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Business Associations -- Fall 2006

First Day Memo

Rules of the Road

Assignment Sheet # 1

Assignment Sheet # 1 (Revised Post-Ernesto)

Assignment Sheet # 2

Assignment Sheet # 3

Links

First Day Memo

To: Students in BUSINESS ASSOCIATIONS

From: Professor Lili Levi

Date: August 8, 2006

Re: Materials at Distribution Center/First Assignment

You will need to purchase 3 books for the class: the casebook, the most recent casebook supplement, and the statutory supplement associated with the casebook. The casebook is Melvin A. Eisenberg, Corporations and Other Business Organizations: Cases and Materials (9th ed. unabridged 2005). The casebook supplement is: Melvin A. Eisenberg, 2006 Supplement, Corporations and Other Business Organizations: Casebook Supplement. The required statutory supplement is Melvin Eisenberg, Corporations and Other Business Associations: Statutes, Rules, Materials & Forms (2006).

In addition, you will have to purchase a photocopied packet from the Distribution Center. The packet will include my Course Information handout, which describes the course materials and rules of the road for this class, the first assignment sheet, and Readings on Agency, Partnership & Corporations (2006).

For the first two classes, please read:

(1) the Course Information handout;

(2) pages 1-19 in the Eisenberg casebook;

(3) pages 1-7 of the Readings on Agency, Partnership & Corporations from the Distribution Center.

We will focus on Eisenberg pages 1-12 and Levi pages 1-3 in the first class.

Course Information Memo -- "Rules of the Road"

Professor Lili Levi

Office: Room 270, Law Library
Telephone: (305) 284-2289
Faculty Assistant: Ms. Lely Rodriguez (305) 284-3996

COURSE INFORMATION

Welcome to Business Associations. The course will give you an overview of agency, partnership and corporations principles. We will spend approximately the first month on agency and partnerships and the rest of the semester on corporations. New business forms, such as LLPs (limited liability partnerships) and LLCs (limited liability companies), will be addressed as well. Since this is an introductory survey course, we will be unable to delve into taxation, corporate finance or most securities regulation issues.

I. COURSE MATERIALS

A. Required Materials

The casebook will be Melvin Eisenberg, Corporations and Other Business Organizations: Cases and Materials (9th ed. unabridged 2005), Melvin Eisenberg, 2006 Supplement to Corporations and Other Business Organizations: Cases and Materials (2006) and Melvin Eisenberg, Corporations and Other Business Associations: Statutes, Rules, Materials & Forms (2006). In addition, you will have to purchase a photocopied packet from the Distribution Center – Levi, Readings on Agency, Partnership & Corporations (2006) You can get the relevant Florida statutory materials either on-line (Westlaw or Lexis), or by purchasing Stuart R. Cohn & Stuart D. Ames, Florida Business Laws Annotated 2004-2005 (2005) (which should be available at the bookstore). The Course Web-site can be found at http://faculty.law.miami.edu/llevi/Courses/BusinessAssociations2006.htm.

B. Recommended Materials and Hornbooks

I do not generally recommend buying or relying on commercial outlines or canned briefs. As for more substantive student aids, students in previous classes have spoken highly of the predecessor to Alan R. Palmiter, Corporations: Examples and Explanations (5th ed. 2006). For agency and partnership, William A. Klein & John C. Coffee, Business Organization and Finance (9th ed. 2004) is the classic introduction. Perhaps a bit easier and more student-friendly are Hamilton & Booth, Business Basics for Law Students (1998) and Kleinberger, Agency and Partnership: Examples and Explanations (latest edition). Traditional single-volume corporations hornbooks include Pinto & Branson, Understanding Corporate Law (2d ed. 2004) and Cox, Hazen & O’Neil, Corporations (1997). Stephen M. Bainbridge, Corporation Law & Economics (2002) and Stephen M. Bainbridge, agency, partnership and limited liability companies (2003) – also look useful. (The classic hornbook is Robert Clark, Corporate Law (1986), which – while somewhat dated – is still analytically very useful.)

C. Useful Sites:

The following is a list (although by no means an exhaustive one) of useful Internet sites you might wish to visit during the course:

SEC web page: www.sec.gov

Search engine: www.google.com

NY Stock Exchange: www.nyse.com

NASD: www.nasd.com

Florida Dep’t of Corps.: http://www.dos.state.fl.us/doc/

Delaware corp. law: www.state.de.us/corp/

Institutional investors: www.isstf.com

New York Times: www.nyt.com

Wall Street Journal: www.wsj.com

Corporate law websites/blogs of potential interest:

Professor Bainbridge: www.professorbainbridge.com/

www.corplawblog.com/

www.law.harvard.edu/programs/olin_center/corporate_governance/

Findlaw's compilation of state corporation law and forms: www.findlaw.com/11stategov/indexcorp.html

Fortune 500 firms: www.fortune.com/fortune/fortune500/500list.html

Business terms: www.washingtonpost.com/wp-srv/business/longterm/glossary/

nytimes.com/library/financial/glossary/bfglosa.htm

www.thecorporatelibrary.com/

You might also wish to look at advance sheets such as BNA’s Securities Regulation & Law Report or Corporate Counsel Daily or Corporate Counsel Weekly – either in paper form in the library or on-line through Lexis or Westlaw.

