Haskell Murray, Author at socentlaw - Page 5 of 6

L3C AND THE ARTS │ 11/16 │ NEW YORK, NY

I recently received an invitation to L3Cs and the Arts from Michael DiFonzo.  I will be unable to attend, but thought I would pass the information on to our readers.

The event will be held at Columbia University in New York, NY on November 16th, from 2:00pm to 6:00pm.  Admission is free for Columbia University students, alumni and all professionals from the performing arts community.  The speakers are listed here, and include attorney, L3C advocate, and author Marc Lane.

I do not know all of the speakers, but I do wish the event would have included one of the vocal L3C opponents, like Daniel Kleinberger, Carter Bishop, or Bill Callison, to give the audience a more balanced picture of L3Cs.  Edward Hwang and I tried to give a balanced account of the L3C in our University of Miami article.  We praised the purported goals of the L3C and tried to recognize its potential, but we also described the many hurdles the L3C still has to overcome.  Professor Cass Brewer also provides a balanced view of the L3C in his work, and has written on using the LLC form in social enterprise here.   Anyone interested in the L3C form, and comparing the L3C to the LLC, would do well to read all five articles linked to in this paragraph.

 

 

 

INTRODUCING JONATHAN STORPER

We are adding quite a number of talented attorneys and law professors to socentlaw.com.  Next in line is Jonathan S. Storper.  Jonathan is a partner and chairs the Sustainable Business Practice Group at the law firm of Hanson Bridgett LLP in San Francisco, CA.  He counsels for profit and nonprofit entities and their investors in connection with business and intellectual property transactions, including formation and finance, such as initial and secondary public offerings, contracts and licenses, joint development agreements, mergers and acquisitions, intellectual property licenses, e-commerce, technology-related matters and general corporate law.

He was the co-chair of the legal working group that drafted and advocated for the law creating the benefit corporation in California which became effective in 2012. Mr. Storper is the recipient of a number of awards including being named a 2012 California Lawyer Attorney of the Year and a California Super Lawyer.

I met Jonathan at UC Hastings’ social enterprise symposium, and heard his interesting presentation on benefit corporations.  I am glad that he is joining the blog.

INTRODUCING JON WIDRICK

I am honored to introduce Jon Widrick to socentlaw.com.  Jon is a graduate of Georgetown Law Center and is a partner at Ascensus Law where he represents small to medium sized businesses dealing with corporate and tax law issues.  Jon has significant experience advising green businesses, sustainable businesses, and social enterprises.  He recently aided clients in becoming the first and second benefit LLCs to be recognized in the United States and currently represents a number of benefit entities in the DC area.  He has written a number of articles and client memos on social enterprise, including this one on Becoming a Benefit Corporation in Virginia, which introduced me to his work and practice.

Jon also has significant experience in representing tax-exempt organizations, including 501(c)(2), 501(c)(3), 501(c)(6), 501(c)(7) and 501(c)(8) entities.  Beyond assisting them in organizing their entity and obtaining tax-exempt status, Jon counsels them on such on-going compliance issues as lobbying and campaigning restrictions, operating in foreign countries, grant making, disclosure issues, sponsorships and avoiding classification as a private foundation.  His clients range in size and scope from multinational organizations seeking systemic governmental change in Africa to national trade organizations dedicated to supporting the composting industry to community charities seeking to provide opportunities for at-risk youth.

Finally, Jon is a founding member of Green America’s Certification Advisory Committee, which advises Green America on ways to make their green certification process more responsive to its members, especially small businesses.

I am excited to have Jon joining the blog as an author and am sure we will all learn from his posts.

PENNSYLVANIA BECOMES THE TWELFTH STATE TO PASS BENEFIT CORPORATION LAW

On October 24, 2012, Pennsylvania became the twelfth state to pass benefit corporation legislation.

I will update my Benefit Corporations: State Statute Comparison Chart when the law goes into effect (after 90 days).

Lancaster Online has additional details: here.

Below are four thoughts that came to mind after reading the Lancaster Online article:

(1) The statement that the traditional purpose of the corporation is “making a profit for its shareholders” is hotly contested.  See, e.g., Professor Lynn Stout’s recent book, The Shareholder Value Myth.  In May, I made a similar statement, but with a two very important caveats (primary purpose and Delaware corporate law), and, even with those caveats, a number of well-regarded academics disagreed (see the comments).

