MARK LOEWENSTEIN, University of Colorado Law School
Email: MARK.LOEWENSTEIN@COLORADO.EDU

This article explores the meaning of "good faith" in the context of corporations and unincorporated entities. The courts, particularly in Delaware, have developed two different approaches. In the corporate arena, the courts are fashioning a notion of good faith that seems to require an examination of director motivations. In the unincorporated arena, good faith has a meaning grounded in contract law. These are two different concepts and reflect the fundamental differences between corporations and unincorporated entities, with the former based on fiduciary duties and the latter on contract. There are, however, indications that this "divergence" is starting to disappear, and this article discusses that trend as well.

ROBERT B. THOMPSON, Vanderbilt University - School of Law, Vanderbilt University - Owen Graduate School of Management
Email: thompson@law.vanderbilt.edu

Benjamin Cardozo's 1928 opinion in Meinhard v. Salmon that co-venturers owe each other "the punctilio of an honor the most sensitive" remains, 80 years later, a defining point for framing the discussion of fiduciary duty, still the most important issue in the law of business associations. This work develops the story of Messers. Meinhard and Salmon and their relationship with the very wealthy Livingston/Gerry family who owned the land in New York City at Fifth Avenue and 42nd Street that gave rise to this long-running dispute. The context helps delineate the scope of fiduciary duty in a way that Cardozo's memorable language does not. This in turn leads to a discussion of the role of private ordering in structuring relationships where such a duty may not be desired and what this classic case may tell us about contracting out of fiduciary duty in a modern setting.

BRADLEY T. BORDEN, Washburn University - School of Law
Email: brad.borden@washburn.edu

The proper tax treatment of profits-only partnership interests is an unsolved aspect of tax law. The problem has manifested recently in the debate over the proper tax treatment of carried interests, a subset of profits-only partnership interests. One group of commentators recommends that at least a portion of partnership income allocated to holders of profits-only partnership interests be taxed as compensation. To obtain the desired compensation result, commentators and lawmakers generally propose disaggregating partnerships (that is, changing the character of income as it flows from the partnership to service-providing partners). Another group of commentators express concern that partnership disaggregation threatens the partnership tax regime, finds little support in tax policy, and potentially disrupts the application of other tax law provisions. This report suggests that partnership disregard (that is, ignoring arrangements that should not come within the definition of tax partnership) will help solve the perceived inequity of profits-only partnership interests, will solidify the integrity of partnership taxation, and will not disrupt the application of the rest of the law.

For a more in-depth discussion of the ideas presented in this report, see Bradley T. Borden, Profits-Only Partnership Interests, 74 Brooklyn Law Review, forthcoming 2009, available at http://ssrn.com/abstract=1262493.