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COMPARATIVE COMPANY LAW
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SYLLABUS
Professor Alan Palmiter
Wake Forest University
School of Law
Winston-Salem, North Carolina
alan.palmiter@wfu.edu
Summer 2007
Comparative Law Program
Venice, Italy
Day 1 - July 16
I.
INTRODUCTION
Introduction .........................................................................................................................1
Drury & Xuereb, Introduction - Comparative Company Law ............................................2
Notes ....................................................................................................................................5
A.
What is a company?
Palmiter, The Corporation -- An Overview .........................................................................8
Notes .................................................................................................................................12
Paillusseau, The Nature of the Company ..........................................................................15
Easterbrook & Fischel, Contractual Freedom in Corporate Law ....................................24
Notes .................................................................................................................................31
Day 2 - July 17
B.
Types of companies
Palmiter, Choice of Organizational Form ........................................................................33
Notes (w/ business forms) ..................................................................................................38
Companies in Italy .............................................................................................................39
Notes (w/ business forms) ..................................................................................................45
Lorenzo Stanghellini, The Italian System of Corporate Governance ................................52
Notes (w/ business forms) ..................................................................................................55
C.
Company law in the European Community - EU Company Law
Introductory Notes ............................................................................................................56
Conard, The European Alternative to Uniformity in Corporation Laws .........................57
Notes .................................................................................................................................64
Carney, The Political Economy of Competition for Corporate Charters ........................64
Notes .................................................................................................................................68
Report of the High Level Group of Company Law Experts
on a Modern Regulatory Framework for Company Law in Europe ....................69
Kellerhalls & Truten Creation of European Company .....................................................72
Notes ..................................................................................................................................76
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COMPARATIVE COMPANY LAW
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Day 3 - July 18
II.
FORMATION OF BUSINESS
A.
Shareholder Liability for Defective Incorporation
1.
Defective incorporation rules -- United States
Cantor v. Sunshine Greenery, Inc., (N.J. Super 1979) .........................................79
Model Business Corporation Act §§ 2.01-2.04, 14.20-14.21 ................................81
Notes .....................................................................................................................85
2.
Defective incorporation rules in Europe
Second Company Law Directive (1968)................................................................87
Notes .....................................................................................................................90
Italian Civil Code ..................................................................................................92
Notes .....................................................................................................................94
Drury, Nullity of Companies ..................................................................................95
Marleasing v. La Comercial Int'l de Alimentacion, (ECJ 1991) ..........................98
Notes .....................................................................................................................99
Day 4 - July 19
B.
Corporate Choice of Law
1.
Choice of law in United States: internal affairs doctrine
Model Business Corporation Act § 15.03, 15.05 ................................................101
Notes ....................................................................................................................102
McDermott v. Lewis, (Del. 1986) ........................................................................104
Romano, THE GENIUS OF AMERICAN CORPORATE LAW ......................................109
Notes ....................................................................................................................114
2.
Choice of law in Europe: siege social and the EU
English, Company Law in the European Single Market ......................................117
Reform of Italian System of Private International Laws .....................................118
Notes ....................................................................................................................118
Carney, The Political Economy of Competition for
Corporate Charters..............................................................................................111
Notes ....................................................................................................................126
Centros Ltd v. Erhvervs-og Selskabsstyrelsen (ECJ 1999) .................................129
Wymeersch, Centros: A Landmark Decision in European
Company Law ......................................................................................................133
Notes ....................................................................................................................138
Uberseering BV v Nordic Construction Company
Baumanagement GmbH (NCC). .............................................................139
Notes ....................................................................................................................144
Kamer van Koohandel v. Inspire Art, Ltd. ..........................................................144
Notes ....................................................................................................................148
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COMPARATIVE COMPANY LAW
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Day 5 - July 23
III.
CORPORATE GOVERNANCE
A.
Power Over Business Earnings
1.
