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Steve Bainbridge
Interests: Law, corporate governance, economics, politics, religion, education, books, food, and wine
Recent Activity
#Pope: "Mass isn't the time for chit chat. It's a time for silence, to prepare for dialogue, a moment of gathering yourself and prepare for meeting with Jesus. Silence is so important. Remember what I told you last time: we are not going to a show." pic.twitter.com/1McDIlKxuG— Catholic News Service (@CatholicNewsSvc) November 15, 2017 Popes in sweet rides, a recent history: JP2: How about this sweet ride?! Francis: *autographs sweet ride* Benedict: Hi Kitty! pic.twitter.com/BKqeCR0yKp— Tommy Tighe (@theghissilent) November 15, 2017 Continue reading
Posted 3 days ago at ProfessorBainbridge.com
I just don’t buy the democracy argument against dual class stock https://t.co/aZYeB9Hu6J— Professor Bainbridge (@ProfBainbridge) November 16, 2017 Continue reading
Posted 3 days ago at ProfessorBainbridge.com
Appreciate this elegant defense of corporate law from @ProfBainbridge: "The corporation remains the engine of economic growth, both at the level of giants like Microsoft and garage-based start-ups." Although imperfect, corporate entities drive economic prosperity. https://t.co/oTmVoTDOWT— Ben Edwards (@BenPEdwards) November 16, 2017 Continue reading
Posted 3 days ago at ProfessorBainbridge.com
Regular readers may recall my article The Parable of the Talents (August 15, 2016), available at SSRN: https://ssrn.com/abstract=2787452, which explains that: On its surface, Jesus’ Parable of the Talents is a simple story with four key plot elements: (1) A master is leaving on a long trip and entrusts substantial assets to three servants to manage during his absence. (2) Two of the servants invested the assets profitably, earning substantial returns, but a third servant — frightened of his master’s reputation as a hard taskmaster — put the money away for safekeeping and failed even to earn interest on it.... Continue reading
Posted 5 days ago at ProfessorBainbridge.com
Ralph Nader went to Harvard Law School to rant and rave about corporations: Ralph Nader, a political activist and repeat third-party presidential candidate, called on Law School students to protest what he characterized as the school’s excessively “corporate” focus at a visit to the school Wednesday. Nader, a Harvard Law graduate, drew a grim picture of the American legal system, saying that Harvard churns out “lucrative cogs in the corporate wheel.” He referenced student debt, hidden bank fees, and unintelligible contracts that consumers don’t read as examples of injustice in the legal system. “The curriculum is built around corporate law,... Continue reading
Posted 5 days ago at ProfessorBainbridge.com
The SEC Division of Corporation Finance has announced guidance for companies on the application of the ordinary business exception to the shareholder proposal rule (14a-8(i)(7)): At issue in many Rule 14a-8(i)(7) no-action requests is whether a proposal that addresses ordinary business matters nonetheless focuses on a policy issue that is sufficiently significant. These determinations often raise difficult judgment calls that the Division believes are in the first instance matters that the board of directors is generally in a better position to determine. A board of directors, acting as steward with fiduciary duties to a company’s shareholders, generally has significant duties... Continue reading
Posted Nov 6, 2017 at ProfessorBainbridge.com
Back in 2014, I reviewed Michael Dorff’s estimable book Indispensable and Other Myths. In it, I noted that: Dorff rightly concludes from a lengthy analysis of both empirical evidence and laboratory studies of decision making, “performance pay very likely … does not result in better performance.” As I likewise observed in a Texas Law Review article reviewing Bebchuk & Fried’s book, there is relatively little evidence that CEOs are motivated by pay, which suggests the possibility that CEOs are motivated principally by other concerns such as ego, reputation, and social effort norms. Put another way, the latter considerations may be... Continue reading
Posted Nov 6, 2017 at ProfessorBainbridge.com
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Dinner Saturday night was boneless beef short ribs braised in a pomegranate juice-based sauce. I got the recipe from Pressure Cooker Perfection . Excellent. To drink we shared a 2015 Ridge Buchignani Ranch Carignane (Sonoma County). Excellent match. Plums and blackberries. Moderate alcohol (by Ridge standards). Well balanced. Not a wine for the cellar but pleasant short term drinking. Very food friendly. Grade: 89 p> Continue reading
Posted Nov 6, 2017 at ProfessorBainbridge.com
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Dinner last night was Smothered Pork Chops (with mashed potatoes and green beans) based on a recipe from Pressure Cooker Perfection . I tweaked the recipe to make it a bit more etouffee-like by seasoning the pork chops with a Cajun spice mixture. I also substituted beer for the chicken stock and added a tablespoon of Lea & Perrins Worcestershire Sauce and two teaspoons of Tabasco to the beer. Yummy. I poured a 2014 Sea Smoke Botella Pinot Noir (Sea Rita Hills), which made a lovely match. This bottling from this vineyard is light by Sea Smoke standards with soft... Continue reading
