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63 Bus. Law. [i] (2007-2008)

handle is hein.journals/busl63 and id is 1 raw text is: Contents ARTICLES Form or Substance? The Past, Present, and Future of the Doctrine of Independent Legal Significance C. Stephen Bigler and Blake Rohrbacher The bedrock doctrine of independent legal significance provides that, if a transaction is effected in compliance with the requirements of one section of the Delaware General Corporation Law (DGCL), Delaware courts will not invalidate the transaction for failing to comply with the requirements of another section of the DGCL-even if the substance of the transaction is such that it could have been structured under the other section. Two recent decisions of the Delaware courts have caused commentators to question the doctrine's status. This Article looks to the foundation of the doctrine and the Delaware courts' use of equitable review (and the substance-over-form doctrine) to clarify when the doctrine of independent legal significance does and does not apply and when it may be relied on with confidence by corporate practitioners. The doctrine as applied by the courts is narrower than sometimes assumed by corporate practitioners, and the Delaware courts may use their equitable power to look through a transaction's form to its substance even if the doctrine does apply 25 When Should Investor Reliance Be Presumed in Securities Class Actions? Roberta S. Karmel Reasonable or justifiable reliance is one of the elements of a claim by a private party under section 10(b) of the Securities Exchange Act of 1934 (Exchange Act). Section 18 of the Exchange Act has an even stricter reliance requirement, but proof of reliance is not required for a claim under section 11 of the Securities Act of 1933. This Article will discuss the basis for these discrepancies and inquire into whether traditional interpretations of the reliance requirement need to be re-examined. There are at least two possible reasons for such re-examination. First, the reliance requirement is frequently presumed in securities class actions based on the efficient capital market hypothesis (ECMH), but the ECMH has come to be seriously questioned in the academic literature. Second, high-powered decision makers in several recent reports have asserted that U.S. capital markets are becoming less competitive than overseas markets due, in part, to the high level of civil liability under the federal securities laws. These decision makers recommend that the uncertainties as to the elements of

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