35 The Delaware Journal of Corporate Law 879 (2010)
This article carefully debunks each major tenet of the L3C “movement” and reveals the legal and practical realities under “the Emperor’s New Clothes.” Using foundation funds to offer market-rate returns to “tranched” investors is, at best, a complicated device; not appropriate for “branding” and simplistic appeals to social conscience. When a foundation contemplates making a program-related investment, the matter requires careful, individualized, professional assessment, not reliance on a branded template. In this context, the L#C is but a snare and a delusion.
Kleinberger, Daniel S., "A Myth Deconstructed: “The Emperor’s New Clothes” on the Low-Profit Limited Liability Company" (2010). Faculty Scholarship. 190.