INSTITUTE for LAW and ECONOMICS
ILE
ANNUAL REPORT 2006–2007
A Joint Research Center of the Law School, the Wharton School, and the Department of Economics in the School of Arts and Sciences at the University of Pennsylvania
1 Si verman Hal nter or, w th entrance to LE o fices at top o s airs
2 Deal Day Spr ng 2007 (see page 18)
3 Chancery Court Pane on “Comp iance ” From eft Simon M Lorne, M l enn um Management, LLC Jane L Kel y ConocoPhi l ps Company
M chael L Wachter University o Pennsylvan a Law Schoo ; Hon Leo E Strine, Jr , Delaware Chancery Court (see page 16)
4 Dist nguished Jur st ecturer Hon Richard A Posner U S Seventh C rcu t Court of Appeals and Un versity of Chicago Law Schoo (see page 24)
5 Corporate Finance Roundtable Fal 2006 Front row Wi l am A Ackman
Persh ng Square Cap ta Management L P Middle row: i l F sch, Fordham
Un vers ty Schoo of Law; Roy J Katzovicz, Pershing Square Capita
Management L P Back row: Ben amin Strauss, Pepper Hami ton LLP (see page 10)
6 Un versity o Pennsy vania Law School S lverman Ha l
Founded in 1980, the Institute for Law and Economics at the University of Pennsylvania has an ambitious agenda that is timelier than ever. The study of law and economics remains the most rapidly growing movement in legal scholarship and jurisprudence. Under the sponsorship of the Law School, the Wharton School, and the Department of Economics in Penn’s School of Arts and Sciences, the Institute has played a leading role in this expanding field
Cross-disciplinary research, the cornerstone of the ILE, seeks to influence the national policy debate by analyzing the impact of law on the global economy, spotlighting the significant role that economics plays in fashioning legal policy Our innovative roundtables and conferences, launched in 1985, complement these goals by provoking in-depth and, frequently, ground-breaking examinations of critical issues. These and other programs highlighted in this Annual Report have helped the Institute to stay on the leading edge of this cross-discipline.
The Institute for Law and Economics has unique advantages We draw on the research and teaching strengths of the Law School, the Wharton School, and the Department of Economics. Our geographic location is optimal, allowing us to bring together participants from Washington and New York for full-day meetings and still get everyone home in time for dinner We have been able to call on the expertise of Penn Law School alumni who occupy key positions in law, business, and government And, critically, we have an extraordinarily distinguished cadre of board members and sponsors who are willing to give of their time and expertise to make our programming a success
In each area, from our public lectures through our closeddoor roundtables to our more academically oriented faculty workshops, we are driven by the same mission: to use the tools of economics to understand the law. In a world in which complex legal rules govern economic relationships, the tools of economics provide a way of asking whether the law creates appropriate incentives to encourage actors to maximize social welfare Funding for the ILE comes from a diverse group of corporations, law firms, foundations, and individuals who endorse our work each year Over the past decade, the Institute has more than tripled its donor base to provide ongoing support for the programs discussed in this Annual Report A list of Institute Investors for 2006–2007 appears on page 40
Un versity of Pennsy van a Law Schoo , Tanenbaum Ha l
Barry M Abelson
Pepper Ham lton LLP
Ph lade phia, PA
James H. Agger
Chair, 1994–2001
Retired Senior V ce Pres dent, General Counsel and Secretary
Air Products and Chem ca s, Inc Al entown, PA
Alan Alpert
Managing Partner, M&A Transact on Serv ces
Delo tte Tax LLP New York NY
William D. Anderson, Jr.
Managing D rector
Go dman Sachs & Co New York NY
Marshall B Babson
Hughes Hubbard & Reed LLP New York NY
Michael J Biondi
Chair, 2007–Co-Chairman, Investment Bank ng
Lazard Frères & Co. LLC New York NY
Fred Blume
Chairman Emeritus
Blank Rome LLP
Ph lade phia, PA
Charles I. Cogut
Simpson Thacher & Bartlett LLP New York NY
Isaac D. Corré
Senior Manag ng Director
Eton Park Capital Management New York NY
Pamela Craven
Ch ef Administrat ve O ficer
Avaya Communications Basking Ridge, NJ
Richard D’Avino
V P Taxes-GE Capital and NBC Universa
Genera Electric Company Stamford, CT
Kenneth C Frazier
Executive Vice President and General Counsel
Merck & Co , Inc
Whitehouse Stat on, NJ
Joel E. Friedlander
Bouchard, Margules & Fried ander
Wi mington DE
Robert L. Friedman
Cha r 2001–2007
Sen or Managing Director and Chief Legal Officer
The Blackstone Group L P New York, NY
Joseph B. Frumkin
Sul ivan & Cromwell LLP New York, NY
Perry Golkin
Member
Kohlberg Kravis Roberts & Co New York, NY
John G. Harkins, Jr.
Cha r 1980–1990
Harkins Cunn ngham LLP Philadelph a, PA
Leon C Holt, Jr
Ret red Vice Chairman and Chief Admin strative Officer
Air Products and Chemicals, Inc Allentown, PA
William B. Johnson
Cha rman Emer tus Whitman Corporation Chicago, IL
Stephen J. Jones
Vice Pres dent General Counsel and Secretary Air Products and Chemicals, Inc Allentown, PA
Cynthia B. Kane
Specia Assistant to the Secretary of State
De aware Department of State Wilmington, DE
Roy J Katzovicz Genera Counsel
Pershing Square Capita
Management L P New York, NY
Paul S. Levy
Founder
JLL Partners New York, NY
Robert A. Lonergan
Execut ve Vice President General
Counse and Corporate Secretary
Rohm and Haas Company
Philadelph a, PA
Simon M. Lorne
Vice Chairman and Ch ef Lega O ficer
Mi lennium Management, LLC New York NY
Michael E. Lubowitz
Weil, Gotshal & Manges LLP New York NY
J Anthony Messina
Buchanan Ingersol & Rooney PC
Ph lade phia, PA
Alan Miller
Co-Chairman
Inn sfree M&A Incorporated New York NY
G. Daniel O’Donnell Dechert LLP
Ph lade phia, PA
James E Odell
General Counsel, The Amer cas UBS Investment Bank New York NY
John E. Osborn
Executive Vice President, General Counsel and Secretary Cepha on, Inc. Frazer, PA
James A Ounsworth
Managing D rector
The Musser Consulting Group Wayne, PA
Morton A. Pierce
Dewey Ba lant ne LLP New York NY
Martha L Rees
Vice President and Ass stant General Counsel
E I du Pont de Nemours & Company, Inc.
Wi mington DE
Myron J Resnick
Retired Senior V ce Pres dent and
Ch ef Investment Officer
Al state Insurance Company Northbrook, IL
Robert H. Rock
Chairman and Publ sher
Directors & Boards
Ph lade phia, PA
Gerald Rosenfeld
Ch ef Execut ve O ficer Rothschi d North America New York NY
John F. Schmutz
Cha r 1990–1994
Ret red Sen or Vice President and Genera Counsel
E I du Pont de Nemours & Company, Inc Wilmington, DE
Howard L. Shecter
Morgan Lewis & Bockius LLP Philadelph a, PA
Robert C. Sheehan
Execut ve Partner
Skadden Arps, S ate, Meagher & Flom LLP
New York, NY
Victoria E Silbey
Sen or Vice President-
Lega and General Counse
SunGard Data Systems Inc Wayne, PA
David M. Silk Wachtell, Lipton Rosen & Katz
New York, NY
Bruce L. Silverstein
Young Conaway Stargatt & Taylor, LLP Wilmington, DE
A. Gilchrist Sparks III
Morris, Nichols, Arsht & Tunnel LLP Wilmington, DE
Hon Leo E Strine, Jr
Vice Chancel or De aware Court of Chancery Wilmington, DE
Nancy Straus Sundheim
Sen or Vice President, Genera Counse and Secretary
Unisys Corporation Blue Bel , PA
Jere R. Thomson
Jones Day New York, NY
Hon. E. Norman Veasey
[Chief Justice, Supreme Court of Delaware, 1992–2004 Wei , Gotsha & Manges LLP New York, NY, and Wilmington, DE
Marc Weingarten
Schulte Roth & Zabel LLP New York, NY
Donald J. Wolfe
Potter Anderson & Corroon LLP Wilmington, DE
This is my ast letter as Chairman of the Board of Adv sors as I step down after serving as Chairman since 2001 An organization such as the Institute for Law and Economics benefits if the leadersh p of its Board of Advisors regularly turns over I am delighted that Mike Biondi has agreed to succeed me as Chairman I have known Mike for a long time and I am confident that the ILE will thr ve under his eadership
It has been extremely gratifying to witness the ILE’s accompl shments over the past six years Its programs have become more relevant and important than ever, focusing on the issues that the academic, legal and business communit es care about Participation in these programs by leaders n their fields is at an all-time h gh Over the past six years, the ILE has considerably broadened ts financial base of support and even more importantly it has garnered the crucial participation and programmatic advice of its distingu shed donors. Today the Institute enjoys an outstanding international reputation for the excel ence of its roundtable conferences, where leaders n business, financial management, legal practice and academic scholarship candidly discuss the intersection of theory and practice on a host of significant issues facing the business community
On behalf of the Board, I want to express our gratitude to everyone who has helped the Institute during this past year, whether through financial contributions or by participation in ILE programs One of the foremost goals of the Institute is to broaden and diversify our foundation, both in terms of the entities that support us and the individuals who take part in our programs Once aga n this year, we have served that goal well
I am de ighted to report some superb add tions to our Board of Advisors dur ng the past year We are pleased to welcome the following new members: Richard D’Avino (General Electric Company); Stephen J Jones (Air Products and Chemicals, Inc ); Roy J Katzovicz (Pershing Square Capital Management, L P ); Alan Miller (Innisfree M&A Incorporated); James E Odell (UBS Investment Bank); Martha L Rees (E.I. du Pont de Nemours & Company, Inc.); Victor a E. Silbey (SunGard Data Systems Inc ); and Marc Weingarten (Schulte Roth & Zabel LLP) These accomplished ndividuals will greatly enhance the work of the Institute and broaden the compos tion of our Board
All of the members of our Board give graciously to the Institute, not ust financ ally but a so of their time and expertise, and I am very gratefu for all of their contributions Very special thanks must be g ven to ILE Benefactors Paul Levy, Skadden, Arps, Slate, Meagher & Flom LLP (through Bob Sheehan) and Wachtell, Lipton, Rosen & Katz (through David Silk) Their extraord nary level of financ al support enables the Institute to continue to lead the field, and I want to express our s ncere apprec ation to each of them
The one thing that stands out from my six years as Chairman of the Board of Advisors is the truly outstanding job that Ed Rock and Michael Wachter have done as co-directors of the Institute. Notwithstanding the terrific financial and programmatic support the Institute has received from all of its Board members, donors and program participants, the
remarkable posit on the ILE enjoys today could not have remotely been achieved without the efforts of Ed and M chael Their tireless dedication to all aspects of the Institute’s work and their ceaseless ability to come up with timely programs and attract the ideal participants to make every program an unqualified success are why the ILE is world-renowned as the forum for interesting dialogue on topical issues for corporat ons and their financ al and legal advisors It has been a real pleasure to work with Ed and Michael over the past six years
For over twenty years, the Institute for Law and Economics has successfully demonstrated the benefits of a cross-disciplinary perspective. Its programs prov de a model for how to build bridges between disciplines by creat ng ties between schools, between faculty members, between students, and between experts in the field from around the world ILE combines Penn’s greatest strengths in the Law School, the Wharton School, and the Department of Economics to focus on complex questions that concern all of these fields The Inst tute proves that when you bring the right people udges, deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more to convene outside of their own n ches, remarkably original insights are generated
As our world grows more complex every day, the topics the Inst tute addresses are both exc ting and relevant It is no longer enough to approach complicated questions such as appraisal law, corporate compliance, and the effect of legal enforcement on financial markets from solely a legal, economic, or business perspective. Indeed, no significant business issue can be addressed w thout paying attent on to the underlying economic trends and legal regulations A l of ILE’s part cpants contribute to and benefit from the profound understanding such analysis affords
benefit of his expertise, in addition to his numerous contacts in the legal and financial communities We are also extremely grateful to him for his leadership support as an Inst tute Benefactor. I extend the deepest appreciat on to all ILE supporters and participants for their commitment and investment during the past year With the proper support and sponsorship, the Institute for Law and Economics has limitless potential for growth and expansion in the future We welcome others to oin in backing and participating in this extremely worthwhile endeavor.
Robert L Friedman Senior Managing Director and Chief Legal Officer
The Blackstone Group L P
ILE Board Chairs Top row: Edward B Rock University o Pennsy van a Law School M chae L Wachter, Univers ty of Pennsylvania Law School
James H Agger Chair 1994–2001 Middle row Leon C Holt Jr
John F Schmutz, Cha r, 1990–1994 Bottom row John G Hark ns Jr Chair 1980–1990; Michae A F tts University o Pennsylvan a Law Schoo ; Rober L Friedman, Cha r, 2001–2007
In addition to ts unique focus, another of the Institute’s strengths is the variety of programs it offers. The roundtables ILE’s signature events bring together distinguished members of the bar, judiciary, government, business world, and academ a for open discussion and intellectua exploration ILE’s public lectures by leading jurists, executives, and entrepreneurs attract participants from all sectors of the University and from the wider commun ty Dur ng the past year the outstanding talks, workshops, and conferences organized by the Inst tute covered a wide range of topics and programs, from corporate finance and corporate governance to private equ ty and investing, hedge funds and labor law, and large-scale entrepreneurship and management
The Institute’s highly successful seminar series, includ ng sess ons jointly sponsored with Wharton’s Finance Department, provides a forum for leading academics from around the country to present their work and receive feedback from the Penn community.
Since my cross-discip inary vision for the Law School and the purposes of the Institute for Law and Economics are so similar, it is personally grat fying to me that the Institute s generously supported by contributors who understand the importance of what we do and the unique position the Inst tute holds Many of these contr butors also serve as members of the Institute’s Board of Advisors, helping to plan the direction and focus of the programs and lending their expertise as pane ists and commentators for Institute events The Inst tute’s extraordinary chair, Bob Friedman, has my part cular thanks at the end of his highly successful term for his many exceptiona contributions and his proact ve role in engaging new participants and supporters Like all who serve as advisors for ILE, Bob contributes his very valuable time and the
Michael A Fitts
Dean, University of Pennsylvania Law School
Bernard G Segal Professor of Law
September 2007
The Institute for Law and Econom cs presented an ambitious program schedu e this past year, as is ev dent n this report
The Fall Corporate F nance Roundtable addressed the ssue of assessing value in appraisal law, particularly in Delaware (pages 10–11). The problems associated with corporate vot ng and how to fix them were the focus of our Spring Corporate Governance Roundtable (pages 8–9). We held two Chancery Court programs in the spring, one addressing the corporate board’s compliance funct on, and one dealing with labor’s v ews on corporate governance (pages 15–16) In addit on, we presented three fascinating Law and Entrepreneurship lectures (pages 21–22) In the fall, Henry R Silverman, Chairman and CEO of the Realogy Corporation, spoke about the problems of management in the 21st century, and Pamela Daley, the Sen or Vice President for Corporate Business Development at General Electric, lectured on large-scale entrepreneursh p at GE In the spr ng, board member Isaac D Corré, Senior Manag ng Director for Eton Park Capital Management, explained to the audience how he uses his legal background to bet on legal risk For our Distinguished Jurist lecture, the Honorable Richard A Posner from the U S Seventh Circuit Court of Appeals and the University of Chicago Law School spoke to an overflowing audience on “The Embattled Corporation” (page 24) Finally, in May, we held a Deal Day program in New York City, where Brian Gavin, Senior Managing Director at The B ackstone Group L P , exp ained how Blackstone evaluates the hedge funds it invests in (page 18)
Our more “academic” programs also flourished The Law and F nance series, he d jointly with The Wharton School’s Finance Department, continued with presentat ons by Luigi Zingales (Robert C McCormack Professor of Entrepreneurship and Finance, University of Chicago, Graduate School of Business) and John C Coffee, Jr (Adolf A Ber e Professor of Law, Columbia University School of Law), (page 30). In February, ILE co-sponsored the th rd annual Penn/NYU Law and Finance Conference, a joint venture of Penn Law, Wharton Finance, New York Un vers ty School of Law, and the F nance Department of the Leonard N Stern School of Business (page 28) And throughout the year scholars from around the country came to present papers in the Law and Econom cs seminar series, co-organized th s year by Penn Law professors Matthew Adler and Chris Sanch rico (page 31)
Th s range of programs provides for an extraordinary cross-fertilization of ideas For the Corporate Roundtables, we gather together academics, judges, business leaders, lawyers, investment bankers, private equity fund managers, hedge fund managers and policymakers for intensive discussion of critical current issues In our programs w th the De aware Chancery Court, we are able to focus on key issues arising n Delaware corporate law with the active participation of students, followed by dinners where the conversation continues informally The Deal Day series gives an aud ence of profess onals, academics and students an opportunity to hear presentations at the market’s cutting edge In our two public lecture ser es, we recogn ze leaders who have played important roles in fashioning law, economic policy and business strategy Our Law and Entrepreneursh p speakers are for the most part law graduates who have developed their careers n unique ways, prov ding exemplary models for our students of the value of a legal education The Distinguished Jurist ser es brings to Penn judges and regulators who work at the cutting edge of bus ness regulation These lectures have a wide appeal throughout the un vers ty, draw ng students and facu ty from all sectors, as well as members of the ILE advisory board and the larger community
Finally, our academic programs build on our relationship with the Wharton Finance Department to bring leading scholars from both disciplines to Penn These programs, along with the joint conferences w th NYU, contribute to creating a network of scholars from around the world who are considering the question of how law and economics influence each other The Institute’s greatest strength lies in the quality of our supporters and the r active, enthus astic participation n our programs Our board members and sponsors make our programs possible, both as key part cipants and with their financial support We would particularly like to acknowledge our wonderful outgoing board chair, Bob Fr edman of The Blackstone Group, for his ded cated and enthusiastic work over the past six years Bob has played a critical role building ILE’s support base, and we are extraordinarily grateful for all of his efforts In addition, we are pleased to welcome the new chair, Mike Biondi of Lazard Frères & Co. With h s assistance, we will bu ld on the successes a ready accomplished, and expand them
We are also delighted to have added eight new members to the board, and we welcome them: Richard D’Avino (General Electric Company); Stephen J Jones (Air Products and Chemicals, Inc ); Roy J Katzov cz (Pershing Square Capital Management, L P ); Alan Miller (Innisfree M&A Incorporated); James E Odell (UBS Investment Bank); Martha L Rees (E I du Pont de Nemours & Company, Inc ); Victoria E Silbey (SunGard Data Systems Inc ); and Marc Weingarten (Schulte Roth & Zabel LLP)
We would also like to express congratulations to our Program Director, Bonnie Clause, who retired this past May after seven years of committed service to the Institute Bonnie’s hard work and many talents were ndispensable in building the Institute to its current level of success We offer her our thanks and best w shes for her future At the same time, we welcome Vicki Hewitt who will pick up where Bonnie left off as we move forward
We also extend our heartfelt thanks to all of our supporters for bringing your perspective, your deas, your experience, and your expertise to all that we do. Your participation is necessary to realize the Institute’s purpose and objectives, and it makes our job as Inst tute directors immensely satisfying and worthwh le.
