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UND STEP Course on The Creed: Week 4 Assignment: What is the Paschal Mystery?

As previously explained, I've enrolled in the University of Notre Dame's Satellite Theological Education Program (STEP) to pursue their Certificate in Doctrine. I've already taken three of the six required courses, plus I digressed from the course list to pick up the course on Catholic Social Teaching. Now I'm back on the Certificate pathway taking my fourth course. This time it's The Creed. Our text is Bernard L. Marthaler - The Creed.

We are focusing this week on the portion of the Apostle’s Creed that reads:

He descended into hell; the third day He arose again from the dead. He ascended into heaven, and sits at the right hand of God, the Father Almighty ….

The corresponding portion of the Nicene Creed reads:

For our sake he was crucified under Pontius Pilate, he suffered death and was buried, and rose again on the third day in accordance with the Scriptures. He ascended into heaven and is seated at the right hand of the Father.

As the Catechism explains (¶ 512):

Concerning Christ's life the Creed speaks only about the mysteries of the Incarnation (conception and birth) and Paschal mystery (passion, crucifixion, death, burial, descent into hell, resurrection and ascension).

And it further explains that it is through “the great Paschal mystery—his death on the cross and his Resurrection—[that Jesus] would accomplish the coming of his kingdom.”

But what is the Paschal mystery?

The word Paschal comes from the Greek word pascha, which in turn came from the Hebrew word pesah (or pesach), is usually translated as “passover.” In using the term Paschal mystery to describe Christ’s salvific sacrifice, the Church asserts that the salvation of the Jews at Passover was a foreshadowing of the salvation to be offered all by Christ Jesus. Christ was the perfect sacrificial lamb foreshadowed by the lambs sacrificed by the Israelites at Passover.

The word mystery also requires explication. Catholicism is not a Gnostic religion in which only believers have access to secret knowledge. When the Church refers to a mystery, it is talking about a revealed truth that we cannot fully understand or prove by human reasoning alone.

Put together, we see that the Paschal mystery is the central act of Christ’s mission; it is the sequence of events—each essential—that collectively constitute his salvific intervention in human history.

Marthaler makes an interesting observation by connecting the Paschal mystery to one of the other great mysteries of the faith; namely, the Trinity. (P. 198). The Father lifts up the Son, who is now seated at the Father’s right hand, and from whom proceeds the Holy Spirit.

What is a joint stock association?

The always interesting Keith Paul Bishop notes that:

California's statutory provisions pertaining to unincorporated associations can be found in Title 3 of the Corporations Code.  Part 3 of Title 3 is devoted to criminalizing various activities on the part of directors, officers and agents of joint stock associations.  Nowhere, however, Part 3 define what constitutes a joint stock association.  Nor does it appear that there are any decisions citing these statutes.  The mystery of what exactly constitutes a joint stock association is deepened by the existence of other provisions within the Corporations Code that refer to joint stock companies (e.g., §§ 5065, 25013, and 29514).  Is a "joint stock association" a "joint stock company" by another name or an entirely different entity? 

According to a 1916 law review article, a joint stock association at common law was "a group of individuals organized for certain purposes into an association similar to a partnership, but, unlike a partnership, having a capital stock divided into shares transferable by the owner".  I. Maurice Wormser, The Legal Status of Joint Stock Associations, 3 Fordham L. Rev. 1 (1916). 

This piqued my interest. Book 28 of the 1917 edition of McKinney's Consolidated Laws of New York Annotated covers "Joint Stock Association Law," section 2 of which states:

Christine Rossini's English as a Legal Language tells us that:

So far it looks like a "joint stock association" in act is a "joint stock company" by another name, but let us persevere:

The Georgia Nonprofit corporation statute (Ga. Code Ann. § 14-3-1108) supports that conclusion:

“Joint-stock association” includes any association of the kind commonly known as a joint-stock association or joint-stock company and any unincorporated association, trust, or enterprise having members or having outstanding shares of stock or other evidences of financial and beneficial interest therein, whether formed by agreement or under statutory authority or otherwise, but shall not include a corporation, partnership, limited liability partnership, limited liability company, or nonprofit organization. A joint-stock association as defined in this paragraph may be one formed under the laws of this state, including a trust created pursuant to Article 2 of Chapter 12 of Title 53, or one formed under or pursuant to the laws of any other state or jurisdiction.

