The May 2007 issue of the Virginia Law Review is now out. The issue includes The Myth of the Shareholder Franchise, by Lucian Bebchuk, and five responses to it. The respondents put forward vigorous critiques to Bebchuk’s call for reforming corporate elections.
One response, The Many Myths of Lucian Bebchuk, is by Martin Lipton and William Savitt of Wachtell, Lipton, Rosen & Katz. Lipton has previously participated in two high-profile exchanges with Bebchuk. In 2002, Lipton published Pills, Polls, and Professors Redux in the University of Chicago Law Review, a response to Bebchuk’s article on The Case Against Board Veto in Corporate Takeovers. And in 2003, Lipton and his partner Steven A. Rosenblum published Election Contests in the Company’s Proxy: An Idea Whose Time Has Not Come in The Business Lawyer, setting forth their objections to Bebchuk’s analysis in The Case for Shareholder Access to the Ballot.
A second response, Too Many Notes and Not Enough Votes: Lucian Bebchuk and Emperor Joseph II Kvetch About Contested Director Elections and Mozart’s Seraglio, is by Yale Law School professor Jonathan R. Macey. In 2002, in The Business Lawyer, Macey published a critique of an article by Bebchuk and Allen Ferrell, A New Approach to Takeover Law and Regulatory Competition, which called for strengthening shareholder rights with respect to certain rules-of-the-game decisions. Bebchuk and Ferrell responded with On Takeover Law and Regulatory Competition.
A fourth response, The Mythical Benefits of Shareholder Control, is by UCLA Law School professor Lynn A. Stout. Stout has also responded to Bebchuk’s work in the past. In 2002, she published Do Antitakeover Defenses Decrease Shareholder Wealth? in the Stanford Law Review, responding to The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy, by Bebchuk and his Harvard colleagues John Coates and Guhan Subramanian.
The final response, The Stockholder Franchise is Not a Myth: A Response to Professor Bebchuk, is by E. Norman Veasey, retired Chief Justice of the Delaware Supreme Court.
Judging by the lengthy history of the debate on shareholder rights and the allocation of power between boards and shareholders, the last word on this subject may not have been spoken.