WFU Law School
Law & Valuation
Introduction - overview

Syllabus

 


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Structure of course. The course begins with a couple introductory sessions. The first day will be an overview, the second a look at an important corporate law case on valuation. During this first week, there will also be a couple "extra" sessions -- for law students on use of spreadsheets, and for management students on US legal process.

The course then launches into a five-week sequence that offers an overview of financial valuation, with references to its use in legal contexts. You will have a chance to observe how basic financial concepts are used in court decisions and regulatory proceedings. We will also take a look at basic financial accounting and how it fits into legal valuation.

For Spring 2005, we will meet during Babcock's fourth mini, on Monday and Wednesday afternoons (in Room 1107) from 1:40 - 3:00pm starting on Wednesday, February 28, and ending on April 25.

Schedule

  Reading assignment Principal cases / materials
Introduction
(Feb 28, Mar 1)
Introduction (including "Old Man and Tree") "Apple Tree" spreadsheet
Weinberger v. UOP
Excel primer (law)
US legal process (mgmt)
Week 1
(Mar 14, 16)
Time Value of Money In re Oil Spill of Amoco Cadiz (prejudgment interest)
Salgado v. County of Los Angeles (structured settlement)
Week 2
(Mar 21, 23)
Risk and Return Chevrolet Malibu case (valuation of human life)
Ryan v. Tad's Enterprises, Inc (capital asset pricing model)
Week 3
(Mar 28, 30)
Accounting Beerly v. Department of Treasury (adjusted book value)
Kamin v. American Express Co. (earnings vs. cash flow)
Week 4
(Apr 4, 6)
Stock Valuation Metropolitan Life v. RJR Nabisco (bond valuation)
Brehm v. Eisner (stock options)
Week 5
(Apr 11, 13)
Business Valuation

Estate of Desmond v. IRS (market and control discounts)
Steiner Corp. v. Benninghoff (discounted cash flow)

Wrap-up
(Apr 18, 20, 25)
Guest speakers

Doyle Early (Wyatt, Early, Harris & Wheeler - High Point)
George Hawkins & Michael Paschall (Banister Financial-CLT)

Principal case analysis/critique. For each of the "principal cases" assigned during weeks 2-6, two-person student teams will prepare a weekly "case analysis." (I will attempt to assign a JD student and an MBA/ACC student to each team.) Each analysis will be 3-4 page paper (single-spaced, double-spaced between headings and paragraphs) that addresses an issue raised in the assigned case, which we will later discuss during class.

Typically, your paper will take a position on a legal valuation issue by presenting a spreadsheet or graphical solution and supporting your solution with a textual explanation. In effect, I will be asking each team to write an advocate's brief on the assigned issue. Each team will be responsible for three (3) case analyses during the course. Your analysis paper will be due (as an email attachment) by 6:00pm on the evening before class, preferably in Word with the spreadsheets embedded in the document.

For example, in Weinberger v. UOP, the first case we will read, a significant issue is whether in a judicial appraisal following a corporate merger the value of minority shares should be based on the going-concern value of the whole company, on the market price of the shares, or on some other measure of value. Your paper would take a position and defend your conclusion, including a spreadsheet illustration of how your suggested position would work in the case.

In addition to preparing case analyses, each team will also be responsible for preparing three "critiques" of other teams' analyses. This will be a one-page set of questions, comments and suggestions. They should be prepared and sent to me as an email attachment before 12 noon of the day of the class.

In short, for every class there will be 4-5 teams that have prepared a "analysis" of the assigned case and 4-5 teams that have prepared a "critique" of the analyses. Each team preparing an "analysis" will email it to me and to the team preparing the "critique," who in turn will email their "critique" to me before class.

