1.0Voices at Templehttps://www2.law.temple.edu/voicesThe Life (and Death?) of Corporate Waste - Voices at Templerich600338<blockquote class="wp-embedded-content" data-secret="Ci2I8ETQ2q"><a href="https://www2.law.temple.edu/voices/life-death-corporate-waste/">The Life (and Death?) of Corporate Waste</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://www2.law.temple.edu/voices/life-death-corporate-waste/embed/#?secret=Ci2I8ETQ2q" width="600" height="338" title="“The Life (and Death?) of Corporate Waste” — Voices at Temple" data-secret="Ci2I8ETQ2q" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script type="text/javascript">
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https://www2.law.temple.edu/voices/cms/wp-content/uploads/2017/01/money-case-163495.jpg19201280At first glance, corporate law’s waste doctrine makes little sense. The classic definition of waste—a transaction “for consideration so disproportionately small as to lie beyond the range at which any reasonable person might be willing to trade,” an act equivalent to “gift” or “spoliation” of corporate assets—suggests that waste should never arise, for what corporation would ever enter into a transaction so absurd, absent self-dealing or gross negligence? Yet waste claims are regularly made. The conventional wisdom is that waste claims never succeed; but empirical studies show that’s wrong, and some of the most significant corporate law cases of the last two decades have dealt with waste. Respected judges have called for the doctrine’s abolition, referring to it as a “vestige” and memorably deriding it as the mythical “Loch Ness Monster” of corporate law; still, waste survives. It is a remnant of ultra vires, a doctrine proclaimed dead for over a hundred years—but waste is not dead. It confounds our model of managerial responsibility; after decades in which discussion of directors’ and officers’ duties have …