Score the duck breast skin lightly in a diamond pattern. Season duck breasts on both sides with salt and pepper and set aside.
Put the morels in a strainer and rinse throroughly under the tap. Place the mrels in a small bowl and pour 1 cup of boiling water over them. Allow to soak at least 30 minutes.
Heat a 10-inch nonstick skillet over medium-high heat. When hot add the duck breasts skin side down. Reduce heat to medium. Cook skin side down for five minutes. Flip breasts to other side and cook another 4 minutes. Check temperature with an instant read meat thermometer. The breasts are ready when they reach 130°(medium rare). Transfer the breasts to a cutting board and moosely top with aluminum foil. Let rest.
Pour rendered duck fat into a Pyrex custard cup (these are incredibly handy things). Put the skillet back over medium heat. Add 2 teaspoons duck fat. When pan is hot add the shiitakes, season with dried herbs, salt, and pepper, and sauté for 3 minutes. Add shallots and sauté 1 minute. Add garlic and sauté an additional minute.
Carefully pour off ½ cup of the mushroom liquid into another Pyrex cup, avoiding any sediment on the bottom of the bowl. Drain the morels in the strainer, rinse them thoroughly, and add them to the pan.
Sprinkle the mushroom mixture with a couple of shakes of Wondra flour.
Deglaze the pan with the red wine. Add mushroom liquid and bouillon base. Bring to a boil, reduce heat to medium, and cook 1 minute or until it slightly thickens.
Slice the duck breasts thickly, fan out on the plate, and top with the mushroom sauce.
Just before you start cooking the duck, combine all ingredients in a 4 quart multicooker. Set to pressure cooker for 16 minutes on high. Allow to naturally release until the duck is ready. Taste and adjust salt and pepper if necessary.
We drank a Flowers Pinot Noir (Sonoma Coast) 2020, which made a lovely match. Earthy notes of dried currants, black cherries, and tea echoed many of the flavors in the sauce and rice. It also worked well with the gaminess of the duck.
As someone who coedited Can Delaware Be Dethroned?: Evaluating Delaware's Dominance of Corporate Law, I have been following with interest recent developments that suggest some slight slippage in Delaware's dominance. So has Keith Paul Bishop. Keith reminds us that VC Laster declined to enjoin TripAdvisor's reincorporation in Nevada, although liability claims remain pending, and informs us that Laird Superfood, Inc., has done likewise.
One of the reasons Laird invoked in its proxy statement to justify the move was a claim that "Nevada is more advantageous than Delaware because Nevada has pursued a statute-focused approach that does not depend upon judicial interpretation, supplementation and revision, and is intended to be stable, predictable and more efficient, whereas much of Delaware corporate law still consists of judicial decisions that migrate and develop over time."
Older readers will recall a debate a few years ago about the extent to which Delaware corporate law is indeterminate and whether any such indeterminacy works to Delaware's advantage or disadvantage. Whether or not indeterminacy helps maintain Delaware's dominance, Keith thinks Delaware law's indeterminacy imposes important costs on its users:
One of my primary complaints about Delaware jurisprudence has been that you can read the Delaware General Corporation Law cover to cover and still know very little about Delaware corporate law. Many extremely important doctrines and standards are the product of case-law and subject to continuous refinement by the Delaware courts. You will not find "entire fairness", "Caremark duty" or "Revlon duty" in the Delaware General Corporation Law. While Delaware's judge-made corporate law does evidence a high degree of legal sophistication, it also imposes significant costs on corporations due to the inherent uncertainty engendered by the ever evolving nature of Delaware jurisprudence. It also encourages litigants to test new theories of liability.
It's a debate that may reward being revisited.
Robert Miller has posted to SSRN:
A chapter in the forthcoming Routledge Handbook of Classical Liberalism, this paper evaluates contemporary corporate law, especially Delaware corporate law, from a classical liberal perspective. Beginning with an explanation of the firm as a mode of organizing voluntary cooperative activity among human beings, the chapter explains and compares two views of the corporation: the privilege view, under which incorporation is a concession from the state benefiting the individuals forming the corporation, and the contract view, under which the corporate form involves nothing that could not be achieved by appropriate contracts among individuals if transaction costs were low enough.
Tracing the evolution of corporate law, the chapter argues that corporate enabling statutes enacted in the nineteenth century democratized business organization by making incorporation available to everyone and separated incorporation from the granting of monopoly rights and other objectionable privileges, thus vindicating the contract view of the corporation.
