Preface |
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v | |
Summary Table of Contents |
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vii | |
Introduction. Approaching Corporate Law |
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1 | (1) |
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Putting Business Organizations in Context |
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1 | (7) |
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Business Organizations Generally |
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1 | (1) |
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2 | (1) |
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2 | (2) |
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The Small and Medium Sized Business |
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4 | (1) |
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The Changing Demographics of the Work Force |
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5 | (3) |
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Other Perspectives of Business |
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8 | (3) |
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The Contractual Theory of the Corporation, 11 George Mason University Law Review 99, 100, 123 (Summer 1989) |
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9 | (1) |
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Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century 11-13 (1995 The Brookings Institution) |
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10 | (1) |
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Development of American Business Corporation Law |
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11 | (15) |
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12 | (4) |
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The Development of American Business Corporation Law |
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16 | (1) |
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Nineteenth Century Developments |
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16 | (1) |
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From Special Acts to General Corporation Statutes |
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16 | (1) |
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From Restrictive to Enabling Statutes |
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17 | (1) |
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From Unlimited to Limited Liability |
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18 | (1) |
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Twentieth Century Developments |
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18 | (1) |
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Emergence of Delaware and the Trend Toward Congruence in Other States |
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19 | (1) |
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Perfection of the Enabling Concept |
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20 | (1) |
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State Regulation to Coregulation with the Federal Government |
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20 | (1) |
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Types of American Corporations |
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21 | (1) |
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21 | (1) |
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21 | (1) |
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22 | (1) |
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23 | (3) |
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Distinguishing Features of Business Law Practice |
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26 | (9) |
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What Does It Take? Hallmarks of the Business Lawyer, 5 Business Law Today 11, 11-14 (July/August 1996) |
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27 | (2) |
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29 | (1) |
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30 | (1) |
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Predilection Against Telling a Client ``No'' |
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30 | (1) |
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Involvement in Clients' Affairs |
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31 | (1) |
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31 | (1) |
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31 | (1) |
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32 | (1) |
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Involvement of Securities Law |
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32 | (1) |
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33 | (1) |
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33 | (2) |
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Sole Proprietorships and Agency Principles |
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35 | (42) |
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35 | (2) |
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Introduction to Forms of Business Entities |
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37 | (4) |
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41 | (1) |
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Agency Law and the Legal Relationships Between Sole Proprietors and Their Employees |
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42 | (35) |
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Formation of an Agency Relationship |
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42 | (1) |
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Gay Jenson Farms Co. v. Cargill, Inc. |
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43 | (6) |
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The Legal Consequences of Appointing an Agent --- The Principal's Liability for the Agent's Acts |
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49 | (1) |
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Apparent Authority, Inherent Agency Power, and Estoppel |
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49 | (1) |
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50 | (2) |
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United States v. International Brotherhood of Teamsters |
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52 | (4) |
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Koval and Koval v. Simon Telelect, Inc. |
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56 | (5) |
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61 | (1) |
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Connecticut Junior Republic v. Doherty |
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61 | (2) |
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Liability for Contract --- Disclosed and Undisclosed Principals |
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63 | (1) |
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African Bio-Botanica, Inc. v. Sally Leiner, t/a Ecco Bella |
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64 | (5) |
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69 | (2) |
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Fiduciary Obligations of Agents |
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71 | (1) |
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71 | (6) |