At the heart of the Institute’s work is the Roundtable series, which brings together members of the Institute’s Associate Faculty and other academics with corporate executives, practicing attorneys, judges, public policymakers, and students Each roundtable provides a forum for lively discussion of current issues that emerge from the research and teaching of the Institute
Over the years, the Institute has sponsored roundtables on a broad range of topics including labor law and bankruptcy, as well as corporate law, governance, and finance engaging the interest and participation not only of scholars but also of leaders in the business and public sectors The high caliber of the participants guarantees that each affair is intense and informative. ILE’s longstanding off-the-record policy for the roundtables is often the impetus for an energetic and wide-ranging exchange of ideas among some of the nation’s most accomplished scholars, attorneys, and business people.
Edward B Rock Co-Director, Institute for Law and Economics
Saul A Fox D st nguished Professor of Business Law
september 2007
M chael L Wachter Co-Director, Institute for Law and Economics
William B Johnson Pro essor of Law and Economics
Corporate Governance
20 april 2007
Welcome
Michae A. F tts
Bernard G Segal Professor of Law
Dean Un vers ty of Pennsy van a Law Schoo
Morning Session
The Hanging Chads of Corporate Voting
Marce Kahan
George T Lowy Professor of Law
New York Un vers ty Schoo of Law
Edward B Rock
Saul A Fox Distingu shed Professor of Bus ness Law
Un vers ty o Pennsy vania Law Schoo
Commentators
Henry T C. Hu
Al an Shivers Chair n the Law of Banking and Finance
The University of Texas Law School
Hon Leo E Strine Jr
Vice Chance lor
Delaware Court of Chancery
Institutional Investors and Proxy
Voting The Impact of the 2003 Mutual
Fund Vot ng D sclosure Regulation
Roberta Romano
Oscar M Ruebhausen Professor of Law
Yale Law Schoo
Commentators
Peter Friz
Vice Pres dent of G oba Voting and Transaction Services
Inst tutiona Shareholder Services
Lynn A Stout
Pau Has ings Professor of Corporate and Secur ties Law
Un vers ty o Ca ifornia-Los Ange es Schoo o Law
Afternoon Session
Pane D scuss on on What Is Wrong w th Corporate Vot ng and How to Fix It
Moderators
Edward B. Rock
Saul A Fox D stinguished Professor of Business Law
Michael L. Wachter
W l iam B Johnson Professor of Law and Econom cs
University of Pennsy vania Law Schoo
Panel sts Hon. Carolyn Berger Justice
Supreme Court of Delaware
James F. Duffy
Executive Vice Presiden and General Counsel
NYSE Regulat on, Inc
Cary I Klafter
Vice President Lega and Government A fairs
Inte Corporat on Alan Mi ler
Co-Chairman
Innisfree M&A Incorporated
David K Musto
Assoc ate Professor o Finance
The Wharton School University of Pennsy vania
A. Gilchrist Sparks III Morr s N cho s, Arsht & Tunne l LLP
John C W lcox
Senior V ce Pres dent and Head of Corporate Governance TIAA-CREF
The Hang ng Chads of Corporate Vot ng Marce Kahan
New York Un vers ty Schoo of Law
Edward B Rock
Un vers ty o Pennsy vania Law Schoo
Never has voting been more mportant n corporate aw With greater activ sm among shareholders there are numerous c ose contests over mergers, d rector elections, execut ve compensat on and shareholder proposals But s the bas c technology of corporate vo ing adequate to the task?
In h s art c e, the authors first descr be the incredibly comp icated system of U S corporate vot ng, a comp ex ty that is dr ven by the undery ng cus odia ownership s ructure
They then identi y three ways in which th ngs predictably go wrong: pa ho og es of comp exity pathologies of ownersh p; and pathologies of misal gnment (o nteres s), and rev ew the current ega treatment o these pathologies The authors hen consider a variety o directions for reform ranging from incrementa mod fications to fundamenta redesign
The paper shows that, absent a undamental reconstruct on of the ownership structure the ex sting system w l cont nue to be noisy, mprec se and disturbingly opaque Given the probems with the exis ing system and the di ficu ties in mproving it, one should be skeptica of ca s to expand the opportunit es for shareholder voting n corporate governance More shareholder power n corporate elect ons w l generate more close outcomes and wi l mpose even more stress on an a ready overstressed system
Institutional Investors and Proxy
Voting The Impact of the 2003 Mutual Fund Vot ng D sclosure Regulation
Mart jn Cremers
Yale Schoo of Management
Roberta Romano
Yale Law Schoo
The proxy vot ng process s thought to be a key mechanism by which shareholders moni or corporate managers
I is the means by wh ch managers are replaced through proxy contests over director elec ions and by wh ch their major plans are reviewed as state aw and stock exchange ru es requ re shareho der approval of significant transact ons Moreover, in recent
years ac iv st nstitut onal investors have used the proxy process to advocate changes n corpora e po ic es such as repeal of takeover defenses and changes in board compos tion or manageria compensat on In January 2003, the U S Secur ty and Exchange Commission (SEC) requ red mutua funds to disclose how they voted on proxy proposals presented at shareho der meet ngs Th s rule fol owed a ser es of significant federal government ntervent ons into firms corporate governance n the Sarbanes-Oxley Act (SOX) Congress’ response to the scanda s of 2001-02 tha began wi h the imp osion of Enron
Th s paper examines the mpact o the mutual fund voting disclosure ru e on corporate governance by examining i s ef ect on proxy vot ng oucomes To th s end, the authors construct a samp e of firms that experienced s m lar proposa s, sponsored either by management or shareho ders, both before and a ter the 2003 ru e change They then examine the d fference in voting outcomes before relat ve o a ter this ru e change particu ar y n relat on to mutual fund ownersh p contro ing or firm charac erist cs inc uding profitabi ity, non-mutual fund nst tutional ownersh p and governance fea ures
The authors find that voting support for management has been dec in ng for close o a decade and that mu ua funds appear to support management less frequently than other investors
However there is no ev dence that the ru e decreased mutua funds voting in support of management Indeed some of the data suggest tha mutua funds’ support for management increased after the rule s adoption particu ar y or executive equity ncentive compensat on p an proposa s Th s finding s contrary to the expectat on o d sc osure rule advocates who contended that funds voted w th management due to confl cts of interest and would reduce that support once he r votes were transparen
1
Dav d C McBride, Young Conaway Stargatt & Taylor, LLP, and James E Ode l UBS nvestment Bank
2
Wi l am D Anderson Jr Go dman Sachs
3 Front row A an Mi ler Inn sfree M&A Incorporated Midd e row Jennifer Gae H l , Sydney Law
Schoo , Un vers ty of Sydney
Back row: Richard Mert , JD’08
Univers ty of Pennsylvania Law
Schoo
4 Front row Cary I Kla ter, Inte Corporat on; James F Duffy, NYSE
Regu ation Inc Back row: Edmund
W Ki ch University of V rg n a Schoo o Law Lynn A Stout
Univers ty of Cal fornia-Los Ange es Schoo o Law Marcel Kahan, New
York University School of Law; Peter Fr z, Inst tut ona Shareho der Serv ces
5
Front row Charles I Cogut
S mpson Thacher & Bart ett LLP
Hon Caro yn Berger, Supreme Court of Delaware; John C Wi cox, TIAA-CREF; David K Musto, The Wharton School Un versity of Pennsylvania M dd e row: Roy J Katzovicz, Persh ng Square Capita
Management L P Ya r J Listok n Ya e Law Schoo Back row: Jonathan
Char es Lipson James E Beasley
Schoo o Law Temple Univers ty
6
A Gi christ Sparks III Morris, Nichols Arsht & Tunnel LLP
Corporate Finance
8 december 2006
Welcome
Michae A. F tts
Bernard G Segal Professor of Law
Dean Un vers ty of Pennsy van a Law Schoo
Morning Session
The Short and Puzz ing Li e of the ‘Imp ic t Minor ty D scount
n Appraisa Law
Lawrence Hamermesh
Ruby R Vale Professor of Corporate and Business Law
Widener University School o Law
Michae L Wachter
Wi l am B Johnson Pro essor of Law and Economics
Un vers ty o Pennsy vania Law Schoo
Commentators
Thomas J A l ngham II
Skadden Arps, S ate, Meager & F om LLP
Andrew Metrick
Associate Professor of F nance
The Wharton Schoo
Un vers ty o Pennsy vania
The Value o Control: Impl cations for Control Premia, Minor ty Discounts, and Vot ng Share Differentials
Aswath Damodaran
Pro essor of Finance and
David Margo is Teach ng Fe low
Stern School of Business
New York Un vers ty
Commentators
John C Coates
John F Cogan Jr Professor of Law and Economics
Harvard Law Schoo
Joel E. Friedlander
Bouchard Margu es & Friedlander
Afternoon Session
Pane D scussion on
De aware Appra sal Law Cha lenges and Proposals or Change
Moderators
Edward B. Rock
Sau A Fox D st nguished Professor o Business Law
Michael L Wachter
W l iam B Johnson Professor of Law and Econom cs University of Pennsylvan a Law School
Panel sts
W ll am A. Ackman
Managing Member
Persh ng Square Capita Management L P
Robert W Holthausen
Nomura Secur ties Company
Professor of Account ng and F nance
Chair, Department of Account ng
The Wharton School
University of Pennsylvan a Hon. Stephen P. Lamb
V ce Chancel or
De aware Court of Chancery
David C McBride
Young Conaway Stargatt & Taylor LLP
A. Gi christ Sparks III
Morris N cho s, Arsht & Tunne l LLP
Randal S Thomas
John S Beasley I Professor of Law and Bus ness
Vanderbi t Un vers ty Law Schoo
The Short and Puzz ing Li e of the ‘Imp ic t Minor ty D scount n Appraisa Law
Lawrence Hamermesh
Ruby R Vale Professor of Corporate and Business Law
Widener University School o Law
Michae L. Wachter
Wi l am B Johnson Pro essor of Law and Economics
Un vers ty o Pennsy vania Law Schoo
The financial/empir ca assert on of the mp ic t minor ty d scount or IMD, s quite simp e: it posits that, no matter how l qu d and nformed he financia markets may be a l pub icly traded shares pers stently and cont nuous y trade n the marke at a substantia discount relative to the r propor ionate share of the value of the corporation
This d scount, it is said, ar ses because the stock prices on national secur ty markets represent “m nori y” posit ons and m nority pos t ons trade at a discount to the va ue o the company’s equity The consequence of the MD n appraisa proceed ngs is l m ted in scope, but substantia n scale: n app y ng a va uat on technique (known as “comparable compan es analys s,” or “CCA”) that estimates subject company va ue by reference to market tradng mult p es observed n shares o comparab e publ c y traded firms the resu t must be ad usted upward by adding a prem um to of set the “imp icit minority discount” asserted to exist in the comparable compan es share prices In the last severa years, the size of th s upward adjustment (and he supposed discount that it “corrects”) has been rout ne y fixed even w thout supporting expert testimony, at 30 percent
Not a s ng e p ece of financia or empirical scho arship affirms the core prem se of the IMD that publ c company shares systemat ca ly trade at a substantia discoun to the ne present va ue of the corporat on To the contrary, he one treat se on wh ch the Delaware courts have re ed n invokng the MD has, n its most recent edi ion exp ic t y warned aga nst rout nely app y ng an upward ad ustment n order to of set some supposed MD
Fortuitously, in some cases where al egations of ncumbent board wrongdo ng are combined w th the appraisal case the IMD may resu t n the correct answer when it o fsets an incumbent control er’s wrongful acts Bu , that result can be ach eved more d rect y, by accept ng pet tioner’s evidence that the respondent s antic pated cash flow projections or o her operational performance measures are oo ow In short the authors core subm ssion is that the De aware courts, n their va uation of shares (particu arly in squeeze out mergers), shou d abandon the IMD and re y instead on a more direct approach to address ng concerns about past or future abuse by con rol ng stockho ders The arsenal of corporate finance techn ques available to measure going concern value, correctly applied, wou d award shareholders the correct amount
The Va ue of Contro : Imp icat ons for Control Premia M nority Discounts and Voting Share D fferent als Aswath Damodaran
Professor of F nance and Dav d Margol s Teaching Fel ow Stern Schoo of Bus ness New York University
It s no uncommon n pr vate company and acquis tion va uat ons to see large premiums attached to est mated va ue o reflect the “va ue o con ro ”
But what f any s the va ue o contro in a firm, and i it ex sts how do we go about est mating it? Th s paper examines the ngredients of the control prem um In part cular the author argues that the va ue of control ing a firm has to l e n be ng ab e to run t dif erent y (and better) Consequent y the va ue o contro wi l be greater for poorly managed firms han wel run ones
The value of contro has wide ranging imp cations beyond acquisit ons The paper shows that the expected ikelhood of control changing is bu lt into the pr ce of every pub icly traded company and that this prov des a way of measur ng the payof to strong corporate governance It a so argues that getting a better hand e on the value of control can al ow one to better exp ain the d fferences between voting and non-voting share prices and the m nority d scount n private company va uations
1
Front row Hon Donald F Parsons, Jr ,
De aware Court of Chancery Dav d C McBride Young Conaway Stargatt & Taylor LLP Hon Stephen P Lamb
De aware Court of Chancery Middle row: Merr tt B Fox Columbia Law School
Bruce L S lverste n Young Conaway Stargatt & Tay or,
11 november 2005
Reed, Un vers ty of North Carol na Susan Christof ersen McGi l Un vers ty; Chr stopher Geczy The Wharton Schoo ; David Musto, The Wharton Schoo
David McBride, Young Conaway Stargatt & Taylor; Ei een Nugent, Skadden, Arps Slate Meagher & Flom Back: Eric Ta ley, The Law School Un versity of Southern
Ca i ornia W l iam D Anderson, Jr , Go dman Sachs Bruce Si verstein, Young Conaway Stargatt & Tay or 3
Front: Thomas Bel , Simpson Thacher & Bartlett; Robert P aze Secur t es and Exchange Commiss on Back: Donald Langevoort, Georgetown University Law Center Rober Rasmussen, Vanderbi t Un versity Law Schoo ; Sean Gr ffith Un versity of Connecticut Schoo o Law
4
Dona d J Wo fe Jr Potter Anderson & Corroon; David Si k Wachte l Lipton, Rosen & Katz; Robin Sampson, Drinker B ddle & Reath
5
Simon Lorne Mi enn um Management; Harvey Goldschm d, Columbia Law
Schoo Background: Robert Thompson, Vanderbi t Univers ty Law School
Merritt Fox Co umbia Law School
Welcome
Michae A. F tts
Bernard G Sega Professor of Law
Dean University o Pennsy van a Law School
Morning Session
Decline of Labor Unions
n the United States
Michae L. Wachter
Wi l am B Johnson Professor of Law and Econom cs
Un vers ty of Pennsy vania Law School
Commentators
Char es I Cohen
Partner Labor and Employment
Morgan Lewis & Bockius LLP
Cynth a Est und
Isidor and Sev l e Su zbacher
Professor of Law
Co umb a Law Schoo
A Reduction n the D sadvantages of Br tish Un onism?
