Business Organizations
Prof. Romano
Spring 1998

Syllabus

The assigned readings refer to three sets of materials: casebook, by William A. Klein and J. Mark Ramseyer, Business Associations (3d ed., Foundation Press, 1997) ("BA"); reader, by Roberta Romano, Foundations of Corporate Law (Oxford University Press, 1993) ("FCL"); and a packet of additional cases and statutory materials available in mimeo ("CS"). There is a second packet, a copy of "How to Read a Financial Report," by Merrill Lynch, for background reading (to be read in conjunction with topic 2). If you have some knowledge of basic financial accounting you do not need the second packet.

1. Introduction to organization in firms
   1. Agency principles
      
      BA pp. 11-18, 23-29, 30-36, 43-49, 54, 58-73
      
      FCL pp. 3-28
      

      Partnerships
      

      BA pp. 82-87, 91-97, 132-34, 106-12, 155-58, 175, 186-88
      

      Mechanics of incorporation
      

      CS pp. 1-3
      

      Distinguishing corporate characteristics: limited liability
      

      BA pp. 191-201, 208-11
      

      FCL pp. 63-83
      
2. Financing the corporation
   
   1. Debt
      
      BA pp. 790-828; CS pp. 4-8
      
      FCL pp. 123-36, 145-49 (through note 5)
      

      Equity
      

      FCL pp. 29-62
      

      BA pp. 442-43, 457-73
      

      FCL pp. 137-43, 149 (note 6), 303-17
      
3. Running the corporation
   
   1. Choosing the legal regime
      
      FCL pp. 85-99, 101-21
      

      Allocation of authority between officers, directors and shareholders
      

      CS pp. 9-34
      

      Fiduciary duties and shareholder litigation
      

      1. Duty of care
         
         BA pp. 281-317; CS pp. 35-53; BA pp. 319-22
         
         FCL pp. 188-90 (through note 5)
         

         Duty of loyalty
         

         BA pp. 323-38; CS pp. 54-56, 65-68; BA pp. 338-343
         

         FCL pp. 164-70, 190-91 (through note 7)
         

         Criminalization of fiduciary duties
         

         CS pp. 57-64
         

         FCL pp. 180-86, 192-93 (note 11)
         

         Procedural aspects of derivative suits
         

         BA pp. 230-35, 241-63; CS pp. 68-87
         

         FCL pp. 170-80, 191-92 (through note 9)
         

         Indemnification and insurance
         

         BA pp. 475-83
         

         FCL pp. 192, 193-94
         

         Corporate purpose
         

         BA pp. 264-79
         

         FCL pp. 157-64, 186-88 (through note 3)
         

      Shareholder exercise of control
      

      1. Voting rights
         
         BA pp. 541-45; CS pp. 88-101
         
         FCL pp. 195-204, 221-223 (through note 6)
         

         Proxy fights
         

         BA pp. 484-95; CS pp. 102-106; BA pp. 495-502
         

         FCL pp. 205-213, 223-24 (through note 8)
         

         Shareholder proposals
         

         CS pp. 107-09; BA pp. 507-18; CS pp. 110-15; BA pp. 518-22; CS pp. 116-30
         

         FCL pp. 214-220, 224-27
         

         Shareholder inspection rights
         

         BA pp. 526-40
         
4. Transfers of control
   
   1. Sales of control blocks
      
      BA pp. 652-56, 649-52, 662-69
      

      Mergers and Acquisitions
      

      CS pp. 131-41; BA pp. 670-99
      

      FCL pp. 229-66
      

      Takeovers
      

      BA pp. 710-89; CS pp. 142-57
      

      FCL pp. 267-300
      
5. Regulation of transactions in shares: insider trading
   
   1. Inside information
      
      BA pp. 364-77, 405-18, 354-60, 377-405; CS pp. 158-206
      
      FCL pp. 319-28
      

      Short-swing profits
      

      BA pp. 429-41; CS pp. 207-10
      

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