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Duck Breasts in a Wild Mushroom and Red Wine Sauce with Mixed Rice Mélange

• 2 Pekin Duck breasts 
• 4 ounces shiitake mushrooms, sliced
• big pinch dried thyme
• big pinch dried sage
• 1 tablespoon diced shallot
• 2 cloves garlic minced
• ½ teaspoon Better Than Bouillon Reduced Sodium Organic Roasted Chicken Base
• ½ ounce dried morel mushrooms
• ½ cup red wine

Score the duck breast skin lightly in a diamond pattern. Season duck breasts on both sides with salt and pepper and set aside.

Put the morels in a strainer and rinse throroughly under the tap. Place the mrels in a small bowl and pour 1 cup of boiling water over them. Allow to soak at least 30 minutes.

Heat a 10-inch nonstick skillet over medium-high heat. When hot add the duck breasts skin side down. Reduce heat to medium. Cook skin side down for five minutes. Flip breasts to other side and cook another 4 minutes. Check temperature with an instant read meat thermometer. The breasts are ready when they reach 130°(medium rare). Transfer the breasts to a cutting board and moosely top with aluminum foil. Let rest.

Pour rendered duck fat into a Pyrex custard cup (these are incredibly handy things). Put the skillet back over medium heat. Add 2 teaspoons duck fat. When pan is hot add the shiitakes, season with dried herbs, salt, and pepper, and sauté for 3 minutes. Add shallots and sauté 1 minute. Add garlic and sauté an additional minute.

Carefully pour off ½ cup of the mushroom liquid into another Pyrex cup, avoiding any sediment on the bottom of the bowl. Drain the morels in the strainer, rinse them thoroughly, and add them to the pan.

Sprinkle the mushroom mixture with a couple of shakes of Wondra flour. 

Deglaze the pan with the red wine. Add mushroom liquid and bouillon base. Bring to a boil, reduce heat to medium, and cook 1 minute or until it slightly thickens.

Slice the duck breasts thickly, fan out on the plate, and top with the mushroom sauce.

• 1 ½  cup water
• ⅓ cup red rice
• ⅓ cup black rice
• ⅓ cup wild rice blend
• 1 ounce dried porcini mushrooms, rinsed and cut into bite size pieces
• 1 teaspoon Better Than Bouillon Reduced Sodium Organic Vegetable Base
• teaspoon kosher salt
• pepper
• 1 teaspoon dried Italian parsley
• ½ teaspoon thyme
• big pinch onion powder
• big pinch garlic powder

Just before you start cooking the duck, combine all ingredients in a 4 quart multicooker. Set to pressure cooker for 16 minutes on high. Allow to naturally release until the duck is ready. Taste and adjust salt and pepper if necessary.

We drank a Flowers Pinot Noir (Sonoma Coast) 2020, which made a lovely match. Earthy notes of dried currants, black cherries, and tea echoed many of the flavors in the sauce and rice. It also worked well with the gaminess of the duck.

Laird Superfood decamps from Delaware and heads to Nevada

As someone who coedited Can Delaware Be Dethroned?: Evaluating Delaware's Dominance of Corporate Law, I have been following with interest recent developments that suggest some slight slippage in Delaware's dominance. So has Keith Paul Bishop. Keith reminds us that VC Laster declined to enjoin TripAdvisor's reincorporation in Nevada, although liability claims remain pending, and informs us that Laird Superfood, Inc., has done likewise.

One of the reasons Laird invoked in its proxy statement to justify the move was a claim that "Nevada is more advantageous than Delaware because Nevada has pursued a statute-focused approach that does not depend upon judicial interpretation, supplementation and revision, and is intended to be stable, predictable and more efficient, whereas much of Delaware corporate law still consists of judicial decisions that migrate and develop over time."

Older readers will recall a debate a few years ago about the extent to which Delaware corporate law is indeterminate and whether any such indeterminacy works to Delaware's advantage or disadvantage. Whether or not indeterminacy helps maintain Delaware's dominance, Keith thinks Delaware law's indeterminacy imposes important costs on its users:

One of my primary complaints about Delaware jurisprudence has been that you can read the Delaware General Corporation Law cover to cover and still know very little about Delaware corporate law.  Many extremely important doctrines and standards are the product of case-law and subject to continuous refinement by the Delaware courts.  You will not find "entire fairness", "Caremark duty" or "Revlon duty" in the Delaware General Corporation Law.  While Delaware's judge-made corporate law does evidence a high degree of legal sophistication, it also imposes significant costs on corporations due to the inherent uncertainty engendered by the ever evolving nature of Delaware jurisprudence.  It also encourages litigants to test new theories of liability. 