DGCL § 254(a) is similar:

The term “joint-stock association” as used in this section, includes any association of the kind commonly known as a joint-stock association or joint-stock company and any unincorporated association, trust or enterprise having members or having outstanding shares of stock or other evidences of financial or beneficial interest therein, whether formed or organized by agreement or under statutory authority or otherwise and whether formed or organized under the laws of this State or any other jurisdiction, but does not include a corporation, partnership or limited liability company.

Yet, as a law review article explains, that definition presents its own set of problems:

Although the definition of a “joint-stock association” is quite broad and would seem to pick up almost all forms of non-corporate entities, there exists substantial ambiguity in the statute as to exactly what is a joint stock association given the exclusion of partnerships and corporations from the definition. For example, is a joint venture (which is nothing more than a partnership under another name) a joint-stock association under Delaware law? Similarly, would a joint venture be considered a joint-stock association if the agreement creating the joint venture provided that all the investors would receive shares and that the joint venture is not a partnership? 

Curtis W. Huff, Choice of State of Incorporation -- Texas Versus Delaware: Is It Now Time to Rethink Traditional Notions?, 31 Bull. Bus. L. Sec. St. B. Tex. 9, 37 (DEC 1994).

Make of it what you will.

I hate to break it to Josh Fershee but "Judgmenty" is not a word

Nonetheless I enjoyed his first and second posts on the corporate governance and corporate law aspects of Nike's controversial ad using Colin Kaepernick.

Ann Lipton revisits the corporate governance and corporate law aspects of les Moonves ouster at CBS

Here

Anabtawi on "The Twilight of Enhanced Scrutiny in Delaware M&A Jurisprudence"

My friend and colleague Iman Anabtawi has just published an interesting new article on an important trend in Delaware M&A law:

Merger and Acquisition (M&A) transactions create the potential for self-interested behavior by the boards of directors of acquired, or target, corporations because target boards may have self-interested reasons for preferring one acquirer over any other. The preferred acquirer may, for example, be more likely to retain the services of certain board members or to employ them in some other capacity after the completion of the transaction. In recognition of these potential conflicts of interest, the courts have recognized that target boards of directors may not always be incentivized to exercise their business judgment in M&A transactions in the best interests of shareholders and have therefore held them to the heightened standard of review of enhanced scrutiny. Enhanced scrutiny contemplates substantive judicial review of the reasonableness of the target board’s conduct in the sale of the company. Until recently, enhanced scrutiny review was not susceptible to being adjusted downward to business judgment-level review through procedural safeguards, such as the constitution of a special committee of the board or shareholder ratification. A special committee was not considered to be an effective means of cleansing an inherent conflict, and shareholder approval of the transaction was deemed to approve only the board’s decision to sell, as opposed to the board’s conduct of the sale process. The Delaware Supreme Court revisited the issue, holding that the shareholder ratification doctrine applies to a shareholder approval of an M&A transaction on the rationale that shareholders, particularly institutions, are at least as well-positioned as judges to evaluate the merits of a sale. As a result, approval of an M&A deal by target shareholders displaces enhanced scrutiny of the board of directors’ conduct in managing the sale in favor of the business judgment rule, effectively making the target board’s decision unreviewable. This Article argues that recent Delaware jurisprudence on shareholder ratification constitutes a fundamental shift in M&A jurisprudence, predicts that, while it will reduce deal litigation, it will have unnecessary detrimental effects on deal process, and proposes a procedural mechanism for mitigating those effects in the form of a bifurcated shareholder vote on each of the deal process and the sale transaction.

Anabtawi, Iman, The Twilight of Enhanced Scrutiny in Delaware M&A Jurisprudence. 43 Delaware Journal of Corporate Law (January 2019, Forthcoming); UCLA School of Law, Law-Econ Research Paper No. 18-11. Available at SSRN: https://ssrn.com/abstract=3248474

Henderson and Bainbridge Podcast on Outsourcing the Board of Directors

UND STEP Course on The Creed: Week 3 Assignment: Pondering "Begotten not made"

As previously explained, I've enrolled in the University of Notre Dame's Satellite Theological Education Program (STEP) to pursue their Certificate in Doctrine. I've already taken three of the six required courses, plus I digressed from the course list to pick up the course on Catholic Social Teaching. Now I'm back on the Certificate pathway taking my fourth course. This time it's The Creed. Our text is Bernard L. Marthaler - The Creed.

