WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015 T/TH
PROFESSOR SIEGEL
COURSE MEMORANDUM
Reading:
1. M. Eisenberg and J. Cox, Corporations and Other Business Associations: Cases and
Materials, 11th edition unabridged ("Eisenberg");
2. Corporations and Business Associations - Statutes, Rules and Forms (M. Eisenberg, ed.)
(2015) ("Statutory Supp.");
3. Case Supplement ("Supp.") posted on MyWCL.
You are required to read the applicable statutory sections of the Delaware General
Corporation Act (Statutory Supp.) in connection with each assignment (I have indicated the
relevant provision on assignments II.6, V.2, and VI.3 as examples). You are not responsible for
any other corporate statute.
You are not responsible for reading other cases and statutes referred to in the casebook.
When the assignment sheet says to “note” a case (e.g., VI.2), that note case will be discussed
in class.
Reading may be periodically assigned, recommended or deleted from these assignment
sheets.
Office Hours:
My office hours are Mondays, 12:00 - 12:30 and Tuesdays 9:15 – 9:45. You can also send
me an e-mail to schedule an appointment at a different time. My office is room 464.
Contact:
E-mail is the best way to reach me: msiegel@wcl.american.edu.
Tentcards
Please put your tentcard on your desk for each class.
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Classes
WCL has canceled classes on Thursday, 11/26 (Thanksgiving) and I have cancelled class on
Tuesday, 9/8 and Thursday, 9/24. The 3 missed classes will be made up as follows: 2 of the
classes will be made up on Sunday, November 15 from 10:30-2 in room TBA, and the 3rd will
be made up on Tuesday, 12/1 at our regular time and regular room. Therefore, our last class is
Tuesday, 12/1.
Classwork:
1. In the second class, I will pass around the seating chart. Please leave the front row empty.
2.
On p.4 of this course memorandum is a list of class dates and panels of students grouped
alphabetically by last name. Please note that your panel will get three turns during the
semester. When it is your panel’s day, you are responsible for that day’s material, even if
this material continues from the previous class. This will be your day to advance the class
discussion, and have me get to know you. When it is your panel’s day, please sit in the front
row with your name card if you want to participate. Please do not notify me if you will be
absent or are unprepared, even on the day of your panel, but do not sit in the front row. You
will simply lose the chance to have me get to know you that day, and possibly, to improve
your grade.
In addition, non-panel volunteers are always welcome and are encouraged to participate.
Consistent outstanding (which is participating more than on your panels’ day) class
participation by any student may impact positively on that student's final grade, depending on
the number of points needed to get to the next grade.
3. As you may know, I am teaching two sections of BA this fall: one on MW at 10, and one on
TTh at 10. Two issues arise from my teaching a double section. First, you may ask whether
you can attend either section, any time. The answer is "NO" for a number of reasons: there
may not be enough extra seats in a particular section; the two sections may not be on exactly
the same schedule (so you may miss coverage); and as you will be on only one seating chart,
I will not get to know you (which may impact your class-participation credit). However, if
you occasionally have to miss your section, please feel free to go to the other
section. Second, as class participation can earn you extra credit, the MW class may NOT
give questions/information, etc. relating to the material to those in the TTh section, and those
in the TTh section may NOT accept such information. Both the giving and accepting of
information will be deemed a violation of the Honor Code.
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4. You may ask me to have the class taped for you only if you will be absent for a religious
reason, jury duty, an extended illness for you or a member of your immediate family, or for
more than one consecutive class due to a multi-day WCL program (e.g., a moot court
competition overseas). In the latter two cases, you should have Dean Jaffe notify me, and in
all cases you should email me to request the taping. Please note that while I will always try
to get the class taped, the Office of Technology officially requires three (3) days’ notice to
tape a class. Moreover, I cannot guarantee that the taping will occur, or its quality. Finally,
any such tape is to be used solely for your purposes.