It's a debate that may reward being revisited.

Miller on "Classical Liberalism and Corporate Law"

Robert Miller has posted to SSRN:

A chapter in the forthcoming Routledge Handbook of Classical Liberalism, this paper evaluates contemporary corporate law, especially Delaware corporate law, from a classical liberal perspective. Beginning with an explanation of the firm as a mode of organizing voluntary cooperative activity among human beings, the chapter explains and compares two views of the corporation: the privilege view, under which incorporation is a concession from the state benefiting the individuals forming the corporation, and the contract view, under which the corporate form involves nothing that could not be achieved by appropriate contracts among individuals if transaction costs were low enough.

Tracing the evolution of corporate law, the chapter argues that corporate enabling statutes enacted in the nineteenth century democratized business organization by making incorporation available to everyone and separated incorporation from the granting of monopoly rights and other objectionable privileges, thus vindicating the contract view of the corporation.

The chapter next considers limited shareholder liability, arguing that it is not a special privilege or concession because there is good reason to believe that, if transaction costs were low enough, parties would agree ex ante to limit the liability of shareholders, with the result that even limited liability comes within the contract view of the corporation.

Turning to the American system of competitive federalism and the preeminence of Delaware corporate law, the chapter explains how, by having multiple enabling statutes for different types of business entities, Delaware can provide one form of organization (the limited liability company) in which parties may agree to virtually any arrangements of their internal affairs that they wish, and another form of organization (the corporation) in which certain rules are mandatory (such as the fiduciary duties of directors), which lessens transaction costs for parties who can invest in such entities with the assurance that rules important to them will apply and cannot be modified.

The chapter then considers the Delaware business judgment rule, with its distinction between the standard of conduct and the standard of review, and the Delaware Supreme Court’s development of a special standard of review applicable to antitakeover devices under Unocal and sales of control under Revlon. In connection with discussing the Environmental, Social and Governance (ESG) movement, the chapter then compares the shareholder model of corporate governance enshrined in Delaware law, which requires directors to manage the corporation for the benefit of the shareholders, and the stakeholder model, in which directors may direct value to other corporate constituencies even when doing so reduces returns to shareholders in the long run. The chapter also briefly considers the federal securities laws.

It concludes that Delaware corporate law comports well with classical liberal principles but the federal securities laws provide some significant points of variance.

Miller, Robert T., Classical Liberalism and Corporate Law (January 31, 2024). Routledge Handbook of Classical Liberalism (Forthcoming), Available at SSRN: https://ssrn.com/abstract=4712591

Cunningham on "Problems with the SEC's Climate Disclosure Proposal"

Larry Cunningham has posted his Congressional testimony to SSRN:

This Congressional testimony, requested by the House Financial Services Committee, identifies the fatal flaws embedded in the SEC's controversial climate disclosure rule proposal. To summarize some primary problems, the proposal:

• disregards evidence that most individual investors buy stocks primarily to save, not to influence climate policy;
• does not address the millions of individual American investors who need the SEC’s protection as they save for education, homes, retirement, and philanthropy; and
• ignores conflicts of interest between large asset managers and their beneficiaries—ordinary Americans—who have different preferences and goals.

In addition, the proposal mandates irrelevant and burdensome disclosures that would harm investors by:

• forcing companies to disclose information about the greenhouse gas emissions of their suppliers, employees, and customers, which is useless to investors;
• making companies report climate impact, not just climate risk, which investors do not need;
• imposing millions of dollars in annual costs on companies with no clear benefit for investors (or the climate);
• compelling the disclosure of information that is inherently speculative and uncertain, as likely to mislead investors as to inform them;
• spurring lawsuits over disclosure adequacy, which wastes resources even when baseless;
• discouraging companies from being publicly traded, which deprives ordinary investors of opportunities and frustrates capital formation; and
• usurping state corporate law and company business judgment, which undermines investor rights and interests.

Furthermore, the Proposal faces legal challenges under:

• the major questions doctrine, as it lacks clear Congressional authorization for its significant policy reach, as suggested in cases since the Proposal was issued, especially West Virginia v. EPA;
• the First Amendment, for compelling company speech on controversial matters; and
• the Administrative Procedure Act, as it solves no problem within the SEC’s mandate, and includes no proper cost-benefit analysis, perils that led another SEC rule to be vacated last month.