John T Add son
Hugh C Lane Professor of Econom c Theory
Moore School of Bus ness, Un vers ty of South Carol na and Un vers dade de Co mbra, Portugal
Commentators
Paul Davies
Cassel Pro essor o Commercia Law
London School of Economics
John W lhelm
President Hotel D vis on UNITE HERE
Afternoon Session
Pane D scuss on on
Bargaining Before Recogn tion in a Global Market:
How Much Wil It Cost?
Moderators
Marshal B. Babson
Hughes Hubbard & Reed LLP
Edward B. Rock
Saul A Fox Dist nguished Professor of Business Law
Univers ty of Pennsylvania Law School
Panel sts
James A Gross
Professor o Labor Po icy & Labor Arb tration
Schoo o Industria and Labor Re ations
Cornel Un versity
Jonathan P H att
Genera Counse
AFL-CIO
Peter Hurtgen
Morgan, Lewis & Bockius LLP
( ormer cha rman, Nationa Labor Relat ons Board)
Hon. Wilma Liebman
Member
Nationa Labor Relat ons Board
Wi
Un
Commentators
Nancy
Associate
Bruce L. Si verste n Young Conaway Stargatt & Tay or LLP
The Publ c and Private Faces of Der vative Lawsuits
Randa l S Thomas
Professor of Law
Vanderb lt Univers ty Law School
Commentators
J l E F sch
A pin J Cameron Pro essor o Law Director,
Securit
Fordham
Afternoon Session
Pane
Moderators
Saul A Fox Distinguished Professor
o Business Law
Michael L Wachter
W l iam B Johnson Professor
o Law and Economics
University o Pennsylvan a Law Schoo
Panel sts
W ll am D. Anderson Jr.
Manag ng Director Goldman, Sachs & Co
Isaac D Corré
Senior Managing D rector
Eton Park Cap tal Management
Saul A Fox
Ch ef Execut ve O ficer
Fox Pa ne & Company, LLC
Robert L. Friedman
Senior Managing D rector and
Ch ef Lega Officer
The B ackstone Group L P
S mon M. Lorne
V ce Chairman and Ch ef Legal Officer
M l ennium Management LLC
Andrew Metr ck
Assoc ate Professor of Finance
The Wharton Schoo
Alan Mi ler
Co-Chairman
Innisfree M&A Incorporated
Chancery Court Panels
ILE’s ser es of Chancery Court Panels was n t ated in fa l 2003 as a component of a Penn Law course on corporate law and finance co-taught by Leo E Str ne Jr , Vice Chancel or of the De aware Chancery Court and Michael L Wachter Wi l am B Johnson Pro essor of Law and Economics The topic of th s year’s seminar was the evolving ro e of ndependent directors n corporate governance
Two specia sessions of the c ass were opened to the entire University commun ty, as wel as to LE board members and nv ted guests, under the auspices of LE These open sess ons eatured panels o lawyers, corporate genera counse s, and representat ves rom the abor commun ty who shared the r wealth of exper ence n ssues of corporate governance and comp iance S nce the top cs combine areas of finance and aw, acul y of The Wharton Schoo often participate ac ively n the Chancery Court Programs
The Chancery Court pane s are o lowed by Corporate Governance Dinners w th further commentary and discuss on ILE’s Corporate Governance Dinners whether as stand-alone events or as ad uncts to ectures, presentations, Chancery Court pane s and other forma programs prov de an opportunity for further off-the-record commentary and conversat on among presenters and members o the board of advisors their nv ted colleagues, and the Inst tute s assoc ate facul y Each dinner eatures focused commentary on a current issue n corporate governance, o lowed by a general d scuss on moderated by ILE co-d rectors Edward Rock and Michae Wachter
Chancery Court Panels
Moderators
Vice Chance lor Leo E Strine, Jr
Chancery Court o De aware
Michael L Wachter
University of Pennsylvan a Law School
5 Apr l 2007
Labor s V ews on Corporate Governance and the Role of the Corporate Board How Has Labor’s
Perspect ve Changed over the Decades? What Are the Current Ob ectives?
Before Wor d War I, unions were not a significant orce in nvestment markets
Between 1945 and 1980 there was an enormous growth n union pens on funds Today more than $5 tr l ion is invested on behalf of un on zed workers, more than $400 bi l on of which is in union-sponsored pens on funds Since the m d-1990s the labor movement has sought to define a governance agenda for workers as ong-term investors that s d stinct from the agendas of both sel -interested managers and short-term investors ike day traders leveraged buyout p ayers and hedge funds This perspective is now being chal enged by the r se of hedge funds and priva e equ ty
Th s program focused on the evolut on of abor’s perspectives about corporate direc ors and officers and what corporate governance n tia ives are in abor s best n erests as owners and stakeho ders In particu ar, the program d scussed labor’s views o corporate takeovers, executive pay, and d rector e ect ons and highl ghted labor’s agenda for the upcoming proxy season
Pane ists and D nner Commentators
R chard C. Ferlauto
Director o Pens on and Benefit Pol cy Amer can Federat on of State County and Mun cipa Employees (AFSCME)
Michae Musuraca
Assistant D rector, Department of Research and Negot ations
Dis rict Counci 37, Amer can Federation o State, County and Municipal Emp oyees (AFSCME) Damon Si vers Associa e Genera Counse Amer can Federat on of Labor and Congress of ndustria Organ zat ons (AFL-C O)
Damon Si vers, AFL-CIO
Leo E Str ne Jr De aware Chancery Court and Damon S lvers, AFL-CIO
Michae L Wach er Un versity of Pennsylvania Law School
Leo
Str ne, r De aware Chancery Cour ; Damon Si vers AFL-CIO Michae Musuraca, AFSCME R chard C Fer auto, AFSCME
Michae Musuraca AFSCME and Richard C Ferlauto, AFSCME
Chancery Court Panels
Structur ng the Board’s Compl ance
Function Should the Corporation Cont nue to ‘Dump It nto Audit or Are Fresher Approaches Needed?
How shou d corpora ions best organize
the r board commi tees and o ficer
s ructure to address the myr ad ncreasingly comp ex and d verse lega and financia mandates that corporat ons must contend w th? The traditional boardroom approach to addressing egal and financia comp ance to “dump t nto aud t,” which is wha Enron did rema ns the preva ent model Th s program focused on whether that s the most prudent way to use the board s ta ents and to organ ze the corporation’s comp iance funct on, and whether there are other mode s that might be more e fect ve and effic ent One a ternat ve s to carve out areas, such as tax or specia publ c po icy ssues and g ve them to board comm ttees tha have spec alzed know edge of the areas The weakness of th s p an s that comp ance ssues are of en re ated The advan age of eav ng comp ance issues w th the aud t comm ttee s hat a single commit ee benefits from hav ng knowledge of he u l array of compl ance issues the corporat on s acing
Panel sts and Dinner Commentators
Mark J Gent le R chards Layton & F nger
Janet L. Kel y Depu y Genera Counse
ConocoPhi l ps Company
S mon M. Lorne
V ce Chairman and Chief Lega Counse
M l ennium Management LLC
Robert H Mundheim
Shearman & Ster ing LLP
Victoria E. Si bey
Sen or Vice Pres dent-Lega and General Counsel
SunGard Data Systems, Inc
Chancery Court Panels
V ctor
4 Apri 2006
Panel Discussion of the Toys “R” Us Lit gat on
Toys “R” Us s a fascinating case, recen ly dec ded by Vice Chance lor Leo Str ne, nvolving the merger of the company w th an acqu si ion veh cle of KKR
The pla nti fs asserted that the board of directors ai ed to act reasonab y in pursu t of the highest atta nab e value The Toys “R” Us case is thus a fiduciary duty suit rather than an appraisal case
However, the case prov des an excel ent study, fi ed with ntricate corporate valuat on pr nciples and show ng the n erp ay of fiduc ary duty suits and va uat on
The panel and audience on Apr 4 brought ogether the major part c pants represent ng the defendant and the plaint ff in Toys “R” Us
Pane is s and Dinner Commentators
Thomas J. A l ngham II
Skadden, Arps Slate Meagher & Flom
Wil iam D Anderson, Jr Go dman, Sachs & Co
John G Fin ey Simpson Thacher & Bartlet LLP
Robin M. Rankin
Credit Suisse First Boston
18 February 2006
“The Techn co or Saga” D scuss on w th Members o the De aware Chancery Court
The Technicolor saga began in 1983 folow ng a cash-out merger of the m nority shareho ders of Technico or Incorporated by a company control ed by Ron Perelman There were five remands by the De aware Supreme Court to the Court of Chancery and two appraisal tr als, the first in 1989 before Chance or A len The l t gat on final y ended with a Chancery Court op nion rom Chance or Chand er in 2004 The appraisal remedy ava able n a cash-out merger, has become more requent y u i zed and thus more requently debated over the last severa years as a result of the “going- private” boom
Panel sts and D nner Commentators
Hon. Wi liam T A len
Former Chance lor
De aware Chancery Court
Hon Wi liam B Chandler I I Chance lor
De aware Chancery Court
Hon. Leo E Str ne, Jr
V ce Chance lor
De aware Chancery Court
Deal Day
Dea Day taps the expertise of our board and sponsors to exam ne n depth current opportunit es and chal enges
By ook ng at the detai s of comp ex
transact ons we exam ne cutting edge ssues at the intersect on of law, finance, governance and operat ons
The goa of these programs s o a ow the participants to understand the “guts of the dea ” as a way o unders anding the issues at the cutt ng edge of deal making
In May 2007 Br an Gav n, head of Blackstone s hedge fund monitoring group presented B ackstone’s approach to evaluating hedge unds in ts $20 bi ion fund o hedge unds
In prev ous years we’ve he d Dea Days in New York, London and Tel Aviv tha have exam ned nternational and domest c private equ ty transac ions the role o the inves ment banker for a spec al committee in a management buyout as we l as the role o a spec a ty corporate court
DEAL DAY in New York
4 May 2007
The Penn C ub of New York
Moderators
Edward B Rock
Sau A Fox D st nguished Professor
o Business Law
Michael L Wachter
W l iam B Johnson Professor
o Law and Economics
Univers ty of Pennsy vania Law School
Monitoring Hedge Funds: Investor Due D ligence
Presentat on by Brian Gavin
Sen or Manag ng Director
The Blackstone Group L P
Commentators
T mothy L Barefie d Chief
Capita Management, L P George J Maz n, Dechert LLP; Gerald Rosen eld, Rothschi d North America; Michael L Wachter, Univers ty of Pennsy van a Law School Edward B Rock, Un versi y of Pennsy van a Law Schoo
2 Eric L Tal ey Schoo of LawBoa t Hal , Univers ty of Ca i ornia Berke ey
3 Br an Gav n The B ackstone Group L P 4 Timothy L Barefie d Persh ng Square Capita Management, L P ; George J Maz n Dechert LLP Gera d Rosen eld, Rothschi d North America
5 George J Maz n Dechert LLP; Gerald Rosenfeld, Ro hsch ld North Amer ca M chae L Wachter, Un versi y of Pennsylvania Law School Edward B Rock, Un vers ty of Pennsy vania Law School Br an Gav n The Blackstone Group L P
Deal Day
spring 2006 and spring 2005
DEAL DAY n ISRAEL
25 May 2006
Te Av v Israel
Co-Sponsored by Inst tute or Law and Economics
Kiryat Ono Col ege of Law
O fice of the Delaware Secretary o State
Moderators
Zohar Goshen
Co umbia Law School and Academ c Co lege Kiryat Ono
Edward B Rock
Un versity of Pennsylvan a Law Schoo
Morning Session
What Are American Private
Equity F rms Look ng for in Israel Companies?
The 2002 Acquis tion of Paradigm Geophysica by Fox Paine Presentat on by
Sau A Fox
Fox Pa ne & Company, LLC (Ca ifornia)
Mitchel S. Presser
Wachte l Lipton, Rosen & Katz (New York)
Eldad We ss Paradigm Geophys ca (Israe )
Afternoon Session
From De aware to Israe
The Ro e of a Specia ized Business Court
Delaware-Style Moot Court
Hon. Stephen P Lamb
Vice Chancel or Delaware Chancery Court
David C McBr de Young Conaway Stargatt & Tay or (Delaware)
Donald J Wo fe, Jr.
Po ter Anderson & Corroon LLP (Delaware)
Panel sts
Hon. Aharon Barak
Pres dent
Supreme Court of srae
Hon Myron T Stee e
Ch ef us ice
Supreme Court of De aware
Hon Moshe Teri
Cha r
Israel Secur ties Authority
Theodore N. Mirvis
Wachte l Lipton, Rosen & Katz (New York)
DEAL DAY in NEW YORK
23 May 2005
The Penn Club of New York
Moderator
Edward B. Rock
Sau A Fox Distinguished Professor of Bus ness Law
Un vers ty o Pennsylvan a Law Schoo
Morning Session
Lazard’s Representat on of the Specia Committee n the Battle for Hollywood Enterta nment (Mov e Ga lery/B ockbuster/Leonard Green Partners/Icahn)
Presen ation by M chae J B ondi
Co-Cha rman of nvestment Bank ng Lazard Frères & Co LLC
Commentators
Joseph B Frumkin
Su l van & Cromwe LLP
Joseph D. Gatto
Managing Director
Go dman, Sachs & Co
Robert E Spatt
Simpson Thacher & Bart ett
Afternoon Session
The Creation of Advance PCS
(through the Merger of Advance Parad gm and PCS) and ts Subsequent Merger into Caremark to Create the Largest PBM in Amer ca
Presen ation by Paul S Levy
Sen or Managing Direc or JLL Partners
Commentators
A an Alpert
Managing Partner, M&A Transaction Services
Deloitte Tax LLP
M chae S. Knoll
Professor of Law and Rea Estate
Un vers ty o Pennsylvan a Law Schoo
John E. Osborn
Sen or V ce Pres dent and General Counse Cephalon Inc
Deal Day in Israel
Cephalon,
The Institute for Law and Economics presents two series of public lectures: Law and Entrepreneurship and Distinguished Jurist.
In sponsoring these events, the Institute aims to spotlight and honor lawyers who have led noteworthy careers and made significant contributions as corporate executives and entrepreneurs, or as members of the judiciary at the state or federal levels. Audiences are drawn from all sectors of the University and the legal and business communities.
These eminent speakers hold particular appeal and inspiration for students of Penn’s Law School and the Wharton School, with whom they talk informally at receptions following each lecture.
The Law and Entrepreneurship lecture is supported in part by the Ronald N. Rutenberg Fund.
Law and Entrepreneurship Lectures
28 February 2007
Law, Legal Risks, and the Financial Markets
Isaac D Corré
Senior Managing D rector
Eton Park Cap tal Management
Isaac D Corré s respons ble for the event or ented ac iv ties of Eton Park
In his talk for ILE, Corré spoke on how he used his egal training in the world of nvest ng by evaluat ng egal risks when a company’s situat on may be s gn fican ly affected by an uncerta n egal outcome
Prior to o ning Eton Park, Corré was a partner at Scoggin Capita Management a New York-based mu t -strategy hedge und At Scoggin, Corré managed the merger arb trage and specia s tuations portfo io that ncluded nvestments in comp ex res ructurings, stub trades and securt es a fected by lega and regulatory changes Corré also managed the firm’s investment in a sovere gn trade c a ms bus ness He was deep y nvo ved in manag ng the distressed debt and value equ t es port o ios
Before jo n ng Scoggin, Corré pract ced law or more than n ne years H s egal pract ce ocused princ pa ly on complex commerc al l tigat on
involv ng mergers and acqu s tions, securit es ssuance, corporate governance and bankruptcy
He graduated w th a BA summa cum laude, from Yeshiva University n 1985 and a JD, cum laude, rom Harvard Law Schoo n 1989 Isaac serves on the Board of Trustees of the Yesh va Un vers ty business schoo 29 November 2006
“The Un ted States features what many right y consider the wor d s most efficient cap tal markets and stable ega reg me. These are mutually rein orc ng, but the financ a markets have a lot to earn about the lega system and the aw has a lot to learn about the financ a markets. Perhaps forums such as this wi l acilitate the crit cal transfer of knowledge between these two systems.