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Traditional Business Forms and Their Progeny |
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77 | (112) |
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77 | (58) |
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77 | (3) |
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80 | (1) |
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80 | (6) |
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86 | (10) |
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96 | (1) |
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Business Organization and Finance 83-85 (7th ed. 2000) |
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97 | (1) |
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Management of the Enterprise |
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98 | (1) |
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99 | (1) |
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100 | (6) |
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Partners' Liability to Third Parties for Partnership Obligations |
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106 | (1) |
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Law of Corporations 73-75 (3d ed. 1983) |
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106 | (2) |
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Kansallis Finance Ltd. v. Fern |
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108 | (5) |
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113 | (1) |
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Partners' Return on Investment |
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114 | (1) |
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Allocation of Profits and Losses |
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114 | (3) |
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Transfer of Partnership Interest to Third Parties or to the Partnership |
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117 | (1) |
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118 | (3) |
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Dissolution of the Partnership |
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121 | (2) |
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123 | (3) |
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126 | (4) |
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130 | (5) |
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135 | (7) |
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Advantages of the Corporate Form |
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135 | (1) |
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Limited Liability of Shareholders |
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136 | (1) |
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136 | (2) |
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138 | (1) |
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138 | (1) |
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139 | (1) |
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Disadvantages of the Corporate Form |
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139 | (1) |
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Expense and Trouble of Formation and Maintenance |
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139 | (1) |
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Required Initial and Continuing Formality |
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140 | (1) |
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140 | (2) |
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Synthesis --- Other Forms Business Organizations |
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142 | (47) |
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Statutory Close and Professional Corporations |
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142 | (1) |
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143 | (4) |
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Gateway Potato Sales v. G.B. Investment Co. |
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147 | (8) |
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Limited Liability Companies |
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155 | (1) |
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Elf Atochem North America, Inc. v. Jaffari and Malek LLC |
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156 | (9) |
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C & J Builders and Remodelers, LLC v. Geisenheimer |
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165 | (4) |
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169 | (17) |
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Limited Liability Partnerships |
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186 | (3) |
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189 | (16) |
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189 | (1) |
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190 | (5) |
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Liabilities of Corporations on Promoters' Contracts |
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190 | (1) |
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McArthur v. Times Printing Co. |
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191 | (2) |
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Rights and Liabilities of Promoters on Promoters' Contracts |
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193 | (2) |
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Where and How to Incorporate |
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195 | (10) |
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195 | (1) |
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The Genius of American Corporate Law 6, 8-9, 14 (1993) |
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196 | (2) |
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198 | (1) |
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Organizing Corporate and Other Business Enterprises 6-1 --- 6-3 (5th ed. 1990) |
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198 | (3) |
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The Purposes and Powers Clauses |
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201 | (1) |
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Preincorporation Agreements |
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202 | (1) |
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1 O'Neal's Close Corporations Ch. 2, pp. 124-26 (3d ed. 1998) |
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202 | (3) |
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205 | (52) |
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205 | (1) |
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Some Capitalization Basics |
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205 | (15) |
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206 | (1) |
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Types of Equity Securities --- Traditional Designations and the Model Act Approach |
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206 | (2) |
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Issuing Equity Securities |
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208 | (1) |
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208 | (1) |
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Mechanics of Equity Capitalization |
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209 | (4) |
