Contractarian Theory and Unilateral Bylaw Amendments

Corporate directors have been utilizing a potent mechanism in dealing with shareholder activism and shareholder litigation: the right to unilaterally amend corporate bylaws. Directors have exercised this right, for instance, to impose various requirements on who can nominate a director or call a special shareholder meeting, or to designate an exclusive forum where the shareholders can bring suit. Based on the theory that corporate charters and bylaws constitute a "contract" between the shareholders and the corporation, courts have blessed many of the bylaws that directors have unilaterally adopted. This Article examines the contractarian theory by drawing a parallel between amending charters and bylaws on the one hand and amending contracts on the other; and by comparing the right to unilaterally amend corporate bylaws with the right to unilaterally modify contracts. The Article shows how contract law imposes various limitations on the modifying party's discretion. The Article also compares the standard contractual relationship with that of the shareholders and the corporation more generally and uncovers several important differences that could make shareholders (particularly, minority shareholders) more vulnerable to counterparty (directors' and controlling shareholder's) opportunism. For example, unlike contracting parties who have the right to terminate the contractual relationship or opt out of undesirable modifications, shareholders lack the right of termination or opt-out. As a possible solution, the Article considers various mechanisms, including giving the shareholders the right of optional redemption, more robust disclosure, the right to vote (including the right to elect or replace directors), and subjecting bylaw amendments to more active judicial oversight

Spartan Daily, March 30, 1965

Volume 52, Issue 97https://scholarworks.sjsu.edu/spartandaily/4712/thumbnail.jp

Spartan Daily, March 30, 1965

Volume 52, Issue 97https://scholarworks.sjsu.edu/spartandaily/4712/thumbnail.jp

Third-Party Bankruptcy Releases: An Analysis of Consent Through the Lenses of Due Process and Contract Law

Bankruptcy courts disagree on the use of third-party releases in Chapter 11 bankruptcy plans, the different factors that circuit courts consider when deciding whether to approve a third-party release, and the impact of the various consent definitions on whether a release is or should be binding on the creditor. Affirmative consent, “deemed consent,” and silence are important elements in this discussion. Both contract law and due process provide lenses to evaluate consent definitions to determine whether nondebtor third-party releases should bind certain creditor groups. This Note proposes a solution that follows an affirmative consent approach to protect against due process violations and promote consistency across bankruptcy courts

The Limitations of an Economic Agency Cost Theory of Trust Law

Should the donor\u27s specific interests or potentially conflicting theoretical economic principles control the creation and administration of trusts? In a highly influential article advancing an agency cost framework for trust law, Harvard Law Professor Robert Sitkoff suggests retooling trust law to focus on wealth maximization and to minimize costs stemming from an assumed misalignment of the interests between deemed principals and agents within the trust setting. An agency cost theory of trust law, however, reduces the complex, highly idiosyncratic, and emotionally charged nature of trust law into a simple business relationship. Given the special nature of trust law and practice-where interests remain difficult to quantify, interpersonal preferences remain incommensurable, and normative principles trump other preferences-slavish attention to economic analysis resembles the youthful mistake of forcing square pegs into round holes. This Article demonstrates that applying a rigid agency cost analysis to trust law not only produces a positively inaccurate account of modern trusts but also a normatively incoherent philosophy to guide the evolution of trust law. Quite frankly, trust law is not damaged, let alone so broken that it needs to be infused with a new overarching jurisprudential principle. Therefore, this Article urges a return to first principles of trusts that focus on the processes for achieving the settlor\u27s goals and a methodology for fostering integrity in the trustee\u27s stewardship of trust property. For centuries, trust law existed as a vehicle for transferring wealth coupled with some preference regarding the conditions for distribution. While estate planning undoubtedly will become even more sophisticated in the decades to come, the complexity of the questions posed does not require ignoring relatively simple solutions. Ultimately, trusts should be viewed as a means to fulfill donative freedom

Moving Beyond the Surface: Ethics Education in Canadian Social Work Bachelor Programs

This thesis is an exploratory analysis of: “How Canadian schools offering bachelor programs attend to social work ethics education in the 21st century?” A concurrent triangulation mixed method research design was chosen to draw upon the strengths of quantitative and qualitative analysis, and minimize the limitations of each method. Deans and Directors at the thirty-two Faculties, Schools and Departments of Social Work with bachelor social work programs in Canada were contacted and requested to identify an expert in social work ethics education to partake in this research. Fifty-three (53%) of the schools had educators either complete the survey and/or engage in an interview. This research, consistent with the historical trend, locates ethics education in Canadian bachelor programs in the curricular margins. Yet, there is hope for social work ethics education and educators in Canada. This research provides an infusion of hope through the “Moving Beyond the Surface” (MBS) vision of ethics education. The MBS vision with its’ process focus suggests “how” to approach ethics education today, and in the future. MBS has three interrelated categories: (a) space creation for ethics dialogues; (b) ethics dialogues; and, (c) student learning ideals. Space creation for ethics dialogues is an essential condition for the two subsequent categories of ethics dialogues and student learning ideals. Space is created by faculty members serving as “ethical advocates.” Educators enhance curricular space for ethics dialogues by working within existing curricular processes to advocate for the inclusion and enhancement of profession ethics and/or mobilizing others to become ethical advocates (i.e. faculty members, field supervisors, students)