ILE Annual Report 2007-2008 by PennCareyLaw

ANNUAL REPORT 2007–2008 ~ 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

FoUnDED n 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 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 groundbreaking 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 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 2007–2008 appears on page 45.

Message from the Co-Chairs for almost three decades, penn’s institute for law and economics has contributed to scholarship, policy, and practice on relevant issues of law and economics that affect our country’s businesses and financial institutions.

ThE InSTITUTE S PRogRAmS have become increasingly relevant and important, focusing on the issues that the academic, legal and business communities care about. Today the Institute enjoys an outstanding international reputation for the excellence of its programs, where leaders in 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 Institute’s Board of Advisors, we 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, and once again we have realized that goal. We are delighted to report some superb additions to our Board of Advisors during the past year. We are pleased to welcome the following new members: Richard B. Aldridge (morgan Lewis & Bockius LLP); Joseph glatt (Apollo Capital management, L.P.); Andrew Jacobs (hutchin hill Capital, L.P.); Bruce n. Kuhlik (merck & Co., Inc.); mark Lebovitch (Bernstein Litowitz Berger & grossmann LLP); Peter g Samuels (Proskauer Rose LLP); gregory P. Williams (Richards, Layton & Finger, P.A.); and one returning member, Joseph gatto (Lehman Brothers Inc.). These accomplished individuals will greatly enhance the work of the Institute and broaden the composition of our Board.

We must also briefly express our sadness at the loss of our dynamic predecessor, michael J. Biondi, who passed away in november 2007. his generosity and spirit contributed greatly to our Board of Advisors, and he will be missed.

All of the members of our Board give graciously to the Institute, not just financially but also of their time and expertise, and we are very grateful for their contributions. Very special thanks must be given to ILE Benefactors Bob Friedman, Paul Levy, Skadden, Arps, Slate, meagher & Flom LLP (through Bob Sheehan), and Wachtell, Lipton, Rosen & Katz (through David Silk). Their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express our sincere appreciation to each of them.

As we move forward as the new Board Chairs, it is gratifying to know that we can count on Ed Rock and michael Wachter to continue the truly outstanding job they have done as co-directors of the Institute. Their tireless dedication to all aspects of the Institute’s work and their ability to come up with timely programs and attract the ideal participants to make every program an unqualified success are why ILE is world-renowned as the forum for interesting dialogue on topical issues for corporations and their financial and legal advisors. We look forward to working closely with them in the future.

B. Frumkin Sullivan & Cromwell LLP

Charles “Casey” Cogut Simpson Thacher & Bartlett LLP

Joseph

Cover Captions

Left: Corporate Finance Roundtable, Fall 2007. Paul S. Levy, JLL Partners.

Middle: University of Pennsylvania Law School.

Right: Law and Entrepreneurship lecturer Robert L. Friedman, The Blackstone Group L.P.

Board of advisors

Barry M. Abelson Pepper hamilton LLP Philadelphia, PA

Abelson Pepper hamilton LLP Philadelphia, PA

James H. Agger

Chair, 1994–2001

Retired Senior Vice President, General Counsel and Secretary Air Products and Chemicals, Inc. Allentown, PA

Richard B. Aldridge

Richard B. Aldridge morgan Lewis & Bockius LLP Philadelphia, PA

morgan Lewis & Bockius LLP Philadelphia, PA

William D. Anderson, Jr. Managing Director goldman, Sachs & Co. new York, nY

William D. Anderson, Jr.

