{"id":3880,"date":"2014-10-23T13:20:28","date_gmt":"2014-10-23T17:20:28","guid":{"rendered":"http:\/\/journals.law.harvard.edu\/hblr\/?page_id=3880"},"modified":"2025-02-18T18:05:55","modified_gmt":"2025-02-18T23:05:55","slug":"volume-4-issue-2","status":"publish","type":"page","link":"https:\/\/journals.law.harvard.edu\/hblr\/volume-4-issue-2\/","title":{"rendered":"Volume 4, Issue 2 (2014)"},"content":{"rendered":"

FOREWORD<\/a><\/h3>\n
Bart Houlahan, Jay Coen Gilbert, Andrew Kassoy<\/i><\/b><\/h6>\n
\n
CORPORATE LAW & GOVERNANCE \u2022 ENVIRONMENTAL, SOCIAL, & GOVERNANCE<\/h5>\n

MAKING IT EASIER FOR DIRECTORS TO \u201cDO THE RIGHT THING\u201d?<\/a><\/h3>\n
Leo E. Strine, Jr.<\/em><\/strong><\/h6>\n

Some scholars argue that managers should take constituencies other than stockholders into account when running a corporation, and refuse to put short- term profit for stockholders over the best interests of the corporation\u2019s employees, consumers, and communities, as well as the environment and society generally. In other words, they argue that managers should \u201cdo the right thing,\u201d while ignoring that in the current corporate accountability structure, stockholders are the only constituency given any enforceable rights, and thus are the only one with substantial influence over managers. Few commentators have pro- posed real solutions that would give corporate managers more ability and greater incentives to consider the interests of other constituencies.<\/p>\n

\n
MERGERS & ACQUISITIONS \u2022 BUSINESS & CORPORATIONS<\/h5>\n

M&A UNDER DELAWARE\u2019S PUBLIC BENEFIT CORPORATION STATUTE: A HYPOTHETICAL TOUR<\/a><\/h3>\n

Frederick H. Alexander; Lawrence A. Hamermesh; Frank R. Martin; Norman M. Monhait<\/em><\/strong><\/p>\n

Noting the enthusiastic initial response to Delaware\u2019s 2013 public benefit corporation statute, this Article presents a series of hypotheticals as vehicles for comment on issues that are likely to arise in the context of mergers and acquisitions of public benefit corporations. The Article first examines appraisal rights, concluding that such rights will be generally available to stockholders in public benefit corporations, and noting the potential for ambiguity in defining \u201cfair value\u201d where the corporation\u2019s purposes extend to public purposes as well as private profit. Next, the Article examines whether and to what extent \u201cRevlon\u201d duties and limitations on deal protection devices may be relaxed or modified in the context of the sale of a public benefit corporation. Finally, the Article examines whether and to what extent a commitment to promote the specified public purposes of a public benefit corporation can be made enforceable against the buyer of the corporation.<\/p>\n

\n
ENTREPRENEURSHIP & STARTUPS<\/h5>\n

CROWDFUNDING: THE REAL AND THE ILLUSORY EXEMPTION<\/a><\/h3>\n
Jason W. Parsont\u00a0<\/em><\/strong><\/h6>\n

Crowdfunding is commonly defined as raising small amounts of capital from a large number of people over the Internet. To avoid the expense of securities regulation, companies often crowdfund by giving away rewards (such as a free t-shirt) instead of selling stock or other securities. In April 2012, Title III of the JOBS Act sought to change this status quo by directing the Securities and Ex- change Commission (SEC) to facilitate securities-based crowdfunding through websites like Kickstarter. Congress and the President believed this would broaden access to sidelined capital and help companies grow and hire. But this \u201cretail crowdfunding\u201d exemption, open to all investors, was not the only means of crowdfunding in the bill. A last minute compromise, which has been largely overlooked, expanded the ability of issuers to use the private placement exemption, as revised in new Rule 506(c), to crowdfund from accredited investors. This \u201caccredited crowdfunding\u201d exemption provides a less regulated capital-raising alternative to retail crowdfunding that is available to the same companies and more.<\/p>\n