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Toms v. Cooperative Management Corporation |
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213 | (3) |
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216 | (1) |
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216 | (2) |
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218 | (2) |
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Duly Authorized, Validly Issued, Fully Paid, and Nonassessable Stock |
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220 | (7) |
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223 | (4) |
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Thin Incorporation and Subordination |
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227 | (10) |
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The Caloric Count of a Thin Incorporation, Proceedings, 17th Annual N.Y.U. Institute on Federal Taxation 771 (1959) |
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228 | (3) |
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Obre v. Alban Tractor Co. |
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231 | (2) |
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Fett Roofing and Sheet Metal Co. v. Moore |
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233 | (4) |
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237 | (9) |
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1 O'Neal's Close Corporations Ch. 3, pp 55-57 (3d ed. 1998) |
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238 | (3) |
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241 | (5) |
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Share Transfer Restrictions and Buyout Provisions |
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246 | (11) |
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Share Transfer Restrictions |
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246 | (1) |
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1 O'Neal's Close Corporations Ch. 7, pp 4-6, 13-15 (3d ed. 1998) |
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246 | (3) |
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249 | (1) |
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Structuring the Agreement |
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249 | (1) |
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1 O'Neal's Close Corporations Ch. 7, pp 52-53, 134 (3d ed. 1998) |
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249 | (1) |
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250 | (1) |
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1 O'Neal's Close Corporations Ch. 7, pp. 136-37 (3d ed. 1998) |
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250 | (2) |
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Denkins v. Zinkan Enterprises |
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252 | (5) |
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Organizing the Corporation |
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257 | (36) |
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257 | (1) |
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257 | (3) |
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Other Organizational Matters |
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260 | (5) |
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Corporate Minutes: Their Form, Contents, Inspection and Evidentiary Value, 29 The Practical Lawyer, 45, 46-52 (1983) |
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263 | (2) |
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265 | (14) |
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Position of Bylaws in the Hierarchy of Regulation |
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265 | (1) |
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What Bylaws Cover and Bylaw Conflict |
|
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266 | (1) |
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Roach & The Legal Center v. Bynum |
|
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267 | (5) |
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Datapoint Corp. v. Plaza Securities Co. |
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272 | (4) |
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276 | (1) |
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277 | (1) |
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277 | (2) |
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279 | (14) |
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De Facto Corporations Doctrine and Corporations By Estoppel |
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279 | (2) |
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281 | (1) |
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282 | (2) |
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Timberline Equipment Co. v. Davenport |
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284 | (9) |
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293 | (44) |
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293 | (1) |
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Functions and Authority of Shareholders |
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294 | (17) |
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295 | (7) |
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State ex rel. Pillsbury v. Honeywell, Inc. |
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302 | (9) |
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Functions and Authority of Directors |
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311 | (8) |
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311 | (8) |
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Functions and Authority of Officers |
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319 | (18) |
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321 | (1) |
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Joseph Greenspon's Sons Iron & Steel Co. v. Pecos Valley Gas Co. |
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321 | (9) |
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330 | (1) |
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331 | (1) |
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332 | (1) |
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332 | (1) |
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In re Drive In Development Corp. |
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333 | (1) |
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334 | (1) |
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Jacobus v. Jamestown Mantel Co. |
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334 | (3) |
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Distributing Corporate Control |
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337 | (66) |
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337 | (1) |
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Cumulative Voting, Classification of Directors, and Class Voting |
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338 | (5) |
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338 | (2) |
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Classification of Directors |
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340 | (1) |
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Class Voting and Weighted Voting |
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340 | (3) |
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343 | (1) |
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344 | (8) |