Large-Scale Entrepreneurship: Business Development at GE Pamela Daley
Senior V ce President or Corporate Business Deve opment Genera Electric Company
Pame a Daley s respons b e or GE’s mergers, acqu sit ons and d vest ture activ ties wor dw de In her November ecture, Da ey descr bed GE’s evo ution nto one o the argest companies in the world, and GE s recent n tiatives to nvest n new fields and sec ors Before assuming her present posit on she was V ce Pres dent and Senior Counse for Transactions at GE Before arriv ng a GE n 1989 Da ey was a tax partner of the national aw firm o Morgan Lewis & Bockius where she spec al zed in tax-oriented financ ngs and M&A From 1982 to 1989, she was an ad unct professor at the University of Pennsylvania Law Schoo , where she taught federal ncome taxation o partners and partnersh ps
Da ey serves on the Board of Directors o Genera E ectr c Cap tal Corporat on, GE Capita Serv ces Inc the GE Foundation, and the World Wi d ife Fund, and is a past direc or
o Genworth F nancial Inc (NYSE GNW) (2004–2006) She also serves on the Board of Overseers of the University of Pennsylvan a Law School Daley rece ved her B A degree with highest honors from Pr nceton University n 1974 in Romance Languages and L teratures In 1979 she graduated first n her class from the University of Pennsylvan a Law School where she served as Editor- nChief o the Law Rev ew She is a member of Ph Beta Kappa and Order o the Coi
Law and Entrepreneurship Lectures
26 October 2006
Managing in the 21st Century
Henry R Si verman Cha rman & CEO Realogy Corporat on
Henry R S lverman is chairman & CEO of Rea ogy Corporation the world’s largest residentia brokerage ranchisor and the larges U S res dent al real estate brokerage firm From 1997 through August 2006 S lverman served as chairman and CEO of Cendant Corporation ranked 107th in the 2006 Fortune magaz ne l st of the 500 largest U S companies Cendant was he largest g oba prov der o consumer and business services with n the travel and res dentia rea esta e sectors before its decis on o separate nto four new compan es ef ec ive Ju y 31 2006 Realogy Corporation s comprised of he business units from Cendant’s ormer Rea Estate Serv ces D vis on Prior to the formation of Cendant n 1997 Si verman was cha rman, presdent and ch ef executive o ficer of HFS Incorporated, wh ch he founded n 1990 S lverman gave a Law and En repreneursh p ecture n 1998 on cr s s management, focus ng on h s discovery of accounting fraud at Cendant after his company merged w th it and how he ed the corporat on n rebui ding H s ecture in the al of 2006 addressed to prob ems o manag ng a corpora ion in the post-Enron post-Sarbanes-Ox ey Act post-tech bubble era At the same t me that g oba izat on s mak ng the business world increasing y competi ive he
bel eves that he ant -business cl mate fostered by the government and the med a is hurting American compan es’ product v ty
In 1998, Si verman received the American Her tage Award from he Anti-Defamat on League for l fet me achievement n fighting d scr m nation He has been honored tw ce for his efforts to promote diversity n he workp ace first in 2001 by he ack e Rob nson Foundat on and again in 2003, by the U S H span c Chamber o Commerce
Si verman graduated rom W l iams Co lege in 1961 and the University of Pennsylvan a Law School in 1964, and served as an officer n the U S Navy Reserve rom 1965 to 1972
“The most mportant th ng that we can a l do is to understand that in the fina ana ysis, every good partnersh p whether t s in bus ness, in friendship or in marr age is based on trust and integrity.”
16 February 2006
23rd Law and Entrepreneurship Lecture
The Banker as Entrepreneur Michae J. Biondi Co-Chairman Investment Banking Lazard Frères & Co LLC
Michael B ondi has extensive experience n adv sing companies and ndependen board committees on domest c and cross-border transact ons n a broad array o ndustr es med a/commun cations transportat on, uti ities, general ndustria and retai He jo ned Lazard rom Dresdner K einwort Wasserstein, where he held a number of sen or posit ons, inc uding Cha rman and Co-Ch ef Executive of the Americas and Co-Head of G obal Inves ment Bank ng Pr or to that, he was a found ng partner of he boutique investment bank Wasserstein
Pere la & Co , serv ng as i s Cha rman and Ch ef Execut ve Officer rom 1996 unti its sa e ear y in 2001 H s talk or ILE focused on h s exper ences n starting and bu ld ng Wasserstein Pere a & Co and ultimately sel ng t or $1 37 bi ion
More recently B ond has p ayed a key role at Lazard as part of the team that assumed contro and took he company public Known as the wor d’s preem nent advisory investment bank
Lazard has offices in 16 countries around the g obe The firm prov des adv sory services ncluding mergers and acqu s tions asset management and restructuring to corporations parnerships nstitutions governments and nd v dua s
B ond has a part cular expertise n advising ndependent directors in conflict s tuat ons When a parent company seeks o acquire a partia ly owned subs d ary, current prac ice requires tha the subsid ary board appoint a special comm ttee of independent d rectors to ook after the interests o minority shareholders For these commit ees to fu fil their responsib l t es they need ndependent and expert investment bank ng adv ce Whom do they ca ? Mike B ondi
Michae Biondi began h s M&A career as a awyer at Skadden Arps, Slate, Meagher & F om He holds both an M B A rom The Wharton Schoo and a J D from Penn Law
“Once you ve done something entrepreneur a , once you ve met a payroll once you’ve been responsib e for hundreds of peop e who’ve been wil ing to fol ow you into battle whether r ghtly or wrong y t is very hard to go to work at a b g bureaucratic organizat on. .. And it’s that spark, it s that essence it’s that fee of a small firm that keeps me do ng th s ..the thri l of both counseling people over the long run and staying cutting edge with what s go ng on n your bus ness I wouldn t be doing this today i I didn’t have a p ace where I could be do ng both of those th ngs ”
Past Law and Entrepreneurship Lectures
26 October 2005
Founding and Bui d ng a New Venture:
The Story o the Nat onal Women’s Law Center
Marc a Greenberger
Founder and Co-Pres dent
Nationa Women s Law Center
7 Apr l 2005
A Swing of the Pendulum:
20 Years in M&A
Joseph D. Gatto
Manag ng D rector
Go dman, Sachs & Co
24 March 2004
The WNBA and Women’s Team Sports A New Sports Marketing Proposition or the New Mil ennium
Va Ackerman
President
Women’s Nationa Basketba l Associat on
30 October 2003
The Ro e o Entrepreneurship in Urban Educat on: Past, Present and Future
James E. Nevels
Cha rman and CEO
The Swarthmore Group, Inc
Cha rman, Ph ladelph a School
Reform Comm ssion
6 November 2002
Publ c Trust and Distrust
n American Business
What Needs to be Done
Peter G Peterson
Cha rman, The Blackstone Group
Cha rman, Federa Reserve Bank of New York
Co-Cha r, Con erence Board
Comm ss on on Publ c Trus and Private Enterpr se
26 September 2002
What They Did Not Teach Me
n Law School
Robert M. Potamkin
Co-Cha rman and Co-CEO
Planet Automotive Group, nc
19 Apri 2002
Smart Peop e Making and Los ng
Money Some Recent Examples
Perry Go kin
Koh berg Kravis Roberts & Co
25 October 2001
The Economics of Sports Team
Franch ses for Cities
Hon. Edward G. Rende l
Governor Commonwea th of Pennsy van a [ ormer Mayor City of Ph ladelph a; former Genera Chair Democrat c Nat onal Comm ttee]
21 February 2001
Private Equity: D fficult Investing in a D fficult Time
Paul S. Levy
Sen or Managing D rector
Joseph L ttle ohn & Levy
2 March 2000
Perspectives on the Health Care Revo ut on
Char es A He mbold Jr
Chairman and CEO
Br sto -Myers Squ bb Company
18 November 1999
Ethics in Sports: Deciding the Game
An ta DeFrantz
V ce President
Internat onal Olympic Comm ttee
Pres dent Amateur A h etic Foundation
23 October 1997
How to Maintain Entrepreneur al Values Whi e Your Company
Cl mbs nto the Fortune 500
Brian L Roberts
Pres dent
Comcast Corpora ion
27 March 1997
The Unique Impact of the Law on the Leveraged Buyout Business
Saul A Fox Fox Pa ne &Company, LLC
Distinguished Jurist Lectures
11 October 2006
The Embattled Corporat on
Hon Richard A Posner
U S Seventh C rcuit Court of Appeals and University of Ch cago Law Schoo
as an academ c and as a judge, s one o the pioneers o Law and Economics In numerous books, artic es and jud c al opinions, he has exam ned egal issues through the ens of economic ana ysis
He came to Law and Economics ndirectly after graduating from Ya e Co lege n 1959, summa cum aude unior Ph Be a Kappa and an Eng ish major Three years ater, after graduatng rom Harvard Law School first in his c ass magna cum laude, and presdent o the Law Review, he went to work n Washington as aw clerk to Just ce Wi liam J Brennan,Jr , as an assistant o Comm ss oner Ph lip E man of the Federal Trade Comm ss on, as an assistant to the So ic tor General of he U S , Thurgood Marsha l and as general counsel o Pres dent Johnson’s Task Force on Commun cations Po icy Posner entered aw teaching n 1968 at Stanford as an assoc ate professor and became professor o aw at the Univers ty o Ch cago Law Schoo n 1969, where he remained ( ater as Lee and Brena Freeman Professor o Law) unti his appo ntment to the Seventh Circu t n 1981 During this period Posner wro e a number o books ( ncluding Ant trust Law An Econom c Perspective Economic Ana ysis of Law and The Economics of Justice) and many artic es exp oring the appl cat on o econom cs to a varie y of legal sub ects, ncluding ant trust, public u i i y and common carrier regu at on torts contracts and procedure He founded the Journa of Lega Studies primar ly to
encourage economic analys s of law and was a research associa e of he Nat ona Bureau of Econom c Research
In his ta k for ILE Posner discussed the ways n which h s thoughts on aw and economics have changed s nce Econom c Ana ys s o the Law was first published and h s current thoughts on executive compensation organizat ona dynamics, and irrat onal ty n the market
Posner became a Judge of the U S Court o Appeals for the Seventh C rcuit in December 1981 and served as Ch ef Judge rom 1993 to 2000 He has wr tten almost 2200 pub ished ud cia opinions He cont nues to teach part time at the Univers ty of Chicago Law Schoo where he is Sen or Lecturer, and to wr te academic articles and books He has wr tten 38 books and more than 300 articles and book rev ews H s academic work s nce h s becom ng a udge has inc uded stud es in the econom cs of crim nal law abor aw, and inte lectua property; in urisprudence aw and literature, and the nterpretat on o const tutional and statutory texts; and in the economics o sexua ity and of old age
“The stock option is not a very talored way o mot vat ng ch ef executive o ficers to do their best because a lot of things af ect the price of stock other than the ef orts of the CEO. To tie a CEO’s income to the va ue of his company’s stock is a ittle like i the sa ary o the President o the United States was tied to the GNP ”
16 March 2006
Techno ogy Mergers n a Shr nking Wor d
Hon Vaughn R Wa ker Ch ef Judge
U S D strict Court for the Northern District of Cal fornia
Hon Vaughn R Wa ker became a edera udge n 1990 after hav ng been nom nated by Pres dents Reagan and George H W Bush and confirmed by the Senate He studied aw at the Univers ty o Chicago and Stanford and practiced aw in San Franc sco, hand ing antitrust and other business cases from 1972 unt l h s appo ntmen o he bench
As a federal udge, Wa ker has been descr bed as “a pioneer who understands business aw ” In h s Distingu shed ur st ta k he shared nsights ga ned n pres d ng over he Oracle ant trust tr al and o her h ghprofi e it gation involving mergers and
nte lectual property issues in hightech compan es (such as the andmark case that p tted Apple Computer against Microsof ) H s ecture focused on he mp ica ions for antitrust merger analysis of the ncreasing importance of ntel ectual property ( e , technology) n commercia activ ty and the impact of global zat on
3 March 2005
“In an industry whose products der ve the r va ue from the r intelectual or conceptual content not from their physica character stics the trad t ona too s we’ve used in merger analys s are much ess useful. They don’t fit the kinds of dynam cs that a techno ogy industry d splays in quite the same way that the traditiona physical k nd of product fits those standards We ve seen that udges in our courts have approached these merger cases w th a hea thy skeptic sm. Th s I th nk has been a wholesome deve opment that eventual y may spur and forward the search for a more workab e metr c of competition in a fast-changing shrinking wor d ”
Corporate Federa ism: Event Horizons in Corporate Governance Hon Myron T. Steele Chie Justice Delaware Supreme Court
The Honorab e Myron T Steele s a ormer Vice Chance lor of the Delaware Court of Chancery Resident Judge of Super or Court, Deputy A torney Genera , Senate (De aware) A torney and Cha rman of the Consumer Af airs Board He has presided over ma or corporate it gat on, LLC and l mited partner governance d sputes and he writes requent y on issues of corporate document nterpretation and corporate governance He has publ shed over 300 opinions d spos ng of disputes among members of imited l abi ity companies and imited partnerships and between shareholders and management of both pub icly traded and c osed corporat ons
In his talk, Ch ef Justice Steele descr bed how the federal government s des re to protect shareholders n corporat ons has ed to a “one-s zefits-al regu atory model” hat s often ess sens tive to a corpora ion s part cular situation than the corresponding s a e laws wou d be As ear y as the Secur ties Act of 1933 and the Exchange Act of 1934 the federal regulat on of corporations has been
“The arger the federal presence the less scope to the states’ radical y different approaches and the r influence in shaping corporate governance L ke b ack ho es the federal government s gravitational pull inevitably swa lows everyth ng n ts path.”
creep ng urther and further into the domain of ndividua states’ regula ion he said
He sees the Sarbanes-Ox ey Act passed in 2002 in response to corporate financ al and account ng scanda s, as a roub ing harb nger of growing federal control Since 2002, corporations have spent $8 b l on attemp ing to comply with the new restr ct ons, the Chie Just ce said, and he expressed concern that there wou d be further costs not only in direct comp iance expend tures, but in osses rom restricted bus ness practices
28 Oc ober 2004
A Twe ve-Year Retrospect ve on Delaware Corporate Jurisprudence and Governance Issues Hon E Norman Veasey Chie Justice Delaware Supreme Court 1992–2004
Chie Justice Veasey presented “a thema ic ook through the rear-v ew mirror” of some of the De aware Supreme Court decisions handed down during a term tha began in Apri of 1992 and ended n the spring of 2004 He d scussed changes durng his time on the bench n l ab l ty exposure o d rectors; standards of conduct and standards of review; trends in fiduciary duty law and the evo ving expecat ons of directors, nc ud ng good fa th dea protection duty of disclosure der vat ve suits; the role of best pract ces and federal sm vs edera izat on n summ ng up his observations across a l of these areas he offered the over-arch ng conclus on that “the corporate governance reg me depends on an act ve board, and it works on y when peop e of ntegrity operating in the right corporate culture make t work The system depends on trust n peop e espec a ly the d rectors, regulators and courts ” Dur ng Mr Veasey s tenure as Chie Justice, the U S Chamber of Commerce ranked De aware’s courts first n the nat on for three consecut ve years for their fa r, reasonab e and e fic ent l tigat on environment Chie
Just ce Veasey has a so been credited wi h ead ng nationw de programs to
restore profess onal sm to the pract ce o law and adopt best pract ces n the runn ng of America’s courts
Current y E Norman Veasey is a senior partner at Wei , Go sha & Manges, serving as a strateg c advisor to the firm’s roster of prom nent globa c ients on a w de range of issues re ated to mergers and acquisitions, restructuring and l tigat on Add tiona ly, he advises on corporate governance issues nvo ving the responsibi it es of corporate direc ors in complex financ al transact ons and cris s management He s a member o the ILE Board of Advisors
“The best way to demonstrate that federal ntervention into the internal affairs o corporations s unnecessary and undesirable is for boards o d rectors gu ded by business lawyers to continue what the Delaware udges have consistently encouraged, which s the quest for best practices of due care loyalty good fa th, independence, construct ve skepticism and demanding tota understand ng before act ng ”
Richard Posner,
11
4
Past Distinguished Jurist Lectures
27
6
29
The Honorable
U
24
Usua ly Lose?
The Honorab e Diane Wood
U S Cour o Appea s for the
12 February 1998
The Va ue of Predictabil ty in Corporate Law
The Honorable E. Norman Veasey Chief Jus ice De aware Supreme Court
11 February 11 1997 What Economics of Law Must Address Next Some Thoughts on Theory
The Honorable Gu do Calabresi
U S Court of Appea s for the Second Circuit
7 February 1996
The MTV Const tution
The Honorable Alex Koz nsk
U S Court of Appea s for the N nth C rcu t
22 March 1995
Accountab lity: Popu ar Wi l, Interest Groups, or the Invis b e Hand
The Honorable Stephen F Wi l ams
U S Court of Appea s for the D strict of Columb a
13 Apri 1994 On the Const tut on The Honorable Anton n Scalia Assoc ate Justice, U S Supreme Court
14 October 1992
Nonpr ce Competition
The Honorable Douglas H G nsberg
U S Court of Appea s for the D strict of Columb a
3 December 1991 Corporate Takeovers and Our Schizophren c Conception of the Corporation
The Honorable Wi l am T A len Chance lor
De aware Court of Chancery
1990
The Const tution and the Spir t of Freedom
The Honorable Anthony M Kennedy
Assoc ate Justice
U S Supreme Court
Major one- and two-day symposia are organized under the sole sponsorship of the Institute for Law and Economics, and in cooperation with other organizations within the Law School and Wharton In February 2005 we launched an annual conference on Law and Finance, jointly sponsored by ILE, the Wharton Finance Department, and the Center for Law and Business at NYU Law School, and the Stern School Finance Department The conference location alternates between Penn and NYU.
In October 2002 ILE debuted the first installment in the new ILE/Wharton Finance series, providing an opportunity for faculty and advanced students from the Law School, the Wharton School, and the Department of Economics to come together around an area of common interest and strengthening the Institute’s core academic relationships A dinner follows each presentation, with commentary presented by members of ILE’s Associate Faculty from Law, Wharton Finance, and the Department of Economics and a general discussion. This series continued with two seminars during 2006–2007 ILE and Finance alternate in selecting speakers, and the venue for the presentations alternates between the Law School and Wharton The organizers of the series are Michael Wachter (Law) and Andrew Metrick (Wharton).
