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TABLE OF CONTENTS Introduction 328 I. Startups and Bankruptcy 334 A. Why Bankruptcy Does Not Fit Most Startups 335 B. When Startups Use Bankruptcy 344 1. Legal Issues 345 2. [...], Venture-backed startups famously aim for a successful "exit" by going public or selling to another company through an acquisition deal and achieving financial return for all equity holders. A different path, however, is vastly more likely to occur--failure. Although high-risk innovative ventures fail at exceedingly high rates, no scholarly account systematically explains what happens to these startups at the end of their life cycle. This Article provides a theory of startup failure: how law and culture have shaped a system for dealing with the large number of startups that cannot reach an exit that will produce a financial return for all participants. It makes three central contributions. First, the Article explains why bankruptcy law does not fit the needs of most distressed startups and highlights how their capital structures are indeed designed to avoid bankruptcy except in unusual circumstances. Second, and most critically, the Article reveals how dealing with failure through a variety of alternative means serves a vitally important role in sustaining the venture capital ecosystem. In particular, soft-landing acquisitions, acqui-hires, and assignments for the benefit of creditors allow entrepreneurs, investors, employees, and creditors to "fail with honor" and redeploy their talent and capital into other ventures. Third, the Article sheds light on rising challenges for dealing with startup failures amid evolving practices and regulatory agendas, with implications for facilitating efficient failure in corporate, antitrust, and insolvency law.

CONTENTS INTRODUCTION I. INNOVATIONS AND ENCRUSTATIONS A. Legal Change and the Non-Contractual Term B. Redundant and Obsolete Encrustations 1. "Construed" 2. "Interpreted" 3. "Except for Conflict of Laws" 4. "Except [...], Different areas of transactional practice, such as M&A or high-yield bonds and sovereign bonds, vary in terms of the degree to which they are afflicted by agency problems. In some areas, clients are actively involved in deal making, and in others they are not present until well after the deal is done. If vulnerability to agency problems differs, and these agency problems impact the quality of contract production, one would expect those differences to appear when comparing contract production across practice areas. This Article compares one feature of contract production--the problems of encrusted and sticky boilerplate--across four different deal types where the degree of agency problems is likely to vary. We find that private equity M&A lawyers, who have the highest degree of client monitoring, innovate in order to repair problems in the deal documents more rapidly than do the other deal types. However, we also find that these private equity M&A contracts have more obsolete and encrusted terms than do corporate or sovereign bonds.

Antitrust is in a time of change, where new leaders of global enforcers, politicians, academics, and newcomers to the field have stated that the old approach to antitrust is misguided [...], Estimating antitrust risk is fundamental to identifying, proposing, and pricing deals. A more informed understanding of what to expect when meeting with agency staff and leadership will help antitrust lawyers, economists, and other consultants anticipate the critical questions and potential paths that should be addressed regarding antitrust merger risk. This article uses practitioner surveys to understand whether and how the change in the Biden administration's antitrust agenda has affected merger review, investments, decision making, and counsel. The surveys also offer antitrust agencies an opportunity to think about the optimal design of the merger control system and various consequences of certain policy choices and institutional design changes. A quantitative online survey was conducted first, followed by qualitative discussions with practice group leadership across top antitrust law firms. Both studies were designed to identify whether respondents perceived any substantive shifts from prior administrations to the Biden administration, the impact of such shifts (if any) on merging parties, and any notable differences between the DOJ and FTC in enforcement and procedures. Our surveys indicate that practitioners have a more critical perception of the DOJ and FTC compared to prior administrations. Both agencies are perceived as less transparent and less fair in their interactions with merging parties. The enforcement process is seen as more demanding in terms of scope of data collected and is reported to take longer to complete. The agencies have also departed from precedent as they increasingly scrutinize labor issues and vertical deals.