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345 | (2) |
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347 | (5) |
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Deadlocks, Oppression, and Dissolution |
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352 | (30) |
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353 | (1) |
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353 | (2) |
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Oppression and Dissension |
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355 | (1) |
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Donahue v. Rodd Electrotype Co. of New England, Inc. |
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356 | (9) |
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In re Kemp & Beatley, Inc. |
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365 | (6) |
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371 | (8) |
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Statutory and Contractual Provisions |
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379 | (1) |
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Judicial Dissolution of the Corporation |
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379 | (1) |
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Buyout of Shareholder Petitioning for Dissolution |
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380 | (1) |
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Appointment of a Custodian or Provisional Director |
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381 | (1) |
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381 | (1) |
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382 | (21) |
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Voting Trusts and Shareholder Voting (or Pooling) Agreements |
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382 | (1) |
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383 | (5) |
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388 | (6) |
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Shareholders' Agreements Allocating Control |
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394 | (1) |
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395 | (6) |
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401 | (2) |
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Piercing the Corporate Veil |
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403 | (32) |
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403 | (1) |
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403 | (1) |
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Tort-Based Claims and Other Considerations |
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404 | (11) |
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404 | (4) |
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408 | (5) |
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413 | (2) |
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415 | (1) |
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415 | (1) |
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Contract-Based Claims and Other Considerations |
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415 | (10) |
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Sea-Land Services, Inc. v. Pepper Source |
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416 | (4) |
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420 | (1) |
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421 | (1) |
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422 | (1) |
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Intra-Enterprise Liability |
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423 | (1) |
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423 | (2) |
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425 | (1) |
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425 | (10) |
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United States v. Bestfoods |
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426 | (7) |
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433 | (1) |
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433 | (2) |
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435 | (26) |
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435 | (1) |
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Mechanics of Dividends and Distributions |
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435 | (15) |
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Legal Capital 13-14 (3d ed. 1990) |
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436 | (1) |
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Dividends in Cash or Other Property |
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437 | (6) |
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Jr., Legal Capital 91-97, 176-77, 183 (3d ed. 1990) |
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443 | (3) |
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Repurchase of a Corporation's Own Shares |
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446 | (1) |
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Fundamentals of Modern Business 366-68 (1989) |
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446 | (2) |
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Stock Dividends and Stock Splits |
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448 | (2) |
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450 | (11) |
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Unrealized Appreciation and Depreciation |
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450 | (1) |
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451 | (8) |
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Judicial Review of Dividend Policy |
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459 | (2) |
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461 | (72) |
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461 | (1) |
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462 | (1) |
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The General Standard of Care and the Obligation to Monitor |
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462 | (12) |
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Francis v. United Jersey Bank |
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462 | (8) |
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470 | (1) |
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ALI and the Model Act Approaches |
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470 | (1) |
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Oversight Responsibilities |
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471 | (1) |
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American Bar Association, Corporate Director's Guide-book, 4-6 (2d ed. 1994) |
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472 | (1) |
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473 | (1) |
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Duty to Inquire and to Monitor |
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474 | (9) |
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In re Caremark International Inc. Derivative Litigation |
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474 | (8) |
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482 | (1) |
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482 | (1) |
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483 | (1) |
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483 | (6) |
