Abstract

http://ssrn.com/abstract=1681744
 
 

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When the Government is the Controlling Shareholder: Implications for Delaware


Edward B. Rock


University of Pennsylvania Law School

Marcel Kahan


New York University School of Law; European Corporate Governance Institute

September 23, 2010

Delaware Journal of Corporate Law (DJCL), Vol. 35, No. 2, p. 409, 2010

Abstract:     
When the federal government is the controlling shareholder, the doctrine of sovereign immunity transforms the legal structures of accountability. Procedurally, the government and its agents can only be sued in federal court. Substantively, claims must be brought within one of the statutory waivers of sovereign immunity (the Federal Tort Claims Act, the Tucker Act, or the Administrative Procedure Act). Although in the right circumstances plausible claims could be brought in Delaware against the directors of a government-controlled Delaware corporation, we argue that Delaware should avoid a confrontation with Washington, and that the best way to do so is to take advantage of the flexibility provided by Delaware Court of Chancery Rule 19.

Number of Pages in PDF File: 28

Keywords: Delaware, Journal, Corporate Law, Corporate, Chancery Rule 19, Controlling shareholder, Government, Sovereign immunity, Government-controlled, Federal government

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Date posted: September 23, 2010 ; Last revised: October 2, 2010

Suggested Citation

Rock, Edward B. and Kahan, Marcel, When the Government is the Controlling Shareholder: Implications for Delaware (September 23, 2010). Delaware Journal of Corporate Law (DJCL), Vol. 35, No. 2, p. 409, 2010. Available at SSRN: http://ssrn.com/abstract=1681744

Contact Information

Edward B. Rock (Contact Author)
University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-8631 (Phone)
215-573-2025 (Fax)
Marcel Kahan
New York University School of Law ( email )
40 Washington Square South
New York, NY 10012-1099
United States
212-998-6268 (Phone)
212-995-4341 (Fax)
European Corporate Governance Institute ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
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