Those who have hailed a taxi or used public transportation can attest to the downsides of urban transportation including dirtiness, crowdedness, and unreliability. Since its founding in 2010, San Francisco-based startup Uber has aimed to appease the unsatisfied market of urban dwellers that desire easier, cleaner, more dependable transportation than has been available. Uber operates as “your on-demand personal driver” allowing users to hire and pay the nearest of the company’s “sleek black cars” (think Lincoln Towncar) as a chauffer through the users’ mobile phones. Unsurprisingly, Uber has clashed with regulators, cabbies, and others who claim that Uber is skirting existing regulations that protect customers. Cities including Chicago, Washington, D.C., and New York City have proposed or threatened to propose regulations that would effectively run Uber out of their respective towns. In addition, cab drivers in several cities have filed class action suits alleging that the company is engaging … Read the rest
As Argentina Faces Another Default, Kitchenware a Last Resort
Earlier this month, hundreds of thousands of disgruntled Argentines flooded the streets of Buenos Aires to protest the embattled presidency of Cristina Fernandez de Kirchner (CFK). [i]. The anti-government demonstrations, dubbed “the Protest of 8N,” were held across the country on November 8th and are estimated to be the country’s largest in a decade.[ii]. With CFK’s approval ratings falling from 64 percent in October 2011 to only 34 percent today, this month’s protests reflect the urgency – and popularity – that now characterizes the opposition movement. [iii]. But with the country’s ears still ringing from 8N’s boisterous cacerolazo (a demonstration technique used in Argentina that involves the banging of pots and pans), we may pause to consider the question – why is Argentina missing out on Latin American growth?
A century ago, Argentina’s future looked as bright as any in Latin America. [iv]. An endless expanse of tillable land, … Read the rest
Fiduciary Duties: Legal Obligations or Investors’ Imaginary Friends?
Founded in 1983, Ancestory.com is the world’s largest family history website that provides access to more than ten billion records and thirty eight million family trees.[i] Recently, the London based private equity firm Permira Advisers LLP agreed to purchase the company at a valuation of $32 a share.[ii] The $32 amount represents a premium of 10% based on the company’s price at the time the deal was announced. [iii] However, many shareholders are unsatisfied and upset.[iv] In fact, many shareholders have filed suit against the company.[v] Principally, these suits allege that the Board of Directors of Ancestry.com breached their fiduciary duties to stockholders by failing to obtain a higher price by adequately shopping the company and that the decision to consummate the sale was not in the best interest of shareholders, rather that of the Board of Directors.[vi]
Attorneys representing pension funds and shareholders … Read the rest
Alternative Dispute Resolution: An Exercise in Interpretation or a Legitimate Discussion of the Merits?
As a way to efficiently resolve cases without drawing on judicial resources, courts are starting to provide litigants with the opportunity to engage in alternative dispute resolution.1 ADR programs vary from court to court but Maine provides an example of how a mandatory ADR program can work.2 Maine has a presumptive ADR program for its civil cases but there are some exemptions or opportunities for waiver.3 Rule 16b requires at least one ADR conference which is where the parties engage in mediation, non-binding arbitration or early neutral evaluation facilitated by a neutral agreed upon by the parties.4 While in the past, an ADR conference may have meant begrudgingly sitting across from an opponent that had no interest in coming to an agreement, technology proposes the online dispute resolution (“ODR”) option.5 Both face to face and online ADR have their advantages and disadvantages, however, ODR offers … Read the rest
Take Your Business Elsewhere: Why the Federal Corporate Income Tax is Destroying our Economy
The national debt of the United States now exceeds $16 trillion. Current estimates suggest that the present year’s deficit will amount to approximately $1.1 trillion, a negligible improvement upon 2011’s $1.3 trillion deficit. The present unemployment rate is one of the highest of the past sixty years, with approximately eight percent of Americans unable to find work. Unless significant changes are made in both federal income and expenditure, the economic livelihood of future generations is bleak.
