SETON HALL UNIVERSITY SCHOOL OF LAW BUSINESS ASSOCIATIONS Syllabus (Revised, based on Concise Edition) Fall Term 2012

Professor Marina Lao Phone: 973-642-8835 Email: Marina.Lao@shu.edu Office: Room 503 Office Hours: Monday, 12:40 2:00 p.m. Class: Monday, Tuesday, & Wednesday 11:20 12:40 in Room 370

Below is a syllabus of materials, grouped by topic (not by class period), that I hope to cover in this course. I will post the specific assignments for the following week on Blackboard sometime before Friday of the previous week. For cases that are not separately listed on this syllabus, but are found within the assigned pages, please read them for their general concepts, but we will not go over them specifically in class. I am often asked by students to recommend a non-casebook to aid in their understanding of the course materials. My recommendation is listed below. I have also included in the syllabus some page references to that book. In addition to materials in the casebook, we will often draw on current business-related events for discussion to the extent that they relate to the subject areas covered in this course. Please try to read the business section of the New York Times, or the Wall Street Journal, on a regular basis. Primary Text: Eisenberg, CASES AND MATERIALS ON CORPORATIONS & OTHER BUSINESS ORGANIZATIONS (Concise, Tenth Edition) Statutory Supplement. Highly Recommended Supplemental Reading: Pinto & Branson, Understanding Corporate Law (3d Edition). Attendance: The law schools mandatory attendance policy will apply. Class Participation: Class participation is important to the learning process. Please read the assigned materials and be prepared for each class.

Final Exam: It will be CLOSED BOOK, and will consist of both multiple choice and essay questions.

Chapter I Agency, pp. 1-22. Who is an agent? Concept of authority. Liability of Principal to third parties. Text, pp. 1-17 (Morris Oil, p. 2). Fiduciary Obligations to Agents. Text, pp. 17-22 (Tarnowski, p. 18). Chapter III Partnership What is a Partnership? Who are the Partners? Partners compared with employees and lenders. Partnership by estoppel. Text, pp. 48-59 (Martin v. Peyton, p. 49; Lupien, p. 53). Various Legal Aspects of Partnership: entity vs. aggregate status; management rights of partners; indemnification and contribution; gain and loss sharing; authority; liability for partnership obligations. Text, pp. 60-73 (Summers, p. 60; Northmon Investment, p. 66). Fiduciary Obligations of Partners. Text, pp. 74-78 (Meinhard, p. 74). Partnership Dissolution: right to dissolve; rightful dissolution; consequences of wrongful dissolution. Text, pp. 78-96 (Page, p. 85; Drashner, p. 92). Settling Accounts After Dissolution, UPA 40(a) and (b) and 18(a) problem handout. Limited Partnerships. Text, pp. 96-108 (Gateway Potato Sales, p. 98; Gotham Partners, p. 108). Limited Liability Partnerships. Text, pp. 109-111. Chapter IV The Foundations of a Corporation Choice of corporate form; choice of state of incorporation; basic corporate financial structure; incorporation process. Text, pp. 112-122, 122-128, 128-133. Pinto, pp. 1-10, 13-17, 69-74. Requisites for Valid Board & Shareholder Action, Election of Directors and cumulative voting; Removal of Directors; Valid action by corporate officers. Text, pp. 136-152. Pinto, pp. 110-115, 131-133, 273-276, 134-135.

Ultra Vires Doctrine. Text, pp. 151-154. Pinto, pp. 17-18. Maximization of Shareholder Wealth. Text, pp. 154-158. Pinto, pp. 18-19. Chapter V Legal Structure of Publicly Held Corporations Legal Structure of Corporation. Statutory Norms on Corporate Governance: Equitable Limits on Boards Legal Powers. Role of Bylaws in Allocation of Power Between Board & Shareholders. Text, pp. 166-193 (Schnell, p. 171; Blasius, p. 173). Pinto, pp. 87-110, 123-126. Vote Buying. Text, pp. 204-211 (Portnoy, p.204); Funding Proxy Contests. Text, pp. 211-219 (Rosenfeld, p. 212). Pinto, pp. 117-123. Allocation of Power Between Board & CEO. Text, pp220-221. Chapter VI Shareholder Informational Rights and Proxy Voting Shareholder Rights to Information. Text, pp. 224-239 (Saito, p. 224). Pinto, pp. 127-130 Overview of SEC & Securities Exchange Act. Text, pp. 240-243. Pinto pp.159-164. Proxy Rules: Introduction. Text, pp. 244-250. Pinto pp. 116-117, 177-180, 180-186. Proxy Rules: Shareholder Access. Text, pp. 250-255. Pinto, pp.187-198. Materially Misleading Proxies & Rule 14a-9: implied private cause of action; misrepresentations or omissions of material fact; scienter; reliance; causation. Text, pp. 256-274 (Borak, p. 256; Mills, p. 257; TSC, p. 262; Virginia Bankshares, p. 264). Pinto, pp. 200-214. To understand mergers, Pinto pp. 143-152. Chapter VII Personal Liability in a Corporate Context Promoters Liability. Text, pp. 275-277. Pinto, pp. 21-28. Consequences of Defective Incorporation. Text, pp. 277-282. Pinto pp. 2833. Limited Liability & Exceptions (Piercing the Corporate Veil). Text, pp. 282-283, 289-303 (Walkovsky, p. 289; Minton, p. 294). Pinto pp. 35-50, 5768.

