
Introduction	407	(4)
Contracting as a Device to Limit the Majority's Discretion	411	(23)
As to Director Decisions	411	(4)
Zion v. Kurtz	415	(4)
Blount v. Taft	419	(6)
Notes and Questions	425	(2)
Problem 5-1	427	(1)
Voting Agreements as to Shareholder Decisions	427	(2)
Ramos v. Estrada	429	(4)
Notes and Questions	433	(1)
Fiduciary Duty and Threat of Dissolution as a Check on Opportunistic Majority Action	434	(47)
Traditional Judicial Deference to Majority's Discretion	434	(1)
Zidell v. Zidell	435	(3)
Notes and Questions	438	(1)
The Partnership Analogy as a Basis for Enhancing Minority Shareholders' Rights	439	(1)
Donahue v. Rodd Electrotype Co.	440	(5)
Wilkes v. Springside Nursing Home, Inc.	445	(4)
Hetherington and Dooley, Illiquidity and Exploitation: A Proposed Statutory Solution to the Remaining Close Corporation Problem	449	(3)
Easterbrook and Fischel, Close Corporations and Agency Costs	452	(1)
Notes and Questions	453	(2)
Note: Direct Versus Derivative Suit	455	(2)
Problem 5-2	457	(1)
Nixon v. Blackwell	457	(8)
Notes and Questions	465	(1)
The Modern Approach to Involuntary Dissolution	466	(1)
Thompson, The Shareholder's Cause of Action for Oppression	467	(2)
In re Kemp & Beatley, Inc.	469	(3)
Gimpel v. Bolstein	472	(5)
Notes and Questions	477	(3)
Problem 5-3	480	(1)
Problem 5-4	480	(1)
Share Repurchase Agreements	481	(13)
Concord Auto Auction, Inc. v. Rustin	481	(5)
Gallagher v. Lambert	486	(2)
Pedro v. Pedro	488	(4)
Notes and Questions	492	(2)
Problem 5-5	494	(1)
Limited Liability Companies	494	(33)
The Evolution of LLCs	494	(2)
Statutory Governance Rules and the Importance of Contract in LLCs	496	(1)
Gottsakcer v. Monnier	496	(7)
The Role of Fiduciary Duty	503	(1)
Harbison v. Strickland	503	(5)
VGS, Inc. v. Castiel	508	(5)
Notes	513	(1)
Problem 5-6	513	(1)
Exit and Liquidity in LLCs	513	(1)
Love v. Fleetway Air Freight & Delivery Service, L.L.C.	514	(4)
Haley v. Talcott	518	(8)
Notes and Questions	526	(1)
The Corporation as a Device to Allocate Risk	527	(92)
Introduction	527	(1)
Corporate Law Rules Specifying an ``Equity Cushion''	528	(13)
Historical Overview	528	(2)
Statutory Rules Governing the Equity Cushion	530	(1)
Minimum Initial Capitalization Requirements	530	(1)
Quality and Valuation of Consideration Paid for Shares	531	(1)
Limits on Distributions to Shareholders	531	(2)
Klang v. Smith's Food & Drug Centers, Inc.	533	(4)
Notes and Questions	537	(3)
Problem 6-1	540	(1)
Problem 6-2	541	(1)
Piercing the Veil	541	(47)
Introduction	541	(3)
Piercing the Corporate Veil to Reach Real Persons	544	(1)
Contract Cases	544	(1)
Consumer's Co-op v. Olsen	544	(6)
K.C. Roofing Center v. On Top Roofing, Inc.	550	(4)
Notes and Questions	554	(3)
Problem 6-3	557	(1)
Tort Cases	557	(1)
Western Rock Co. v. Davis	558	(2)
Baatz v. Arrow Bar	560	(4)
Notes and Questions	564	(2)
Problem 6-4	566	(1)
Piercing the Corporate Veil to Reach Incorporated Shareholders	566	(1)
Craig v. Lake Asbestos	566	(5)
United States v. Bestfoods	571	(7)
Notes and Questions	578	(4)
Problem 6-5	582	(1)
Piercing in LLCs	582	(1)
Kaycee Land and Livestock v. Flahive	582	(5)
Notes and Questions	587	(1)
Ambiguous or Legally Defective Allocation of the Risk of Loss	588	(31)
Introduction	588	(1)
Contracts on Behalf of Nonexistent Entities	589	(1)