Searching high and low for a remedy to our nation’s economic woes, many politicians and businessmen have set their sights on the federal corporate income tax. Hoping to simultaneously create jobs and stimulate our economy, individuals from across party lines, including Barack Obama and Mitt Romney, have suggested that we lessen the federal taxation of corporate profits. A small group, though, including individuals such as Gary Johnson and Ron Paul, are of the
… Read the rest Election 2012 – Business Leaders and The Social Contract Referendum
Next week’s presidential election is not a simple referendum on Barack Obama’s first term in office, nor is it another routine debate over the appropriate size and role of the federal government. The contest between Barack Obama and Mitt Romney is a referendum on the American social contract as we know it. This November, the electorate will answer a meaningful question – to what extent do our country’s most successful captains of business and industry have a contributive, financial duty to the maintenance of the American economy?
The modern understanding of the American social contract first took form with Franklin Roosevelt’s New Deal, passed in the wake of the Great Depression. In FDR’s view, the government could only continue to fulfill its obligation to those it governed by securing some measure of economic protection for its citizens. “As I see it, the task of government in its relation to … Read the rest
Welfare, Innovation and Growth: The Patent Paradox
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Increasing intellectual property rights (IPR) poses a risk to both consumers and economic growth. The United States scored 4.9 out of 5 in 2005, up from 3.8 in 1975, according to the Park index for evaluating the strength of patent protection.[1] This trend has continued to gain strength, as evidenced by the over one billion dollars awarded to Apple for its infringement case against Samsung. Economic considerations dominate the arguments favoring this trend towards strong IPR, namely the “incentive to invent” theory. This rationale, however, falls short in its justification for continuing to strengthen IPR. Firstly, the “incentive to innovate” theory fails to discuss the implications stringent IPR have on consumers. Secondly, the Endogenous Growth Model demonstrates the … Read the rest
Bluebird: Walmart Wants To Be Your “Every Day Low Price” Bank.
Frustrated with your bank’s surprise fees and minute interest rates? Shop at Walmart? You may find a solution to your woes in an unusual but convenient location: on the “Every Day Low Price” stores’ shelves. Bluebird, the child of a Walmart and American Express partnership, will offer a prepaid, easy-to-refill, low fee debit account and card that aims to attract disgruntled bank customers and millions of “underbanked” households. The product is poised to change the banking industry (to the dismay of banks) by offering traditional banking services from a non-bank, but consumer activists have voiced concern over the legitimacy of Walmart’s foray into banking and the potential for abuse in the relatively unregulated area of prepaid card accounts.
In its quest to be America’s neighborhood “everything” store, Walmart has taken aim at the personal banking industry. The “underbanked” market, populated by “customers who use few, if any, … Read the rest
Let Organizational Sentencing Get Creative
Earlier this month a United Kingdom court took their turn on stage in the world-wide Apple v. Samsung dispute over copyright infringement. The court upheld a July ruling which took a slap at Apple. This slap did not consist of incarceration or a monetary fine, but instead brought Apple a taste of public shame. The court ruled that Apple must place a link to the ruling on its webpage run advertisements in prominent British magazines saying that Apple is not a copycat. The appeal court stated, “The acknowledgment must come from the horse’s mouth.”[1] This was a small demonstration of a court taking steps to actually hit an organization where it hurts. In this particular case, Apple was required to tarnish its image.
While corporations are not people, they are in many regards citizens of their respective states. This privilege of citizenship comes with a great deal of … Read the rest
Say-On-Pay: The First Results Are In
Pursuant to enacted legislation, shareholders of publicly owned companies are entitled to hold a non-binding vote on executive compensation packages (say-on-pay). With the 2011 say-on-pay votes complete and a substantial portion of the 2012 say-on-pay votes well underway, analysis of all the available data is beginning to give say-on-pay supporters reason to celebrate.
During the first Congressional hearing into the financial crisis, Richard Fuld, the former Chief Executive Officer of Lehman Brothers, was forced to defend his receipt of $484 million in salary, bonuses, and stock options between 2000-2008 http://abcnews.go.com/Blotter/story?id=5965360&page=1#.UIFzH6DNlFI. Part of his explanation was to suggest that, because the collapse of Lehman relegated his stock worthless, his actual earnings were closer to $350 million (Id.). He conceded, “That’s still a lot of money” (Id.).
That sure is a lot of money for someone who, by virtue of his title as CEO, bears responsibility for the taxpayer … Read the rest