Chapter VIII Special Problems of Shareholders in Close Corporations Introduction. Text, pp. 304-307. Pinto 313-316. Special Voting Arrangements at the Shareholder Level. Text, pp. 307-320 (Ringling Bros, p. 308). Pinto, pp. 316-329. Agreements Limiting Powers of Board. Text, pp. 320-332 (McQuade, p. 320; Galler, p. 324). Pinto pp. 330-333, 342-343. Super Quorum and Super Majority Voting Requirements. Text, pp. 332336 (Sutton, p. 332). Pinto pp.339-341. Special Fiduciary Obligations. Text, pp. 336-354 (Donahue, p. 336; Wilkes, p. 344; Merola, p. 352). Pinto pp.343-350. Share Transfer Restrictions. Text, pp. 354-371 (FBI Farms, p. 355). Pinto, pp. 78-85, 333-339. Dissolution for Deadlock. Text, pp. 371-373 (Wollman, p. 371). Dissolution for Oppression and Mandatory Buyout. Text, pp. 373-393 (Kemp & Beatley, p. 374; McCallum, p. 384). Pinto, pp. 351-360. Chapter IX Limited Liability Companies Introduction. Text, pp. 395-399. Piercing the Veil. Text, pp. 400-405 (Kaycee Land, p. 400). Fiduciary Duties. Text, pp. 405-414 (VGS, p. 406). Dissolution. Text, pp.415-419 (Haley, p. 415) Chapter X Duty of Care and Duty to Act in Good Faith Basic Standard. Text, pp. 420-433 (Francis, p. 420). Pinto, pp. 215-219, 220227. Business Judgment Rule. Text, pp. 433-457 (Kamin, p. 433; Van Gorkom, p. 439). Pinto, pp. 227-229. Duty to Monitor and Compliance Programs. Text, pp. 457-470 (In re Caremark, p. 457). Pinto, pp. 233-236.

Liability Shields. Text, pp. 470-476 (Malpiede, p. 471). Pinto, pp. 229-231. D&O Liability Insurance. Text, pp. 476-478. Duty to Act in Good Faith. Text, pp. 479-485 (Disney, p. 479). Pinto, pp. 231-233, 237-238. Duty to Act Lawfully. (Miller, handout). Pinto, pp. 238-239, Sarbanes-Oxley, read Pinto, pp. 136-141. Chapter XI Duty of Loyalty of Corporate Officers and Directors Self-interested Transactions. Text, pp. 486-504, p.512 (Gantler, p. 486; Lewis v. S.L. & E., p. 496). Pinto, pp. 241-243, 243-247. Statutory Approach, DGCL 144. Text, pp. 513-524 (Cookies Food Products, p. 513). Pinto, pp. 247-254. Waste and Shareholder Ratification. Text, pp. 524-536 (Ryan p.527). Pinto, pp. 263-265. Corporate Opportunity Doctrine. Text, pp. 537-553 (Northeast Harbor Golf Club, p. 537). Pinto, pp. 265-273. Duties of Controlling Shareholders. Text, pp. 553-578 (Zahn, p. 553; Sinclair, p. 561; Kahn, p. 567). Pinto, pp.277-282. Sale of Control. Text, pp. 587-596, 599-608 (Zetlin, p. 587; Perlman, p. 591; Essex Universal, p. 599). Pinto, pp. 282-283, 302-307, 310. Chapter XII Antifraud Provision: 10(b) and Rule 10b-5 Introduction. Text, pp. 609-615 (Wharf, p. 609). Pinto, pp. 403-406. Standing, In Connection with and Scienter. Text, pp. 615-625 (Blue Chip, p. 615; Ernst & Ernst, p. 619). Pinto, pp. 406-408, 410-415, 420-421. Primary Participants After Central Bank. Text, pp. 625-635 (Pac. Investment, p. 627). Pinto, pp. 421-424. Materiality; Causal Relationship. Text, pp. 635-637, 639-652 (Basic v. Levison, p. 639). Pinto, pp. 408-410, 415-420. Junction of Breaches of Fiduciary Duty & Rule 10b-5. Text, pp. 653-655 (Santa Fe, p. 653).

Chapter XIII Insider Trading Common Law Background. Text, pp. 656-657. Pinto, pp. 427-428, 444-448. Disclose or Abstain. Text, pp. 658-673 (Texas Gulf, p. 658); Text, pp. 673702, 702-704 (Chiarella, p. 673; OHagan, p. 680; Dirks, p.693). Pinto, pp. 428-440; 441-444. Short Swing Trading, 16(b). Text, pp. 704-715 (Kern County, p. 709). Pinto, pp. 448-452. Chapter XIV Shareholder Derivative Suits Introduction and Nature of Derivative Action. Text, pp. 723-736. Pinto, pp. 453-462. Individual Recovery. Text, pp. 736-739 (Glenn, p. 736). Pinto, pp. 462-466. Contemporaneous Ownership Rule. Text, pp. 739-748 (Bangor, p. 739). Pinto pp. 467-474. Demand on Board and Termination of Suit. Text, pp. 748-777 (Marx v. Akers, p. 749; Auerbach v. Bennett, p. 759; Zapata Corp., p. 765). Pinto, pp. 475-488, 488-499. Indemnification and Insurance. Text, pp. 779-791 (Waltuch, p. 780). Pinto, pp. 523-525, 526-529