Exam:
The exam will be closed-book and will have 2 options; you may choose the option during the
exam after you have seen the questions:
Option 1: 75 objective, multiple choice questions, each worth 1⅓ points, for a total of 100
points;
Option 2: 75 objective questions, each worth 1 point, and an essay worth 25 points, for a
total of 100 points.
Both sections will have the same exam at the same time.
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The following is a list grouping the students into panels alphabetically by last name to
specify on which date you are responsible for the material:
Date
T, 8/25
Th, 8/27
ABC
T, 9/1
Th, 9/3
DEF
GHI
T, 9/8
Th, 9/10
CLASS CANCELED
JKL
T, 9/15
Th, 9/17
MNO
PQR
T, 9/22
Th, 9/24
STU
CLASS CANCELED
T, 9/29
Th, 10/1
VWXYZ
ABC
T, 10/6
Th, 10/8
DEF
GHI
T, 10/13
Th, 10/15
JKL
MNO
T, 10/20
Th, 10/22
PQR
STU
T, 10/27
Th, 10/29
VWXYZ
ABC
T, 11/3
Th, 11/5
DEF
GHI
T, 11/10
Th, 11/12
Sunday, 11/15
JKL
EXAM DISCUSSION
MAKEUP CLASS: Room TBD, 10:30 am - 2:00 pm
T, 11/17
Th, 11/19
MNO
PQR
T, 11/24
Th, 11/26
STU
WCL CLOSED: NO CLASS (Thanksgiving)
T 12/1
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First letter of Last Name
LAST CLASS: VWXYZ
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #1
I. INTRODUCTION
1. The Fiduciary Relationship:
Black's Law Dictionary (6th ed. 1990) at 640 (Supp. p. 1);
Eisenberg 114 (“Meinhard”) - 118 (up to “Latta”);
Meinhard dissent (Supp. pp. 2-5).
2. Agency:
Eisenberg 2 (“Agency”) - 3 (up to Speed”), 5 (Note) - 6 (up to “Illustrations”), 7 (“Actual
authority may…”) - 9 (up to 3.), 17 (bottom Note) -18 ( up to paragraph 4: “As
Restatement Second…”).
3. Overview of Partnership Law:
Eisenberg 73 (“Introductory Note”), 80 (“Note on Formation”) - 81 (up to 2.), 87 (Note) 89 (up to “B”), 112 (Note) -113 (bottom), 138 (Note) -139 (up to “In Kovacik…”),
144 (Note) -149 (up to “Robert W. Hillman…”);
Uniform Partnership Act with emphasis on §§ 6-9, 13-15, 17-21, 24-27, 29-32, 40 (a, b,
and d) and comments thereon (Statutory Supp.);
Revised Uniform Partnership Act §§ 103, 601, 801 and comment thereon (Statutory
Supp.);
Eisenberg 159 (10.) - 160 (up to C.), 180 (Note) -181 (up to 11.);
Revised Uniform Limited Partnership Act (1976) with 1985 Amendments with emphasis
on §§ 101(7), 201, 301-303, 403, 502, 503, 702, 704, 804 and comments thereon
(Statutory Supp.);
Uniform Limited Partnership Act 2001 §§ 303, 404 (Statutory Supp.).
4. Limited Liability Partnerships:
Eisenberg 181 (11.) - 181 (bottom), 188 (§3.03) – 189 (up to Note).
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5. The Public Corporation and the Close Corporation:
Eisenberg 191-193 (up to “Vantage Point…”), 437 - 439 (up to Note), 214 - 215 (up to
“Typically, preferred…”), 299 (B.) -301 (up to “Still another…”), 471 (“Donahue”) 478 (up to Note).
6. Limited Liability Companies:
Eisenberg 548-549 (up to “Racing”), 557 (Note) – 558 (up to 5.), 569 (3.) – 569 (bottom);
Delaware Limited Liability Company Act §§ 18-101(6), (7), (8), (10), 18-106, 18-302,
18-303, 18-402, 18-405, 18-501, 18-503, 18-702(a), 18-801, 18-804, 18-1101(b), (c),
and 18-1104 (Statutory Supp.);
Revised Uniform Limited Liability Company Act §409(a), (d).