The chapter next considers limited shareholder liability, arguing that it is not a special privilege or concession because there is good reason to believe that, if transaction costs were low enough, parties would agree ex ante to limit the liability of shareholders, with the result that even limited liability comes within the contract view of the corporation.
Turning to the American system of competitive federalism and the preeminence of Delaware corporate law, the chapter explains how, by having multiple enabling statutes for different types of business entities, Delaware can provide one form of organization (the limited liability company) in which parties may agree to virtually any arrangements of their internal affairs that they wish, and another form of organization (the corporation) in which certain rules are mandatory (such as the fiduciary duties of directors), which lessens transaction costs for parties who can invest in such entities with the assurance that rules important to them will apply and cannot be modified.
The chapter then considers the Delaware business judgment rule, with its distinction between the standard of conduct and the standard of review, and the Delaware Supreme Court’s development of a special standard of review applicable to antitakeover devices under Unocal and sales of control under Revlon. In connection with discussing the Environmental, Social and Governance (ESG) movement, the chapter then compares the shareholder model of corporate governance enshrined in Delaware law, which requires directors to manage the corporation for the benefit of the shareholders, and the stakeholder model, in which directors may direct value to other corporate constituencies even when doing so reduces returns to shareholders in the long run. The chapter also briefly considers the federal securities laws.
It concludes that Delaware corporate law comports well with classical liberal principles but the federal securities laws provide some significant points of variance.
Miller, Robert T., Classical Liberalism and Corporate Law (January 31, 2024). Routledge Handbook of Classical Liberalism (Forthcoming), Available at SSRN: https://ssrn.com/abstract=4712591
Larry Cunningham has posted his Congressional testimony to SSRN:
This Congressional testimony, requested by the House Financial Services Committee, identifies the fatal flaws embedded in the SEC's controversial climate disclosure rule proposal. To summarize some primary problems, the proposal:
In addition, the proposal mandates irrelevant and burdensome disclosures that would harm investors by:
Furthermore, the Proposal faces legal challenges under:
Cunningham, Lawrence A., Congressional Testimony: Problems with the SEC's Climate Disclosure Proposal (January 18, 2024). GWU Legal Studies Research Paper No. 2024-12, GWU Law School Public Law Research Paper No. 2024-12, Available at SSRN: https://ssrn.com/abstract=4732968
From my friend Francis Pileggi:
A recent gem of a short letter ruling from the Delaware Court of Chancery in Goldman v. LBG Real Estate Company LLC, C.A. No. 2023-0426-KSJM (Del. Ch., Feb. 26, 2024), provides important insights, with citations to authority, on three noteworthy topics of widespread relevance to corporate litigators ...
He goes on to offer a bulleted summary. useful.
Herewith a guest post from Anthony Rickey:
Three law firms filed papers last Friday seeking fees for their victory in rescinding Elon Musk’s $55.8 billion pay package at Tesla. The law firms—Bernstein Litowitz Berger & Grossman LLP, Friedman Oster & Tejtel PLLC, and Andrews & Springer LLC—want the Court of Chancery to award them 29,402,900 freely tradeable shares of Tesla common stock, along with over $1.12m in expenses. According to Reuters, this would not only be the largest fee in Delaware history, it may be the largest fee in the history of stockholder litigation, dwarfing the $688 million fee in the Enron securities fraud case.
Some comparative statistics may help to wrap one’s head around this mammoth request. This is not legal advice: most of the numbers below are legally irrelevant under the factors that govern Delaware fee awards. Instead, they offer some amusing perspective on an attempt to make multimillionaires out of attorneys. (These figures use the $202.64 closing price of Tesla stock on March 1, 2024, the day of Tornetta’s fee application. The stock fell considerably after the announcement.)
The Basic Figures
Compared to the Delaware Economy
Compared to Texas
Other Entertaining Figures
While I’ve tried to keep these lighthearted, I can’t end without expressing disbelief at this fee application. Elon Musk’s pay was meant to incentivize him to build a company; the lawyers prosecuted a complaint. No attorney deserves six figures in compensation per hour, no matter how complex or risky the litigation, and the concept that this level of incentive is necessary to motivate contingency lawyers is incredible. One can only hope that the Delaware courts channel Dorothy Parker’s perhaps apocryphal comment and do not toss this application aside lightly. It should be hurled with great force.