ILE Seminars provide an opportunity for scholars from the University of Pennsylvania and elsewhere to present provocative ideas on timely issues and a wide range of subjects. All participants are invited to engage in give-andtake with the presenter, an interchange that is a hallmark of these workshops. Papers, which are usually works in progress, can be downloaded from the ILE Web site at www.law.upenn. edu/ile/seminarseries.html, and copies are provided to faculty and advanced students upon request. The 2006–2007 ILE Seminar Series was organized by Professors Matthew Adler and Chris William Sanchirico
3 During the 2006–2007 academic year Michael Knoll (Penn Law and the Wharton School), Chris William Sanchirico (Penn Law and the Wharton School), and Reed Shuldiner (Penn Law), with funding from the University of Pennsylania Provost’s Office, ran a Seminar on Tax Policy and Public Finance. As part of that seminar, six prominent tax academics and one high-ranking government official were brought to the
Bruce Si verste n Young Conaway Stargatt & Tay or right, Andrew Metrick The Wharton School
Marce Kahan New York Univers ty Schoo of Law; Gerald Rosenfeld, Rothsch ld North Amer ca
Wharton Schoo ; Michael Roberts The Wharton Schoo
NYU/Penn
Conference on
Law and Finance
23–24 February 2007
Chair:
Stern
Session
Inst
Martijn Cremers
Ya e Schoo o Management
Roberta Romano
Commentator
Chair:
Stern
New
University
University
School
University of Pennsylvan a
Commentator
Michael Barr
The Un vers ty o M chigan Law Schoo
Chair: Andrew Metr ck
The Wharton School
University of Pennsylvan a
Session V Pay Distribut on in the Top Executive Team
Lucian Arye Bebchuk
Harvard Law Schoo
Martijn Cremers
Ya e Schoo o Management
Urs Peyer
INSEAD
Commentator
Steve Kaplan
The Un vers ty o Chicago Graduate
School of Business
Chair: Andrew Metr ck
The Wharton School
University of Pennsylvan a
Session VI
Corporate Financing Decisions
When Investors Take the Path of Least Resistance
Malco m Baker
Harvard Business Schoo
Nat onal Bureau of Econom c Research
Joshua Coval
Harvard Business Schoo
Nat onal Bureau of Econom c Research
Jeremy C. Stein
Harvard University, Econom cs Department
Nat onal Bureau of Econom c Research
Commen ator
Robert M Da nes
S anford Law School
Chair
Edward B. Rock
University of Pennsylvan a Law School
Session VII
D d Re orm of Prudent Trust
Investment Laws Change Trust Portfo io A location?
Max M Schanzenback
Northwestern Univers ty School o Law
Robert H S tkoff
New York University School o Law
Commentator
W ll am N Goetzmann
Ya e Schoo o Management
Chair:
Edward B. Rock
Univers ty of Pennsy vania Law School
Session VIII
Who Blows the Whist e on Corporate Fraud?
Alexander Dyck
Rotman Schoo o Management
University of Toronto
Ada r Morse
The Un vers ty o M chigan
Luigi Zinga es
The Un vers ty o Chicago Graduate
School of Business
Nat onal Bureau of
Econom c Research
Centre for Econom c Po icy Research
Commentator
Jeffrey N Gordon
Columbia Law Schoo
Chair: Kose John
Stern Schoo of Bus ness
New York University
Penn/NYU
Conference on Law and Finance
24–25 February 2006
University of Pennsylvania
Law School
Jo nt y sponsored by
Inst tute for Law and Economics
Un vers ty of Pennsy vania
Financia Institutions Center
The Wharton School
Center for Law & Business
New York University
Organized by Yakov Amihud
Stern Schoo of Business
New York University
Marce Kahan
New York University Schoo of Law
Andrew Metrick
The Wharton School
Un vers ty of Pennsy vania
Michae L. Wachter
Un vers ty of Pennsy vania Law School
Session I
Ex Ante Choices of Law and Forum:
An Empirica Ana ysis of Corporate Merger Agreements
Theodore E senberg
Corne University Law Schoo
Geoffrey P. Mi ler
New York University Schoo of Law
Commentator
Matthew Rhodes-Kropf
Co umb a Un versity
Graduate School of Bus ness
Moderator
Merritt B. Fox
Co umb a Law Schoo
Session II
Is F nanc al Contract ng Costly?
An Empirica Ana ysis of Debt
Covenants and Corporate Investment
Sudheer Chava
C T Bauer School of Business
Un vers ty of Houston
Michae R Roberts
The Wharton School
Un vers ty of Pennsy vania
Commentator
Michae K ausner
Stan ord Law Schoo
Moderator
Andrew Metrick
The Wharton School
Un vers ty of Pennsy vania
Session III
Bottom-Up Corporate Governance
Augustin Land er
Stern School of Business
New York Univers ty
Dav d Sraer
CREST & GREMAQ
Dav d Thesmar
HEC Par s (Groupe HEC) & CEPR
Commenta or:
Ehud Kamar
University of Southern Ca iforn a, Law Schoo
Moderator:
Ji l Fisch
Fordham Un versity School of Law
Session IV
Lega Origins and Stock Markets in the Twentieth Century
Mark J. Roe
Harvard Law Schoo
Commenta or:
Lu g Zinga es
The Un vers ty of Ch cago
Gradate School of Bus ness
Moderator:
H. Frank in Al en
The Wharton Schoo
University of Pennsy van a
Session V
The Law and Econom cs of Se f-Dea ing S meon Djankov
The Wor d Bank
Rafael LaPorta
Dartmouth Col ege
Florencio Lopez-de-S lanes
University of Amsterdam
Andrei Sh eifer
Harvard Univers ty
Commenta or:
John C. Coates
Harvard Law Schoo
Moderator:
M chael L Wachter
University of Pennsy van a Law Schoo
Session VI
How Law Affects Lending
Rainer Haselmann
Leipzig Graduate School of Management
Kathar na Pistor
Columbia Law Schoo
V krant Vig
Graduate Schoo of Bus
Columbia Univers
Commenta or:
V ra V Acharya
London Business Schoo
Moderator:
Bernard Black
University of Texas
Session VII
Hedge Funds in Corporate
Governance and Corporate Contro
Marce Kahan
New York Un versity School of Law
Edward B Rock
Univers ty of Pennsylvania Law School
Commentator:
Laura T. Starks
McCombs School o Business
Univers ty of Texas at Aust n
Moderator
Wi liam T A len
New York Un versity School of Law
Co-Sponsored by
Inst tute for Law and Economics
and Depar ment of Finance
The Wharton School
22 March 2007
Law and the Market:
The Impact of En orcement
John C Cof ee Jr
Adol A Ber e Professor of Law
Co umbia Un vers ty Schoo of Law
Commentators:
Phi ip Bond
Wharton Finance
J l F sch
Fordham University School of Law
Penn Law (v sit ng)
Wayne R Guay
Wharton Finance
Tobias B. Wo ff
Penn Law
This paper exp ores the poss ble re at onship between the intensity of enforcement efforts by securit es reguators in selected nat ons and (i) he cost o equ ty cap ta by nation and ( i) the extraord nary l st ng premium hat non-U S firms exhibi upon cross-l stng on a U S exchange En orcement
ntens ty may dissuade issuers from entering a particu ar market and thus may be responsib e for the asserted decl ne in the “compet tiveness” o the U S cap tal markets
This paper suggests that one lega variable the eve of en orcement
does distingu sh ur sdictions n a manner that can expla n national d f erences n the cost of capital (especia ly between common law and civi aw countr es) and that may he p expla n financial development Because enforcement ntensity appears to play a dual ro e, both enhanc ng share value for foreign ssuers that cross-l st nto a high enforcement egal reg me and deterr ng many ore gn issuers from en ering high enforcement ur sdic ions, reasonab e persons m ght d sagree about whether the best policy response is to ncrease or re ax it
30 November 2006
Who Blows the Whist e on Corporate Fraud?
(co-authored w th A exander Dyck and Adair Morse)
Luigi Zinga es Robert C McCormack Pro essor
o Entrepreneurship and F nance
The Un vers ty o Chicago Graduate School of Business
Commentators
Ad ti Bagchi
Penn Law
John E Core Wharton F nance
Andrew Metr ck Wharton F nance
Edward B. Rock Penn Law
The arge and numerous corporate frauds that emerged n the United States at the onset of the new mi lenn um have provoked an mmediate leg slative response n he Sarbanes
Ox ey Act (SOX) Th s aw was predcated upon the idea that the nstitutions designed to uncover fraud had fa led, and their ncent ves as we l as their mon tor ng shou d be increased
The pol tica mperat ve to act quick y prevented any empir cal ana ysis to subs ant ate the aw’s premises
The authors gathered data on a comprehens ve sample of al eged corporate rauds n compan es wi h more than 750 m l ion do lars in assets that took p ace between 1996 and 2004
Through an extens ve reading of each fraud s his ory, they identified who was involved n the reve ation o the fraud and what were the c rcumstances tha lead to ts detect on In par icular they stud ed the source o the information and the ncent ves detectors face in br ng ng the raud to ight
The authors found that no spec fic actor dom nates the revelat on o fraud
The SEC accounts for on y 6 percent Even us ng the most comprehensive and generous nterpretat on, the revelat on can be a tributed to shortse lers in only 9 percent of the cases Financ al ana ysts and auditors do a ittle better (respective y 15 and 14 percent o the cases) but they hard y dom nate the
scene More surpris ng s the key ro e played by ac ors who lack a governance mandate, such as emp oyees (19 percent), the media (15 percent), and industry regu ators (15 percen )
Having identified the wh st e blowers the au hors then invest gated the cost-benefits trade of they ace Overal , ana ysts, ournal sts aud ting firms, and emp oyees who br ng raud to ight do not seem to be rewarded n mone ary or n career terms n act, cond tional on a fraud being committed auditing firms are more ikely to ose the ob when they revea i than when they do not The on y except on s employees who reveal a fraud aga nst the government to ava l themse ves of the qui tam statute, which guarantees
a percentage of he money recovered by the government Genera iz ng rom these resu ts the authors arr ved at wha m ght be ca led a paradox o wh st e blowing: those w th the best access to n ormation have weak ncent ves to b ow the wh st e and are most active whi e those w th less access to n ormation have better ncent ves and are east act ve This paradox has mportant po icy impl cat ons rather than increase the layers of mon tors (as done in SOX) it would be more cost effective to increase the reward for people o come orward
ILE/Finance Seminars
6 Apri 2006
The States as Laboratory
Legal Innovation and State
Competit on for Corporate Charters
Roberta Romano
Al en Duffy/C ass of 1960
Professor o Law
Yale Univers ty Law School
Commentators
R chard E Kihlstron
Wharton F nance
Andrew Metrick
Wharton F nance
Chris W. Sanchirico
Penn Law
Bruce L. Si verste n
Young Conaway Stargatt & Tay or
20 October 2005
Creating Constituencies for Reform
Raghuram G Ra an
Econom c Counse lor and Director, Research
Internat ona Monetary Fund
Commentators
Wil iam W Burke-White
Penn Law
Robert P. Inman
Wharton F nance
Jason Scott Johnston
Penn Law
B lge Y lmaz
Wharton F nance
31 March 2005
What Matters n Corporate Governance?
Lucian Arye Bebchuk
Harvard Law Schoo
Commentators
Hulya Eraslan
Wharton F nance
Andrew Metrick
Wharton F nance
Edward B Rock
Penn Law
Dav d A Skeel
Penn Law
11 November 2004
Venture Cap ta Investment Cycles
The Role of Experience and Specia ization
Pau A Gompers
Graduate Schoo
o Business Administrat on
Harvard Univers ty
Commentators:
Rafi Am t
Wharton Finance
Sean Griffith
Penn Law (v sit ng)
Richard Kih strom
Wharton Finance
Polk Wagner
Penn Law
21 Apri 2004
The State o U.S Corporate Governance:
What s R ght and What’s Wrong
Steven Kap an
Graduate Schoo o Business
University o Chicago
Commentators:
Frank in Al en
Wharton Finance
Andrew Metr ck
Wharton Finance
Katharina P stor
Penn Law (v sit ng)
9 October 2003
Understanding Mater al Adverse
Change C auses
Mora Hazard n Acquis tions
(co-authored with A an Schwartz)
Ronald J. Gi son
Columbia Law School and Stanford Law Schoo
Commentators:
Frank in Al en
Wharton Finance
Krist n Madison
Penn Law
Andy Post ewaite
Penn Economics
31 October 2002
Law and Finance The Pract ce of Justice
Andrei Sh eifer
Harvard Univers ty
Commentators:
Richard E. Kih strom
Wharton Finance
Michael S. Knol
Penn Law
Jason Scott Johnston
Penn Law
Andrew Metr ck
Wharton Finance
12 Apri 2007
Mandated Medical Leave n the Workp ace
Christine Jol s Professor of Law Yale Law School
15 March 2007
Complet ng Contracts n the Shadow of Costly Verification
A bert Cho
Professor of Law
Associate Director, John M Ol n Program in Law and Economics
Un vers ty of Virginia Schoo o Law
1 March 2007
Unconsc ous Pre udice and Accountabil ty Systems
What Must Organizat ons Do to Check Impl cit B as?