Week 3 assignment: Select one phrase from the second article of the Nicene Creed on Jesus Christ covered in this unit—e.g. “true God from true God.” What heresy or misunderstanding about Jesus Christ does it address? How helpful or meaningful is this phrase, in your opinion, in our day today?

I chose "eternally begotten of the Father ... begotten, not made, one in Being with the Father."

That clause was inserted in response to one of the Arian heresies circulating in the early part of the fourth century. Arius taught that Christ did not come into existence until after the events of Genesis 1:1 ("In the beginning, when God created the heavens and the earth ...."). Instead, Christ was created by God thereafter. Arius regarded Christ as the "first born" of God's creatures, but insisted Christ was a creature and therefore neither co-eternal with God nor partaking of God's essential nature.

Most of the relevant passage speaks to the Arian heresy. "True God from True God," for example, confirms that Jesus shares God's nature as do the other statements. But I've always found the word "begotten" interesting in this context.

What immediately comets mind is the series of "begats" that begins Matthew. One function of the Creedal statement this is to affirm that Jesus was not begat of Joseph, but was begat of God the Father. More important, however, "begotten" also affirms orthodox (lower case o) Christianity's rejection of Arianism. But to see why requires us to dig into the meaning of "begotten."

The Greek word translated as "begotten" is monogenēs, which some linguists argue connotes a unique relationship. "One of a kind." This translation makes sense in this context, since it conveys the unique relationship between God the Father and God the Son.

Other linguists translate it as "to generate," which in this context could be understood not as creation (bringing something out of nothing) but as the process of bringing something of of something. Hence, Jesus proceeds from the Father--is generated by the Father out of the divine essence. For a discussion of the translation issues, go here.

Christ thus proceeds from the Father, but is of the same nature. Christ thus is simultaneously God but also a distinct person begotten by the Father.

By the way, Bishop Robert Barron has a great podcast on the meaning of "begotten not made."

UND STEP Course on The Creed: Week 3 Reflection Question

As previously explained, I've enrolled in the University of Notre Dame's Satellite Theological Education Program (STEP) to pursue their Certificate in Doctrine. I've already taken three of the six required courses, plus I digressed from the course list to pick up the course on Catholic Social Teaching. Now I'm back on the Certificate pathway taking my fourth course. This time it's The Creed. Our text is Bernard L. Marthaler - The Creed.

Week 3 reflection question:

Refer to the sections of the Apostles’ and Nicene Creeds below. Is one or the other preferable to you? How significant to you are the differences between the two?

Apostles’ Creed	Nicene Creed
I believe in Jesus Christ, his only Son, our Lord.	We believe in one Lord, Jesus Christ, the only Son of God,
	eternally begotten of the Father, God from God, Light from Light, true God from true God, begotten, not made, one in Being with the Father.
	Through him all things were made.
He was conceived by the power of the Holy Spirit and born of the Virgin Mary.	For us men and our salvation he came down from heaven: by the power of the Holy Spirit he was born of the Virgin Mary, and became man.

 I'm not convinced the differences matter very much today. As Marthaler relates (83ff), the additional language in the Nicene Creed does not reflect a change in doctrine but rather a rejection of heresy. They elaborated the Church's theology of the Trinity and the Godhead by making it more precise, albeit at the cost of complexity. "Begotten of the father" rebuts the heresy that claimed there was only one God with three names or modalities. "God from God" affirms that Christ's nature was fully divine, as does the statement that Christ was "begotten not made," which reaffirms that he is God and not a creature. "Became man" confirms that Jesus was also fully human, while simultaneously being fully divine. 

These debates have been settled in mainstream Western Christianity for a very long time, so today both Creeds can be understood as stating a consistent doctrine.

The principal difference I see is that the Nicene Creed provides a test of orthodoxy while the Apostle's Creed is probably better suited for teaching new converts and the young, since it gets across the basics without getting to deeply into into the complex mysteries of the Trinity.

