August 17, 2020

ABA Business Law Section

ABA Business Law Section

Documenting the Deal: How Quality Control and Candor Can Improve Boardroom Decision-making and Reduce the Litigation Target Zone
     Leo E. Strine, Jr.; 70(3): 679-706 (Summer 2015)
This Article addresses what legal and financial advisors can do to conduct an M&A process in a manner that: i) promotes making better decisions; ii) reduces conflicts of interests and addresses those that exist more effectively; iii) accurately records what happened so that advisors and their clients will be able to recount events in approximately the same way; and iv) as a result, reduces the target zone for plaintiffs’ lawyers.

Proceedings of the 2014 Delaware Business Law Forum: Director- Centric Governance in the Golden Age of Shareholder Activism
     Diane Holt Frankle, Holly J. Gregory, Gregory V. Varallo, and Christopher H. Lyons; 70(3): 707-718 (Summer 2015)
In October 2014, leading corporate governance practitioners from around the United States convened at the biennial Delaware Business Law Forum, along with current and former jurists of the Delaware Supreme Court and Court of Chancery, to discuss and debate developing topics in corporate governance. Participants also included representatives of “activist” investors, institutional investors, public company directors and those who advise them, academics, and others. The participants considered and debated the extent to which corporate governance remains “board-centric,” the extent to which the rise of shareholder activism is changing that paradigm, and what implications such changes may have for the future. This Article reports on the key questions discussed at the Forum and attempts to summarize the discussion and consensus (if any) reached with respect to these questions.

Consequential Damages Redux: An Updated Study of the Ubiquitous and Problematic “Excluded Losses” Provision in Private Company Acquisition Agreements
     Glenn D. West; 70(4): 971-1006 (Fall 2015)
An “excluded losses” provision is standard fare as an exception to the scope of indemnification otherwise available for the seller’s breach of representations and warranties in private company acquisition agreements. Sellers’ counsel defend these provisions on the basis of their being “market” and necessary to protect sellers from unreasonable and extraordinary post-closing indemnification claims by buyers. Buyers’ counsel accept such provisions either without much thought or on the basis that the deal dynamics are such that they have little choice but to accept these provisions, notwithstanding serious questions about whether such provisions effectively eviscerate the very benefits of the indemnification (with the negotiated caps and deductibles) otherwise bargained for by buyers. For buyers’ counsel who have given little thought to (or who need better responses to the insistent sellers’ counsel regarding) the potential impact of the exclusion from indemnifiable losses of “consequential” or “special” damages, “diminution in value,” “incidental” damages, “multiples of earnings,” “lost profits,” and the like, this article is intended to update and supplement (from a practitioner’s perspective) the legal scholarship on these various types of damages in the specific context of the indemnification provisions of private company acquisition agreements.

Business Lawyers Are in a Unique Position to Help Their Clients Identify Supply-Chain Risks Involving Labor Trafficking and Child Labor
      E. Christopher Johnson Jr., 70(4): 1083-1122 (Fall 2015)
The United States and other governments are actively passing legislation addressing labor trafficking and child labor practices. This legislation includes the Updated Federal Acquisition Regulation and Proposed Federal Supply Chain Transparency Act in the United States; supplychain laws in the United Kingdom and France; and corporate social responsibility (CSR) laws in the European Union, Canada, and India. Similarly, the Southern Poverty Law Center and others in the plaintiffs’ bar are experiencing increasing success in bringing suits against businesses allegedly engaging in illegal labor trafficking and child labor practices.

Against this backdrop of increasing regulatory action, business lawyers are well positioned to help their clients identify supply-chain risks involving labor trafficking and child labor. To assist them, a working group of the ABA Business Law Section developed four simple principles (since adopted by the ABA House of Delegates) to provide businesses and their lawyers with a risk-based compliance approach.

The ABA Model Principles and related Policies are consistent with the growing body of regulatory law and can help businesses comply and hopefully avoid compliance issue pitfalls, such as have occurred with the Dodd-Frank conflict-minerals provisions, and litigation from a growing number of potential plaintiffs, including the families of over 1,100 workers killed in the 2013 Rana Plaza tragedy in Bangladesh. From the perspective of CSR—the subject matter covered by one of the Business Law Section’s newest task forces—the ABA Model Principles and related Policies can help justify a business case against labor trafficking and child labor economically, legally, ethically, and philanthropically. This, in turn, helps both inside and outside counsel identify and navigate the human rights risks in the supply chains of the corporations they represent— corporations associated with products consumers buy and use every day.

Human Rights Protections in International Supply Chains - Protecting Workers and Managing Company Risk
      David V. Snyder and Susan A. Maslow, 73(4): 1093-1106 (Fall 2018)

Through the Decades: The Development of Business Courts in the United States of America
      Lee Applebaum, Mitchell Bach, Eric Milby, and Richard L. Renck, 75(3): 2053-2076 (Summer 2020)
This article interprets the meaning of the term “business court” as it has developed through the variety of implementations and describes the successful development, and occasional failure, of those courts across the country.

Essay: The ABA’s Contribution to the Development of Business Courts in the United States
     Christopher P. Yates, 75(3): 2077-2084 (Summer 2020)
More than a quarter-century ago, the ABA Business Law Section made a commitment to the development of business courts across the United States. From the formation of its Ad Hoc Committee on Business Courts in 1994 through the engagement with state officials and business-court judges for more than two decades, the Section has become a driving force behind the adoption and refinement of the business-court concept by an overwhelming majority of the states. In this article, the innovators and champions of business courts who took up the cause on behalf of the Section tell the story of how the Section played a central role in the success of business-court initiatives and how the Section works diligently today to maintain and build upon that success.

The Paradox of Delaware’s “Tools at Hand” Doctrine: An Empirical Investigation
     James D. Cox, Kenneth J. Martin, and Randall S. Thomas 75(3): 2123-2172 (Summer 2020)
Much has been written on the subject of abusive shareholder litigation. The last decade has witnessed at first an increase and then a dramatic spike in such suits, primarily suits filed in connection with mergers and acquisitions. Delaware courts are known for not just their deep experience in corporate lawsuits but as being doctrinal innovators. One such innovation occurred in Rales v. Blasband, 634 A.2d 927 (Del. 1993), establishing the “tools at hand” doctrine, whereby, before considering whether to grant a motion to dismiss, the court admonishes the shareholder to resort to inspection rights accorded by the Delaware General Corporation Law so as to gather facts necessary for the complaint to survive the pretrial motion.