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483 | (2) |
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485 | (1) |
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Applicability anExceptions |
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486 | (1) |
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Perspectives on the Business Judgment Rule |
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487 | (2) |
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489 | (22) |
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489 | (20) |
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509 | (1) |
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510 | (1) |
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510 | (1) |
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Corporate Objective and Social Responsiblity |
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511 | (8) |
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512 | (1) |
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512 | (3) |
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515 | (1) |
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515 | (1) |
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Other Constituencies Statutes |
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515 | (2) |
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517 | (2) |
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519 | (1) |
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Johnson & Johnson's Credo |
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519 | (1) |
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Corporate Governance Reforms |
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519 | (5) |
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The Professional Board, 50 Business Lawyer 1427-28 (August 1995) |
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520 | (2) |
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Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century, pp. 197-201 (1995) |
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522 | (2) |
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|
Legislative Responses to Liability |
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524 | (9) |
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524 | (2) |
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526 | (1) |
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Arnold v. Society for Savings Bancorp, Inc |
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526 | (3) |
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WLR Foods, Inc. v. Tyson Foods, Inc. |
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529 | (4) |
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533 | (42) |
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533 | (1) |
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533 | (1) |
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534 | (8) |
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534 | (6) |
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540 | (1) |
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540 | (1) |
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541 | (1) |
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542 | (11) |
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Statutory Interpretations |
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542 | (1) |
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542 | (5) |
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Procedures and the Fairness Test |
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547 | (1) |
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Statutes and Their Interpretation |
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547 | (1) |
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Effect of Safe Harbor Procedures |
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548 | (1) |
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In re Wheelabrator Technologies, Inc. Shareholders Litigation |
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548 | (3) |
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551 | (1) |
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552 | (1) |
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553 | (2) |
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Corporate Opportunity Doctrine |
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555 | (20) |
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Broz v. Cellular Information Systems, Inc. |
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556 | (8) |
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564 | (1) |
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564 | (1) |
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564 | (2) |
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Northeast Harbor Golf Club, Inc. v. Harris |
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566 | (9) |
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Duty of Controlling Shareholders |
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575 | (36) |
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575 | (1) |
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Operation of Corporations |
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576 | (5) |
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Sinclair Oil Corp. v. Levien |
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576 | (5) |
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581 | (8) |
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581 | (6) |
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587 | (1) |
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588 | (1) |
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589 | (22) |
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589 | (12) |
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601 | (10) |
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Changes in Control: Corporate Combinations and Tender Offer Defenses |
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611 | (72) |
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611 | (1) |
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611 | (1) |
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Negotiated Changes in Control |
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612 | (13) |
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612 | (1) |
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612 | (1) |
|
Commerce Clearing House, Business Strategies, § 1235 (1995) |
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613 | (2) |
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615 | (1) |
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615 | (1) |
|
Farris v. Glen Alden Corp |
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615 | (5) |
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Hariton v. Arco Electronics, Inc. |
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620 | (1) |
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Knapp v. North American Rockwell Corp |
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621 | (4) |
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Defending Against Tender Offers |
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625 | (58) |
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625 | (1) |
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625 | (6) |
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631 | (2) |
