UCLBJ
Volume 22 Insights and commentary
By: Medha Maindwal & Jessica Lin, Staff Editors 2025–2026
Edited by: Talya Bernstein, Executive Development Editor 2025–2026
THE (RE)NEW(ED) CORPORATION: FOUNDATION FOR A STAKEHOLDER REGULATORY AGENDA
Gregory E. Louis questions whether stakeholder capitalism could serve as a legitimate foundation for government regulation and if so, how it could be done. Amid the historical misunderstanding of corporations, he emphasizes the one conviction that all corporate activities should share: “to serve some conception of the common good as all exercises of government power do.” Louis explains that there should be a renewed cooperation that aims to uphold stakeholder capitalism through both legislative and administrative regulations. In doing so, he assesses two regulatory mechanisms to advance stakeholder capitalism.
First, he demonstrates how securities regulatory schemes should be amended to account and require the protection of sweat equity in capital markets. The current law embraces a general incorporation regime that is structured to be a democratic self-determination, which is fundamental to U.S. corporate law. Louis explains that this principle of legal morality should be mirrored in how the government approaches regulating stakeholder capitalism. Second, Louis delves into how economic development schemes should be amended to promote business organizations as workers' cooperatives. While the U.S. is facing a politically divisive society, Louis encourages readers that both parties have the shared goal of holding business corporations accountable by promoting stakeholders beyond equity investors. Louis concludes how stakeholder capitalism can serve as a legitimate foundation for government regulation.
Shareholder Standoff: The Erosion of Minority Protections in the Wake of SB21
In Kiara R. Sims’ “Shareholder Standoff: The Erosion of Minority Protections in the Wake of SB21”, she discusses how the M&F Worldwide (MFW) doctrine will apply to Delaware corporate law in relation to the state’s Senate Bill 21. She explains the strength of the MFW doctrine by protecting both minority shareholders and controllers. In the conclusion of her paper, she argues that the bill’s impact on the MFW doctrine may diminish minority stakeholders’ previously installed protections with no societal benefits.
Sims addresses the clear distinction of court rulings by differentiating which rulings were based on business judgement rule (BJR) and where rulings were based on entire fairness review (EFR). In turn, she makes it clear about the dangers of the court’s differing application of the MFW doctrine. Sims argues that the modern MFW doctrine provides that the default standard of review should be entire fairness. In litigation cases involving corporate decisions where controlling shareholders are at odds with one another, the MFW doctrine is supposed to benefit both controllers and minority shareholders to no loss. As such, Senate Bill 21 applies to undermine the doctrine in its corporate satisfaction, scope of application, and its requirements. Important cases, such as In re Match Group, Inc., and their impacts on corporate law may be undone. Sims predicts that Senate Bill 21 will continue to be a point of discussion for years to come. She concludes that as amendments to the bill are discussed, it is crucial to emphasize the policy of fairness and how fundamental it is to Delaware corporate law.
Beyond Comprehension: Why Tax Code Complexity Necessitates IRS Deference
“Beyond Comprehension: Why Tax Code Complexity Necessitates IRS Deference” concludes that deference must be given to the Internal Revenue Services (IRS) interpretations due to its technical demands in a complex area of law. The article explores the evolution of the tax code throughout history by analyzing notable tax reforms, such as the Economic Recovery Tax Act (ERTA), Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), and the Tax Reform Act of 1986 (TRA86). While the code continues to grow in its expansion and lasting impact, judicial interpretation of the code may add to its complexity.
As the authors explain the court’s reasoning behind each tax case decision, they caution that judicial interpretation of the code will endanger the tax code to be interpreted beyond its original meaning. The authors do not conclude that the IRS’ interpretation is dispositive, but they suggest that the IRS’ interpretation should serve as guidance for courts and result in more accurate and consistent applications. The article does not propose a solution to address tax complexities. Rather, the authors aim to highlight the need for institutional mechanisms, such as the IRS’ interpretation, to be evaluated in determining the interpretation, administrative, and consequences of tax legislation. The authors conclude that judicial deference must be given to safeguard the tax system to uphold its original meaning.
A Critical Analysis of Alternative Section 1031 Proximate-Exchange Structures
“A Critical Analysis of Alternative Section 1031 Proximate-Exchange Structures” compares proximate exchanges with the alternative proximate exchanges that advisors usually recommend. Proximate exchanges are a popular transaction structure for taxpayers to claim section 1031 nonrecognition in tax law. The author points out that taxpayers have six wins and zero losses in cases granting the nonrecognition. The article argues that the tax court and legal precedents support proximate exchange structures rather than alternative structures, even though advisors may believe otherwise. The author parses through the different types of proximate exchange structures available to taxpayers and highlights how alternative proximate exchanges seemingly reduce tax risk but increase the non-tax risks associated with these complex transactions. Borden outlines the multiple tax law principles that strongly support the acceptance of proximate exchanges and highlights how the alternative structures may serve to undermine the available legal defenses for taxpayers.
Additionally, the perpetration of alternative proximate exchanges by advisors encourages waste – the antithesis of tax law's policy principle of efficiency – since the legal fees and associated transaction costs increase while the tax risk remains unchanged or rather, unchallenged. The article urges tax authorities to unequivocally look back and recognize the existing law regarding primary proximate exchanges, so advisors are not drawn to recommend alternative structures to clients.
“For Whom the Bell Tolls”? Is the Corporate Transparency Act Dead, and if Not, What is Its Impact on Corporate Governance?
Kellen Ware examines the utility of the Corporate Transparency Act (CTA) and critically evaluates whether the Act is still able to accomplish the initial purpose it was created for. The CTA was created to combat illicit financial activity through mandated beneficial ownership disclosure for corporations. The author challenges why the CTA is still on the books amidst constitutional challenges to the law and the current administration's decision to not enforce the reporting requirements on domestic entities. Kellen Ware dives into the history of the CTA to demonstrate how cumbersome the reporting requirements can get for corporations and outlines the obstacles corporations face to comply with the federal regulations. The author also highlights how the CTA may be a case of federal overreach as corporate governance is an area of the law historically left to state law and legislatures.
Furthermore, the author argues that the CTA purports to harm small businesses and non-profit corporations as it poses undue obstacles to corporate governance, and the ambiguity regarding the law causes more harm than the purported benefits suggest. The article suggests that the current state of the law does not sufficiently mitigate the detrimental impacts it poses as future administrations can still opt to enforce the law, and states may try to emulate the CTA. Hence, the note argues that the CTA should be repealed and legislatures should refrain from mirroring the Act.