CORPORATIONS SYLLABUS

PROF. CUNNNGHAM

FALL 2013

Description. This four-credit course provides students with a basic understanding

of the law that governs business corporations. Specific topics include: capitalization,

leverage, organization and authority, control, limited liability, dividends, fiduciary duties,

control transactions, derivative litigation, indemnification and insider trading.

Required Materials. The required casebook is CORPORATIONS AND OTHER BUSINESS

ORGANIZATIONS: CASES, MATERIALS, PROBLEMS by Linda O. Smiddy & Lawrence A.

Cunningham (7th

ed. 2010). It will be necessary to consult statutory selections from two

principal sources, the Delaware General Corporation Law (DGCL) and the Model

Business Corporation Act (MBCA). Links to both appear on the course web site (via the

GW portal). Throughout the semester, PowerPoint slides will be posted on the course web

site containing other material we will use during class.

Meetings. Class meetings, in Room LL101, are August 27, 2013 through

November 21, 2013 on Tuesday and Thursday, 1:40 p.m.to 3:40 p.m. We will take a mid-

meeting break during each session.

Class Rules. Classes may not be taped or recorded (exceptions are considered on

request by email due to extraordinary circumstances such as deaths in the family or student

illness). Student use of any electronic equipment during class is prohibited, with the

exception of devices being used to store and/or take notes related to the class. A seating

chart will be completed in the first days of class, and students must sit in elected seats

during all classes.

Office Hours. My office is Stuart Hall 408. My office hours are Tuesday and

Thursday 11:00 to 12:00. You can send me an e-mail, lacunningham@law.gwu.edu,

seeking an appointment at other times. You can pose queries by e-mail concerning the

class but, given the complexity and subtlety of the course’s subject matter (and all of legal

studies), in-person communications are usually better. For those opting to communicate by

email, please note that I reserve the right to share email correspondence (on an anonymous

basis) with the entire class when doing so would benefit the entire class.

Evaluations. Grades are based on the final examination administered at the end of

the semester. Grades can be improved by distinguished class contributions to class

discussion. Examination is multiple-choice and open-book. A set of sample questions and

answers will be posted on the course web site.

Assignments. The assignments follow, organized by class meeting. We should be

able to adhere to the schedule closely, though some variation may arise due to current

events and/or class discussion. Pacing in the earlier half of the course may also warrant

adjustments to the assignment list during the latter half of the course. Any such

adjustments will be reported in class and referenced on a supplemental assignment listed

posted on the course web site.

Additional Optional Reading. WARREN E. BUFFETT & LAWRENCE A. CUNNINGHAM,

THE ESSAYS OF WARREN BUFFETT: LESSONS FOR CORPORATE AMERICA (Carolina

Academic Press) (advanced materials, written in accessible format, containing famed

investor Warren Buffett’s letters to shareholders of Berkshire Hathaway, assembled by

Prof. Cunningham); WILLIAM A. KLEIN & JOHN C. COFFEE, JR., BUSINESS ORGANIZATION

AND FINANCE (Foundation Press) (intermediate level materials providing theory and policy

from economic perspective); ALAN R. PALMITER, CORPORATIONS: EXAMPLES AND

EXPLANATIONS (West Group) (elementary level introduction to basics of corporate law

from doctrinal perspective with illustrations).

ASSIGNMENTS

CORPORATIONS / PROF. CUNNINGHAM

FALL 2013

No. Date Topic / Cases Casebook Notes / Statutes

1 8/27 Agency

Cargill, Tarnowski

Partnership

Holmes

24-31 (skip n.8 @ p. 28) 66-69

71-87

As background, read: 1-15; 18-23;

226-234

2 8/29 Hybrids: LLPs/LLCs

Elf Atochem, VGS

148-154

154-160 (skim)

160-170

187-191

3 9/3 Incorporation / Internal Affairs

Doctrine

McArthur; Vantagepoint

234-253 MBCA 2.01-2.04, 3.01-3.02, 3.04,

7.32, 8.01

DGCL 102; 141(a)