Gregory M tchel
Professor of Law
E ames Kel y Jr -C ass of 1965
Research Professor
Un vers ty of Virginia Schoo o Law
15 February 2007
The Enduring Prob em of WTO Export Subsid es Rules
(with Andrew Green and Vivien M lat)
Michae Trebi cock
Un vers ty Professor
Faculty of Law
Un vers ty of Toronto
9 November 2006 Of sett ng R sks
Ar el Porat
A ain Poher Professor of Law
Tel Aviv University Facu ty of Law
Vis ting Professor of Law
Un vers ty of Ch cago
12 October 2006
Mandatory versus Vo untary
Disc osure of Product Risks (with Steven Shave )
A M tchel Po insky
Joseph ne Scott Crocker Pro essor of Law and Econom cs Stan ord Law Schoo
14
L sted below is a samp ng of recent y pub ished papers and work in progress by members of the Associate Facu ty of the Inst tute for Law and Economics ILE maintains a series of research papers and prov des copies e ectronic or paper to interested parties upon request to vhewit @ aw upenn edu
The Ins itute is a member of the Lega Scho arsh p Network (LSN), a subset of the Socia Sc ence Research Network
Current ILE research papers are posted n the Un versity of Pennsylvan a Law and Economics Research Paper Series on the LSN Web site Abstracts as wel as comp ete papers can be down oaded (http //www ssrn com/ ink/penn-lawecon htm )
Faculty appo ntmen s are n the Un vers ty o Pennsy vania Law Schoo un ess otherwise noted
Matthew D Ad er Leon Me tzer Professor o Law
Risk Equity: A New Proposal Harvard Environmenta Law Review forthcoming 2008
New Foundat ons o Cost-Benefit Analysis (co-authored with Eric Posner), Harvard University Press, 2006
Po icy Ana ysis or Natura Hazards
Some Caut onary Lessons from Environmental Pol cy Ana ysis Duke Law Journal, 2006
Frank in Al en N ppon L fe Professor of F nance and Pro essor of Econom cs The Wharton Schoo
Understand ng Financ al Cr ses, (w th D Ga e), Oxford Univers ty Press 2007
Beauty Contests Bubb es and Iterated Expectat ons in Asset Pr ces (w th S Morris and H Shin), Rev ew of Financ a Stud es, 2006
Large Investors Pr ce Man pu ation, and Limits to Arbitrage An Anatomy of Market Corners (with L Litov and J Mei), Review o F nance, 2006
Adit Bagchi
Assistant Professor of Law
Variet es of Emp oyee Ownership: Some Unintended Consequences of Corporate Law and Labor Law
Un vers ty o Pennsy vania Journa of Bus ness and Emp oyment Law forthcoming
The Accidental Prom se Remak ng the Law o M srepresented ntent, University of Il inois Law Rev ew, forthcoming
Howard F. Chang
Ear e Hepburn Professor of Law
The Effect of Jo nt and Several Liabi ity under Superfund on Brownfie ds (w th Hi ary S gman), International Rev ew of Law and Economics, forthcom ng
Cultural Communit es n a G oba Labor Market Imm gration
Restr ct ons as Res dent al Segregat on, University of Ch cago Legal Forum, orthcom ng 2007
Cary Coglianese
Edward B Shi s Pro essor of Law and Professor of Pol tical Sc ence
Legit macy and Corporate Governance, Delaware ournal of Corporate Law 2007
Leverag ng the Private Sector: Management-Based Strategies for Improving Environmenta Performance (w th Jenn fer Nash), Johns Hopkins University Press/Resources for the Future Press, 2006
John E Core
Assoc ate Pro essor of Accounting
The Wharton School
Can D fferences in U S and U K CEO Pay Be Exp ained by Di ferences in Equity Incent ves? (w th W Guay and M Conyon) Work ng Paper
Agency Problems of Excess Endowments in Not- or-Profit F rms (w th W Guay and R Verd ) Journa of Accounting and Economics 2006
Is U S CEO Compensation Inefficient Pay W thout Performance? A review of Pay Without Performance The Unfu filled Prom se of Executive Compensat on by Luc an Bebchuk and Jesse Fried (with W Guay and R Thomas), Mich gan Law Rev ew, 2005
Gerald R Fau haber
Professor o Bus ness and Publ c Pol cy and Management
The Wharton Schoo
Professor of Law
Network Neutral ty: The Debate Evo ves Internat ona Journa of Communicat on forthcom ng 2007
So ving the Interoperabi ity Problem Are We on he Same Channe ?, Federal Communicat ons Law Rev ew, orthcom ng 2007
F le Sharing, Copyr ght, and the Optima Production of Mus c, M ch gan Te ecommunicat ons and Technology Law Review 2006
Lawrence A Hamermesh
Ruby R Vale Professor of Corporate and Business Law Widener University School o Law
The Short and Puzzl ng L fe of the “Impl c t M nor ty Discount” n Delaware Appraisa Law (with Michae Wachter) Un vers ty o Pennsy vania Law Review forthcom ng
The Fa r Value o Cornfields in De aware Appra sa Law (w th Michael Wachter), Journa of Corporat on Law, 2006
The Policy Foundat ons of De aware Corporate Law Co umbia Law Review 2006
R chard J Herr ng Jacob Safra Pro essor of Internationa Bank ng Professor o Finance
The Wharton Schoo Co-Director Wharton F nanc al Inst tutions Center
The Case of the M ssing Market: The Bond Market & Why t Matters or F nanc al Development (with Nathporn Chatusr pitak) n Recent F nanc al Crises Analysis Chal enges and Impl cat ons Edward Elgar Pub ish ng 2006
Implemen ing Base II Is the Game Worth the Candle?, F nanc al Markets, Institutions & Instruments 2005
Robert W Holthausen
The Nomura Secur t es Company
Pro essor, Pro essor of Accounting and F nance and Management and Cha rman, Account ng Department The Wharton Schoo
Testing the Relative Power o Accounting Standards versus Incentives and Other Inst tut onal Features to Influence the Outcome of F nanc a Reporting in an Interna iona Se ting 36 Journa of Account ng & Economics December 2003
Robert P Inman
Richard K ng Mel on Pro essor; Pro essor of Finance, Economics, Bus ness and Pub ic Po icy, Real Estate
The Wharton Schoo
Why Federa sm?, CESifo Econom c Stud es forthcoming 2007
F nanc ng Cit es, in A Compan on to Urban Economics, B ackwe Pub ish ng 2006
Federal sm and the Democrat c Transit on: Lessons from South A rica Amer can Econom c Rev ew, Papers and Proceed ngs, 2005
Jason Scott Johnston
Robert G Fu ler Jr Professor of Law and Director Program on Law, the Env ronment and the Economy
Desperate y Seeking Numbers: G oba Warming Spec es Loss and the Use and Abuse of Quantification in C mate Change Po icy Analys s Un versity of Pennsy van a Law Rev ew, forthcoming 2007
Fashioning Entitlements: A Comparat ve Law and Economic Ana ysis of the Jud c a Ro e in Environmental Centra izat on in the U S and Europe (with Michael G Faure) n Respons bi ity and Governance, Edward Elgar Publish ng orthcom ng 2007
The Return of Barga n An Econom c Theory of Standard Form Contracts and the Negotiat on of Bus ness Re ationsh ps, M chigan Law Rev ew, 2006
Leo Katz
Frank Carano Professor o Law
A Theory o Loopho es, Working Paper, 2007
In De ense o Tax Shelters V rg n a Tax Review 2007
Richard E. Kihlstrom
Ervin M l er-Arthur M Freedman
Professor of F nance and Econom cs Chairman Finance Department
The Wharton School
R sk Aversion and the E asticity of Substitut on n General Dynamic Portfol o Theory Cons stent Planning by Forward-Looking, Expected Uti i y Maximiz ng Investors, Working Paper, 2007
Takeover De enses and Manager al Incent ves Under A ternat ve Legal Regimes (w th M chael L Wachter) 2006
Michael S Kno l
Theodore K Warner Professor of Law Professor of Real Estate
The Wharton School
Imp ic t Taxes and Economic Substance: A Rep y Tax Notes 2007
Imp ic t Taxes and Pretax Profit in Compaq and IES Industries, Tax Notes, 2007
Fr edrich K. Kübler
Professor and D rector of the Banking Law Institute Emeritus University of Frankfurt, Germany
Professor of Law
Recht und Sozia wissenschaften Herausforderungen und Chancen der Verhaltensökonomie (Law and Soc al Sciences the Chal enge and the Prom se of Behavioral Economics) (w th Doro hea Kub er) Krit sche V erte jahresschri t für Gesetzgebung und Rechtsw ssenscha t, 2007
Gesel schaftsrecht (comprehens ve treat se of German corpora e law), w th Hans-D eter Assmann, 6th ed t on 2006
The Sh fting Parad gm of European Company Law The Columb a Journa o European Law 2005
Peter D. Linneman
Albert Sussman Professor o Rea Estate Finance, and Publ c Po icy The Wharton Schoo
A New Produc to ENHANCE
Shareholder Value: Bi urcat ng Land and Improvements to Generate Super or Returns (co-authored wi h Mukund Krishnaswam ), Wharton Rea Estate Review 2006
Revisit ng Return Profiles of Real Estate Investment Vehic es (co-au hored with Deborah Chan Moy) Wharton Real Estate Rev ew, 2005
Kr stin Madison
Assistant Professor of Law
Hospita Mergers in an Era o Qual ty
Improvement Houston Journal of Hea th Law and Po icy, forthcoming 2007
Regu ating Hea th Care Qual ty in an Informa ion Age, U C Davis Law Rev ew, orthcom ng 2007
George J Mai ath
Walter H Annenberg Pro essor n the Soc al Sc ences
Pro essor of Econom cs Schoo o Arts and Sc ences
Disappearing Pr vate Reputat ons n Long-Run Relationships (with Mart n W Cr pps and Larry Samue son), Journal o Economic Theory, 2007
Soc al Assets (with Andrew Postlewa te) International Economic Rev ew 2006
Repeated Games and Reputations: Long Run Relationsh ps (with Larry Samuelson), Oxford Un vers ty Press, 2006
Andrew Metrick
Associate Professor of F nance The Wharton Schoo
Venture Cap tal and the Finance o Innovation, John W ley & Sons, 2007
The Econom cs of Private Equi y Funds (with Ayako Yasuda), Working Paper 2007
Charles W. Mooney, Jr Charles A Heimbold Jr Pro essor of Law
The “Consumer Comprom se” in Revised UCC Article 9 The Shame “of It A ” , Oh o State Law Journal
2007
Secur ty Interests in Persona Property (w th S Harris), Foundation Press 2006
A Normative Theory of Bankruptcy: Bankruptcy As ( s) C vi Procedure, Washington & Lee Law Rev ew, 2004
David K. Musto Assoc ate Pro essor of Finance
Vote Trad ng and Informat on Aggregat on (w th Susan Chr stoffersen Chr s Geczy, and Adam Reed), ournal of F nance, for hcoming
Fai ure s an Option Imped ments to Shor -Se ng and Option Prices (with Rich Evans Chris Geczy and Adam Reed), Review of Financ al Studies orthcom ng
A Port o io View of Consumer Cred t (w th Nicholas Soule es), Journa of Monetary Economics 2006
G deon Parchomovsky Professor of Law
Tradable Patent R ghts (w th Ian Ayres) Stan ord Law Rev ew, orthcom ng 2007
Sa e Use Harbors (w th Kev n Goldman), V rginia Law Review, forthcoming 2007
Of Equa Wrongs and Half Rights (w th Peter S egelman and Steve Thel) NYU Law Review forthcom ng 2007
Mark V Pauly Bendheim Pro essor, Depar ment of Heal h Care Systems and Pro essor of Heal h Care Systems Insurance and R sk Managemen , and Pub ic Po icy and Management, The Wharton School Professor of Economics Schoo of Arts and Sciences; Co-Director Vagelos Li e Sciences and Management Program
Measures o Costs and Benefits for Drugs n Cost Effectiveness Ana ysis n Pharmaceutical Innovat on: ncentives, Competit on and Cost-Benefit Analysis in Internat ona Perspect ve, Cambridge Univers ty Press, 2007
The Demand for Hea th Insurance n the Group Sett ng Can You A ways Get What You Want? (with B J Herr ng) The Journa o R sk and Insurance 2007
Is H gh and Growing Spending on Cancer Treatment and Prevent on Harm u to the U S Economy?, Journal of C in cal Oncology, 2007
Andrew W Postlewaite Harry P Kamen Professor of Econom cs School of Arts and Sc ences Professor of F nance
The Wharton School
Reputat on and Rhe or c n E ections (with E Aragones and T Palfrey), Journa of the European Econom c Association, forthcoming
Courts of Law and Unforeseen Contingencies (w th L Anderl n and L Fel i) Journa of Law, Economics and Organization, orthcom ng
Socia Assets (with G Mailath), International Economic Review 2006
Edward B Rock Saul A Fox Distingu shed Professor of Bus ness Law; Co-D rector, nst tute or Law and Economics; Assoc ate Dean Un vers ty of Pennsy van a Law Schoo
Hedge Funds n Corporate Governance and Corporate Contro (with Marcel Kahan) Un versity of Pennsylvania Law Rev ew, 2007
Symbiot c Federal sm and the Structure of Corporate Law (with Marce Kahan), Vanderb lt Law Rev ew, 2005
Chris W Sanchir co Pro essor of Law Pro essor of Business and Publ c Pol cy The Wharton Schoo
Progressiv ty and Potent al Income: Measur ng the Effect of Changing Work Pat erns on Income Tax Progressiv ty Work ng Paper, 2007
Inequa i y and Uncerta nty: Theory and Lega Appl cat ons University of Pennsylvania Law Rev ew, 2006
Detect on Avo dance NYU Law Rev ew, 2006
Reed Shuldiner Alv n Snow ss Pro essor of Law
Comment on “Does the United States Tax Cap ta Income ” n Tax ng Capital Income Brookings Inst tution and Urban Inst tute, orthcom ng 2007
Taxation of Risky Investments, 2005
David A. Skee , Jr. S Samuel Arsht Professor of Corporate Law
Who Makes he Ru es or Hos i e Takeovers and Why? The Pecul ar Divergence of US and UK Takeover Regu ation (w th John Armour), Georgetown Law ournal orthcom ng 2007
The Prom se and Per ls of Credit Deriva ives (w th Frank Partnoy), Un vers ty o C ncinnat Law Review orthcom ng 2007
Odious Deb or Od ous Regimes? (with Patrick Bo ton), Journal o Law and Contemporary Problems forth-
com ng 2007
Michael L Wachter W l iam B Johnson Professor of Law and Econom cs Co-Director Insti ute for Law and Econom cs
The Short and Puzz ing Li e of the “Implicit Minori y D scount” in Delaware Appraisa Law (w th Lawrence A Hamermesh) Univers ty of Pennsylvania Law Rev ew forthcom ng
Labor Unions: A Corporat st Institut on in a Competi ive World Un vers ty of Pennsy vania Law Rev ew, 2007
Susan M. Wachter R chard B Wor ey Professor of F nanc al Management; Professor o Rea Estate and Finance
The Wharton School Co-Director nst tute for Urban Research
What s a Tree Worth? Green-C ty Stra eg es and Hous ng Prices (with Grace Wong), Rea Estate Economics, forthcoming
The Inev tabi ity of Market-Wide Underpriced Risk (with Andrey Pav ov), Real Estate Econom cs 2006
Neighborhood Pa terns o Subpr me Lending: Ev dence from Disparate Cities (with Paul Ca em and Jonathan E Hershaff), Hous ng Pol cy Debate, 2005
R. Polk Wagner Professor of Law
The Federal Circui and Paten ab l ty An Empir cal Assessment of he Law o Obviousness (with L Petherbridge) Texas Law Review 2007
“A Teach ng Sugges ion or Mot vat on to Combine” Br ng ng Structure and Clar ty to the Obviousness Analys s, University of Pennsylvan a Law Rev ew, 2006
Comments on “Stea th Marketing and Editor al Integr ty ” Texas Law Rev ew, 2006
Amy Wax
Robert Mundheim Professor of Law
Group Justice, Social Wrongs and Ind v dua Respons bi ity, Hoover Institut on Monograph Ser es, forthcoming 2007
Too Few Good Men Po icy Rev ew, 2005/2006
Unique, L ke Everyone Else, Pol cy Review 2006
Matthew D. Adler
Leon Meltzer Professor of Law
Pro essor Adler is a graduate of Yale Co lege St Antony’s Col ege of Oxford Un vers ty and the Ya e Law School
Prior to teach ng at Penn he worked as a aw clerk for Judge Harry Edwards, U S Court of Appea s for the D C C rcuit and or Justice Sandra Day
O Connor U S Supreme Court, and pract ced law at Paul Weiss, Rifkind
Wharton & Garr son n New York City
At the Penn Law School Professor Ad er teaches adminis rative law, cons itutional aw, and regu at on His current research focuses on po icy analys s and on risk regulat on
Frankl n Allen
N ppon L fe Professor of F nance and Professor o Economics
The Wharton School
Frankl n Al en is the N ppon L fe
Pro essor of Finance and Pro essor of Economics at the Wharton School of the Un vers ty o Pennsy vania He has been on the acu ty s nce 1980 He s currently Co-Director of the Whar on Financia Inst tu ions Center and President o the Financ a Intermed at on Research Soc ety He was formerly V ce Dean and Director of Wharton Doctora Programs and Execut ve Editor o the Rev ew of F nancia Studies, one of the ead ng academ c finance ourna s He s a past President of the American Finance Associat on, the Western F nance Association and the Society of F nancial Studies He received his doctorate rom Oxford Un versity Dr A en’s main areas of interest are corporate finance, asset pr c ng financ a nnovation and compara ive financ a sys ems He is a co-author w th Richard Brealey and S ewart Myers of the e ghth edit on of the textbook Princ ples of Corporate F nance
Adit Bagchi
Assis ant Pro essor of Law
Pro essor Bagchi received a J D from Yale Law Schoo n 2003 and a M Sc n econom c and socia his ory from Oxford University in 2000 She clerked or Un ted States Court of Appeals
Judge Jul o Fuentes and pract ced law w th Cravath, Swaine & Moore LLP n New York She o ned the Penn Law acu ty in 2006 and current y teaches contracts and labor aw Her areas of research interest nclude norma ive theories o pr vate aw and comparat ve pol tical economy
E izabeth Ba ley
John C Hower Professor of Business and Pub ic Pol cy
The Wharton Schoo
Professor Bai ey received her Ph D n economics from Princeton University in 1972 From 1983 until 1990
Professor Bai ey served as dean o the Gradua e School of Industria
Adm n strat on at Carneg e Me lon University She o ned the Whar on facu ty in 1991 where she served as Chair Department of Business and Publ c Pol cy from 1997 to 2005 She served as head o the Econom cs Research Department and member of the Technical Staf at Bel Laboratories between 1960 and 1977 and was comm ss oner and vice-chairman o the Civi Aeroneut cs Board from 1977 unti 1983 She has served on the boards of many organizat ons nc ud ng the Brookings Insti ut on and Bancro t Neurohealth and she currently serves on the boards of A tria Group, Inc , CSX, TIAA/CREF and the Nationa Bureau of Economic Research Her research nterests concern pub ic po icies that af ect business particu arly those involv ng regula ion deregu ation, and corporate governance
Howard F. Chang
Ear e Hepburn Pro essor o Law
Professor Chang rece ved a Ph D in economics from the Massachusetts Institute of Techno ogy n 1992, a J D from Harvard Law Schoo in 1987 a Master in Publ c Affa rs from Pr nceton University n 1985, and an A B from Harvard Col ege in 1982 Pr or to joining the Penn facu ty n 1999, he was a Professor of Law a the University of Southern Ca i ornia Law Schoo , where he began teach ng n 1992 He was a V sit ng Professor of Law at Stanford Law Schoo n 1998 at Harvard Law School and at the New York Un vers ty School of Law n 2001, at the Universi y o M chigan Law School n 2002 and at the Un vers ty of Chicago Law School in 2007, and a Visiting Associate Professor of Law a the Georgetown University Law Center from 1996 to 1997 He served as a law clerk for the Honorab e Ruth Bader Ginsburg on the U S Court of Appeals for the D C Circu t from 1988 to1989 He served on the Board of Directors of the American Law and Economics Assoc ation from 2004 to 2007 He has written on a wide var ety of subjects nc ud ng env ronmenta protection, nternat onal trade mmigrat on, inte lec ua property and the economics of it gation and settlemen
Cary Cogl anese
Edward B Shi s Professor of Law and Professor of Pol tica Science
Cary Cogl anese is the Edward B Shi s Pro essor of Law and Pro essor of Po i ica Sc ence at the Un vers ty of Pennsylvania Law Schoo He s a so the director of the Penn Program on Regu ation and a sen or research feow a Harvard University’s John F Kennedy Schoo o Government H s work has appeared n journals such as the Duke Law ournal, Law & Society Rev ew and Stanford Law Rev ew Cogl anese s the founder and co-chair of he Law & Society Associat on’s nternat onal col aborat ve research network on regulatory governance, a vice cha r o the E-Rulemaking Comm t ee of he Amer can Bar Associat on s section on Administrative Law and Regu atory Practice, and a V ce Cha r of he nnovation Management Systems, and Trading Committee of the Amer can Bar Associat on’s sec ion on Environment Energy and Resources He is a so co-editor of the peer-reviewed ournal Regulation & Governance
Cogl anese rece ved his J D M P P , and Ph D in po it ca sc ence from the Un vers ty o M chigan and for twelve years served on the faculty o the John F Kennedy Schoo o Government a Harvard Un vers ty He has also been a vis t ng pro essor of aw at Stan ord Un vers ty and Vanderb lt University and an affil ated scho ar at the Harvard Law Schoo
