Producing Corporate Text: Courtrooms, Conference Rooms, and Classrooms

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Efforts to account for corporate law using economic analysis do not address the pervasive professional concern with the production of legal text. For this reason, analysis of Delaware corporate law as sub-optimal because it permits inefficient litigation does not acknowledge or analyze the collaboration among Delaware corporations, Delaware lawyers, and Delaware judges to produce corporate text. The collaboration produces a socially valuable product - sophisticated writing about the corporation fed by rich cultural sources - for which there is a set of readers willing to pay a premium. Moreover, these readers use the texts to produce the re-readings that active readers provide for texts, and new writings, that enhance the social and legal understanding and functioning of the corporation by situating it in a body of expert text. The Caremark case, and its echoes in Disney, are the exemplars of this phenomenon. Both are widely read and discussed as a source of moral and practical insight, even though neither produced a legal outcome imposing a penalty on corporate directors.

This Article discusses the contested status of demands for text in corporate law and reviews failures in readership associated with financial disclosure by corporations. In contrast with text that experiences such readership failures, Delaware law stands out as an editorial site for the creation of corporate law as text that commands a wide readership. The engagement of a community of readers is a large factor in the creation and influence of Delaware law. It is not clear that audiences such as those embedded in the reading and writing of corporate legal text produced in Delaware, and contending over time for its interpretation and recovery, would exist and thereby recreate a comparably rich collaboration of readers and collective authors in another editorial site.