Is the duty of loyalty really shrinking?

Interesting new article by Julian Velasco:

Fiduciary duties comprise an integral part of corporate law. It is generally understood that directors owe the corporation and its shareholders two fiduciary duties: the duty of care and the duty of loyalty. Although both duties are firmly established in corporate law, they are not treated equally. It is generally understood that the duty of loyalty is enforced far more rigorously than the duty of care. The justification for this dichotomy is twofold. First, differential treatment is appropriate because of the relative urgencies of the underlying subject matter: loyalty issues pose greater risks than do care issues. Second, the deference of the business judgment rule is made possible by the rigor of the entire fairness test: directors who are not conflicted can be trusted. In this Article, I demonstrate that the duty of loyalty is not enforced as rigorously as is commonly believed. Over fifty years ago, Professor Harold Marsh argued that the duty of loyalty had been watered down substantially over the preceding century. I argue that the diminishment of the duty of loyalty has continued and increased substantially since the time of his writing. I catalog various legal developments that have had the effect of curtailing the enforcement of the duty of loyalty significantly. As a result of these developments, I maintain that the corporate law reality does not currently match the corporate law theory. I argue that some sort of realignment is necessary: either the law must be amended to correspond to the theory, or the theory must be revised to reflect reality.

Velasco, Julian, The Diminishing Duty of Loyalty (August 27, 2018). 75 Wash. & Lee L. Rev. 1035 (2018). Available at SSRN: https://ssrn.com/abstract=3239605

To what extent should a board of directors be liable for not preventing a company's CEO from using racial slurs?

Bloomberg reports:

A Papa John's investor filed a putative class action against the pizza chain Aug. 30 for allegedly misleading shareholders about Schnatter's conduct, not having adequate systems in place to prevent inappropriate workplace conduct, and negatively affecting the company's business and reputation. Schnatter, who is also named as a defendant in the U.S. District Court for the Southern District of New York complaint, resigned from his position as chairman of the Papa John's board in July after reports that he'd used a racial slur on a conference call.

Schnatter's conduct hurt the company's bottom line, the investor complaint alleged. Pizza sales slowed after Schnatter's use of the slur became public, according to a Bloomberg report. The company's stock price also declined by 4.84 percent, the complaint said.

I found myself rolling my eyes as I read this silliness. It immediately called to mind Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 833 A.2d 961 (Del. Ch. 2003), aff'd, 845 A.2d 1040 (Del. 2004):

The market for MSO products is uniquely tied to the personal image and reputation of its founder, Stewart. MSO retains “an exclusive, worldwide, perpetual royalty-free license to use [Stewart's] name, likeness, image, voice and signature for its products and services.”7 In its initial public offering prospectus, MSO recognized that impairment of Stewart's services to the company, including the tarnishing of her public reputation, would have a material adverse effect on its business. ...

Stewart was accused of insider trading in Imclone stock:

Ultimately Stewart's prompt efforts to turn away unwanted media and investigative attention failed. Stewart eventually had to discontinue her regular guest appearances on CBS' The Early Show because of questioning during the show about her sale of ImClone shares. After barely two months of such adverse publicity, MSO's stock price had declined by slightly more than 65%. In August 2002, James Follo, MSO's chief financial officer, cited uncertainty stemming from the investigation of Stewart in response to questions about earnings prospects in the future.

Plaintiff sued claimed that "the director defendants and defendant *971 Patrick breached their fiduciary duties by failing to ensure that Stewart would not conduct her personal, financial, and legal affairs in a manner that would harm the Company, its intellectual property, or its business." The court tossed the claim:

Even if I accept that the board knew that Stewart's personal actions could result in harm to MSO, it seems patently unreasonable to expect the Board, as an exercise of its supervision of the Company, to preemptively thwart a personal call from Stewart to her stockbroker or to fully control her handling of the media attention that followed as a result of her personal actions, especially where her statements touched on matters that could subject Stewart to criminal charges. Plaintiff has not cited any case to support this new “duty” to monitor personal affairs. Since the defendant directors had no duty to monitor Stewart's personal actions, plaintiff's allegation that the directors breached their duty of loyalty by failing to monitor Stewart because they were “beholden” to her is irrelevant. Count II is dismissed for failure to state a claim.