Locus of corporate power -- United States
Delaware General Corporation Law, §§ 141, 170 ..............................................151
Sinclair Oil Co v. Levien,(Del. 1971) .................................................................151
Notes ...................................................................................................................155
Litle v. Waters, (Del. Ch. 1992) ...........................................................................155
Notes ....................................................................................................................157
2.
Locus of corporate power -- Europe
Introductory Notes ..............................................................................................158
Italian Civil Code, arts. 2350, 2377, 2380-2395, 2423, 2432-33 .......................159
Notes ...................................................................................................................167
Stanghellini, Corporate Governance in Italy: Strong Owners,
Faithful Managers: an Assessment and a Proposal for Reform ..........................168
Note ......................................................................................................................175
Report of the High Level Group of Company Law Experts
on a Modern Regulatory Framework for Company Law in Europe .......176
Note ......................................................................................................................181
Communication from the Commission to the Council and The European
Parliament: Modernizing Company Law (2003) ....................................182
Day 6 - July 24
B.
Corporate Purposes
1.
Shareholder wealth maximization -- United States
Dodge v. Ford Motor Co., (Mich. 1919) ............................................................185
Pennsylvania Business Corporation Law, § 1715 (1990)) .................................191
Notes ...................................................................................................................191
Mitchell, A Framework for Enforcing Corporate Constituency Statutes ............192
Macey, An Economic Analysis for Making Shareholders the Exclusive
Beneficiaries of Corporate Fiduciary Duties ......................................................201
Notes ...................................................................................................................206
2.
Companies as social institutions in Europe
Notes ...................................................................................................................208
Italy Civil Code ...................................................................................................209
Stanghellini, Corporate Governance in Italy: Strong Owners,
Faithful Managers: an Assessment and a Proposal for Reform ..........................211
Notes ...................................................................................................................216
Hopt, Labor Representation on Corporate Boards: Corporate Governance and
Economic Integration in Europe ..........................................................................217
Notes ...................................................................................................................222
Corporate Law Different Across Legal Systems:
Corporate Governance Around the World (WSJ 2003) ......................................224
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COMPARATIVE COMPANY LAW
C.
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Worker Rights in Business Changes [not included]
1.
Employee rights on transfer of business: United States
McLeod, Rekindling Labor Law Successorship in an Era of Decline
11 Hofstra Labor L. J. 271 (1994)
Alarcon v. Keller Industries, Inc., No. 92-17045
(9th Cir. June 17, 1994)
Macey, Externalities, Firm-Specific Capital Investments, and the
Legal Treatment of Fundamental Corporate Changes,
[1989] Duke L. J. 173
2.
Employee rights on transfer of business: Europe
Council Directive, OFFICIAL JOURNAL THE EUROPEAN COMMUNITY, 77/187/EEC
P Bork Int'l A/S v. Foreningen af Arbeejdseldere, [1988] ECR 3057 (ECJ, Case
101/87)
Litster v. Forth Dry Dock Co.,2 CMLR 194 (House of Lords 1989)
Day 7 - July 25
IV.
A.
SHAREHOLDER LIQUIDITY AND STOCK MARKETS
Insider Trading Regulation
1.
Insider trading regulation -- United States
Introductory Notes ..............................................................................................227
United States v. O’Hagan, Supreme Court of the United States
521 U.S. 642 (1997) ............................................................................................228
Palmiter, Insider Trading, Securities Regulation: Examples & Explanations.....234
Notes ...................................................................................................................243
2.
Insider trading regulation: Europe
Notes ...................................................................................................................244
Council Directive of 28 January 2003 On Insider Dealing And Market
Manipulation .......................................................................................................244
Raghavan, Ascarelli & Woodrugg, Europe’s Police Are Out of Luck
on Insider Cases (SJ 2000) ..................................................................................249
Langevoort, Defining Insider Trading: The Experience in Other
Countries, (April 1992)........................................................................................252
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COMPARATIVE COMPANY LAW
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SHAREHOLDER LIQUIDITY AND STOCK MARKETS
B.
Corporate Takeovers [Not Included]
1.
