109 Iowa L. Rev. 1157 (2024)

DOWNLOAD PDF

Abstract

For decades, the corporate world has been dominated by “Corporate Empires.” Corporate empires are conglomerates comprising a parent and tens, even hundreds, of subsidiaries. Corporate empires differ from standalone companies not only in the scale and scope of their operations, but also in the interdependencies that exist among entities in the group and the international nature of their activities. Despite this commercial reality, no unique body of law for these entities has been developed. Corporate law evolved, and continues to evolve, with the standalone company as its exclusive focal point. This legal focus has driven a wedge between the law and the business world. In this Article, we set out to fill the gap between corporate law and its largest, and arguably most important, subject matters by advancing a set of legal principles, uniquely designed for complex corporate structures. To gain an insight into this world, we collected and analyzed statistical data on the largest one hundred corporations on the S&P 500 list over five-year intervals, beginning in 2004 and ending in 2021. Building on our empirical and theoretical foundations, we advance a core set of principles for complex corporations, designed to preserve the economic benefits of conglomerate structures while minimizing the costs. Specifically, we redesign the doctrines of liability and veil-piercing in conglomerates and corporate groups, repurpose fiduciary duties in wholly owned subsidiaries, redefine oversight liability, and advance a multivariegated approach to the challenge of cross-border activities.