7. Taxes:
Eisenberg 172 (“E.”) - 174 (up to “F.”), 220 (Note) – 220 (up to example);
Tax Rates as of 1/1/13 (Supp. p. 6).
8. Summary Problem:
Work on facts developed in class.
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #2
II. THE CORPORATE FORM
1. Corporate Objective
Eisenberg 251 (15.) - 252 (bottom), 258 (“Other Constituency Statutes”) - 260 (up to
“Another new…”), 265 (Note) - 266 (up to “American Law Institute”).
2. Where to Incorporate:
Eisenberg 205 (4.) – 207 (bottom);
Delaware Corporation Act with emphasis on §§ 101-102 (especially (a)(3), (a)(4),
(b)(1) and *(b)(7) and *(f), 106, 109(b), *112, *113, *115, 121, *122(17), *124,
141*(a), *(b), *(c)(2), (e), (f), (k), *144, *146, 151(a), (c-e), *152, 153(a-c),
162(a), *170(a), 211(a), (b), (d), 212(a), 213(a), *214, *216, *218(a-c), 225(c),
228(a), *251(a-c) (1st sentence of each section), *253(a) (1st sentence), 262(a),
(b), 271(a), *327, *341(a), *342(a), *350, *351, *354, *355(a) (Statutory Supp.).
Some of the above sections tell you how a corporation functions; others delineate
specific rights and obligations. I have put an * next to sections that will be
particularly important to our discussions this semester.
3. Organizing a Corporation:
Review 1.5 and II.2, supra;
Eisenberg 211-212 (up to “In connection with…”), 282 (C.) - 282 (up to “One defensive
use…”).
4. Promoters:
Eisenberg 391-393 (up to “Restatement (Third)”).
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5. Defective Incorporation:
Eisenberg 393 (2.) - 395 (up to “i”).
6. Ultra Vires:
Eisenberg 248 (14.) – 251 (up to 15.);
Del. Gen. Corp. Law §124.
7. Disregard of the Corporate Entity:
Eisenberg 403 (“Walkovsky”) - 408 (up to “Berle”), 409 (Note) – 411 (“The
analysis…”), 412 (2.) – 414 (up to “Minton”), 416 (“Arnold”) - 418 (up to “Sea-Land”)
(note “Radaszewski” on 417).
8. Subordination:
Eisenberg 222 (8.) - 226 (up to 9.) (note “Deep Rock” and “Taylor” on 222, “Arnold” on
225).
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #3
III. FINANCING
1. The Basic Types of Financial Securities:
Review Eisenberg 214-215 (I.5, supra) (but read up to 3. on 215);
Eisenberg 216 (“Introduction…”) - 217 (bottom).
2. Authorized and Issued Stock:
Review Eisenberg 211-212 (II.3, supra);
Eisenberg 212 (“In connection with”) - 213 (up to “Form of Minutes…”);
Aiple v. Twin City Barge and Towing Company (Supp. pp. 7-15).
3. Pre-emptive Rights:
Review Eisenberg 212 (III.2, supra);
Stokes v. Continental Trust Co. (Supp. pp. 16-22).
4. Par Value:
Eisenberg 1333 (1.a & b) – 1334 (up to 2.), 1336 (Note) - 1337 (up to “Reduction
Surplus”).
5. Federal Law: A Brief Overview:
Eisenberg 1363 - 1364 (up to 2.), 1396 - 1401 (bottom).
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #4
IV. CORPORATE DISTRIBUTIONS
1. Review II.1 and III.4, supra.
2. Dividends:
Eisenberg 1317 - 1320 (bottom), 253 (“Dodge”) - 255 (up to Note), 1322 (B.) - 1329 (up
to 2.), 1332 - 1333 (up to B.), 1336 (Note) - 1337 (up to 2.),
1338 - 1338 (up to (b)), 1344 (top) - 1345 (up to “With respect to…”).