\n
ENVIRONMENTAL, SOCIAL, & GOVERNANCE \u2022 BUSINESS & CORPORATIONS<\/h5>\n

SOCIAL ENTERPRISE INNOVATION: DELAWARE\u2019S PUBLIC BENEFIT CORPORATION LAW<\/a><\/h3>\n
J. Haskell Murray<\/em><\/strong><\/h6>\n

Delaware has innovated in the benefit corporation area by creating its own statutory framework to compete with the Model Benefit Corporation Legislation (the \u201cModel\u201d), and when Delaware talks, other states listen.\u00a0 This Article provides a comparative analysis\u00a0of Delaware\u2019s Public Benefit Corporation (\u201cPBC\u201d) law and the Model, and suggests that Delaware\u2019s approach is superior in most areas. Despite Delaware\u2019s superiority, this Article also calls for policymakers to consider amendments to Delaware\u2019s PBC statute, including clarifying the priority of the specific public benefit purpose, requiring a partial-asset lock, imposing a charitable giving floor, providing more effective enforcement mechanisms, and reconfiguring the current re- porting requirements. Social enterprise legal forms are extraordinarily recent additions to the list of possible business entity types. While Delaware\u2019s PBC law is likely to have significant influence on social enterprise statutes, continued innovation in this field, from inside and outside of Delaware, is both likely and necessary.<\/p>\n

\n
BUSINESS & CORPORATIONS \u2022 INDUSTRY<\/h5>\n

PHARMACEUTICAL PUBLIC-PRIVATE PARTNERSHIPS: MOVING FROM THE BENCH TO THE BEDSIDE<\/a><\/h3>\n
Constance E. Bagley & Christina D. Tvarn\u00f8<\/em><\/strong><\/h6>\n

This article provides a game theory and law-and-management analysis of for- profit pharmaceutical public-private partnerships, a complex type of legal arrangement in the highly regulated pharmaceutical industry. A pharmaceutical public-private partnership (PPPP) agreement is a legally binding contract be- tween a private pharmaceutical enterprise and a public research university (or a private university conducting publicly funded research) to support research leading to new commercial pharmaceutical and biologic products. The key purpose of this article is to provide a theoretical explanation and a practical perspective on how properly crafted PPPP arrangements can promote innovation more efficiently than traditional self-optimizing contracts. In particular, a properly framed binding contract, coupled with respect for positive incentives, can move the parties away from an inefficient prisoners\u2019 dilemma Nash equilibrium to the Pareto Optimal Frontier and thereby increase both the overall size of the pie and the value of the share retained by each participant. To deliver an efficient framework for collaboration, the PPPP contract must include mechanisms for encouraging cooperative behavior, leading to a win-win approach rather than a traditional competitive perspective. Thus, this article discusses how the PPPP contract should encourage the parties to collaborate with a strong focus on attaining common goals by sharing gains or losses and information, and by instituting risk and reward systems to build and share innovation. When coupled with appropriate attention to the difficult task of coordinating the actions of interdependent actors, a PPPP arrangement can enhance the likelihood of successful commercialization of pharmacological discoveries by flipping the par- ties\u2019 incentives as compared with a more traditional contract.<\/p>\n","protected":false},"excerpt":{"rendered":"

FOREWORD Bart Houlahan, Jay Coen Gilbert, Andrew Kassoy CORPORATE LAW & GOVERNANCE \u2022 ENVIRONMENTAL, SOCIAL, & GOVERNANCE MAKING IT EASIER […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"class_list":["post-3880","page","type-page","status-publish","hentry"],"jetpack_shortlink":"https:\/\/wp.me\/PgKEUK-10A","jetpack-related-posts":[{"id":5029,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-12-issue-1\/","url_meta":{"origin":3880,"position":0},"title":"Volume 12, Issue 1","author":"wgu","date":"April 3, 2023","format":false,"excerpt":"CORPORATE LAW & GOVERNANCE SHIFTING INFLUENCES ON CORPORATE GOVERNANCE: CAPITAL MARKET COMPLETENESS AND POLICY CHANNELING Ronaldo J. 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While neither of these diametrically opposed views\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/3880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/comments?post=3880"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/3880\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/media?parent=3880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}