Posted Nov 4, 2017 at ProfessorBainbridge.com
Despite controlling both houses of Congress and the Presidency, the GOP has accomplished very little other than getting Gorsuch onto the Supreme Court. In particular, they've failed to reform Dodd-Frank and Sarbanes-Oxley. Granted, the House passed a bill, but the Senate killed it. The prospects for reforming federal corporate governance law have further dimmed with the announcement that House Financial Services chairman Jeb Hensarling will retire at the end of this Congress. Without his leadership, it seems unlikely that the next Congress will have any greater success. Continue reading
Posted Nov 3, 2017 at ProfessorBainbridge.com
Like a B-movie franchise villain who keeps coming back, 18 U.S.C. § 1001 -- the prosecutor's best friend -- has once again reared its ugly head. If it is true that a prosecutor can get a grand jury to indict a ham sandwich, it seems to also be true that a prosecutor can get a ham sandwich to violate 18 U.S.C. § 1001. The statute provides that: (a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully— (1)... Continue reading
Posted Oct 31, 2017 at ProfessorBainbridge.com
They're back: The left-liberals who run the American Bar Association are once again declaring that conservative jurists are not qualified to sit on the federal courts. In my view, the Senate should join with President Trump and deny the ABA any institutional role in the nomination process. As I explained back in 2005: In today's WSJ ($), ABA member and section leader Joseph Smith argues that the American Bar Association's rating of SCOTUS nominee John Roberts: ... should be viewed no differently from an opinion expressed by any other special-interest group. Yet that is not how ABA ratings are received... Continue reading
Posted Oct 30, 2017 at ProfessorBainbridge.com
Sad news. Richard Merrill who was Virginia's dean when I was in law school has passed. Reflecting on his accomplishments as dean in 2007 as he was retiring, Merrill said he was proud of the faculty hired during his deanship, including Kenneth Abraham, Pamela Karlan (now at Stanford Law School), Saul Levmore (who became dean at the University of Chicago Law School), Mildred Robinson and Alex Johnson. The school also made dramatic gains in fundraising as state support was shrinking. Former Dean John C. Jeffries, Jr. said Merrill “was a gentle leader — meticulously observant of the sensibilities of those... Continue reading
Posted Oct 30, 2017 at ProfessorBainbridge.com
In Kandell v. Niv, the Delaware Chancery Court held (HT: Pileggi): Where directors knowingly cause or permit a Delaware corporation to violate positive law, they have acted in bad faith, and are liable to the corporation for resulting damages. Sigh. This is a topic on which I have written occasionally on this blog, but maybe it needs a law review article. Until then, may I implore Delaware jurists and lawyers to consider the arguments in these posts? Can directors of corporations be held liable to shareholders when the corporation breaks the law My earlier post on the corporate law aspects... Continue reading
Posted Oct 29, 2017 at ProfessorBainbridge.com
From Ann Lipton comes one more thing to worry about if you worry about CEO agency costs: I mean, leaving aside the obvious pull on a CEO’s attention and time, Schultz – apparently while harboring presidential ambitions – announced that Starbucks would hire 10,000 refugees (a decision that, arguably, negatively impacted his company’s stock price). Bob Iger has had to navigate such highly charged issues as his presence on Trump’s Advisory Council, and the political commentary of Jimmy Kimmel at ABC, and Jemele Hill at ESPN. Facebook, of course, has had to address issues of foreign interference with American elections,... Continue reading
Posted Oct 29, 2017 at ProfessorBainbridge.com
Last night, I made Butter Chicken in my Fagor4 Quart LUX Multi-Cooker using a recipe from Indian Instant Pot® Cookbook . The Fagor is an amazing multi-tasker and Urvashi Pitre's cookbook is an excellent resource for using multi-cookers. Lots of classic Indian recipes made easy for the home kitchen. I recommend both. BTW, I generally don't try to match wine to Indian food. Instead, as we did last night, I usually opt for a Firestone-Walker IPA (I believe Union Jack in this instance). Continue reading
Posted Oct 29, 2017 at ProfessorBainbridge.com
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Last night we has a 2015 Ridge East Bench Zinfandel (Dry Creek Valley) with NY strip steaks and fingerling potatoes as inspired by a Gordon Ramsay video. The Zin was obviously very young, but nevertheless quite approachable. Lots of pepper, blackberries, and an interesting suggestion of chocolate that I rarely find in Zinfandels. Grade: 91 FYI: I used a standard Cajun spice rub. Continue reading