Managing Director goldman, Sachs & Co. new York, nY

Marshall B. Babson

hughes hubbard & Reed LLP new York, nY

Marshall B. Babson

Fred Blume

hughes hubbard & Reed LLP new York, nY

Chairman Emeritus Blank Rome LLP Philadelphia, PA

Fred Blume

Charles I. Cogut

Co-Chair, 2008–

Chairman Emeritus Blank Rome LLP Philadelphia, PA

Simpson Thacher & Bartlett LLP new York, nY

Charles I. Cogut

Isaac D. Corré

Co-Chair, 2008–Simpson Thacher & Bartlett LLP new York, nY

Senior Managing Director Eton Park Capital management new York, nY

Isaac D. Corré

Senior Managing Director

Pamela Craven

Eton Park Capital management new York, nY

Chief Administrative Officer Avaya Communications Basking Ridge, nJ

Richard D’Avino

V.P. Taxes-GE Capital and NBC Universal

general Electric Company Stamford, CT

V.P. Taxes-GE Capital and NBC Universal general Electric Company Stamford, CT

Joel E. Friedlander

Bouchard, margules & Friedlander Wilmington, DE

Robert L. Friedman Chair, 2001–2007

Senior Managing Director and Chief Legal Officer

The Blackstone group L.P. new York, nY

Joseph B. Frumkin

Co-Chair, 2008–Sullivan & Cromwell LLP new York, nY

Joseph D. Gatto

Joseph D. Gatto Vice Chairman Lehman Brothers Inc. new York, nY

Vice Chairman and Co-Head of Corporate Finance Lehman Brothers Inc. new York, nY

Joseph Glatt

General Counsel

Principal Counsel Apollo Capital management, L.P. new York, nY

Apollo Capital management, L.P. new York, nY

Perry Golkin

Member Kohlberg Kravis Roberts & Co. new York, nY

Member

Kohlberg Kravis Roberts & Co. new York, nY

John G. Harkins, Jr. Chair, 1980–1990 harkins Cunningham LLP Philadelphia, PA

Leon C. Holt, Jr.

John G. Harkins, Jr. Chair, 1980-1990 harkins Cunningham LLP Philadelphia, PA

Retired Vice Chairman and Chief Administrative Officer Air Products and Chemicals, Inc. Allentown, PA

Leon C. Holt, Jr.

William B. Johnson

Chairman Emeritus Whitman Corporation Chicago, IL

Retired Vice Chairman and Chief Administrative Officer Air Products and Chemicals, Inc. Allentown, PA

Stephen J. Jones

Andrew Jacobs

Chief Operating Officer & General Counsel

hutchin hill Capital, L.P. new York, nY

Vice President, General Counsel and Secretary Air Products and Chemicals, Inc. Allentown, PA

Cynthia B. Kane

William B. Johnson

Special Assistant to the Secretary of State Delaware Department of State Wilmington, DE

Chairman Emeritus Whitman Corporation Chicago, IL

Stephen J. Jones

Senior Vice President, General Counsel and Secretary

Air Products and Chemicals, Inc. Allentown, PA

Cynthia B. Kane

Roy J. Katzovicz

General Counsel

Pershing Square Capital management, L.P. new York, nY

Special Assistant to the Secretary of State Delaware Department of State Wilmington, DE

Bruce N. Kuhlik

Roy J. Katzovicz

Executive Vice President and General Counsel merck & Co., Inc. Whitehouse Station, nJ

Chief Legal Officer Pershing Square Capital management, L.P. new York, nY

Mark Lebovitch

Bruce N. Kuhlik

Bernstein Litowitz Berger & grossmann LLP new York, nY

Paul S. Levy

Executive Vice President and General Counsel merck & Co., Inc. Whitehouse Station, nJ

Founder JLL Partners new York, nY

Mark Lebovitch

Robert A. Lonergan

Bernstein Litowitz Berger & grossmann LLP new York, nY

Paul S. Levy

Executive Vice President, General Counsel and Corporate Secretary Rohm and haas Company Philadelphia, PA

Founder JLL Partners new York, nY

Simon M. Lorne

Robert A. Lonergan

Vice Chairman and Chief Legal Officer millennium management, LLC new York, nY

Michael E. Lubowitz

Executive Vice President, General Counsel and Corporate Secretary Rohm and haas Company Philadelphia, PA

Weil, gotshal & manges LLP new York, nY

J. Anthony Messina

Buchanan Ingersoll & Rooney PC Philadelphia, PA

Simon M. Lorne Vice Chairman and Chief Legal Officer millennium management LLC new York, nY

Alan Miller

Michael E. Lubowitz

Co-Chairman

Weil, gotshal & manges LLP new York, nY

Innisfree m&A Incorporated new York, nY

J. Anthony Messina

Buchanan Ingersoll & Rooney PC Philadelphia, PA

G. Daniel O’Donnell Dechert LLP Philadelphia, PA

James E. Odell

Alan Miller

General Counsel, The Americas UBS Investment Bank new York, nY

Co-Chairman Innisfree m&A Incorporated new York, nY

G. Daniel O’Donnell Dechert LLP Philadelphia, PA

James A. Ounsworth

James E. Odell

Managing Director The musser Consulting group Wayne, PA

General Counsel, The Americas UBS Investment Bank new York, nY

Morton A. Pierce

Dewey & LeBoeuf LLP new York, nY

James A. Ounsworth

Martha L. Rees

Vice President and Assistant

Managing Director The musser Consulting group Wayne, PA

General Counsel

Morton A. Pierce

E. I. du Pont de nemours & Company, Inc. Wilmington, DE

Dewey & LeBoeuf LLP new York, nY

Myron J. Resnick

Martha L. Rees

Vice President and Assistant General Counsel

Retired Senior Vice President and Chief Investment Officer Allstate Insurance Company northbrook, IL

