March 17, 2010
Delaware Justice Holland brings governance law insight to UI law school
Delaware is a small state, tucked hard up against the Atlantic seaboard, not terribly well known to most Americans except maybe to history buffs as the first state to ratify the Constitution.
But in the world of corporate law, no state is more important. Through a series of mostly accidental events dating to independence, Delaware has become the state of charter for thousands of American corporations, making its corporate laws the most well-defined in the nation and its Supreme Court one of the most significant.
A justice from that Court-Randy Holland-is making his annual visit to the University of Iowa College of Law this week, providing UI students with a unique insight into how corporate governance law is interpreted. Holland is teaching a weeklong intra-session law class, Corporate Governance and Control, that explores the legal relationship between corporate shareholders and boards of directors in the context of legal decisions made by the Delaware courts.
"The faculty here at Iowa are excellent and can explain the law as well as anyone," Holland said. "But it's interesting for students to get a judicial perspective, too. I can explain the philosophical considerations and the structural considerations, explaining how we built on the basic principles of the law, or modified it with our decisions."
Holland has served on the Court since 1986, making him the longest serving justice in Delaware history (he was also the youngest when first appointed). He said that while only abut 20 percent of the Court's decisions are related to corporate law, those cases have by far the widest reach because so many publicly traded firms are chartered there, including more Fortune 500 firms than any other state. Since legal action against a corporation by shareholders takes place in the state where the firm is chartered, the Delaware Court carries an outsize influence in U.S. corporate law.
That makes Delaware the home of some heavy-hitter lawyering. It was in Delaware, for instance, where Disney shareholders sued the company's board of directors over an employment agreement with deposed CEO Michael Ovitz (the justices ruled in favor of the company) and where Paramount sued to stop Time Inc. from acquiring Warner Communications (the ruling went in favor of Time).
Holland expects more significant cases in the future, as legal fallout from the 2008 meltdown in the financial system settles on the Court's docket. He said the Delaware Court's work is done with full awareness of its importance and gravity.
"We try to maintain a balanced approach and are fair to everyone," he said. As evidence of that, the U.S. Chamber of Commerce has ranked the Delaware court system first of all state courts for fairness and impartiality for seven consecutive years.
STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Iowa City, Iowa 52242-2500
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