Posted Oct 29, 2017 at ProfessorBainbridge.com
This looks useful: The University of Pennsylvania Law School and the Institute for Law and Economics (ILE) are pleased to announce the availability of an important new resource for scholars and students of Delaware corporate law. Constructed in cooperation with Widener University Delaware Law School and members of the Delaware Bench and Bar, and with the financial support of Penn Law, ILE and CSC Global, the Delaware Corporation Law Resource Center can now be accessed at http://www.DelawareCorporateHistory.org. This website has two principal components. The first is a compilation of resources relating to the Delaware General Corporation Law, including a link... Continue reading
Posted Oct 25, 2017 at ProfessorBainbridge.com
Bloomberg reports that: Corporate boards are at their most willing in five years to see one of their own members replaced, according to an Oct. 17 survey from consultant PwC. Almost half of the U.S. public company directors surveyed said at least one of their peers should step aside in favor of someone new. That's the highest response PwC has gotten since it started asking the question in 2012. I await someone's call. Continue reading
Posted Oct 25, 2017 at ProfessorBainbridge.com
Collett, Teresa Stanton, The Urgency of Restoring the Catholic (and Catholic) Nature of Higher Education (2017). Leisure and Labor Conference, Ignatius Press (2017, Forthcoming); U of St. Thomas (Minnesota) Legal Studies Research Paper No. 17-14. Available at SSRN: https://ssrn.com/abstract=3055458 This essay reflects upon the overwhelming trend of secularization in American Catholic higher education that has led to colleges and universities largely abandoning their liberal arts heritage for a more “instrumentalist” approach to education. This trend is part of what Pope Benedict XVI has identified as the “crisis of cultures” where Western concepts of reason are increasingly detached from their cultural... Continue reading
Posted Oct 25, 2017 at ProfessorBainbridge.com
I've been kicking around corporate philanthropy with a friend and fellow corporate law academic. For what it's worth, I think I offer a pretty good summary of the state of the law in my book on Corporate Law : The law’s basic position on corporate social responsibility [—the broader doctrine of which the question of corporate philanthropy is a subset—] famously was articulated in Dodge v. Ford Motor Co.[1] In 1916, Henry Ford owned 58% of the stock of Ford Motor Co. The Dodge brothers owned 10%. The remainder was owned by five other individuals. Beginning in 1908, Ford Motor... Continue reading
Posted Oct 18, 2017 at ProfessorBainbridge.com
A Business Associations student posed this question: Can class actions be either a derivative suit or a direct suit or are they one or the other? They are, of course, quite different. Here's a good explanation of the difference. Continue reading
Posted Oct 18, 2017 at ProfessorBainbridge.com
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I got an email today from an outfit called Kent Com LLC, which states in part that: I've been fascinated by the necessity defense since I read Cannibalism and the Common Law: The Story of the Tragic Last Voyage of the Mignonette and the Strange Legal Proceedings to Which It Gave Rise , which is a truly great sea/law story. Based on my recollection pf the law, I didn't see how this was a proper case for the necessity defense. After going back to the law, I think it should not be allowed. Under Minnesota law: A necessity defense defeats... Continue reading
Posted Oct 16, 2017 at ProfessorBainbridge.com
The #MiamiLaw community mourns the passing of Professor Fred McChesney, J.D. ’78 https://t.co/CtJmcDRpFe pic.twitter.com/dDDj2dCH5c— Miami Law School (@MiamiLawSchool) October 13, 2017 "The concept of integrating law and economics began at Miami Law in 1975, when a young Fred McChesney ...." https://t.co/8E5RRO1iZf #corpgov— Stefan Padfield (@ProfPadfield) October 15, 2017 Just learned that Fred McChesney passed away last week. I highly recommend his 1997 book, "Money for Nothing." https://t.co/r6FVLlVT2q— Peter G. Klein (@petergklein) October 16, 2017 Saddened by the recent passing of Prof. Fred McChesney of @MiamiLawSchool, former guest professor, and a world-class scholar and individual. pic.twitter.com/uf8zu6CHiU— IE Law School (@IElaw) October... Continue reading
Posted Oct 16, 2017 at ProfessorBainbridge.com
Sad news from Brian Leiter, who reports that Fred McChesney has passed: A leading law & economics and antitrust scholar, Professor McChesney taught at Emory, Cornell, and Northwestern Universities before taking up a Chair at his alma mater, the University of Miami, in 2011. I will add links memorial notices when they appear. He was a great scholar and good friend. We worked together on various projects over the years and his brilliance was matched by his kindness and good fellowship. Update: Miami has posted a rather touching obituary notice. Continue reading
Posted Oct 14, 2017 at ProfessorBainbridge.com