Emory Law Journal

Volume 68Issue 2

The Flawed Corporate Finance of Dell and DFC Global

Charles Korsmo & Minor Myers | 68 Emory L.J. 221 (2018)

In a pair of momentous decisions involving stockholder appraisal rights, the Delaware Supreme Court made four critical mistakes in analyzing the financial ideas and concepts at play. First, the Court ignored the differences between how public markets price risk and how private parties—particularly financial sponsors—price risk. Second, the Court took the well-supported evidence of information efficiency in securities markets as necessarily implying a high degree of value efficiency. It then compounded this error by attributing this value efficiency not simply to the securities market but also to the deal market. Third, the Court succumbed to a flawed analogy between the fiduciary duty and appraisal contexts, implying that conditions of pricing efficiency are met whenever directors satisfy their minimum fiduciary obligations. Fourth, the Court treated company valuation as a mechanical calculation, downplaying the role of human judgment. This Article analyzes these errors and considers some implications for the future.

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Agency Legislative History

Jarrod Shobe | 68 Emory L.J. 283 (2018)

This Article examines agency–Congress legislative communications, which it terms “agency legislative history,” and argues that they have important, but previously underexplored, implications for the theories and practice of statutory interpretation. Agency legislative history also sheds new light on the ongoing debate over Chevron’s domain. Agency legislative history reinforces arguments in favor of deference to agencies by raising questions about courts’ institutional capacity to effectively uncover congressional deals, and by providing new reasons to believe that agencies may be better statutory interpreters than courts. At the same time, for the many judges skeptical of broad deference but unsure how to limit it, agency legislative history can allow for more narrowly tailored and empirically supported deference decisions that reflect the variety of ways legislation is made.

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A Snapshot of Dual-Class Share Structures in the Twenty-First Century: A Solution to Reconcile Shareholder Protections with Founder Autonomy

Zoe Condon | 68 Emory L.J. 335 (2018)

Dual-class share structures—either an autocratic restraint on shareholders or a protector of founder autonomy—present a long-standing, though hotly contested debate both within the United States and around the world. Recent global developments have pushed the debates to new extremes. This comes after several jurisdictions have lost key initial public offerings to other jurisdictions, resulting in a myriad of responses from stock exchanges, stock indices, and government bodies. As a result of the significant change in regulatory landscape, this Comment considers how the United States should respond. In turn, this Comment offers a framework to offset the extremes on both sides of the debate. The proposed solution balances minimal safeguards that protect shareholders from the most egregious failings of the dual-class structure while safeguarding founders’ vision for the future of their companies.

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Off-Key Regulation: Examining the SEC’s and the DOL’s Dissonant Regulation of Broker-Dealers

Richard J. Kubiak | 68 Emory L.J. 369 (2018)

In 2016, the DOL forecasted that retirement investors were at risk of losing upwards of $189 billion over the next ten years due to receiving conflicted investment advice from broker-dealers. Later that year, the DOL issued a final rule, known as the fiduciary rule, that aimed to prevent conflicted investment advice and consequent losses. But after nearly two years of an uncertain fate, the rule was vacated by the Fifth Circuit in March 2018. While the SEC is currently finalizing a rule that could fill the void created by the DOL’s fiduciary rule being vacated, the details of that rule remain unknown. This Comment explores how the SEC should fill the void; namely, it argues that the SEC should impose a fiduciary standard on broker-dealers who provide personalized investment advice to investors.

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Broad Banned: The FCC’s Preemption of State Limits on Municipal Broadband and the Clear Statement Rule

John T. Cobb | 68 Emory L.J. 407 (2018)

In 2015, the FCC preempted statutes in North Carolina and Tennessee that limited the powers of municipally owned internet service providers to expand their networks to nearby underserved communities. The FCC determined, pursuant to Section 706 of the Telecommunications Act of 1996, that these state limits on municipal broadband networks were anticompetitive barriers to infrastructure investment. The States appealed the FCC order, arguing that the FCC did not have the authority to interpose itself between the States and their political subdivisions. Relying on the Supreme Court’s earlier decision in Nixon v. Missouri Municipal League, the Sixth Circuit agreed with the States. This Comment argues that the Sixth Circuit should have applied a narrower reading of the clear statement rule, which would strike an appropriate balance between the FCC’s unmistakably clear authority to regulate the deployment of broadband technology against the legitimate sovereign interests of the affected states.

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