(2) To date, not many benefit corporations have been formed.  The fact that 19  benefit corporations (reported by other sources as only 12) were formed in California on the first day is nice, but not impressive.  The first benefit corporation statute (Maryland) went effective in 2010, and it appears that a total of fewer than 200 benefit corporations have been formed across the nine states with active statutes (IL, MA, and PA are not yet effective).  To put the total number of benefit corporations into perspective, over 900,000 business entities are formed in Delaware alone.  The benefit corporation form may take off, but it has not yet.

(3) I am extremely interested to see what Pennsylvania’s neighbor, Delaware (the leader in U.S. corporate law), will do to address the social enterprise movement. The total number of benefit corporations currently formed will not get Delaware’s attention, but the media attention and the passion of social entrepreneurs might.  Whatever Delaware’s response, I am sure it will be well thought out.

(4) While I still maintain a healthy skepticism, I am intrigued by these new forms, respect those who are on the ground trying to effectuate change, and am enjoying my research in the area.

INTRODUCING PROFESSOR ALICIA PLERHOPLES

We are thrilled to welcome Professor Alicia Plerhoples to socentlaw.com. Professor Plerhoples joined Georgetown Law Center as an associate professor of law in 2012. She is a graduate of Princeton University’s Woodrow Wilson School of International and Public Policy and Yale Law School where she served as senior editor of the Yale Law Journal and articles editor of the Yale Journal of Law & Feminism. Professor Plerhoples practiced real estate finance and corporate finance law in both New York City and Silicon Valley prior to entering academia. She has completed two post-graduate fellowships, the first at Stanford Law School as the Orrick, Herrington & Sutcliffe Clinical Teaching Fellow with the Organizations & Transactions Clinic, and the second at the University of California Hastings College of the Law as a Visiting Assistant Professor in business law and clinical education.

Professor Plerhoples’ scholarship, which will be quite valuable to our readers, explores hybrid business entities and their governance. Her recent article Can an Old Dog Learn New Tricks?, 13 Transactions: Tenn. J. Bus. L. 221 (2012), examines traditional corporate law principles and how they might be adapted and applied to the flexible purpose corporation.  Currently, she is developing a Social Enterprise and Nonprofit Clinic at Georgetown that is scheduled to open in the fall of 2013.

Professor Plerhoples facilitated my participation in UC Hastings’ social enterprise symposium last week, where I was able to meet her in person and hear about her academic interests.  She has already become a thought leader in the social enterprise space and is a valuable addition to this blog.

INTRODUCING PROFESSOR CASS BREWER

As a new addition to socentlaw.com myself, it is my pleasure to welcome Professor Cassady V. (“Cass”) Brewer to the blog.  Professor Brewer joined Georgia State University College of Law in 2011 after over 20 years in private practice.  Immediately prior to joining Georgia State, Professor Brewer served as a Senior Partner at Morris, Manning & Martin LLP in their Tax, Exempt Organizations, and Wealth Planning Practices.  He still serves as Of Counsel with the firm.  Among his many honors, Professor Brewer was named a “Georgia SuperLawyer” in the tax area by Atlanta Magazine from 2007-10, and was listed in Chambers USA: America’s Leading Lawyers for Business from 2008-11.  Professor Brewer is publishing, teaching, and consulting in the tax and social enterprise areas.  He holds an LL.M. in taxation from New York University (where he was a graduate editor of the Tax Law Review), a J.D. from the University of Arkansas (where he was Editor-in-Chief of the Arkansas Law Review), and a B.S. from Vanderbilt University.  We are fortunate to has someone with his expertise joining the blog as an author, and we plan to add additional authors over the coming months.

NYU JOURNAL OF LAW & BUSINESS HOSTS CONFERENCE ON THE LAW AND FINANCE OF SOCIAL ENTERPRISE │ 11/9 │ NEW YORK, NY

This announcement comes from an editor of the NYU Journal of Law & Business:

Please join the NYU Journal of Law & Business on Friday, November 9, 2012, from 2:30-5:30 PM for our Fall Conference on the Law & Finance of Social Enterprise.

The conference will be held in Greenberg Lounge at the NYU School of Law. Deborah Burand (University of Michigan Law School) will present groundbreaking work on social impact bonds; Ana Demel (NYU School of Law) and Rebecca Leventhal (Social Finance) will comment. John Tyler (General Counsel of the Kauffman Foundation) will present work on the fundamental question whether state attorneys general should regulate hybrid entities as charities; Jill Manny (NYU School of Law) and David Spenard (Assistant Attorney General for the Commonwealth of Kentucky) will comment.