West Palm Beach Firefighters Pension Fund v. Moelis & Co. is a new Delaware Chancery Court opinion by VC Travis Laster. The case involves what VC Laster calls "new wave" stockholder agreements: "The new wave of stockholder agreements does not involve stockholders contracting among themselves to address how they will exercise their stockholder-level rights. The new-wave agreements contain extensive veto rights and other restrictions on corporate action."
These sort of arrangements are very old school in the close corporate context. Think of such corporate law chestnuts as Clark v. Dodge, 269 N.Y. 410, 199 N.E. 641 (1936). I discuss these cases in my book Corporate Law at pp. 528-35.
What gives the new wave versions their newness is that these purport to apply to public corporations:
Moelis & Company (the “Company”) is a global investment bank. Ken Moelis is its eponymous founder, CEO, and Chairman of the Board. After years of success operating the investment bank as a private entity, Moelis decided to raise capital from the public markets. He created the Company as a new holding company and reorganized the bank’s underlying entity structure. One day before the Company’s shares began trading publicly, Moelis, three of his affiliates, and the Company entered into a stockholder agreement (the “Stockholder Agreement”).
The Stockholder Agreement is a new-wave agreement. Under its terms, the Company’s board of directors (the “Board”) must obtain Moelis’ prior written consent before taking eighteen different categories of action (the “Pre-Approval Requirements”). The Pre-Approval Requirements encompass virtually everything the Board can do. Because of the Pre-Approval Requirements, the Board can only act if Moelis signs off in advance.
Other provisions in the agreement are intended to ensure Moelis will still be able to select a majority of the board of directors and to populate board committees with Moelis nominees in the same proportion that they represent on the full board.
The statutory provision that comes immediately to mind is DGCL 141(a). As Laster explains: "That provision famously states that 'the business and affairs of every corporation organized under this chapter shall be managed by or under the direction of a board of directors, except as may be otherwise provided in this chapter or in its certificate of incorporation.'" Private ordering of the board's functions thus must be effected through the articles of incorporation not in a mere shareholder agreement.
A whopping 132 pages later VC Laster concludes that Section 141(a) trumps most of the provisions of the agreement:
When market practice meets a statute, the statute prevails. Market participants must conform their conduct to legal requirements, not the other way around. Of course, the General Assembly could enact a provision stating what stockholder agreements can do. Unless and until it does, the statute controls.
I note that the MBCA has a statutory provision that allows shareholder agreements sweeping ability to limit board powers. But even if Moelis were incorporated in an MCA state, the statute would not apply. Under the MBCA statute, the agreement must be unanimous with all shareholders being a party to it. Secondly, the agreement is voided by operation of law when the company has a class of stock registered with the SEC.
Speaking purely in my capacity as a casebook editor, this is yet another example of an important Delaware opinion I would very much like to include in my Business Associations casebook, but that I see no way to edit down to a manageable length--say 20 pages at max.
But I am grateful to VC Laster who cites my work in footnotes 15, 286, 297, 298, and 299.
My good friend and leading Delaware corporate law litigator Francis Pileggi has a new blog post that digs into an earlier decision in the case. As always, he does a brilliant job.
Steak
I had wanted a flat iron steak for this recipe, but couldn't get one at my store. So I opted for two 1.5" thick top sirloin steak that each weighed about 10 ounces.
I heavily seasoned both sides of the steak with salt, pepper, and Creole seasoning. I vacuum sealed each steak in its own bag. I let the steak rest in the refrigerator for 1 hour. I set up my sous vide machine, using a stock pot for the water bath. I added the bags to the water bath, set the machine to 134°, and set the time for 75 minutes.
When the steaks were finished, I set a 10-inch non-stick skillet with 1 tablespoon of bacon fat (see below) over medium-high heat. I removed the steaks from the bags, patted them very dry with paper towels, and added them to the hot pan. I seared the steaks for about a minute per side and transferred them to a cutting board to rest.
Slice against the grain.
Sauce
Combine all three ingredients in a small bowl. After cooking the steaks, add the sauce ingredients to the still hot skillet. Mix well and let reduce very slightly. Add any juices that collect on the cutting board.
Potatoes
Cook bacon in a 12-inch non-stick skillet.
Cut red onion in half. Reserve one half for another use. Slice the other half into 1-inch long thin moons.
Slice potatoes using the 7 mm blade of your v-slicer.
When bacon is ready, transfer to a paper towel lined plate to drain. When cool, crumble bacon. Reserve.
Transfer 1 tablespoon of bacon fat into a 10 inch skillet and set aside.