3. Repurchases:
Eisenberg 1352 (8.) -1353 (up to 2.), 1356 (Note) -1358 (up to 8).
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #5
V. GOVERNANCE
1. The Business Judgment Rule:
Eisenberg 623 (2nd full ¶ “On their face...”) - 624 (up to “An example...”), 634 (“Under
Delaware law…”) – 634 (up to “The standard of care…”).
2. Allocation of Power: Directors:
Eisenberg 269 - 270 (bottom), 275 (“Blasius”) - 282 (up to C.), 328 (5.) – 332 (up to
“American Law Institute”), 229 (Note) – 230 (up to “Level 2"), 232 (“Note On Board
Committees”), 757 (Note) – 758 (bottom);
Del Gen. Corp. Law §141(c).
Recommended Reading:
Mercier v. Intel, 929 A.2d 786 (Del. Ch. 2007) (note proposed modification of Blasius).
3. Allocation of Power: Officers:
Eisenberg 244 - 248 (up to §14).
4. Allocation of Power: Shareholders:
Review I.5, supra;
Eisenberg 232 - 233 (up to iii), 243 (12.) – 243 (bottom).
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5. Voting in a Public Corporation:
Eisenberg 240 (C.) – 243 (up to 12.), 284 (“CA., Inc.”) - 291;
Del. Gen. Corp. Law §§ 112, 113;
Committee on Corporate Laws Discussion Paper on Voting by Shareholders for the
Election of Directors (Supp. pp. 23-26);
Del. Gen. Corp. Law §§ 141(b) (fifth and eighth sentences), 216 (last sentence);
City of Westland Police and Fire Retirement System v. Axcelis Technologies, Inc.,
(Supp. pp. 27-34).
Recommended Reading:
Siegel, “The Holes in Majority Voting,” 2 Columbia Business Law Review 364 (2011).
6. Voting in a Non-Public Corporation:
Eisenberg 236 (B.) - 237 (up to “2. Mathematics”), 452 (B.) – 454 (up to C.), 442 - 448
(up to Note).
7. Special Recognition of the Close Corporation:
Review: Eisenberg 471 - 478, Del. Gen. Corp. Law §§ 350 - 51, 354 - 55 (Statutory
Supp.) (I.5, supra), Eisenberg 442 - 448 (V.6, supra);
Eisenberg 437 - 441 (up to (2.) (note “Nixon” on 440), 478 (“Note on Nixon”) - 480 (up
to “Rosenthal”).
Recommended Reading:
Siegel, “Fiduciary Duty Myths in Close Corporate Law,” 29 Delaware Journal of
Corporate Law 377 (2004).
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #6
VI. DUTY OF CARE
1. The Business Judgment Rule:
Review V.1, supra.
2. The Basic Standard of Care:
Eisenberg 603 - 618 (up to B.) (note “Aronson” on 614, “Barnes” on 616, and “Cede” on
618), 627 - 642 (up to “McNeilly”);
Smith v. Van Gorkom dissent (Supp. pp. 35 - 37);
Eisenberg 643 (only the first full ¶ “It is reported…”).
3. Limits on Liability:
Del. Gen. Corp. Law § 102(b)(7);
Indiana Code Ann. §23-1-35-1 (Statutory Supp.).
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #7
VII. DUTY OF GOOD FAITH
1. Eisenberg 672 - 679, 1277 (midpage “Lyondell v. Ryan”) – 1278 (up to last ¶ “In
Paramount…”).
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WASHINGTON COLLEGE OF LAW
AMERICAN UNIVERSITY
BUSINESS ASSOCIATIONS
Fall 2015
PROFESSOR SIEGEL
ASSIGNMENT SHEET #8
VIII. DUTY OF LOYALTY
1. Remedies:
Eisenberg 705 (Note) - 706 (up to iii), 1147-1148.