Introduction I. The Role of Fiduciary Outs A. The Evolution of Fiduciary Outs B. Developments in Canadian Corporate Law II. Fiduciary Outs in Canadian M&A Transactions A. Data Collection and [...], One of the most contentious issues in corporate law is the proper scope of fiduciary duties. Many scholars have argued that fiduciary duties are owed exclusively to shareholders, while others have advocated a broader conception of directors&apos; fiduciary obligations, potentially encompassing a wide variety of stakeholder and community interests. This debate has both normative and positive dimensions: Not only are there theoretical disagreements as to whom directors&apos; duties should be owed, there are also more basic disagreements as to what the law actually requires, including the extent to which business norms supplement (or undermine) legal rules. In Canada, at least, jurisprudential and statutory reforms have broadened the scope of fiduciary duties to extend their protections to stakeholder groups including creditors, employees, and the environment. Or have they? In reality, there are reasons to believe that legal standards play a limited role in corporate governance, not least with respect to the fundamental question of in whose interests the corporation is to be governed. For public corporations, a variety of factors, including the professional norms of corporate managers, the realities of public financial markets, and the central role of shareholders in the mechanisms of corporate democracy, strongly encourage directors to prioritize shareholder interests. This article finds evidence of this phenomenon through an empirical study of "fiduciary out" provisions in Canadian M&A agreements. These provisions, which allow directors to abandon committed transactions in order to fulfill their fiduciary duties, are almost universally drafted in terms of maximizing shareholder value. Indeed, in two samples containing more than one thousand M&A agreements, only a single agreement permitted directors to consider non-shareholder interests. This evidence indicates that fiduciary duties are broader in theory than in practice. L&apos;une des questions les plus controversees du droit des societes est celle de l&apos;etendue des obligations fiduciaires. De nombreux chercheurs ont soutenu que les obligations fiduciaires sont dues exclusivement aux actionnaires, tandis que d&apos;autres ont defendu une conception plus large des obligations fiduciaires des administrateurs, englobant potentiellement une grande variete d&apos;interets des parties prenantes et de la communaute. Ce debat a des dimensions a la fois normatives et positives : il y a non seulement des desaccords theoriques sur les personnes auxquelles les administrateurs devraient etre redevables, mais il y a egalement des desaccords plus fondamentaux sur ce que la loi exige reellement, y compris la mesure dans laquelle les normes commerciales completent (ou affaiblissent) les regles juridiques. Au Canada, en tout cas, les reformes jurisprudentielles et legislatives ont elargi la portee des obligations fiduciaires pour etendre leur protection aux groupes de parties prenantes, y compris les creanciers, les salaries et l&apos;environnement. Ou l&apos;ont-elles fait ? En realite, il y a des raisons de croire que les normes juridiques jouent un role limite dans la gouvernance des entreprises, notamment en ce qui concerne la question fondamentale de savoir dans l&apos;interet de qui l&apos;entreprise doit etre gouvernee. Pour les entreprises publiques, divers facteurs, notamment les normes professionnelles des gestionnaires d&apos;entreprise, les realites des marches financiers publics et le role central des actionnaires dans les mecanismes de la democratie d&apos;entreprise, encouragent fortement les administrateurs a donner la priorite aux interets des actionnaires. Cet article met en evidence ce phenomene par une etude empirique des clauses de << retrait fiduciaire >> contenues dans les accords de fusion et d&apos;acquisition canadiens. Ces dispositions, qui permettent aux administrateurs de renoncer a des transactions engagees afin de remplir leurs obligations fiduciaires, sont presque toutes redigees en termes de maximisation de la valeur actionnariale. En effet, dans deux echantillons comprenant plus de mille accords de fusion et d&apos;acquisition, un seul accord autorisait les administrateurs a prendre en consideration les interets des non-actionnaires. Ces elements indiquent que les obligations fiduciaires sont plus larges en theorie qu&apos;en pratique.

I. INTRODUCTION A generation ago, two of us, together with our late friend, Professor and former Chancellor William T. Allen as co-author, and the third of us as a primary [...], In a 2001 article (Function Over Form: A Reassessment of Standards of Review in Delaware Corporation Law) two of us, with important input from the other, argued that in addressing issues like hostile takeovers, assertive institutional investors, leveraged buyouts, and contested ballot questions, the Delaware courts had done exemplary work but on occasion crafted standards of review that unduly encouraged litigation and did not appropriately credit intra-corporate procedures designed to ensure fairness. Function Over Form suggested ways to make those standards more predictable, encourage procedures that better protected stockholders, and discourage meritless litigation, by restoring business judgment rule protection for transactions approved by independent directors, the disinterested stockholders, or both. This article examines how Delaware law responded to the prior article&apos;s recommendations, concluding that the Delaware judiciary has addressed most of them constructively, thereby creating incentives to use procedures that promote the fair treatment of stockholders and discourage meritless litigation. The continued excellence and diligence of the Delaware judiciary is one of Delaware corporate law&apos;s core strengths. But some recent cases have articulated standards of review that involve greater than optimal litigation intensity and less than ideal respect for decision-making in which independent directors and disinterested stockholders have potent say. Those standards also impair the integrity of Delaware&apos;s approach to demand excusal in derivative cases and the identification of controlling stockholders. We also propose eliminating concepts like substantive coercion that do not provide a legitimate basis for resolving cases. Finally, we urge action to correct new problems such as the unfair targeting of corporate officers for negligence claims in representative actions and the frustrating state of practice under Delaware&apos;s books and records statute.