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633 | (1) |
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633 | (1) |
|
Unocal Corp. v. Mesa Petroleum Co. |
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634 | (7) |
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Reasonable Response Standard |
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641 | (1) |
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642 | (1) |
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|
643 | (1) |
|
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc |
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643 | (9) |
|
Refinements of Enhanced Scrutiny |
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652 | (1) |
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Paramount Communications, Inc. v. Time, Inc |
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|
652 | (12) |
|
Paramount Communications, Inc. v. QVC Network, Inc. |
|
|
664 | (16) |
|
Applicability of the Unocal Analysis |
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|
680 | (1) |
|
Judicial Deference Under the Unocal Standard |
|
|
681 | (2) |
|
Shareholder Derivative Litigation and Other Resolution Processes |
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|
683 | (38) |
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|
683 | (1) |
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|
683 | (2) |
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|
683 | (1) |
|
ALI, The Derivative Action, Introductory Note |
|
|
683 | (2) |
|
Rule 23.1 of the Federal Rules of Civil Procedure: Derivative Actions by Shareholders |
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|
685 | (1) |
|
Distinguishing Derivative Suits |
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|
685 | (3) |
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686 | (1) |
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|
687 | (1) |
|
Policy and Other Considerations |
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|
687 | (1) |
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|
688 | (11) |
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688 | (8) |
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696 | (1) |
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697 | (1) |
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698 | (1) |
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698 | (1) |
|
Directors' Authority to Terminate a Suit and Special Litigation Committees |
|
|
699 | (16) |
|
|
699 | (7) |
|
ALI Approach and Cuker v. Mikalauskas |
|
|
706 | (2) |
|
Zapata Corp. v. Maldonado |
|
|
708 | (5) |
|
|
713 | (2) |
|
|
715 | (1) |
|
Alternative Dispute Resolution Processes |
|
|
715 | (6) |
|
|
715 | (1) |
|
Settling Disputes: Conflict Resolution in Business, Families, and the Legal System, 55-57, 70, 74-75, 78-80 (2d ed. 1994) |
|
|
715 | (5) |
|
|
Characteristics of ADR Processes |
|
|
720 | (1) |
|
Indemnification and Insurance |
|
|
721 | (26) |
|
|
721 | (1) |
|
|
721 | (1) |
|
|
722 | (22) |
|
Mandatory Indemnification |
|
|
723 | (1) |
|
Waltuch v. Conticommodity Services, Inc |
|
|
723 | (4) |
|
|
727 | (1) |
|
``Wholly'' and ``Otherwise'' |
|
|
728 | (1) |
|
Permissive Indemnification |
|
|
728 | (1) |
|
Heffernan v. Pacific Dunlop GNB Corp |
|
|
729 | (5) |
|
|
734 | (1) |
|
|
735 | (2) |
|
Court-Ordered Indemnification |
|
|
737 | (1) |
|
|
737 | (1) |
|
Waltuch v. Conticommodity Services, Inc |
|
|
737 | (7) |
|
|
744 | (3) |
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Directors and Officers Indemnification and Liability Insurance: An Overview of Legal and Practical Issues, 51 Business Lawyer 573, 598-603, 607-08 (1996) |
|
|
745 | (2) |
|
|
|
Impact of Securities Laws on Corporations |
|
|
747 | (42) |
|
|
747 | (42) |
|
The Effect of the Securities Laws Upon the Small Business, The Practical Lawyer, September 1, 1982 at 11 |
|
|
748 | (13) |
|
|
Hill York Corp. v. American International Franchises, Inc |
|
|
761 | (6) |
|
Lawyers' Responsibilities Under the Securities Laws |
|
|
767 | (1) |
|
Securities and Exchange Commission v. Spectrum, Ltd |
|
|
768 | (5) |
|
Going Public: Practice, Procedure and Consequences, Bowne & Co., Inc. (1996) |
|
|
773 | (16) |
|
|
|
|
|
789 | (40) |
|
|
789 | (1) |
|
|
790 | (18) |
|
Mills v. Electric Auto-Lite Co |
|
|
790 | (5) |
|
TSC Industries, Inc. v. Northway, Inc |
|
|
795 | (3) |
|
Cole v. Schenley Industries, Inc |
|
|
798 | (1) |
|
Virginia Bankshares, Inc. v. Sandberg |
|
|
799 | (8) |
|
|
807 | (1) |
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|
808 | (10) |
|
Securities and Exchange Commission v. Transamerica Corp |
|
|
809 | (4) |
|
Roosevelt v. E.I. Du Pont de Nemours & Co |
|
|
813 | (5) |
|
|
818 | (11) |
|
Union Pacific Railway Co. v. Chicago and North Western Railway Co. |
|
|
818 | (6) |
|
Kennecott Copper Corp. v. Curtiss-Wright Corp |
|
|
824 | (5) |
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|
829 | (48) |
|
|
829 | (2) |
|
|
831 | (4) |
|
Hanson Trust PLC v. SCM Corp |
|
|
831 | (4) |
|
|
835 | (17) |
|
Piper v. Chris-Craft Industries, Inc |
|
|
836 | (8) |
|
Indiana National Corp. v. Rich |
|
|
844 | (5) |
|
Schreiber v. Burlington Northern, Inc |
|
|
849 | (3) |
|
|
852 | (15) |
|
|
853 | (9) |
|
CTS Corp. v. Dynamics Corp. of America |
|
|
862 | (5) |
|
|
867 | (10) |
|
Is Takeover Defense in Shareholders' Best Interest?, Legal Times of Washington, August 10, 1981 at 42 |
|
|
868 | (6) |
|
|
|
Taming the Corporate Takeover, The Wall Street Journal, October 30, 1984 at 30 |
|
|
874 | (3) |
|
|
Insider Trading and Other Securities Fraud |
|
|
877 | (94) |
|
|
877 | (1) |
|
Insider Trading and Other Securities Fraud Under State Law |
|
|
877 | (9) |
|
|
878 | (4) |
|
|
882 | (4) |
|
Insider Trading and Other Securities Fraud Under Federal Law |
|
|
886 | (85) |
|
Remarks of Milton Freeman, 22 Business Lawyer 922 (1967) |
|
|
888 | (1) |
|
Securities and Exchange Commission v. Texas Gulf Sulphur Co. |
|
|
889 | (11) |
|
Causation and Reliance; Materiality |
|
|
900 | (1) |
|
Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc |
|
|
900 | (8) |
|
|
908 | (6) |
|
|
914 | (9) |
|
``In Connection With'' Requirement |
|
|
923 | (1) |
|
Superintendent of Insurance of New York v. Bankers Life & Casualty Co. |
|
|
923 | (3) |
|
|
926 | (2) |
|
|
928 | (1) |
|
Blue Chip Stamps v. Manor Drug Stores |
|
|
928 | (7) |
|
|
935 | (1) |
|
Ernst & Ernst v. Hochfelder |
|
|
935 | (7) |
|
Persons Subject to Trading Constraints |
|
|
942 | (1) |
|
Chiarella v. United States |
|
|
942 | (6) |
|
Securities and Exchange Commission v. Materia |
|
|
948 | (4) |
|
|
952 | (1) |
|
Dirks v. Securities and Exchange Commission |
|
|
953 | (1) |
|
Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A. |
|
|
954 | (2) |
|
Issuer's Duty to Disclose |
|
|
956 | (1) |
|
Stransky v. Cummins Engine Co |
|
|
956 | (4) |
|
|
960 | (1) |
|
Elkind v. Liggett & Myers, Inc |
|
|
960 | (11) |
|
Short-Swing Trading: Section 16 of the Securities Exchange Act of 1934 |
|
|
971 | (26) |
|
|
971 | (1) |
|
|
972 | (4) |
|
|
972 | (4) |
|
|
976 | (6) |
|
|
976 | (6) |
|
|
982 | (5) |
|
Kern County Land Co. v. Occidental Petroleum Corp |
|
|
982 | (5) |
|
|
987 | (5) |
|
Reliance Electric Co. v. Emerson Electric Co |
|
|
987 | (2) |
|
Foremost-McKesson, Inc. v. Provident Securities Co |
|
|
989 | (3) |
|
|
992 | (5) |
|
|
992 | (5) |
Appendix A: Some Agency Concepts |
|
997 | (16) |
Appendix B: Reading Financial Statements |
|
1013 | (14) |
Appendix C: American Bar Association Model Rules of Professional Conduct |
|
1027 | (34) |
Table of Cases and Other Materials |
|
1061 | (8) |
Index |
|
1069 | |