Recommended Reading:
Siegel, “Back to the Future: Appraisal Rights in the Twenty-First Century,” 32 Harv. J.
on Legis. 79 (1995); Siegel, “An Appraisal of the Model Act’s Appraisal Provisions,”
74 Duke J. Law and Contemp. Prob. 231 (2011).
2. Self-Dealing Transactions:
Eisenberg 695 (“Marsh”) - 698 (up to “Lewis”), 712 (Note) - 713 (up to Note).
3. Statutory Approaches:
Eisenberg 722 (Note) - 724 (up to “Sutherland”) (note “Marciano” on 723), 788
(“Kahn”) - 799 (up to “Jones”).
4. Corporate Opportunity:
Eisenberg 775 (Note) - 779 (up to “In re eBay”).
Rapistan Corp. v. Michaels (Supp. pp. 38-41).
Recommended Reading:
Eisenberg 772 (“Broz”) – 775 (up to “Model”).
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5. Insider Trading:
Eisenberg 925 - 928 (up to 2.) (note “Goodwin” on 925, “Hotchkiss” on 926, and
“Strong” on 927);
Securities Exchange Act §10(b) and Rule 10b-5 (Statutory Supp.);
Eisenberg 928 (2.) - 929 (up to “Securities and Exchange…”), 943 (bottom) - 948 (up to
Note), 949 (“Chiarella”) – 957 (up to “Securities Exchange Act…”).
Recommended Reading:
Eisenberg 957 - 967 (up to Note).
6. Shareholder Suits/Derivative Actions:
Eisenberg 1011-1013 (up to “Federal Rules…”), 1024 (“Tooley”) - 1030 (up to 5.), 1050
- 1051 (up to “Marx”), 1067-1073 (up to “Boland”), 1059 (“Aronson”) – 1061 (up to
last ¶ “Massachusetts…”);
Levine v. Smith (Supp. pp. 42-44).
7. Tender Offers & Other Constituencies:
Eisenberg 1296 (“d. Constituency Statutes”);
Eisenberg 1220 - 1221 (up to “The Williams Act”), 1227 (“Unocal”) -1238 (bottom)
(note “Unitrin” on 1235), Eisenberg 1250 (“Revlon”) – 1278 (bottom) (note
“Paramount Communications v. QVC Network” on 1273, Lyondell on 1277), 256
(bottom) (“eBay”) – 258 (up to “Other Constituency…”);
Arnold v. Society For Savings Bancorp (Supp. p. 45);
Indiana Code Ann. § 23-1-35-1 (Statutory Supp.).
Recommended Reading:
Johnson and Siegel, “Corporate Mergers: Redefining the Role of Target Directors,” 136
Univ. of Pa. L. Rev. 315 (1987);
Siegel, “Tender Offer Defensive Tactics: A Proposal For Reform,” 36 Hastings L. J. 377
(1985).
8. Appraisal Remedy and Statutory Mergers:
Eisenberg 1147 - 1148, 1165 - 1167 (bottom);
Review Eisenberg 627 - 643 (VI.2, supra);
Eisenberg 1281-1291 (up to Note);
Del. Gen. Corp. Law §146.
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9. Freezeouts:
Eisenberg 1189 (G.) - 1211 (up to “Solomon”);
Review Eisenberg 788 - 799 (VIII.3, supra).
10. Controlling-Shareholder Tender Offers
Review Eisenberg 1189 - 1211 (VIII.9, supra), and 788 - 799 (VIII.3, supra);
Eisenberg 1211 (“Solomon”) - 1217 (up to Note).
Recommended Reading:
Siegel, “The Illusion of Enhanced Review of Board Actions,” 15 U. Pa. Bus. L. 599
(2013);
Siegel, “Going Private: Three Doctrines Gone Astray,” 4 NYU J. of Law & Business 399
(2008).
THE END!
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