We just received word that Professor Mike Dooley of the University of Virginia Law School died last night from complications from his long battle with cancer. Among his other professional accomplishments, Mike was the Official Reporter for the Model Business Corporation Act for nearly 30 years. I did not know him well, but we met a few times, and he was unfailingly engaging and kind.
Many of us have cited his influential article (with John Hetherington) entitled Illiquidity and Exploitation: A Proposed Statutory Solution to the Remaining Close Corporation Problem, 63 Va. L. Rev. 1 (1977). That article was the basis for a reform of the MBCA, providing for a buyout remedy in cases of oppression.
He also wrote an oft-cited artilce with Norm Veasey entitled The Role of the Board in Derivative Litigation: Delaware Law and the Current ALI Proposals Compared, 44 Bus. Law. 503, 522 (1989), which contains this well-known defense of the business judgment rule:
The power to hold to account is the power to interfere and, ultimately, the power to decide. If stockholders are given too easy access to courts, the effect is to transfer decisionmaking power from the board to the stockholders or, more realistically, to one or few stockholders whose interests may not coincide with those of the larger body of stockholders. By limiting judicial review of board decisions, the business judgment rule preserves the statutory scheme of centralizing authority in the board of directors. In doing so, it also preserves the value of centralized decisionmaking for the stockholders and protects them against unwarranted interference in that process by one of their number. Although it is customary to think of the business judgment rule as protecting directors from stockholders, it ultimately serves the more important function of protecting stockholders from themselves.
Nicely written. You will be missed, Professor Dooley.
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