BA
This is the page for Caroline Bradley’s Fall 2008 Business Associations Class at the University of Miami. The case book for this course is D. Gordon Smith & Cynthia A. Williams, Business Organizations: Cases, Problems, and Case Studies (2nd. ed. 2008). This is a change from last year, and very many of the cases in the book are different from last year’s cases. The authors have emphasised recently decided cases in this book. I am not assigning a statutes book - we will use online resources for statutory material instead.
Here is an initial syllabus (with no semester plan).
Roadmap: After Chapter 6 we will read Chapter 7, but I would like to move straight from Chapter 7 to Chapter 9 (omitting Chapter 8). We will read Chapters 9, 10 and 11. After Chapter 11 I would like to read Chapter 14.
WEEK 14: 17-21 November
Here are some notes on insider trading.
Here is Rule 10b5-2.
Here is a link to Fedex’s Reg FD Disclosure Policy, and one to Continental Airlines’ Policy.
Mon. Nov. 17th. The SEC today announced proceedings against Mark Cuban. The complaint:
alleges that in June 2004, Mamma.com Inc. invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.
Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban’s entire position in the company. When the offering was publicly announced, Mamma.com’s stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day’s closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.
Here is Mark Cuban’s response denying the charges. Cuban is the majority shareholder in Sharesleuth.com which describes itself as “an independent Web-based reporting aimed at exposing securities fraud and corporate chicanery”. The web site discloses that Mark Cuban may make personal investments based on information sharesleuth.com discovers.
Update November 19: Here is a link to Mark Cuban’s brother’s reaction (my brother is not Martha Stewart). And Mark Cuban’s lawyer posted to Cuban’s blog an excerpt from an interview with the issuer’s CEO, suggesting that although the CEO said that the information about the proposed PIPE offering was confidential Cuban may not have agreed to keep it confidential.
WEEK 13: 10-14 November
Next week we will begin to look at the securities regulation material in Chapter 14. I think that we should be able to cover pages 911-956 next week and the remainder of the chapter the following week. The cases in this chapter are a bit different from the cases we have been reading - you’ll notice a number of US Supreme Court decisions, including some significant recent decisions (e.g. Dura v Broudo).
WEEK 12: 3-7 November
This week we will continue with the derivative litigation material (and the rest of chapter 11). We will not be meeting on Thursday 6 November.
WEEK 11: 27-31 October
We have had a number of opportunities to focus on duty of loyalty issues so far this semester. In the corporate context claims of breach of the duty of loyalty are more serious than claims of breaches of the duty of care. The rationale for applying the business judgment rule presumption does not apply where it is claimed that directors made secret profits, took corporate opportunities, or acted in other ways against the corporation’s interests (e.g., Stone v Ritter). I’d like to cover the Benihana and Wheelabrator cases relatively quickly if possible with a view to beginning Chapter 11 on Tuesday this week. Please read to page 712, although I think we won’t get beyond p 695 this week.
Note: here’s a link to a news story about the sentencing of David Bershad, one of the former partners in Milberg Weiss (now known as Milberg) to 6 months imprisonment for the firm’s scheme for paying plaintiffs we discussed the other day.
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