Drain remaining bacon fat out of skillet into a glass bowl. Put 4 tablespoons of the fat back into the 12-inch skillet. Put skillet over medium-high heat (I used the 7 setting on my electric stove).
Add onion slices to pan. Salt well and sauté for 2-3 minutes. Add potatoes. Season generously with salt, pepper, and Creole seasoning. Mix well, cover, and reduce heat to medium. Cook a total of approximately 15 minutes, stirring potatoes every few minutes, until lightly browned and tender.
Plate potatoes. Top with steak slices. Top with sauce. Serve a side salad.
Wine
We drank a 2021 Ridge Three Valleys (Sonoma County), which is a blend of 65% Zinfandel, 26% Petite Sirah, 5% Syrah, and 4% Alicante Bouschet. Great match. Deep purple. Rich and full bodied. Plums, blackberries, black cherry, and some peppery spice.
Cold Soba Noodle Salad
To make the dressing, thoroughly whisk together the first six ingredients in a small bowl. Set aside.
Drain soba noodles through a colander or strainer. Rinse with cold water until the noodles are cold. Pat dry with paper towels. Transfer to a mixing bowl.
Drain spinach through a colander or strainer. Rinse with cold water until cold. Put the spinach in middle of a clean kitchen towel or a big wad of paper towels. Squeeze out as a much water as possible. Add to the mixing bowl.
Slice radishes using the 3.5 mm blade of a v-slicer. Add to mixing bowl.
Add scallions to mixing bowl.
Put bowl in the refrigerator until ready to serve. Just before service add dressing to taste. Mix. Top with wonton strips. Divide between plates.
Seared Tuna
Pat tuna steaks very dry with paper towels. Spray one side of each tuna steaks with Pam. Season with salt and pepper. Liberally sprinkle with sesame seeds and press into tuna. Flip steaks over and repeat on the other side.
Spray a 12-inch non-stick skillet with Pam. Heat over medium-high heat (I use the 8 setting on the 10 point dial on my electric stove). When the pan is very hot but before Pam starts to burn, add steaks and reduce heat slightly (I use 6). For rare to medium-rare, cook 2 minutes. Flip steaks (trying to avoid knocking off seeds). Cook another 2 minutes. (If the steak is very thin, reduce cooking time by 30 seconds per side. If the steak is very thick, add 30 seconds per side.)
Slice steaks against the grain.
Mix Ponzu and fish sauce. Brush liberally onto cut sides of the steaks.
The Wine
We drank a 2019 Trimbach Gewürztraminer, which is one of my favorite wines for quasi-Asian foods. It's a delicious wine. Bright gold color. Big nose of rose petals, pineapple, nutmeg, and lychee. The palate followed through with the same associations and a medium-long finish.
I note that Delaware Vice Chancellor Sam Glasscock intends to retire at the end of the year. As usual when there is an opening on thee Chancery Court, I expect to throw my hat into the ring. After all, am I not the leading proponent of Delaware corporate law in the academy? Am I not the voice crying in the wilderness that we don't need a Restatement of Corporate Law because we already have Folk on the Delaware General Corporation Law? When Lucian Bebchuk said Delaware is winning a race to the bottom, did I not proclaim that the race is to the top?
Of course, the usual blatant discrimination against non-Delaware residents will probably scupper my chances. It's a moral outrage.
Larry Cunningham argues that the SEC's pending climate change rule suffers from the same problems as the now defunct proposal to require disclosure of share buyback rationales and data.
State laws allow corporations to repurchase shares, which are seen by some as beneficial for shareholders but criticized by others for negatively impacting workers and social equality. The SEC's rule on disclosing buyback motives was vacated by the Fifth Circuit Court of Appeals for lack of substantial evidence on its benefits, specifically in reducing investor uncertainty. The court argued that without proving buybacks as problematic for investors, the SEC had no basis for mandating rationale disclosure, questioning the rule's focus on stakeholder interests.
The decision raises questions about the SEC's authority and its ability to enforce similar regulations, such as the controversial climate disclosure proposal, which faces scrutiny for potentially overstepping SEC's mandate and being burdensome and controversial. The climate disclosure rule's viability is uncertain, with critics comparing it to the failed conflict minerals rule, which was struck down for imposing a moral judgment under the guise of factual disclosure.
Both cases highlight the ongoing debate over the scope of the SEC's regulatory powers and the balance between investor interests and broader societal or environmental concerns.