John E Core Associate Pro essor of Account ng The Wharton School John Core joined the Wharton Schoo n 1996 He has a B A from Ya e Un vers ty and a Ph D from The Wharton School He has worked as an nvestment banker or PaineWebber, as a compensation consu tan for Ernst & Young, and as an assis ant pro essor at MIT S oan Schoo of Management He s an ed tor of The Account ng Review and an assoc ate editor of the Journa of Account ng and Economics and he serves on the editoria boards of the Journa of Account ng Research and the ournal of Management Account ng Research
H s primary research nterest is execut ve compensation and execut ve stock and option incent ves and he has also pub ished work n he areas o corporate governance, equity va uation and corporate d sc osure
Patric a M. Danzon
Cha r, Hea th Care Systems Department
Ce ia Z Moh Pro essor of Hea th Care Systems Insurance and Risk Management
The Wharton School
Professor Danzon rece ved her Ph D in economics from the University of Chicago in 1973 and joined the Penn facul y rom Duke University in 1985
She s a member o the Insti ute of Medicine and the Nationa Academy o Soc a Insurance and she has served as a consu tant to many pr vate and pub ic institut ons n the U S and wor dw de Professor Danzon’s research nterests are n hea th care pharmaceutica s insurance aw and economics She has publ shed w de y in scholar y journals on a broad range o sub ects related to medica care pharmaceutica s insurance and the economics o law
Gerald R. Faulhaber
Professor o Bus ness and Publ c Pol cy and Management
The Wharton Schoo Professor of Law
Professor Faulhaber has publ shed extens ve y on telecommunications and Internet economics and pol cy focusing part cular y on the nteraction o bus ness and pub c po icy His most recent work has focused on network neutral ty publ c safety communicat ons and fi e sharing and inte lec ua property He spent a year on scholar y leave at Penn Law, after wh ch he was granted a secondary appointment at the Law Schoo He served as Ch ef Economis at the Federa Commun cations Comm ss on for the year ending June 30 2001 At the FCC he worked on te ecommunications and nternet ssues inc uding the AOL-Time Warner merger He has served on numerous scholar y boards and rev ew comm ttees and was V cePres dent of the Board of D rectors of the Te ecommun cat ons Po cy Research Conference n Washington D C Professor Faulhaber was the found ng d rector o Wharton s F shman-Dav dson Center for the Study of the Serv ce Sec or from 1984 to 1989 Prior to h s academic career Professor Faulhaber was Director of Stra eg c Planning and Financia Management at AT&T, a ter ho d ng the pos tion o Head, Economics Research a Be l Laborator es As a V s ting Scholar at INSEAD Founta neb eau France, and at
the Inst tut d’Anal s Econom ca n Barcelona, Spain, Pro essor Fau haber engaged n po it cal economy research
He he d an appo n ment at Ts nghua Un vers ty Schoo of Economics and Management Bei ing China as a Vis ting Professor where he lectured on technology management His current research s n the area of pub ic pol cy and broadband infras ructure or the nternet, and the use of markets and property r ghts for the al ocat on of the elec romagnet c spectrum
Michae A. F tts
Dean of the Law Schoo and Bernard G Segal Pro essor o Law
Michae A Fitts was named Dean of the Law Schoo in March 2000 Before o ning the Penn Law faculty n 1985, Dean F tts served as clerk to the Honorable A Leon H gg nbotham Jr U S Court of Appea s for the Th rd C rcuit and as attorney advisor n the O fice of Lega Counse in the U S Department of Just ce At Penn he was appo nted Associate Professor of Law
n 1990, Professor of Law n 1992 and Robert G Ful er, Jr Professor of Law n 1996 From 1996 to 1998 he served as Assoc ate Dean for Academ c Affa rs at the Law Schoo and was active in estab ishing a var ety of o nt programs wi h other schoo s w th n the Un vers ty In 1999 he served as Vis ting Professor in Po it ca Science at Swarthmore Co lege Dean Fit s’s current research focuses on the ef ect of various structura changes (e g , s ronger po it cal part es presidents or centra ized egal insti ut ons) on government budget ng and leg s ation
He has authored numerous aw review and pol t cal sc ence articles in this area severa co-authored w th pol tical scientists
Lawrence A. Hamermesh
Ruby R Vale Pro essor of Corporate and Bus ness Law
Widener Un vers ty Schoo o Law
Pro essor Hamermesh received a B A rom Haverford Col ege n 1973, and a J D rom Yale Law Schoo in 1976
Pro essor Hamermesh pract ced law
w th Morr s Nicho s, Arsht & Tunne l Wi m ngton, Delaware as an associate rom 1976–84, and as a partner from 1985–94 Pro essor Hamermesh
o ned he aculty at Widener in 1994, and teaches and wr tes n the areas of corporate finance, mergers and acqus t ons, securit es regulat on bus ness organ zat ons, and professional
responsib l ty Since 1995 Pro essor Hamermesh has been a member of the Council of he Corpora ion Law Section o the Delaware State Bar Assoc ation, which s responsible for the annual review and modernization o the Delaware Genera Corporat on Law, and served as Chair o the Council from 2002 to 2004 n 2002 and 2003
he also served as the Reporter for the American Bar Assoc ation s Task Force on Corpora e Responsib l ty He served from 2001 to 2007 as a member of the Committee on Corporate Laws o the American Bar Assoc ation Section o Business Law wh ch supervises the dra ting o the Model Business Corporation Act In 2007 Professor Hamermesh was appo nted as Chair o the Corporate Pract ce Comm ttee o the Section of Bus ness Law n 1999 Pro essor Hamermesh was elected as a member of the American Law Institute Professor Hamermesh is also a member o the Board o D rectors of ACLU Delaware Inc and represents tha organiza ion on the Nat onal Board of he ACLU
Richard J Herr ng Jacob Safra Pro essor o International Banking, Professor of F nance
The Wharton Schoo Co-D rector Wharton F nancia Institutions Center
R chard J Herr ng s Jacob Safra Professor of Internat onal Banking and Professor of F nance a The Wharton School University of Pennsylvan a where he s a so founding d rector of The Wharton Financia Institut ons Center, one of Wharton s argest research centers From 2000 to 2006, he served as he Director o the Lauder Institute of Internat onal Management Studies and, from 1995 to 2000, he served as Vice Dean and D rector o Wharton s Undergraduate Div s on During 2006 he was a Pro essoria Fel ow at the Reserve Bank of New Zea and and Victor a Un vers ty He s the author of more than 90 articles monographs and books on various top cs in financ al regula ion internationa banking and nternat onal finance At var ous times his research has been unded by grants from the Nat onal Sc ence Foundat on the Ford Foundat on, he Brook ngs Institution, the S oan Foundation and the Counc l on Foreign Re ations
Outside the un vers ty he is cocha r o the US Shadow Financia Regu atory Comm ttee He is a member of the F nancial Econom st s Roundtab e the Adv sory Board of the European Bank ng Report n Rome and the Inst tute for Financia Studies in Frankfurt He served as co-chair of he Mu tinat onal Banking seminar from 1992–2004 and was a Fel ow of the Wor d Econom c Forum in Davos rom 1992–95 He was a member of the recent Group of 30 task force on the re nsurance ndustry and as we l as an ear ier study group on international supervision and regu at on Currently, he s an independent d rector o the DWS Scudder mutual fund comp ex and has served on the predecessor Deutsche Asset Management and Bankers Trust boards s nce 1990 Herring received h s undergraduate degree from Oberl n Col ege in 1968 and his PhD from Princeton Un versity n 1973 He has been a member o the F nance Department since 1972 He is marr ed w th two children, and ives n Bryn Mawr, Pennsy vania
Robert W. Ho thausen
The Nomura Securit es Company Professor Professor of Accounting and F nance and Management and Cha rman Accounting Department
The Wharton School
Pro essor Holthausen earned his doctorate and h s M B A at the Univers ty of Rochester Prior to his academ c career he was a C P A He worked at Pr ce Waterhouse and was also a financ a ana yst with Mobi He was on the account ng and finance facu ty at the Graduate School of Business of the Un vers ty o Chicago for ten years, o ning the Penn faculty n 1989 Dur ng the 2001–2002 academic year he was a visit ng professor at Harvard Bus ness School Since 1998 he has served as the academic d rector o Wharton’s Mergers and Acqu s tions program Professor Holthausen’s research interests include the ef ects of management compensat on and governance structures on firm perormance, the e fects o information on volume and prices, corporate res ructuring and valuation, he effects of arge block sales on common stock prices, and numerous other top cs He s wide y pub ished n both finance and accounting journa s and s currently an edi or of the Journal of Accounting and Econom cs
Robert P Inman
R chard K ng Mel on Professor Professor of Finance, Econom cs Business and Pub ic Pol cy Rea Estate
The Wharton Schoo
Professor nman received h s Ph D in economics from Harvard Univers ty and o ned the Penn acu ty in 1972
He s a sen or fel ow o Wharton s Leonard Dav s nst tute of Hea th Econom cs He s a so a research assoc ate of the Nationa Bureau o Econom c Research He has served as a consu tant to the c ty of Phi adelph a, the state of Pennsy van a, Cit Group Chem ca Bank, the U S Departmen o the Treasury, the F nanc al and F sca Comm ss on of the Republ c o South Afr ca, the Nat onal Bank of Sr Lanka, the National Academy of Sciences and numerous U S federa government agenc es His research s current y ocused on fisca federal sm, the urban fisca cr sis and the pol t cal and egal nstitut ons of fiscal pol cymaking Pro essor Inman held the F orence Chair n Economics at the European Un vers ty nst tute, F orence, I aly, or the spr ng quarter of 2000 He wi l be a V si ing Scholar at the Rocke el er Foundat on’s Be lag o S udy Center for the fal 2007 semester
Jason Scott Johnston
Robert G Ful er Jr Professor of Law and Director, Program on Law, the Environment and the Economy After graduating summa cum laude from Dartmouth Col ege, Pro essor Johnston obtained both his J D and Ph D n economics from the Univers ty o M chigan, where he was an A coa Fel ow n Law and Econom cs and was elected to Order of the Coif He served as aw c erk for Un ted States Court of Appea s Judge G lbert Merritt was a civi iabi ity fel ow at Ya e Law School and n 1995 came to the Un vers ty o Pennsy vania Law Schoo from Vanderbi t Univers ty Law Schoo
Johnston is he found ng Director o the Program on Law and the Env ronment at Penn Law Schoo , and in 2001 became he Robert G Fu ler r Professor of Pub ic Law Pro essor
Johnston s research includes both theoretica and empir cal projects exp oring var ous aspects of natura resource and env ronmenta law and po icy, as wel as more genera studies o lega rights and ent t ements He s current y in the midst of book- ength proects on the aw and economics of
corporate env ronmenta sm and the centra ization of env ronmenta and natural resource regulat on, and s organ zing a first-o -its k nd nterdiscipl nary conference on he law, economcs and sc ence of iabi ity or g oba warming Johnston has publ shed dozens o art c es bo h in various ma or American law ourna s such as the Yale Law Journa , V rgin a Law Rev ew and Co umbia Law Review, as we l as in peer-rev ewed econom cs ournals such as the Journal of Law Econom cs and Organ zation, and the Journa of Lega Stud es He has served as a Regent for the Po icy Academy of the Mu tistate Working Group on Env ronmental Management Systems, on the Board of D rectors of the American Law and Econom cs Association and on the Nationa Science Foundation s Law and Soc a Science grant review pane He was an Ol n V siting Fel ow at the Un versity of Southern Ca i ornia Law Center and Vis t ng Professor at the Un versity of Virg n a Schoo of Law In Fa l 2007, he w l be n res dence as the Bosch Publ c Pol cy Fel ow at the Amer can Academy o Ber in
Leo Katz
Frank Carano Professor of Law
Pro essor Katz graduated from he Un vers ty o Chicago Col ege and Law Schoo He then c erked for the Honorable Anthony M Kennedy, at that t me on the U S Court of Appea s or the Ninth Circu t, and he practiced corporate law for several years w th Mayer Brown and P att n Ch cago He began teach ng at the University of Mich gan n 1987 and oined the Penn acu ty in 1991 Professor Katz teaches and wr tes abou both cr m na and corporate law He s the author of Bad Acts and Gu lty M nds: Conundrums o the Cr m na Law and I l-Gotten Gains: Evasion, Blackmai , Fraud and K ndred Puzzles o the Law and ed tor (w th Michae Moore and Stephen Morse) of Foundations of the Cr m na Law
He s currently working on another book, Why the Law Is So Perverse
R chard E Kihlstrom
Ervin M l er-Arthur M Freedman
Professor of F nance and Economics
Chairman Finance Department
The Wharton School
Richard K h strom holds a doctorate rom the Un vers ty of Minneso a He has been a member of the Wharton acu ty since 1979, was named to the Mi ler-Freedman professorship n 1986, and prev ous y served as Cha r of the
F nance Department rom 1988 to 1994 Before coming to Penn, he taught at Northwestern Un vers ty the University of Il ino s the S ate University of New York at Stony Brook, and the Un vers ty o Massachuset s He s a Fe low of the Econome ric Soc ety H s areas o research nterest inc ude nformation and uncertainty in economics, financia market equi ibrium and corporate finance
Michael S Knol
Theodore K Warner Professor of Law Professor of Rea Estate The Wharton Schoo Pro essor Knoll jo ned the Penn Law and Wharton acu t es from the Un versi y o Southern Cal forn a Law Schoo n 2000 He teaches courses in corporate finance and taxat on n the Law School the Wharton Schoo , and the Wharton Execut ve Program He is also an a fi ia e of the Ze l/Lur e Real Estate Center at the Wharton Schoo , and the editor of Forensic Economic Abstracts an electron c journa publ shed by the Socia Science Research Network Professor Knol ’s undergraduate and J D degrees are rom the University of Ch cago He a so earned a Ph D in Econom cs at the Un vers ty o Chicago In 1990 he jo ned the USC Law faculty as an Ass stant Professor and n 1995 he was promo ed o u l
Professor He has been a Vis ting Professor of Law at Georgetown (1999), Penn (1998–99) and Virg n a (2000)
Professor Kno l was also a John M Ol n Sen or Research Scho ar at Columb a University School o Law (1996–97), a V siting Scholar at New York Univers ty Law Schoo (1996–97) and a ohn M Olin D st nguished V sit ng Professor of Law at Toronto Un versity He c erked for the Honorable A ex Kozinsk on the U S Court of Appea s, Ninth C rcu t, from anuary o August 1986 when he was appo nted lega advisor to the Vice Chairman of the U S Internationa Trade Commiss on He has pub ished ex ens ve y n the fields of corporate finance, taxation economics and real estate finance
Friedr ch K. Kübler
Professor and D rector of the Banking Law Institute Emer tus, Un vers ty of Frankfurt Germany; Professor o Law
After earning a Dr ur from the Un vers ty o Tübingen n 1961
Pro essor Kübler he d appo ntments as teaching ass stant n Tüb ngen and Paris Professor o Law, Un vers ty o Giessen (1966–70); Vis ting Lecturer, Harvard Law Schoo (1968–69); Pro essor of Law and Dean o the Graduate Schoo of Socia Sciences Un vers ty o Konstanz (1971–76) and Professor of Law Universi y of Frankfurt (1976–98) He first came to Penn n 1975 and again n 1983 as a Vis ting Professor o Law, and in 1985 he o ned the aculty as Pro essor of Law He has served on the board of the Deu scher Juristentag and is a member of the American Law Inst tute He was one of the six comm ss oners regulat ng concentration in the German te ev sion industry and is a member of the European Shadow Financia Regu atory Commi tee as we l as of the Frankfur Academy of Ar s and Sc ences Professor Kübler s teach ng nterests are the European Un on corporations, internat ona finance, and mass commun cation H s current (comparative) research nterests are in the areas of corpora e governance and finance the supervis on of transnat onal financia markets and broadcast regulat on
Peter D L nneman
A bert Sussman Professor o Rea Estate F nance and Publ c Po icy The Wharton School Dr L nneman a member of he Wharton facu ty since 1979 also serves as a strateg c advisor o he Luber -Adler Real y Funds He a so currently serves as a D rector o one New York Stock Exchange firm and severa pr vate y he d firms Dr L nneman was the Cha rman of the Board of Rockefe ler Center Propert es, Inc He was Senior Managing Director of Equ ty In ernat ona Properties and a Manag ng D rector and V ce Chairman of he nvestment Comm ttee of Amer mar Realty He s an Urban Land Inst tute Research Fe low and a member of numerous professiona organzations Since 1987, Dr L nneman has been A bert Sussman Professor of Real Estate Finance and Pub ic Pol cy at Wharton; he a so served as the Direc or of the Wharton Real Estate Center or 13 years and was the found-
ing Chairman of the Rea Estate Department He s one of the founding co-editors of The Wharton Rea Estate Review Dr Linneman rece ved both h s master’s degree and doc ora e in economics from the University of Chicago, and he is a graduate of Ashland University
Krist n Madison Ass stant Professor of Law Professor Mad son received a J D from Ya e Law School n 2000 and a Ph D in economics from Stanford University n 2001 She o ned the Penn Law faculty n 2001 and currently teaches contracts and health care law Her ma n areas o research interest are hea th economics and the regulation o the hea th care ndustry Professor Madison is curren ly study ng the d f usion of new orms o health care regu at on part cular y heal h care qua ity report ng requ remen s
George J Mai ath Wa ter H Annenberg Professor in the Soc al Sc ences Professor of Econom cs Schoo of Arts and Sciences Professor Mai ath rece ved h s Ph D n economics from Princeton University in 1985 He is current y an assoc ate ed tor of Econometr ca, serves on the editoria board o Games and Economic Behavior and s on the execut ve board of Theoret ca Economics H s research nterests inc ude the organization of the firm, noncooperat ve game theory, evolut onary game theory, socia norms, and the oundations of repu ations, law and authority
Andrew Metr ck Assoc ate Professor of Finance, The Wharton Schoo Andrew Metrick is an associate professor o finance a the Wharton Schoo o the Un versity of Pennsylvan a and a facul y research fel ow at the Nat ona Bureau of Economic Research He joined Wharton in 1999 a ter spend ng five years on he aculty of the Harvard economics department He s the author of Venture Capita & the F nance of Innovation (Wiley, 2006) and he teaches a course o the same name to MBAs and undergraduates He has been recogn zed w th severa teaching awards and been named by BusinessWeek as one of the best teachers at Wharton
Professor Metr ck s current research interests are n corpora e governance, venture cap ta , and techno og cal innovat on He has pub ished papers n many top academic journa s n economics and finance, and his research has been supported by grants rom the Nat onal Science Foundation and the Nat onal Institutes o Health He curren ly serves as an assoc ate edi or of The Journal of F nance
Professor Metr ck received a B A n Econom cs and Mathematics from Ya e in 1989 and a Ph D in Econom cs rom Harvard in 1994
Char es W. Mooney, Jr.