The court further explained that:

Regardless of Stewart’s importance to MSO, she is not the corporation. And it is unreasonable to impose a duty upon the Board to monitor Stewart’s personal affairs because such a requirement is neither legitimate nor feasible. Monitoring Stewart by, for example, hiring a private detective to monitor her behavior is more likely to generate liability to Stewart under some tort theory than to protect the Company from a decline in its stock price as a result of harm to Stewart’s public image.

So the claim that Papa John's board "is liable not having adequate systems in place to prevent inappropriate workplace conduct" should be a non-starter.

Law and Liberty's Symposium on the Crisis in the Catholic Church

From the Law & Liberty blog:

... we have put together a symposium by Paul Seaton, Richard Garnett, and Ed Condon to think about the legal, institutional, and reform issues the Catholic Church’s abuses puts to the law and to itself.

Paul Seaton – The Archbishop and the Pope

To begin with the obvious is a good place to start. In this case it is also quite dramatic. Archbishop Viganò’s recent J’accuse of the Pope and many high-up church men is not just another salvo in the ongoing civil war in the Catholic church, it changes the battlefield in a dramatic way. Its impact was immediately felt, while its full impact and significance remain to be seen, as responses and reactions unfold. Such is the nature of history with human agency involved. Since it is a battlefield with armed camps and live-fire, there will be casualties, including reputations and, to some extent, truth, and smoke aplenty. In the fog of battle, it helps to have some understanding of the state of the Church and who the combatants are.

Richard W. Garnett – The Catholic Church’s Accountability and Autonomy

[T]he recent horrifying and heartbreaking revelations, reports, and rumors of sexual abuse in the Catholic Church have supplied additional evidence that, reasonable people could well conclude, cuts against my positions. As Damon Linker put it, writing in The Week, the “monstrous, grotesque ugliness” of alleged and confirmed abuses reveals the Catholic Church “as a repulsive institution.” Respecting the rights of the “repulsive” is, for all of us, a challenge.

Ed Condon – Flouting the Canon Law, Once More

The recent series of scandals to engulf the Church in the United States, first around Archbishop Theodore McCarrick and then following the publication of the Pennsylvania grand jury report, have left the hierarchy in a difficult position. On the one hand, the evidence seems to be that previous reforms are working, albeit with now obvious gaps in its applicability—most notably for addressing allegations made against bishops. On the other, the presence of so many unresolved cases, even if they are historical, in many dioceses suggests a continued reticence to go “looking for trouble” in one’s own filing cabinet.

Predictably, of course, let me use that as a jumping off point for a little self-promotion:

Bainbridge, Stephen M., Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies. UCLA School of Law, Public Law Research Paper No. 18-32. Available at SSRN: https://ssrn.com/abstract=3249236

Keith Paul Bishop on the De Facto Merger Doctrine in California

Keith Paul Bishop responds to my post about the status of the de facto merger doctrine under California law, in which I tagged him:

As an initial matter, it must be understood that there are at least two applications of the de facto merger doctrine.  The first, as described above, imposes a selling corporation's debts and liabilities on a successor corporation in an asset sale transaction.  The second involves whether shareholders of the selling corporation will enjoy voting and dissenters rights in an asset sale transaction.  In Jones v. H.F. Ahmanson & Co., 1 Cal. 3d 93, 117 (1969), Justice Roger Traynor noted that "Judicial protection has also been afforded the shareholder who is the victim of a "de-facto merger" to which he objects" (citing Farris v. Glen Alden Corp. 123 A.2d 25 (1958)).  

The Ahmanson case predates the current General Corporation Law which largely moots the discussion by defining a "reorganization" to include a sale-of-assets reorganization.  Cal. Corp. Code § 181(c).  See also When a Sale of Assets is not a "Sale-of-Assets Reorganization".  

Thanks!

The Ministry of Truth Opens a UC Berkeley School of Law Branch

Just don't call it Boalt Hall.

Francis Pileggi on Brett Kavanaugh on Delaware Corporate Law

Here

New article: Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies

Bainbridge, Stephen M., Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies. UCLA School of Law, Public Law Research Paper No. 18-32. Available at SSRN: https://ssrn.com/abstract=3249236