Summer 2006
Volume 2
Number 2
Articles
SECTION 1032: ARE WE THERE YET?
This paper discusses various issues related to Section 1032 of the Internal Revenue Code, including the proper scope and applicability of Section 1032 necessary to ensure that economically equivalent transactions are treated in a consistent manner. Among other topics, the paper provides a summary of legislative enactments and judicial and administrative rulings related to Section 1032 and a review of the general scope and applicability of the section in current tax practice. The paper also provides an analysis of attempts to provide for a workable definition of "money or other property in exchange for stock" within the meaning of Section 1032 as well as the impact of the applicable rules on equity derivatives and employee stock option plans. Lastly, the paper reviews and discusses the proper scope of Section 1032 and proposals for amending the provision to reduce the opportunity for whipsaw.[ARTICLE]
REVISITING AUSTIN V. LORAL: A STUDY IN ECONOMIC DURESS, CONTRACT MODIFICATION AND FRAMING
Austin Instrument, Inc. v. Loral Corp. is a favorite among Contracts casebooks because the New York Court of Appeals held that it was a "classic" example of economic duress. The close division of judicial opinion suggested, however, that there was a more complex story behind the Court of Appeals’ recitation. Indeed, revisiting the case reveals a rich and intricate story. Why were Austin and Loral litigating so fiercely over roughly $22,000? Was it possible that the threat of Austin, a small, privately held company, could coerce Loral, a large, publicly traded company? What influence did the conflict in Vietnam have on the decision? This article explores these questions, reconstructing Austin v. Loral. The article goes on to present the frames of contract modification and economic duress, and discusses the doctrinal differences between them at the time of Austin v. Loral. This article concludes by refocusing the duress doctrine to ask solely whether Austin’s threat was made in good faith.[ARTICLE]
Employers who employ both Americans and non-citizens in America, as well as those who employ either Americans or non-citizens overseas, will face a wide range of demands for cooperation with counterterror agencies, choices about employment policies that affect counterterror efforts, and concerns by employees about the impact of counterterror measures on their employment. This Article surveys some of the less immediately obvious issues that employers need to consider in adjusting to the post-9/11 environment—an environment in which counter-terror operations have become the nation’s highest government priority.[ARTICLE]
DETERMINANTS OF THE SETTLEMENT AMOUNT IN SECURITIES FRAUD CLASS ACTION LITIGATION
This article identifies the factors most responsible for determining the settlement amount in securities fraud cases. It also develops a settlement model that incorporates these factors. This article analyzes a sample consisting of 525 securities fraud class action settlements that were reached between 1994 and 2005. It identifies the main drivers of the observed settlement amounts and develop a settlement model that explains more than fifty-six percent of the settlement amounts in terms of these settlement drivers. The settlement model should be useful to counsel or interested parties for gauging a reasonable settlement amount consistent with past experience. It should also be of interest to legal scholars because it identifies a set of factors that affect the settlement amount and quantifies their relative impact on the settlement amount for an important set of class actions. This article’s modeling technique could be applied to other types of class action (or other) litigation to estimate similar models to aid in the litigation settlement process.[ARTICLE]
EMPLOYERS BEWARE: THE I-9 FORM: VERIFYING IDENTITY AND IDENTITY DOCUMENTS IN THE EMPLOYMENT CONTEXT
Verification of identity has taken on new importance in a post 9/11 environment. This article discusses employers’ obligation to verify the identification of their employees and the technical problems with identity verification employers face under current approaches. Attempts by the government to resolve these issues will meet resistance from both privacy advocates and liberty defenders. Understanding the issues with the current state of documentation of identity will enable employers to make more informed decisions about who they are hiring, particularly if the analysis is completed prior to the hiring decision. For the time being, the I-9 form and associated process will serve little preventative value for an organization, other than enabling it to escape liability with a defense to the situation of actually employing an unauthorized worker.[ARTICLE]
Student Note
A BRIEFING FOR AMERICAN BUSINESSES LOOKING TO INVEST IN VIETNAM
Positioned to become the newest member of the WTO later this year, Vietnam is an ever more appealing destination for foreign investors. In 2005 alone, the country received an impressive $5.8 billion in foreign investment. This note provides the essential information for any American business contemplating expansion into Vietnam. After a brief overview of modern Vietnam, this note delves into the major trade agreements between the United States and Vietnam and changes that are being made to make Vietnam a more comfortable environment for business. The final section deals with the risks that remain a part of doing business in Vietnam.[ARTICLE]