Kyle Westaway will serve as master of ceremonies and will write an introductory essay for the Journal’s Winter 2013 Special Issue, in which the principal papers and written comments will be published.

FIVE INTERNATIONAL SOCIAL ENTERPRISE EVENTS

Social Enterprise Buzz has information about five international social enterprise events.

1) Social Enterprise World Forum 2012 │ October 16-18, 2012 │ Rio de Janeiro, Brazil

2) Social Finance Forum 2012 │ November 8-9, 2012 │ Toronto, Canada

3) Global Social Business Summit 2012 │ November 8-10, 2012 │ Vienna, Austria

4) Make a Difference Asia 2013 │ January 25-27, 2013 │ Hong Kong

5) Skoll World Forum 2013 │ April 10-12, 2013 │ Oxford, UK

ABA’s LLC INSTITUTE | 10/18 – 10/19 | ARLINGTON, VA

The Business Law Section of the American Bar Association is hosting the LLC Institute on October 18-19, 2012 at the Le Meridien hotel near Washington D.C. (Arlington, VA).  The entire program looks excellent, but the “Drafting LLC Agreements for Nonprofit and Social Enterprise LLCs” session on October 18 may be of special interest to our readers. 

Program Chair:

J. William Callison, Partner, Faegre Baker Daniels LLP, Denver, CO.

Panel:

Carter G. Bishop, Professor of Law, Suffolk University Law School, Boston, MA;

Cassady V. Brewer, Assistant Professor, Georgia State University School of Law, Atlanta, GA;

J. William Callison, Partner, Faegre Baker Daniels LLP, Denver, CO; and

J. Haskell Murray, Assistant Professor, Regent University School of Law, Virginia Beach, VA.

Each panelist has written about using LLCs in social enterprise and/or about low-profit limited liability companies (“L3Cs”) specifically, with varying degrees of criticism or suggestions for improvement.  The articles are available on SSRN:  Professor Bishop (here); Professor Brewer (here); Mr. Callison (here and here); and Professor Murray (here).

REGENT LAW SYMPOSIUM RECAP

The Regent University Law Review’s symposium entitled “Emerging Issues in Social Enterprise” was a great success this past weekend.  The symposium consisted of a reception Friday night, two academic panels on Saturday morning, a primarily practitioner panel on Saturday afternoon, a CLE led by SocEntLaw’s own Kyle Westaway, and a gourmet three-course meal with Michael Pirron (CEO of Impact Makers, a founding Certified B Corporation) as the keynote speaker.

On the first academic panel, Professor Joan Heminway discussed securities law issues surrounding social enterprises, and briefly mentioned some of her research on crowdfunding (See, e.g., here).  Professor Cass Brewer followed with a presentation that suggested eight ways the L3C statutes might be reformed, including statutory language making explicit that investments other than program related investments (“PRIs”) would be freed from the requirement that “no significant purpose… [be] the production of income or the appreciation of property.”  On the second academic panel, Professor Lyman Johnson discussed the history of the traditional corporations, the longstanding debate over the shareholder wealth maximization norm, and corporate governance opportunities and issues presented by the benefit corporation form.  Professor Dana Brakman Reiser then discussed the Stag Hunt Game that social entrepreneurs and investors engage in when pursuing the goals of social enterprise.  She discussed the need of assurances from each group that they would pursue a blend of social purpose and private profit.  As a solution, she suggested financing social enterprises through “flypaper” – long-term (10-15 years), low-yield (below-market), convertible (upon sale of the company) debt.

The afternoon panel included Greg Bergethon (corporate attorney and CPA), Professor Marcia Narine (a Visiting Assistant Professor, with significant legal and corporate experience, at the University of Missouri-Kansas City School of Law), Michael Pirron, and Kyle Westaway.  They each described their experiences with social enterprise and ways to address the practical issues facing those in this space.  In the CLE, Kyle Westaway led the audience through the entity choice process for social entrepreneurs.  He also addressed management, tax, financing, and liability issues.  Michael Pirron concluded the symposium with a discussion of Impact Makers, and information regarding the Certified B Corporation and Benefit Corporation movements.

Professors Brewer, Heminway, Johnson, and Narine will all publish original papers with  the Regent University Law Review, and during the spring semester we will likely link to and discuss their articles.