D. Note on statutes:

The law of business associations is heavily statutory. With respect to corporations, for example, both state and federal law are relevant – with federal law purportedly addressing procedural issues regarding issuance and trading of securities, and state law governing all substantive aspects regarding the corporation. On the state law front, there are at least three statutory models to which different states adhere – the Delaware approach, the Model Business Corporation Act approach, and the NY approach. Although differences among these models appear to be diminishing in recent years, it is important to address the remaining differences because various jurisdictions may well deal with the same corporate problem differently. In this class, in addition to federal law, we will concentrate on the corporate law statute of Delaware because most of this country’s large firms are incorporated in Delaware. We will refer to the Model Business Corporation Act (which is used as a base point by more than 25 states, including Florida) principally by way of contrast to the Delaware provisions. I understand that having to refer to three or more statutes with regard to every issue may appear unduly burdensome, so we will concentrate on material differences between the Model Act and Delaware statutory schemes.

E. Restatement (Third) of Agency

The American Law Institute (ALI), under whose aegis the Restatement (Second) of Agency was written in 1958, has produced a revision of the Restatement of Agency. The Restatement (Third) of Agency has now replaced the Restatement Second. While we will focus our work on the new Restatement Third, we will be referring to the Restatement Second in order to illustrate the major changes reflected in the new version.

II. OFFICE HOURS

My formal office hours will be on Tuesday afternoons from 3:30PM to 5:00PM. In order to allocate this time fairly, my faculty assistant will have a sign-up sheet. (Please do not try to see me in the hour before class) If you have some pressing matters to discuss at any time other than office hours, or can’t get in to see me during office hours in any given week, please feel free to call me for an appointment (305-284-2289) or leave a note on my door. I will post a note on my door if I ever have to reschedule office hours.

III. SEATING POLICY

Since this is a large class and I want to know you all as quickly as possible, I would like you to pick your permanent seats for the semester at the beginning of our second class session. I will pass around a seating chart at that time.

IV. GRADING

Grades will be based primarily on your performance on a final examination. The exam will be no longer than four and one-half hours in length and will be a closed book examination. It will consist of multiple choice and/or short answer questions, and may also have an essay component. I have included some examples of prior exams in this packet.

Note also that class participation that I deem to be substantial in both quality and quantity may positively affect your grade.

V. CLASS ATTENDANCE, COURTESY, PREPARATION, PARTICIPATION

AND TAPE RECORDINGS

A. Attendance

Law School regulations require class attendance. Each student will be permitted four unexcused absences or “unprepareds” during the semester. The final grade will be reduced by 0.5 for each unexcused absence or “unprepared” beyond four. Excuses may be obtained before the fact from me or from the Dean of Students, but after the fact only from the Dean of Students. The most efficient way to request an excused absence is by filling out the appropriate form at the Dean of Students’ office.

B. Promptness & Courtesy

As a courtesy to me and to your fellow students, please arrive promptly for every class. I find tardiness extremely disruptive and will take whatever steps I deem necessary to eliminate it. If for some reason you must be late, please enter the room as quietly as possible through the rear entrance and sit in the open seat nearest the door. Again, if this proves to be disruptive, I will take whatever steps I deem necessary to eliminate the problem.

In light of past experience, let me also emphasize that chatting with your neighbors or passing notes while class is in session – not to mention playing computer games or watching DVDs on your laptops – is rude, disruptive and unacceptable to me. I reserve the right to use any and all corrective methods to promote promptness and courtesy.

C. Preparation

I expect everyone in this class to be prepared for each class session. Unless you have read the assigned materials carefully and thought about them, you will have trouble following the class discussion and applying the relevant principles when necessary. In addition, class discussion is critical to the development of the materials in this course. In order to prevent the domination of such class discussion by only a handful of people, I intend to call on you as well as relying on volunteers.

E. Tape Recordings

Unless you require taping for reasons of disability, you may not record any class sessions at which you are present. However, if you know that you will be absent for a particular class, you may have someone record it for you if I am advised about the tape recording. (Persons who are taping for reasons of disability need not request my permission.) You may not, however, transcribe such recordings (unless, again, you are taping for reasons of disability.) Infractions of this tape recording rule will cause offenders to be referred to the Honor Council and will lead to the elimination of absentee taping privileges for the rest of the class. Those who need to tape for reasons of disability are of course exempted from this rule.