Here are the teams for Spring 2005:

Team assignments
Team 1: Liu, Thomas Team 5: Gomes, Vore Team 9: Walter, Dabney
Team 2: Bean, Cumbus Team 6: Moon, Byars Team 10: Lee, Anand
Team 3: Roper, Reavis Team 7: Temchenko, Bhatt Team 11: Green, Godrecka
Team 4: Fehrman, Reese Team 8: Murray, Pickron Team 12: Pittman, Brown

Here are the assignments (first entry is "analysis team" / second is "critique team"):

Team schedules
Analysis/Critique
Week 1  Mar 14 
1/2 4/5 7/9 
Mar 16
3/1 6/4 10/7 11/8
Week 2 Mar 21
2/3 5/6 9/10 12/11
Mar 23
1/12 4/11 8/5
Week 3 Mar 28
3/9 7/1 10/4 11/8
Mar 30
2/3 6/7 9/11 12/10
Week 4 Apr 4
1/6 5/2 8/9
Apr 6
4/12 7/5 10/8 11/1
Week 5 Apr 11
3/4 6/10 9/7 12/2
Apr 13
2/6 5/3 8/12 

As you can see, each team will have three "analysis" papers and three "critiques" during the course.  For example, Team 5 will be responsible for the following papers:

 

"analysis" (emailed to me and copy to their "critique" team)

  • Mar 21 (week 2 - copy team 6)
  • Apr 4 (week 4 - copy team 2)
  • Apr 13 (week 5 - copy team 3)

"critique" (emailed to me and "analysis" team)

  • Mar 14 (week 1 critique of team 4)
  • Mar 23 (week 2 - critique of team 8)
  • Apr 6 (week 4 - critique of team 7)

Please identify your team's schedule.  Let me know immediately if you anticipate any scheduling conflicts.

Legal valuation paper. You will also research and write a "review paper" that identifies and discusses a valuation issue in a legal context. The paper should present a cross-disciplinary summary and critique of a legal valuation topic, using a broad range of legal, financial and other sources. You can choose an academic article (law or business), a law case, statute, regulatory policy -- whatever grabs you. The 6-8 page paper (single-spaced, double-spaced between headings and paragraphs) should identify and summarize the main thesis or issue of your reading, analyze its main points, and contrast its valuation methodology or analysis with what we have studied in class. I am particularly interested in your personal reactions and analysis. You should feel free to ask me to review your topic choice.

Your paper, like those of students in past years, will eventually be posted on this website. See "Student Papers." The paper, which should include a 1-2 paragraph introductory abstract, should be submitted to me as an email attachment in Word or WordPerfect - feel free to imbed tables/charts and Web links for your research. The paper, which should be titled ["Last name - topic" / "Smith-ValueLifeLibertyHappiness.doc"], is due at the end of the exam period, which varies depending on whether you are a 2L, 3L or MBA student.

  • MBA grades are due April 29 (I would want your paper by April 25)
  • 3L grades are due May 6 ( I would want your paper no later than May 2)
  • 2L grades are due June 3( I would want your paper no later than May 9)

A frequently-asked question: Should the paper have endnotes or footnotes? My answer: I believe endnotes and footnotes are overdone. If you have something you want your reader to consider, such as a citation or a clever aside, you should include it in the text. If the note is an extraneous Id or Supra, why bother? What do you add? In short, either is fine - if you feel you have to.

But, while I'm at it, some ranting. Citation frenzy exists only in law reviews no other academic writing is so compunctual. Why? Maybe it's because law review editors have nothing better to do. In the end, law review writing is exegetic - similar to the parsing of religious texts in the Middle Ages. When it comes down to it, almost every law review article asks for the reader to have, with the author, a leap of faith. Law, in this sense, is religion.

Course materials. The course book is this website - an e-book! The book is entirely web-based, with links to spreadsheets, law cases, company websites, statutes, SEC information, press clippings. You should read the main text of each assigned chapter, and browse the additional stories, illustrations and case as you choose. You should also spend some time reviewing the problems at the end of each chapter and trying your hand at some of them (solutions are linked).

Do e-books have a future? You can be the judge. See Roger Ebert, "Resist the e-book hype" Do e-books used in educational settings have the same privileges in assembling copyrighted materials as hard-copy course materials? Congress is clarifying.

You will also be a significant contributor to this book. The paper you prepare for the course will be posted on the course website. That is, you (like other students in past courses) will be e-published!!

Other Internet Resources

There are other resources you might want to browse that fit with the methodology and coverage of this course:

Grading. I will base your grade on your participation in class discussions (20%), your weekly team assignments (40%) and your valuation paper (40%). I will use the Babcock grading criteria for students enrolled in the MBA course, and the Law School grading rules for students in the JD course.

Introduction - overview

©2003 Professor Alan R. Palmiter

This page was last updated on: May 5, 2005