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

handle is hein.journals/busl63 and id is 1 raw text is: Contents

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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