Business Organizations

For helpful comments, I thank Alan Auerbach, Alan Blinder, Mitchell Engler, Victor Fleischer, Mark Gergen, Kevin Hassett, James Hines, Mitchell Kane, Alex Raskolnikov, Julie Roin, Frank Sammartino, Daniel Shaviro, Joel Slemrod, Gene Seago, David Weisbach, Larry Zelenak, and participants at the University of Michigan’s Tax Policy Workshop Series and NYU’s Colloquium Series on Tax Policy and Public Finance. Special thanks to Reed Shuldiner and Michael Knoll for many useful discussions. This research was not supported by funding from any outside source. The working paper version of this Article was first circulated and posted on SSRN on June 25, 2007. See Chris William Sanchirico, The Tax Advantage to Paying Private Equity Fund Managers with Profit Shares: What is It? Why is It Bad? (University of Pennsylvania Institute for Law and Economics Research Paper No 07-14, June 25, 2007), online at http://ssrn.com/abstract= 996665 (visited June 8, 2008).

This Article has benefited from the comments and suggestions of Professors Bobby Ahdieh, Douglas Baird, Margaret Blair, Bill Bratton, William Christie, Steven Davidoff, Gillian Hadfield, Paul Heald, Larry Helfer, Donald Langevoort, David Millon, Erin O’Hara, Bob Rasmussen, Hans Stoll, Bob Thompson, Joel Trachtman, and Todd Zywicki. The Article also benefited from faculty workshops at the University of Georgia, the University of Pennsylvania, the University of Southern California, and Northwestern University. I would also like to thank Murray Teitelbaum, James Duffy, and the staff of the New York Stock Exchange for their time and valuable insight.

My thanks to Michael Abramowicz, Brad Clark, John Duffy, Howell Jackson, Geoffrey Miller, Richard Nagareda, Robert Rhee, Bill Rubenstein, Anthony Sebok, Mark Spindel, and participants in faculty workshops at Harvard Law School, Georgetown University Law Center, and George Washington University Law School.

Thanks to Robert Bartlett, Alicia Davis-Evans, Todd Henderson, Kim Hogrief, Arthur Levitt, Patrick McGurn, Nell Minow, Maureen Mulligan, Adam Pritchard, Robert Reville, two anonymous referees, and conference participants at The University of Chicago Law School, University of Michigan, and the American Bar Association Tort Trial & Insurance Practice Section for helpful comments and discussions, and to the RAND Corporation Institution for Civil Justice for generous support. Many thanks as well to the Corporate Library for granting me access to their data. All errors are mine.

In preparing this Article, I benefited greatly from conversations with several private-equity partners (both limited and general) as well as the excellent research assistance of Tracey Chenoweth. Thanks also, for insightful comments and advice, to Bobby Bartlett, Kate Litvak, Bob Rasmussen, Larry Ribstein, and Randall Thomas.

Thanks for comments on previous versions to Amitai Aviram, Steve Bainbridge, Vic Fleischer, Ron Gilson, Richard Squire, Michael Weisbach, and Charles Whitehead, and participants at workshops at the Association of American Law Schools, University of Connecticut, Fordham, UCLA School of Law, George Washington University, and the Symposium, The Going-private Phenomenon: Causes and Implications at The University of Chicago Law School. For a longer version of this Article, see Larry E. Ribstein, Uncorporating the Large Firm (University of Illinois Law & Economics Research Paper No LE08-016, May 27, 2008), online at http://ssrn.com/ abstract=1138092 (visited Jan 11, 2009).

I am grateful to Laura Adams, Todd Henderson, and Shaun Martin for their comments.