Introduction	589	(1)
Ambiguous Attempts to Contract Around Personal Liability	590	(1)
RKO-Stanley Warner Theatres, Inc. v. Graziano	590	(3)
Allocating Losses When Insiders Make No Attempt to Contract Around Personal Liability	593	(1)
Timberline Equipment Co. v. Davenport	593	(4)
Notes and Questions	597	(2)
Allocating the Risk of Loss from Unauthorized Actions	599	(1)
Agent's Unauthorized Actions	599	(1)
General Overseas Films, Ltd. v. Robin	599	(7)
International, Inc. Menard, Inc. v. Dage-MTI, Inc.	606	(9)
Notes and Questions	615	(1)
Ultra Vires	616	(1)
Problem 6-6	617	(2)
Mergers and Other ``Friendly'' Control Transactions	619	(136)
Introduction	619	(2)
Mergers and Dissenter's Rights	621	(17)
Mergers	621	(1)
Hewlett v. Hewlett-Packard Co.	622	(13)
Dissenter's Rights	635	(1)
Notes and Questions	636	(1)
Problem 7-1	637	(1)
Contracting Around Appraisal and Voting Rights	638	(11)
Use of Alternative Transactional Forms	638	(1)
Introductory Note	638	(1)
Sale of Assets	639	(1)
Triangular Mergers	639	(1)
Compulsory Share Exchanges	640	(1)
``De Facto'' Mergers	640	(2)
Applestein v. United Board & Carton Corp.	642	(4)
Hariton v. Arco Electronics, Inc.	646	(1)
Notes and Questions	647	(2)
Problem 7-2	649	(1)
The Intersection Between the Appraisal Remedy and Fiduciary-Duty-Based Judicial Review	649	(24)
Cash-Out Mergers and the Business Purpose Test	649	(2)
Coggins v. New England Patriots Football Club, Inc.	651	(5)
Notes and Questions	656	(1)
Problem 7-3	657	(1)
The Weinberger Approach	657	(2)
Weinberger v. UOP, Inc.	659	(11)
Notes and Questions	670	(2)
Problem 7-4	672	(1)
Appraisal and Entire Fairness Review After Weinberger	673	(55)
Valuation Under Statutory Appraisal	673	(1)
Cede & Co. v. Technicolor, Inc.	674	(6)
Notes and Questions	680	(2)
Problem 7-5	682	(1)
Appraisal as the Exclusive Remedy	682	(1)
In Delaware	682	(1)
Glassman v. Unocal Exploration Corp.	683	(5)
Notes and Questions	688	(2)
Problem 7-6	690	(1)
Exclusivity in Other Jurisdictions	690	(1)
Stringer v. Car Data Systems, Inc.	691	(3)
Notes and Questions	694	(3)
Problem 7-7	697	(1)
Litigating Entire Fairness---Lynch Claims	697	(1)
In re Emerging Communications, Inc. Shareholders Litigation	697	(17)
Notes and Questions	714	(1)
Problem 7-8	715	(1)
Problem 7-9	715	(1)
Lynch Claims and the Siliconix Transaction: The Impact of the Common Law on Deal Structuring	716	(1)
In re Cox Communications, Inc. Shareholders Litigation	716	(12)
Transfer of Control for a Premium	728	(27)
Fundamental Principles	729	(1)
Sale of Control Block	729	(1)
Tryon v. Smith	729	(3)
Sale of Corporate Office	732	(1)
Essex Universal Corp. v. Yates	732	(2)
Negligent Sale of Corporate Control	734	(1)
Harris v. Carter	735	(3)
Notes and Questions	738	(1)
Problem 7-10	739	(1)
Sale of Corporate Opportunity	740	(1)
Premium Received in Compensation for Sale of Corporate Asset	740	(1)
Perlman v. Feldmann	740	(4)
Notes and Questions	744	(1)
Problem 7-11	745	(1)
Proper and Improper Use of Majority Power	746
Thorpe v. Cerbco, Inc.	745	(8)
Problem 7-12	753	(2)
Changes in Control: Hostile Acquisitions	755	(120)
The Market for Corporate Control	755	(10)
Coffee, Regulating the Market for Corporate Control: A Critical Assessment of the Tender Offer's Role in Corporate Governance	757	(4)