4 9/5 Capitalization

Toms, Hanewald

255-280 MBCA 6.01, 6.21

DGCL 152-154, 244

5 9/10 Leverage

Obre, Fett Roofing

Preemptive Rights; Buyouts

Katzowitz, Denkins

280-283 (skim)

284-305

MBCA 6.30

DGCL 102(b)(3)

6 9/12 Organization

Roach, Datapoint,

Paulek, Jones

307-328 MBCA 2.05-2.06, 8.01, 8.40

DGCL 106-109, 211, 228

7 9/17 Shareholder Authority

Gashwiler, Seinfeld

342-360 MBCA 7.01-7.02, 7.04-7.05, 8.01,

10.22, 16.01-16.03

DGCL 113, 141(a), 220

8 9/19 Director and Officer Authority

(Manson), Molasky,

Anderson, Drive In,

First Securities

360-366 (skim)

367-383

MBCA 8.01, 8.03, 8.20-8.21, 8.24-

8.25, 8.41

DGCL 141(a)-(b)

9 9/24

Shareholder Control

Auer, Campbell,

Hall, Lehrman, Ramos

391-408

439-451

MBCA 7.27-7.28, 8.04-8.06, 8.08,

8.24, 10.01

DGCL 141(d), 141(k), 214

(Recall Vantagepoint)

10 9/26 Oppression

Donahue, Kemp & Beatley,

Nixon

408-418

423-439

457-459

MBCA 7.30-7.32, 14.02, 14.30

DGCL 218, 341-342, 348, 350-351,

355

11 10/1 Veil Piercing

Baatz, Walkovszky,

Sea-Land, Bestfoods

461-471

471-474 (skim)

474-492

MBCA 6.22

12 10/3 Dividends

Klang, Kamin

Duty of Care

Frances

493-500

501-509 (skim)

509-518

520-529

MBCA 1.40(6), 6.31, 6.40, 8.30, 8.33

DGCL 154, 160, 170, 173, 174

13 10/8 Duty of Care

Caremark

Business Judgment Rule

(Joy); Smith v. Van Gorkum

529-542

542-548 (skim)

548-563

MBCA 8.30-8.31, 8.42

14 10/10 Constituencies

Shlensky v. Wrigley

Exculpation

Arnold, Malpiede, WLR

563-582 MBCA 2.02(b)(4), 8.31(a)

DGCL 102(b)(7)

Va. Code 13.1-690(A) (p. 572)

15 10/15 Duty of Loyalty

Lewis

Safe Harbors

Marciano, Benihana

583-604 MBCA 8.60-8.63

DGCL 144

16 10/17 Good Faith

Disney, Stone

606-625

17 10/22 Executive Compensation

Tyson Foods, Ryan

Corporate Opportunity Doctrine

Broz, Northeast Harbor

626-640

640-658

MBC 8.70

ALI 5.05 (casebook pp. 655-656)

18 10/24 Controlling Shareholder Duties

Sinclair, Perlman

Cash Out Mergers

Weinberger, Glassman

660-689 [in Weinberger

ignore π2 on p.

673]

DGCL 251(a), 253(a) & (d)

MBCA 11.05

19 10/29 De Facto Merger Doctrine

Farris, Hariton, (Knapp)

Takeover Defenses

Cheff

699-709

709-714 (skim)

714-722

MBCA 11.01-11.04; 12.01-12.02

DGCL 271

20 10/31 Intermediate Scrutiny

Unocal, Revlon

722-739

21 11/5 Sale of Control

Time, QVC

739-768

22 11/7 Deal Protection

Ace, Omnicare, Lyondell

768-791 DGCL 146; MBCA 8.26 www.concurringopinions.com/

archives/2009/03/delaware_back_t.html

23 11/12 Derivative Litigation

Aronson, Auerbach, Zapata

793-824 MBCA 7.42, 7.44

24 11/14 Indemnification & Insurance

Waltuch I, Heffernan,

Waltuch II

835-859 DGCL 145

MBCA 8.51-8.52

25 11/19 Insider Trading

Freeman, Chiarella,

Materia, Dirks,

O’Hagan

927-932

965-977

26 11/21 Q&A