Introduction to regulation of takeovers: United States
Palmiter, Takeover Contests -- An Introduction, Corporations: EXAMPLES AND
EXPLANATIONS
2.
Ownership structures and takeovers: Europe
Lorenzo Stanghellini, Corporate Governance in Italy: Strong Owners,
Faithful Managers: an Assessment and a Proposal for Reform,
6 Ind. Int'l & Comp. L. Rev. 91 (1995)
Gilson, The Political Ecology of Takeovers: Thoughts on Harmonizing
the European Corporate Governance Environment,
61 Fordham L. Rev. 161 (Oct. 1992)
Day 8 - July 26
C.
Shareholder Activism
1.
Ownership structures and shareholder activism: United States
Notes ...................................................................................................................259
Robert W. Hamilton, Corporate Governance in America 1950-2000:
Major Changes but Uncertain Benefits ...............................................................260
Carolyn Brancato, The Institutional Investor’s Goals for Corporate Law in the
Twenty-first Century ..........................................................................................269
2.
Ownership structures and shareholder activism: Europe
Stanghellini, Corporate Governance in Italy: Strong Owners, Faithful Managers:
An Assessment and a Proposal for Reform ..........................................................278
Notes ...................................................................................................................291
Ronald Gilson, Globalizing Corporate Governance: Convergence of Form
Or Function ......................................................................................................... 293
Notes ...................................................................................................................303
______________________________
Internet resources:
$
Law articles - Social Science Research Network (SSRN)
http://ssrn.com/
$
Delaware General Corporation Law
http://www.delcode.state.de.us/title8/c001/
$
Model Business Corporation Act (NC BCA)
http://wwws.wfu.edu/~palmitar/CorporationLawPolicy/Conexus/Conexus.htm
$
Italian Civil Code (company law provisions, including 2003 reforms)
http://www.aspman.it/raggio/CodiceCivile/Nuovo Codice Civile.htm
$
Italian Civil Code
http://www.jus.unitn.it/cardozo/obiter_dictum/codciv/codciv.htm
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COMPARATIVE COMPANY LAW
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Class Participation and Grading
Daily preparation and answers. The readings are interesting and the cases worth learning. Ours
will be a small group; your contributions will add to the class experience.
To prepare for class, you will want to prepare your own summary of the readings. For each case,
article and statute, you should prepare a “brief” – either on a separate sheet of paper or in the
margin. The brief should contain the following:
F
I
R
A
C
Factual summary of the case (or facts anticipated by the article or statute)
Issue (or issues) addressed by the author and the author's position
Statement of the rule (or rules) proffered by the author
Summary of the analysis presented by the author
Your view (importance of the case, article or statute)
US students. For US students, I will base your grade on class participation (25%) and a final
exam to be administered when we return to the States (75%). The written portion of the exam
will call for multiple-choice responses and short essays demonstrating your knowledge and
understanding of the principal topics of all three areas covered in the course -- civil law,
European law and comparative company law. Following the written exam, I also anticipate that
there will be an oral component in which I will ask follow-up and more general questions based
on the written exam. You should expect these events will happen in late September.
Italian students. For Italian students who are taking the course for a grade, I will base your
grade on class participation (25%) and a course paper to be sent me by email by September 30
(75%). The paper (between 10-15 pages in length) should identify a court decision in Italy or
elsewhere in Europe. It should compare the actual outcome in the case to what would have been
the outcome had the case been litigated in an identified US jurisdiction (such as Delaware).
Your paper should have the following parts: (1) an introduction that identifies the case, the issues
it raises, and the main points of the paper; (2) a section that describes the case and its outcome,
including excerpts (translated) of the important passages from the court’s opinion or judgment;
(3) a section that analyzes how the case would have been decided in a US jurisdiction, with
specific reference to relevant statutes (legislation), cases (jurisprudence) and law review articles
(doctrine); (4) a comparison of the two approaches, including any relevant references to the
course materials; and (5) your conclusion on this comparative law project.
Please keep your materials and notes from the course.