Have a good semester!

* * *

Assignment Sheet # 1 -- Agency and Partnership

Abbreviations:

CB = Eisenberg Casebook (9th Edition Unabridged)

CB SUPP = Eisenberg 2006 Casebook Supplement

LEVI PM = Photocopied Readings on Agency, Partnership & Corporations

STAT = Eisenberg 2006 Statutory Supplement

FL = Florida Business Laws Annotated

DATE

COVERAGE

ASSIGNMENT

I. Agency

8/22, 8/23

A. Introduction

B. Characterization

C. Authority

CB 1-19

LEVI PM 1-7

8/24

D. Duty of loyalty

E. Financial Statements

CB 19-30

II. Partnership

8/29

A. Formation

CB 31-42

8/30, 8/31

B. Ongoing operation:

1. Management:

2. Money matters

3. Authority & liability for partnership obligations

CB 41-48

LEVI PM 8-9

CB 49-53

CB 54-63

9/5

C. Property

CB 64-71

LEVI PM 10-13

9/5, 9/6

D. Duty of loyalty

CB 71-77

9/6, 9/7

E. Dissolution

CB 77-105

CB Supp 1-8

LEVI PM 14-16

On your own

F. Partnership Hypotheticals

G. Form of Partnership Agreement (for review)

LEVI PM 17-19

STAT Partnership Forms

Revised Assignment Sheet # 1 -- Post-"Ernesto"

DATE

COVERAGE

ASSIGNMENT

I. Agency cont'd

8/31

A. Duty of loyalty

B. Financial Statements

CB 19-30

II. Partnership

8/31

A. Introduction to PPs

CB 31-42

9/5, 9/6

B. Formation

C. Ongoing operation:

      1. Management:

      2. Money matters

       3. Authority & liability for partnership obligations

CB 41-48

LEVI PM 8-9

CB 49-53

CB 54-63

9/7

D. Property

CB 64-71

LEVI PM 10-13

9/7

E. Duty of loyalty

CB 71-77

9/12, 9/13

E. Dissolution

CB 77-105

CB Supp 1-8

LEVI PM 14-16

On your own

F. Partnership Hypotheticals

G. Form of Partnership Agreement (for review)

LEVI PM 17-19

STAT Partnership Forms

Assignment Sheet # 2 - Corporations

DATE

COVERAGE

ASSIGNMENT

9/14, 9/19,

maybe part of 9/20

Corporations

Introduction to the corporate form; Selecting a state of incorporation

Overview: Formation and financing of corporations; legal formalities

Promoter transactions; defective incorporation

Objectives of corporations and corporate law

Read CB 106-108

Review CB Supp. 9-28

Read CB 108-114

(Review forms of charter, by-laws, minutes and stock certificates in STAT)

Read CB 114-121

Review CB 121-127

Read CB 127-153 (focus in class on 134-153)

LL Materials 20-23

9/20, 9/21, 9/26, 9/27, 9/28, 10/3, 10/4

Corporate structure and governance:

-- Shareholdership

-- Allocation of power bet. shareholders and management

-- Structure of management, formalities for board action, authority of officers

-- Formalities for shareholder action;

Cumulative voting

-- Limited liability/piercing the corporate veil; equitable subordination

Read CB 154-162

Read CB 162-197

Read CB 197-215

Review LL Materials 41-53



Read CB 215-220

Review LL Materials 24-40

Read CB 220-257

Read CB Supp. 29-31

Review LL Materials 54-61

10/5, 10/10, 10/11

Shareholder informational rights and proxy voting:

-- Informational rights

-- Proxy rules: intro and private actions

-- Proxy rules: shareholder proposals

-- Proxy contests

Read CB 258-275

Review LL Materials 62-67

Read CB 275-303

Read CB 303-315

Review LL Materials 68-82

Read CB 315-324

TBA



Alternative Forms of Business Organization





Limited partnerships, LLP, LLC



Read CB 466-514

Read CB Supp. 32-33

Review LL Materials 83-87

TBA

Back to Corporations

Fiduciary duties/Normal governance:

-- Duty of care and duty of good faith, limits on director/officer liability, duty to act lawfully

Fiduciary duties/Conflict transactions:

-- Duty of loyalty

-- Compensation

-- Use of corporate assets; corporate opportunity doctrine

-- Duties of controlling shareholders; Sale of control

Read CB 515-587, 603-605

Read CB Supp. 34-55

Review CB 587-603

Read CB 606-641

Read CB 641-654

Review LL Materials 88-101

Read CB 654-678

Read CB 686-711, 719-730

Review CB 678-686, 731-747

ASSIGNMENT SHEET # 3

TBA

Links (These are far from exhaustive)