Cunningham, Lawrence A., Congressional Testimony: Problems with the SEC's Climate Disclosure Proposal (January 18, 2024). GWU Legal Studies Research Paper No. 2024-12, GWU Law School Public Law Research Paper No. 2024-12, Available at SSRN: https://ssrn.com/abstract=4732968

California versus Delaware on Advancement

From my friend Francis Pileggi:

A recent gem of a short letter ruling from the Delaware Court of Chancery in Goldman v. LBG Real Estate Company LLC, C.A. No. 2023-0426-KSJM (Del. Ch., Feb. 26, 2024), provides important insights, with citations to authority, on three noteworthy topics of widespread relevance to corporate litigators ...

He goes on to offer a bulleted summary. useful.

Guest Post: Every Billionaire Lawyer is a Policy Failure—Ten Ways to Think About the Tornetta Fee Request

Herewith a guest post from Anthony Rickey:

Three law firms filed papers last Friday seeking fees for their victory in rescinding Elon Musk’s $55.8 billion pay package at Tesla.  The law firms—Bernstein Litowitz Berger & Grossman LLP, Friedman Oster & Tejtel PLLC, and Andrews & Springer LLC—want the Court of Chancery to award them 29,402,900 freely tradeable shares of Tesla common stock, along with over $1.12m in expenses.  According to Reuters, this would not only be the largest fee in Delaware history, it may be the largest fee in the history of stockholder litigation, dwarfing the $688 million fee in the Enron securities fraud case.

Some comparative statistics may help to wrap one’s head around this mammoth request.  This is not legal advice:  most of the numbers below are legally irrelevant under the factors that govern Delaware fee awards.  Instead, they offer some amusing perspective on an attempt to make multimillionaires out of attorneys.  (These figures use the $202.64 closing price of Tesla stock on March 1, 2024, the day of Tornetta’s fee application.  The stock fell considerably after the announcement.)

The Basic Figures

1. An award of 29,402,900 shares would be worth $5,958,203,656. The law firms spent 19,499.95 hours on the case, so the stock would be worth $305,549.69 per hour, or a lodestar multiplier of 437.32x to the attorneys’ hourly rates.  That does not include time spent preparing the fee application or to be spent on appeal.  With numbers that high, the appeal won’t move the needle much.
2. The award would amount to $622,022,628.44 for each of the nine shares of Tesla stock owned by plaintiff Richard Tornetta.
3. In comparison, it’s a mere $94.55 for each of the 63,014,339 disinterested shares voted in favor of Musk’s compensation package. The opinions of those shareholders are functionally irrelevant because the Court of Chancery held that the vote was not fully informed.  Under Delaware law, plaintiffs do not need to prove that any stockholder would have changed their mind had they known the supposedly material information, let alone that the vote would have come out differently.
4. The requested fee is 19.6 times larger than the current record in the Delaware Court of Chancery set by the $304,742,604.45 granted to plaintiffs in Americas Mining Corp. v. Theriault.

Compared to the Delaware Economy

5. The fee would be only slightly smaller than the $6.07 billion general fund operating budget proposed by Delaware Governor Carney for FY2025. Alternatively, it represents 6.6% of Delaware’s estimated GDP in 2022.
6. Assuming (unrealistically) that the entire fee were subject to Delaware’s 8.7% corporate income tax, the state would receive $518,363,718.07. For perspective, that is 15.64% of all business tax revenue collected by Delaware in fiscal year 2022.

Compared to Texas

7. Elon Musk has proposed reincorporating Tesla in Texas. By statute, class action fees in Texas are limited to four times lodestar.  Under a similar rule, Tornetta’s attorneys could receive no more than $54,497,851.00. 
8. That would still represent a return of $2,794.77 per hour for each timekeeper. In other words, Texas plaintiffs could have secured a much smaller recovery while still achieving the same net benefit for Tesla stockholders.

Other Entertaining Figures

9. According to Calculator.net, there are 2,974,015 minutes between the time that Tornetta filed his complaint and the Court of Chancery reached its decision. If awarded, Tornetta’s attorneys will collectively earn $2,003.42 per minute between those two events
10. According to Pollstar, Taylor Swift’s “Eras Tour” grossed $1,039,263,762 as of December 2023. The Tornetta attorneys would thus earn 5.7x more than the world’s most successful musical tour.

While I’ve tried to keep these lighthearted, I can’t end without expressing disbelief at this fee application.  Elon Musk’s pay was meant to incentivize him to build a company; the lawyers prosecuted a complaint.  No attorney deserves six figures in compensation per hour, no matter how complex or risky the litigation, and the concept that this level of incentive is necessary to motivate contingency lawyers is incredible.  One can only hope that the Delaware courts channel Dorothy Parker’s perhaps apocryphal comment and do not toss this application aside lightly.  It should be hurled with great force.