I. INTRODUCTION 391 II. THE LONGSTANDING CONCEPTION OF THE STOCKHOLDER'S ENTITLEMENT 396 A. The Necessity of Defining Stockholder Entitlements at Merger 396 B. The Irrelevance of Trading Prices to Stockholder [...], Corporate law is on the cusp of a paradigm shift--a revolution in the definition of the stockholder&apos;s entitlement. For a century, a simple proposition sat at the heart of corporate law: a share of stock may have some trading price, but in an intracorporate dispute that trading price has no necessary bearing on the value of an individual stockholder&apos;s entitlements. Instead, the stockholder&apos;s entitlement is determined by inquiring into the value of the corporate enterprise as a whole, not the individual fractionalized share. First articulated in the context of appraisal rights, this proposition has served as the Atlas of Delaware&apos;s corporate law, providing the theoretical underpinnings of its entire doctrinal universe. It&apos;s the centerpiece of the fairness standard, and it serves as a measure of damages for stockholders who suffer from unfaithful conduct by corporate managers. This traditional paradigm is foundational in the merger context, animating landmark decisions like Unocal and Revlon, for the powers and obligations of boards of directors make little sense if trading prices are the measure of the stockholders&apos; entitlement. A new paradigm is emerging, however. In a series of important decisions, the Delaware Supreme Court has thoroughly refashioned the appraisal remedy, elevating the role of trading prices in delineating the stockholder&apos;s entitlement. These decisions have unfortunate consequences even in their native appraisal rights context. But they portend a far broader change that has thus far escaped the attention of commentators, one that goes to the very foundation of Delaware&apos;s corporate law. As we show in this Article, the Delaware Supreme Court has redefined the nature of the stockholders&apos; entitlement, and the implications are potentially revolutionary. Most notably, the new paradigm calls into question the power of corporate directors to fight off a hostile bid. In concrete terms, it directly undermines the high-profile line of cases that culminates in the controversial 2011 Airgas v. Air Products decision. In Airgas, which has stood for a decade as the high-water mark of board power under Delaware law, the court allowed directors to repel a bidder offering a large premium to the market price by crediting the board&apos;s view that the corporation&apos;s value--and the value to which the stockholders were entitled--exceeded both the unaffected trading price and the bidder&apos;s offer. If, as the Delaware Supreme Court suggests in its recent appraisal cases, the legal position of stockholders entitles them to nothing more than the trading price of their shares, then the justification for the board&apos;s sweeping powers in Airgas to defend the corporation against hostile suitors has been swept away.

It has long been recognized in antitrust cases that market definition is typically malleable and frequently outcome-determinative. In United States v. Grinnell, a Section 2 case, Justice Abe Fortas dissented [...]

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I. INTRODUCTION Since at least 1999, most class action litigation in Delaware has involved M&A deals where the charge was either that the directors, in selling the company, failed to [...], Much has been written on the subject of abusive shareholder litigation. The last decade has witnessed at first an increase and then a dramatic spike in such suits, primarily suits filed in connection with mergers and acquisitions. Delaware courts are known for not just their deep experience in corporate lawsuits but as being doctrinal innovators. One such innovation occurred in Rales v. Blasband, 634 A.2d 927 (Del. 1993), establishing the "tools at hand" doctrine, whereby, before considering whether to grant a motion to dismiss, the court admonishes the shareholder to resort to inspection rights accorded by the Delaware General Corporation Law so as to gather facts necessary for the complaint to survive the pretrial motion. On its face, the doctrine reflects a balanced approach to the competing claims that shareholder litigation is necessary to address and discourage managerial misconduct and the belief the suits are vexatious, being brought to garner an extortionate settlement. In this article, we empirically examine how Rales has dramatically changed the composition of suits in which shareholders seek to exercise their inspection rights. We compare the composition, outcomes, and related questions surrounding such suits maintained 1981-1994 with the post-Rales period 2004-2018. We not only find that post-Rales suits entail substantially more suits involving "books and records" requests but, in tracing the results of those requests, we find that many suits maintained after using the tools at hand yield outcomes favorable to plaintiffs. Our data also support the belief that such books and records litigation is something of a surrogate for a trial on the underlying claims of wrongdoing. Thus, our data support the positive social benefits of Delaware&apos;s innovative tools at hand doctrine. Nonetheless, in the concluding section, we bring bad news. The increasing usage of private ordering to limit inspection rights of owners--stockholders, partners, and members--raises concerns that the potential benefits of the tools at hand doctrine will not be fully realized. We also reason that the Delaware Supreme Court&apos;s decision in California State Teachers&apos; Retirement System v. Alvarez, 179 A.3d 824 (Del. 2018), likely eviscerates the tools at hand. Alvarez holds that the Delaware litigant&apos;s suit is precluded by an earlier decision by another jurisdiction that a derivative suit initiated by a different shareholder than was prosecuting the Delaware action lacked standing to sue. We reason that Alvarez is a powerful disincentive for Delaware litigants to pursue the tools at hand as the time expended in pursuing that right may enable competing slothful lawyers to take their chances with a less developed complaint in a sister jurisdiction&apos;s courts on the same claim.

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Abstract Has corporate law and its bundles of fiduciary obligations become irrelevant? Over the last thirty years, the American public corporation has undergone a profound metamorphosis, trans forming itself from [...]

A M&A Indemnification Survey recently issued by our firm analyzed the key indemnification terms of 100 publicly filed acquisition agreements from June 1, 2016, to August 16, 2017, with transaction [...]