Black, Bidder Overpayment in Takeovers: Manager Ignorance and the Winner's Curse	761	(1)
Kraakman, Taking Discounts Seriously: The Implications of ``Discounted'' Share Prices as an Acquisition Motive	761	(1)
Glossary of Defensive Tactics	762	(3)
Judicial Review of Tender Offer Defenses	765	(39)
Traditional Review	765	(1)
Cheff v. Mathes	766	(5)
Problem 8-1	771	(1)
The Enhanced Scrutiny Framework	772	(1)
Introduction	772	(1)
The Unocal Doctrine	772	(1)
Unocal Corp. v. Mesa Petroleum Co.	772	(6)
Notes and Questions	778	(1)
Problem 8-2	779	(1)
Poison Pills	779	(1)
Moran v. Household International, Inc.	780	(7)
Notes and Questions	787	(1)
Problem 8-3	787	(1)
The Revlon Rule	788	(1)
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.	788	(6)
Notes and Questions	794	(1)
Problem 8-4	794	(1)
Refining Revlon and Unocal	794	(1)
Paramount Communications, Inc. v. Time, Inc.	795	(8)
Notes and Questions	803	(1)
Problem 8-5	804	(1)
Paramount Communications, Inc. v. QVC Network, Inc.	804	(30)
Notes and Questions	817	(1)
Problem 8-6	818	(1)
Judicial Review of Voting Contest Defenses	818	(1)
Judicial Limits on Inequitable Actions	818	(1)
Schnell v. Chris-Craft Industries, Inc.	818	(4)
Problem 8-7	822	(1)
Enhanced Review of Good Faith Actions	823	(1)
MM Companies, Inc. v. Liquid Audio, Inc.	823	(9)
Adlerstein v. Wertheimer	832	(1)
Problem 8-8	833	(1)
Problem 8-9	833	(1)
Testing the Limits of Pre-Planned Defenses	834	(11)
Carmody v. Toll Brothers, Inc.	834	(8)
Notes and Questions	842	(2)
Problem 8-10	844	(1)
Testing the Limits of ``Deal Protection Devices'' in Friendly Mergers	845	(17)
Omnicare, Inc. v. NCS Healthcare, Inc.	845	(16)
Problem 8-11	861	(1)
State Anti-Takeover Statutes	862	(8)
Amanda Acquisition Corp. v. Universal Foods Corp.	864	(2)
Committee for New Management of Guaranty	866	(4)
Bancshares Corp. v. Dimeling Problem 8-12	870	(1)
Differing Incentives in Proxy Fights	870	(5)
Disclosure and Corporate Governance	875	(126)
Introduction: Disclosure's Distinctive Role	875	(2)
Mandatory Disclosure	877	(6)
In the Matter of Informix Corp.	878	(3)
Notes and Questions	881	(2)
Problem 9-1	883	(1)
Disclosure Related to Shareholder Voting	883	(38)
Coverage of §14(a)	883	(1)
Business Roundtable v. Securities and Exchange Commission	884	(5)
Notes and Questions	889	(1)
Problem 9-2	889	(1)
Rule 14a-9	889	(1)
Implied Private Cause of Action	890	(1)
J.I. Case Co. v. Borak	891	(3)
Notes	894	(1)
Misrepresentations or Omissions of a Material Fact	895	(1)
TSC Industries, Inc. v. Northway, Inc.	896	(2)
Virginia Bankshares, Inc. v. Sandberg	898	(5)
Notes	903	(2)
Scienter	905	(1)
Reliance, Causation, and Remedy	905	(1)
Mills v. Electric Auto-Lite Co.	905	(3)
Virginia Bankshares, Inc. v. Sandberg	908	(7)
Notes and Questions	915	(1)
Wilson v. Great American Industries, Inc.	916	(2)
Notes: Remedies	918	(3)
Problem 9-3	921	(1)
Disclosure Related to Buying or Selling	921	(80)
State Law	921	(1)
Malone v. Brincat	921	(5)
Notes and Questions	926	(1)
Federal Law: Rule 10b-5	927	(1)
The Reach of Rule 10b-5: Standing and ``In Connection with a Purchase or Sale''	928	(1)
Birnbaum v. Newport Steel Corp.	928	(2)
Notes and Questions	930	(1)
Superintendent of Insurance v. Bankers Life & Casualty Co.	931	(2)
Notes and Questions	933	(1)
Blue Chip Stamps v. Manor Drug Stores	934	(5)
