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The Business Lawyer
The Business Lawyer - August 2007, Volume 62, Number 4 ARTICLES Toward a Reg. FCPA: A Modest Proposal for Change in Administering the Foreign Corrupt Practices Act James R. Doty, 62(4): 1233-1256 (August 2007) Approaching the 30th anniversary of the FCPA, enforcement trends indicate a need for an administrative regime that would enable public companies to achieve a measure of regulatory certainty regarding compliance. Case-by-case enforcement is not a satisfactory substitute for a rule enabling boards and senior management to protect the corporation from vicarious liability for the actions of officers and employees. A new, rule-based system of permissive filing, modeled on the principles of other administrative safe-harbor regulations, would serve the national interest while advancing the goals of the FCPA. Debt Recharacterization Under State Law James M. Wilton and Stephen C. Moeller-Sally, 62(4): 1257-1280 (August 2007) The doctrine of debt recharacterization, as developed in the federal courts, imposes inconsistent, and sometimes irrational, standards on insiders who wish to support their business enterprises through periods of financial distress. Three conflicting lines of cases have evolved in the federal jurisprudence of debt recharacterization, two holding that debt recharacterization is a viable separate cause of action under the Bankruptcy Code and one holding that any such action has no statutory basis at all. This Article examines the flaws in these approaches and analyzes state law as a rational basis for developing a principled doctrine of debt recharacterization. Under long- standing legal principles, state law provides the proper framework for determining whether debt should be recharacterized as equity in bankruptcy cases. Drawing examples from Massachusetts and Wisconsin law, this Article shows that state law offers a higher degree of predictability concerning the enforcement of insider debt and may serve as a means for reconciling the conflicting and inconsistent tests applied in federal courts. Beyond the Basics: Seventy-five Defenses Securities Litigators Need to Know Jonathan Eisenberg, 62(4): 1281-1394 (August 2007) After questioning the value of securities class actions, which are largely unknown outside the United States, the author discusses 75 defenses that courts have used to dismiss securities claims. These defenses are typically raised at the motion to dismiss stage, and are important because securities class actions that survive motions to dismiss are usually settled rather than resolved on the merits. The article provides a template for analyzing the application of each defense to securities class action complaints, and then discusses each defense and references key authorities that practitioners can turn to for further analysis. The Guilty Eye: Unauthorized Access, Trespass and Privacy Peter A. Winn, 62(4): 1395-1438 (August 2007) Statutes forbidding unauthorized access to computers have become a mainstay of the legal protections governing networked computer systems, both in the United States and throughout the world. Courts have interpreted the concept of unauthorized access in the light of the common law of trespass, taking its meaning beyond the simple idea of computer hacking, and using it to protect computer-based information in general. This process has been very controversial; it is perceived to be creating a new property right in electronic information. This article contends that the debate about the so-called "new property" in electronic information has overlooked the flexibility in common law trespass, which maintains a natural balance between over-protection and under-protection of any given resource. While the writ of trespass has traditionally protected property and privacy rights, resource users who conform to objective standards of reasonableness have rarely been held liable for trespass. The balance inherent in common law trespass is illustrated by the famous two-part "reasonable expectation of privacy" test, used to decide Fourth Amendment search and seizure cases. This article proposes a similar test should be used when deciding computer trespass cases, formulated as follows: First, the access must take place without the (subjective) permission of the rights-holder. Second, the access objected to must be of a kind that a reasonable person (objectively) would expect to be unauthorized. Use of this test allows for a doctrine of computer trespass which protects property and privacy interests in electronic information, while still being flexible and dynamic enough to permit the free flow of ideas and information in open computer networks like the internet. Seeking a Meaning for "Meaningful Residual Value" and the Reality of "Economic Realities"--An Alternative Roadmap for Distinguishing True Leases from Security Interests Robert W. Ihne, 62(4): 1439-1466 (August 2007) This article examines (i) the statutory criteria provided in the Uniform Commercial Code for distinguishing between true leases of goods and security interests in such goods, and (ii) various concepts developed by courts and commentators for analyzing fact patterns not covered by the statute. The article concludes that each of these concepts, while helpful to some extent, falls short in certain respects. Employing some of the more helpful theoretical underpinnings of the statute and these concepts, the article proposes an alternative framework of analysis focusing on whether or not the lessee can be expected to exhaust the economic value of the goods. Joint Ventures and the Supreme Court's Decision in Texaco, Inc. v. Dagher: A Win for Substance Over Form James H. "Hart" Holden, 62(4): 1467-1478 (August 2007) In the summer of 2004, the Court of Appeals for the Ninth Circuit issued its opinion in Dagher v. Saudi Refining, Inc., holding that the decision of a legitimate joint venture between two former competitors to charge a single price its products could constitute per se illegal price fixing under Section I of the Sherman Act. This ruling generated significant antitrust uncertainty as to what joint ventures can and cannot do in operating their business. The Supreme Court unanimously reversed the Ninth Circuit, and in so doing helped to clarify this important but murky area of business law. This paper details the Court's Dagher decision, and the guidance that can be taken from it. REPORTS Corporate Director's Guidebook, Fifth Edition Committee on Corporate Laws, ABA Section of Business Law, 62(4): 1479-1554 (August 2007)
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