As I've already mentioned, this Friday, October 19, the University of Illinois College of Law will be presenting a very interesting program featuring Delaware Chancellor William Chandler meeting three law professors – Bill Carney (Emory), Bob Thompson (Vanderbilt) and me. You can join via webcast even without traveling to Champaign (though we think there are special advantages of making that trip). Here's more details, including bios and pictures of the participants and instructions for joining the webcast.
Rather than duplicate the web content, I'm going to give a substantive preview of the festivities.
Logically we should start with the paper by Bill Carney and his colleague George Shepherd, the title of which we've borrowed for the conference. Here's the abstract:
This paper challenges the widely held view that Delaware corporate law is dominant because it possesses superior traits, whether they be a well-understood statute, many judicial decisions interpreting the law, or wise and experienced judges administering it. We measure superiority by the measure first identified by Romano as the relevant one for jurisdictional choice – reducing transactions costs in major transactions. We show that since the 1980s Delaware law has become increasingly complex and uncertain, due largely to judicial decisions that appear to tailor doctrines to produce fairness in individual cases, at the expense of certainty in planning and executing transactions. The result has been a variety of mini-rules that require firms and their lawyers to structure transactions formalistically to avoid the most intrusive forms of judicial review. These rules have led to a litigation explosion in Delaware, with concomitant high litigation costs. We also demonstrate the weaknesses of the Delaware General Corporation Law when compared with the Model Business Corporation Act. Next we examine and reject a series of apologies for Delaware law by commentators who concede at least some of these problems.
Who better to respond on behalf of Delaware law than one of the principal Delaware lawmakers, Chancellor William Chandler. Chancellor Chandler criticizes Carney & Shepherd for comparing the pristine terms of the MBCA to the real world of Delaware law as applied in actual cases. MBCA cases can be every bit as messy as Delaware law, and indeed often borrow from Delaware.
Bob Thompson and I then will come at the issue from the standpoint of our respective scholarly interests.
I point out that the "mystery" is clarified by analyzing Delaware law on "uncorporate" cases – that is, limited partnerships and limited liability companies. In this setting, Delaware lawmakers provide substantial coherence by focusing on the parties' contracts. So I show that the supposed problem of Delaware law is to some extent a more fundamental problem with corporate law and the corporation.
Bob Thompson will discuss how Delaware has changed its traditional approach to corporate to adapt to the challenge of federal law – specifically, via a recent focus on disclosure obligations. This provides yet another perspective for analyzing Delaware indeterminacy.
As noted above, the Carney-Shepherd paper is already on the web. Drafts of one or more of the other papers also may be available by the time of the conference -- if so I'll post links. The papers will be published in the Illinois Law Review.
This program promises to be a significant contribution to the debate on Delaware corporate law. I hope you'll tune in, either in person or live on the web, or by watching the webcast after the conference on the Illinois website (I'll be posting the link when available).
Comments