Notes and Questions	939	(1)
Santa Fe Industries, Inc. v. Green	939	(6)
Note: Case Law Since Santa Fe	945	(2)
Problem 9-4	947	(1)
Elements of Common Law Fraud Applied to Rule 10b-5	947	(1)
Misrepresentation or Omission of a Material Fact	948	(1)
Basic Inc. v. Levinson	948	(5)
Notes and Questions	953	(1)
In re Time Warner, Inc. Securities Litigation	954	(6)
Note: Safe Harbor for Projections	960	(1)
Defendant's Mental State---Scienter	961	(1)
Ernst & Ernst v. Hochfelder	961	(3)
Notes	964	(1)
Novak v. Kaskas	965	(10)
Note	975	(1)
Reliance and Causation	975	(1)
Basic, Inc. v. Levinson	976	(4)
Notes and Questions	980	(3)
Dura Pharmaceuticals, Inc. v. Broudo	983	(6)
Notes and Questions	989	(2)
Problem 9-5	991	(1)
Measure of Recovery	991	(1)
Green v. Occidental Petroleum Corp.	991	(6)
Note: Measure of Recovery Under Rule 10b-5	997	(2)
Problem 9-6	999	(2)
Federal Regulation of Tender Offers	1001	(46)
The Williams Act	1001	(27)
Disclosure	1002	(1)
Prudent Real Estate Trust v. Johncamp Realty, Inc.	1002	(4)
Notes	1006	(2)
Securities and Exchange Commission v. Amster & Co.	1008	(4)
Notes	1012	(1)
Problem 10-1	1013	(1)
Substantive Regulation	1013	(1)
Field v. Trump	1013	(6)
Notes and Questions	1019	(1)
Definition of a Tender Offer	1020	(1)
Problem 10-2	1021	(1)
Problem 10-3	1021	(1)
Antifraud Provisions of the Williams Act	1022	(1)
Schreiber v. Burlington Northern, Inc.	1022	(5)
Note: Duty to Disclose Corporate Mismanagement	1027	(1)
Intersection of Federal Regulation and State Anti-Takeover Statutes	1028	(19)
CTS Corp. v. Dynamics Corp. of America	1028	(9)
Notes and Questions	1037	(1)
Amanda Acquisition Corp. v. Universal Foods Corp.	1038	(7)
Notes and Questions	1045	(2)
Insider Trading	1047	(74)
The Common Law Foundation for Rule 10b-5	1047	(3)
Rule 10b-5 as a Regulator of Insider Trading	1050	(54)
``Classic'' Insider Trading as Fraud	1050	(1)
Securities and Exchange Commission v. Texas Gulf Sulphur Co.	1050	(10)
Notes and Questions	1060	(3)
Chiarella v. United States	1063	(5)
Notes	1068	(1)
Extensions of the Classic Theory	1068	(1)
Tippee Liability and Constructive Insiders	1069	(1)
Dirks v. Securities and Exchange Commission	1069	(7)
Note	1076	(1)
Problem 11-1	1077	(1)
Problem 11-2	1077	(1)
Problem 11-3	1077	(1)
Regulation FD	1077	(1)
Securities and Exchange Commission v. Siebel Systems, Inc.	1077	(9)
Notes and Questions	1086	(1)
Problem 11-4	1087	(1)
Misappropriation and Rule 14e-3	1087	(1)
United States v. O'Hagan	1088	(10)
Notes and Questions	1098	(3)
Problem 11-5	1101	(1)
Problem 11-6	1101	(1)
Problem 11-7	1101	(1)
Problem 11-8	1101	(1)
Problem 11-9	1102	(1)
Note: Enforcement	1102	(2)
Regulation of Insider Trading Under §16 of the Securities Exchange Act of 1934	1104	(17)
Enforcement	1104	(1)
Gollust v. Mendell	1105	(3)
Note: Incentive to Bring Suit	1108	(1)
Computation of Recovery	1108	(1)
Problem 11-10	1108	(1)
Who Is an Insider?	1109	(1)
CBI Industries, Inc. v. Horton	1109	(4)
Note: Beneficial Ownership	1113	(1)
Feder v. Martin Marietta Corp.	1114	(4)
Note: Deputization	1118	(1)
Timing Questions: Transactions Before or After Insider Status	1118	(1)
Unorthodox Transactions, Tender Offers, and the Definition of Purchase and Sale	1119	(1)
Derivative Securities	1120	(1)
Table of Cases	1121	(6)
Index	1127