Charles A Heimbold, Jr Professor of Law
Professor Mooney received h s J D from Harvard Law School n 1972 He practiced law with he Oklahoma firm of Crowe and Dunlevy and as a partner of the New York firm of Shearman & Sterl ng Professor Mooney oined the Penn faculty n 1986 and during 1999 and 2000 he served as nter m Dean of the Law School From 1998 to 2000 he served as Assoc ate Dean or Academ c
Af airs He s an active member o the American Law Inst tu e and the American Bar Assoc ation He served as a member o a Un form Commercia Code Permanent Ed toria Board Article 2 (Sa es) Study Commi tee and a so served as a reporter or hat Board s Art cle 9 (Secured Transact ons) Study Commi tee and as a reporter for the Rev sed Art c e 9 dra ting commi tee He served as a member of the U S Secur ty and Exchange Commission’s Advisory Commi tee on Market Transact ons Mooney was awarded the Distingu shed Serv ce Award presented by the Amer can Col ege of Commerc al F nance Lawyers
He a so served as U S Delegate and Pos tion Coordinator (appo n ed by U S Department o S ate) at the Diplomatic Conference for he Cape Town Convent on on International Interests n Mob le Equipment and the Protocol on Matters
Spec fic to A rcraft Equ pment, in Cape Town South A r ca He currently serves as a U S Delegate or the UNIDRO T dra t convent on on intermed ated securi ies H s current research centers around he intermediated securit es, securi y nterests n bankruptcy, and bankruptcy theory
Robert H Mundheim
Un versity Professor of Law and Finance Emeritus Univers ty o Pennsy vania; Of Counse , Shearman & S er ing; ormerly Senior Executive
V ce Presiden and General Counsel of Salomon Smith Barney Ho d ngs Inc
Professor Mundheim rece ved h s LL B rom Harvard Law School in 1957 He jo ned the New York firm o Shearman & Ster ing, of wh ch he is now O Counse , and then served as specia counsel to the U S Secur t es and Exchange Comm ss on be ore joinng the Penn facu ty in 1965 Professor Mundheim served as Dean of the Law School from 1982 to 1989 He has been a v si ing professor at Harvard Law School UCLA Law School the James E Rogers Col ege of Law at The University of Ar zona and the Un vers ty of Konstanz n Germany
Be ween 1977 and 1980, he served as genera counse to the U S Department of the Treasury He a so has served as cha rman of he U S Tax Court Nominating Commission, a d rector of the Securit es nvestor Protect on Corporat on and genera counse to the Chrysler Loan Guarantee Board
He was co-chairman o the New York firm Fr ed, Frank, Harr s Shr ver and Jacobson from 1989 to 1992 n 1992, he o ned Salomon Inc as ts Genera Counse and as a Manag ng Direc or and member of he Execut ve Committee of Sa omon Brothers Professor Mundheim s the organizer and pres d ng officer emeri us o the Internat onal Facu ty for Corporate and Capita Market Law, a ormer Trustee and President of the American Academy in Berl n a Trustee of the New Schoo Un vers ty a director of the Appleseed Foundation and a member of the Counci o the American Law Inst tute and Chairman o i s Governance Comm ttee He a so serves on the American Bar Association s Stand ng Comm ttee on Eth cs and Professional Respons b l ty He is chairman of the Quadra Rea ty Trust Board o D rectors and a director of eCo lege Inc and of Arnho d & S B e chroeder Holdings, Inc He is also the Chairman o the Legal Advisory Board o NASDAQ Mr Mundheim has served as a Consu tant to the American Law nst tute’s Pr nciples of Corporate Governance Analys s and Recommendations (1978–1994), as a member of the Amer can Bar Associat on President’s Task Force on Corporate Responsib l ty (2002–2003) and as a member of the Assoc ation o
the Bar o the C ty of New York s Presidentia Task Force on Lawyers
Ro e n Corporate Governance He has wri ten in the areas of corporate governance, secur t es regu at on, corporat ons and profess ona respons b l ty
Dav d K Musto
Associate Pro essor of F nance
David K Musto is Assoc ate Professor of F nance at the Wharton Schoo , where he has been on the facu ty s nce 1995 He has a B A rom Yale Un vers ty and a Ph D from the Un vers ty o Chicago, and between co lege and graduate school he worked or Ro l and Ross Asset Management n Los Ange es He s an editor of the Journa of F nanc a Serv ces Research
Most of his work both theoretical and empirical is in the area of consumer financ a serv ces mutual funds and consumer cred t in particu ar He has a so publ shed work on corporate and pol tica vot ng opt on pric ng short sel ing and cross-border taxa ion
Gideon Parchomovsky
Professor of Law
Pro essor Parchomovsky received his LL B from the Hebrew Un vers ty of Jerusa em in 1993 h s LL M from he Un vers ty o Ca ifornia at Berke ey in 1995 and h s S J D from Ya e Law Schoo in 1998 Prior to o n ng the Penn Law aculty n fa l 2002 Professor
Parchomovsky served as an Associate Pro essor at Fordham Law Schoo and a Visit ng Lecturer at Ya e Law School
H s research interests include inte lectua property aw and property theory
H s recent work ocuses on un ock ng synerg es among sub-fields of intel ectua property and devis ng nnovat ve mechan sms for protecting property entitlemen s
Mark V. Pauly
Bendhe m Pro essor, Department of Hea th Care Systems, and Professor of Hea th Care Systems Insurance and Risk Management and Publ c Pol cy and Management The Wharton Schoo ; Professor o Economics, School of Arts and Sciences Co-Director, Vage os L fe Sc ences and Management Program
Dr Pauly is a former commissioner on the Physic an Payment Review Comm ss on and an active member of he nstitute of Med c ne He has made significant contributions to
the fields of medica economics and hea th insurance His classic study on the economics o mora hazard was the first to po nt out how hea th insurance coverage may a fect pat en s’ use o med cal serv ces Subsequent work, both theoretica and empir ca , has explored the impact of conventional insurance coverage on preventive care on ou pat ent care, and on prescription drug use n managed care In add tion, he has explored the nfluences that determ ne whether insurance coverage is ava lable and, through several cost e fec iveness studies, the influence o use on hea th outcomes and cost His interests in health pol cy dea with ways o reduce the number of un nsured through tax credits for publ c and priva e insurance, and appropria e design for Medicare in a budget-constra ned environment Dr Pauly s a co-editor- n-ch ef of the International Journal o Health Care F nance and Economics and an assoc ate editor of the Journal o R sk and Uncertainty He has served on Inst tute o Medicine pane s on pub ic accountabi ty or hea th insurers under Med care and on mproving the financing of vacc nes
Dr Pau y s a former member of the advisory committee to the Agency or Health Care Research and Qual ty and most recently a member o the Medicare Technical Advisory Panel
Andrew W. Post ewaite
Harry P Kamen Professor of Economics
Schoo of Arts and Sciences
Professor of Finance
The Wharton Schoo Professor Postlewa te rece ved his Ph D from Northwestern University n 1974 and oined the Penn faculty from the University of Il ino s n 1980 He s ed tor of Amer can Economic Journal
M croeconomics past editor of the International Economic Rev ew and past co-editor of Econometr ca He serves on the Board of Directors o the Nat ona Bureau of Economic Research the Execut ve Comm ttee of the Game Theory Soc ety and on the Executive Committee of the American Econom c Associat on He has publ shed w dely in the areas o strateg c behav or and ndustria organization
Edward B Rock
Sau A Fox D st ngu shed Pro essor of Bus ness Law Co-Director, Inst tute or Law and Econom cs Assoc ate Dean University o Pennsy van a Law School
Pro essor Rock received h s J D from the Un vers ty o Pennsy vania n 1983 He joined the Penn facul y n 1989 rom the Ph ladelphia aw firm of F ne, Kap an and B ack where he speciazed in antitrust corporate and securit es i igat on He has written wide y n corporate law on opics inc ud ng: hedge funds; the ro e of nstitut onal nvestors in corporate governance; close corporat ons the role of norms n corporate law the overlap between corporate law and ant trust; the overap between corporate law and labor aw; comparat ve corpora e law and the regulat on of mutua funds In 1994, Pro essor Rock was a Vis ting
Pro essor of Interna iona Bank ng and Cap ta Markets at the Ins itut für Arbe ts- Wirtschaf s- und Ziv l Recht, Johann Wo fgang Goethe - Un vers tät Frankfurt am Ma n Germany During the 1995–96 academic year he was a Fulbright Sen or Scholar and V siting Pro essor of Law at the Law Faculty of he Hebrew Un vers ty o Jerusalem, Israel In 2001 he was appointed the first Saul A Fox D stinguished
Pro essor of Bus ness Law Dur ng 2005–06, he was again a Vis ting Professor of Law and Lady Dav s Fel ow, a Hebrew Un versity Professor Rock’s current research focuses on mergers and acqu sitions, hedge funds, and corporate vo ing
Chris W. Sanchirico Professor of Law
Pro essor of Bus ness and Publ c Po cy The Wharton School
Pro essor Sanchir co rece ved his A B rom Princeton and both h s law degree and his Ph D n economics rom Yale Before joining the Penn Law and Wharton facu ties in 2003, he was a law pro essor at the Un vers ty of Virginia and an economics professor at Co umbia Professor Sanchir co has wri ten w dely on tax po icy d str but ve ustice, the n ormat on problems of egal en orcement, the ru es governng tr a ev dence and pretr al d scovery, and the evolut on and stabi ity of soc al norms Pro essor Sanch r co has pub ished extensive y in top aw rev ews as wel as the premier peerrev ewed journa s in both law and economics and econom c theory
Reed Shuldiner
A vin L Snowiss Professor of Law
Professor Shu d ner is a recogn zed expert n the taxat on of financia instruments and transact ons His area o research s taxation and tax po icy
His current research inc udes the taxation o risk under ncome, wea th and consumpt on taxes and the v ab l ty and e fects o a federa wealth tax (with Dav d Shakow) Pro essor Shuldiner served as Assoc ate Dean at Penn Law from 2000–02 Dur ng Spr ng 2005, Professor Shu d ner was the W l am K Jacobs, r Vis ting Professor o Law at Harvard Law School He was a Visit ng Ass stant Pro essor at Yale Law Schoo dur ng 1994–95 Before jo n ng the Penn law acu ty in 1990 he served n the Office of Tax Legislat ve Counse of he
U S Department of the Treasury, was counsel to the law firm o Cadwa ader, W ckersham and Taft and was an assoc ate with the Washington, D C law firm of Wi mer Cut er and Picker ng
Professor Shu d ner received h s J D from Harvard University in 1983 and h s Ph D n econom cs rom the Massachuset s Inst tute o Technology in 1985
David A Skee , Jr.
S Samuel Arsht Professor o Corpora e Law
Professor Skee o ned the Penn acu ty in 1999 He gradua ed n 1987 from the Un versity of V rginia School of Law where he was ed tor of the V rginia Law
Rev ew and a member o the Order of the Coif He clerked for the Honorab e Wa ter K Stapleton on the U S Court o Appea s or the Third C rcu t and practiced or several years at Duane, Morris & Heckscher n Phi adelph a, before joining the Temple University School of Law n 1990 Professor Skee has also he d visit ng appo ntments at the Un vers ty of W sconsin Law School (1993–94), he Univers ty o V rg n a Schoo o Law (spr ng 1994), Georgetown Un vers ty Law Center (fal 2004) and the University of Pennsy vania Law Schoo (fal 1997) Professor Skee spec al zes in corporate and commercia aw and has wr tten wide y on corporate aw bankrup cy and sovereign debt He has also has wr tten on aw and re igion and poetry and law
Michae L. Wachter
Wi l am B Johnson Professor of Law and Econom cs Co-D rector, Inst tute for Law and Economics
Pro essor Wachter received h s Ph D n econom cs from Harvard Un vers ty and joined the Penn facul y n 1970
He has he d ful professorsh ps in three of Penn s schoo s the School of Ar s and Sc ences, where he has been pro essor of economics s nce 1976; the Wharton School where he was professor of management, 1980–92; and the Law Schoo , where he became professor of aw and econom cs n 1984 He has been senior advisor to the Brookings Pane on Economic Act v ty in add tion to consu t ng or the Federal Reserve s Board of Governors and he Counci of Economic Advisors He has a so served as a member of the Nationa Counc l on Employment Pol cy and as a comm ss oner on the M n mum Wage Study Commission Pro essor Wachter served as Deputy Provost of the Un vers ty o Pennsy vania rom July 1995 to January 1998 and as Interim Provost from anuary to December 1998 He is the author of numerous art c es n aw and econom cs as wel as in corporat on aw and abor aw and econom cs
Susan M Wachter
Richard B Wor ey Pro essor of Financia Management; Professor of Real Estate and Finance The Wharton School Co-Director, Inst tute for Urban Research From 1998 to 2001 as Ass stant Secretary for Po icy Deve opment and Research U S Department of Housing and Urban Deve opment Dr Wachter served as the senior urban po cy offic a and princ pa advisor to the Secretary on overa l HUD po icies and programs At Wharton, Dr Wachter was Cha rperson of the Real Estate Department and Professor of Real Estate and Finance from Ju y 1997 unti her 1998 appo n ment to HUD She founded and current y serves as Direc or of Wharton’s Geograph cal Informa ion Systems Lab Dr Wachter served as a member of the Board of Direc ors of the Beneficia Corporat on rom 1985 to 1998 and of the M G Residentia REIT from 1994 to 1998
She was the editor of Real Esta e Economics from 1997 to 1999 and serves on the ed toria boards for severa rea estate journa s Dr Wachter has been a member of the Advanced Stud es Inst tute of the Homer Hoyt
Institute since 1989 She s author of more than 100 scho arly publ cat ons and s the rec pient of several awards for teaching excel ence at the Wharton School
R Polk Wagner
Professor of Law
Professor Wagner focuses his research and teach ng n intellectua property law and po icy, w th a spec al nterest in paten law He s the author of more than seventeen articles on topics rang ng from an empir ca analysis o jud c al dec s on-mak ng n the patent law to the F rst Amendment status o software programs His work has appeared in the Stanford Law Review the Columb a Law Rev ew, and the University of Pennsylvan a Law Rev ew, among severa others He is a frequent nat ona and nternat ona lecturer on inte lec ua property topics, presenting h s research at both academic inst tutions (such as Harvard, Stanford Columbia, Un vers ty o M chigan, University of Virginia, Un vers ty of Californ a at Berke ey) and prom nent industry groups (such as the Intel ec ual Property Owner s Organ za ion, the American Inte ectua Property Law Assoc ation, and the Assoc ation of Corporate Patent Counsel) Pr or to jo ning the Penn facu ty n 2000, Wagner served as a clerk to Judge Raymond C C evenger III of the United States Court o Appea s or the Federal Circu t He ho ds a law degree rom Stan ord, an eng neer ng degree from the Un versity o M chigan, and was the 1994–95 Roger M Jones Fel ow at the London School of Economics
Amy Wax
Robert Mundhe m Pro essor of Law A graduate o Ya e Co lege and Harvard Medical Schoo , Professor Wax tra ned as a neurologist at New York Hospi al before comp et ng a law degree at Co umbia Law Schoo in 1987 She served as a clerk to the Honorab e Abner J M kva of the U S Court of Appea s for the D C C rcuit and worked for six years at the Office o the So icitor Genera at the U S Departmen of Just ce, where she argued 15 cases be ore the U S Supreme Court She taugh from 1994 to 2001 at the University of Virginia Law Schoo Her areas o teach ng and research inc uded c vil procedure, remed es abor and emp oyment aw, poverty aw and welfare po icy the aw and econom cs o work and fami y, and soc a science and he law Professor Wax o ned the Penn Law Facu ty in al 2001
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