E. I. du Pont de nemours & Company, Inc. Wilmington, DE

Robert H. Rock

Myron J. Resnick

Chairman and Publisher Directors & Boards Philadelphia, PA

Retired Senior Vice President and Chief Investment Officer

Gerald Rosenfeld

Allstate Insurance Company northbrook, IL

Deputy Chairman Rothschild north America new York, nY

Peter G. Samuels

Gerald Rosenfeld

Proskauer Rose LLP new York, nY

Deputy Chairman Rothschild north America new York, nY

John F. Schmutz

Chair, 1990–1994

Peter G. Samuels

Retired Senior Vice President and General Counsel

Proskauer Rose LLP new York, nY

E. I. du Pont de nemours & Company, Inc. Wilmington, DE

John F. Schmutz

Chair, 1990-1994

Howard L. Shecter

Retired Senior Vice President and General Counsel

orrick, herrington & Sutcliffe LLP new York, nY

E. I. du Pont de nemours & Company, Inc. Wilmington, DE

Robert C. Sheehan

Executive Partner

Skadden, Arps, Slate, meagher & Flom LLP new York, nY

Howard L. Shecter orrick, herrington & Sutcliffe LLP new York, nY

Victoria E. Silbey

Robert C. Sheehan

Senior Vice President–Legal and General Counsel

Sungard Data Systems Inc. Wayne, PA

Executive Partner Skadden, Arps, Slate, meagher & Flom LLP new York, nY

Victoria E. Silbey

David M. Silk Wachtell, Lipton, Rosen & Katz new York, nY

Senior Vice President–Legal and General Counsel Sungard Data Systems Inc. Wayne, PA

Bruce L. Silverstein

David M. Silk Wachtell, Lipton, Rosen & Katz new York, nY

Young Conaway Stargatt & Taylor, LLP Wilmington, DE

Bruce L. Silverstein

A. Gilchrist Sparks III morris, nichols, Arsht & Tunnell LLP Wilmington, DE

Young Conaway Stargatt & Taylor, LLP Wilmington, DE

Hon. Leo E. Strine, Jr. Vice Chancellor Delaware Court of Chancery Wilmington, DE

A. Gilchrist Sparks III morris, nichols, Arsht & Tunnell LLP Wilmington, DE

Nancy Straus Sundheim

Hon. Leo E. Strine, Jr.

Vice Chancellor Delaware Court of Chancery Wilmington, DE

Senior Vice President, General Counsel and Secretary Unisys Corporation Blue Bell, PA

Nancy Straus Sundheim

Jere R. Thomson Jones Day new York, nY

Senior Vice President, General Counsel and Secretary Unisys Corporation Blue Bell, PA

Hon. E. Norman Veasey Chief Justice, Supreme Court of Delaware, 1992–2004

Jere R. Thomson Jones Day new York, nY

Hon. E. Norman Veasey

Weil, gotshal & manges LLP new York, nY, and Wilmington, DE

Chief Justice, Supreme Court of Delaware, 1992–2004 Weil, gotshal & manges LLP new York, nY, and Wilmington, DE

Marc Weingarten Schulte Roth & Zabel new York, nY

Gregory P. Williams

Richards, Layton & Finger, P.A. Wilmington, DE

Marc Weingarten Schulte Roth & Zabel LLP new York, nY

Donald J. Wolfe

Gregory P. Williams

Potter Anderson & Corroon LLP Wilmington, DE

Richards, Layton & Finger, P.A. Wilmington, DE

Donald J. Wolfe

Potter Anderson & Corroon LLP

Wilmington, DE

Message from the Dean

for over twenty years, the institute for law and economics has successfully demonstrated the benefits of a crossdisciplinary perspective.

ITS PRogRAmS PRoVIDE a model for how to build bridges between disciplines by creating 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 Institute proves that when you bring the right people—judges, deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more—to convene outside of their own niches, remarkably original insights are generated.

As our world grows more complex every day, the topics the Institute addresses are both exciting and relevant. It is no longer enough to approach complicated questions such as the role of activist investors, the responsibilities of independent directors, 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 without paying attention to the underlying economic trends and legal regulations. All of ILE’s participants contribute to and benefit from the profound understanding such analysis affords.

In addition to its 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 academia for open discussion and intellectual exploration. ILE’s public lectures by leading jurists, executives, and entrepreneurs attract participants from all sectors of the University and from the wider community. The Institute’s highly successful seminar series, including sessions 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. During the past year the outstanding talks, workshops, and conferences organized by the Institute covered a wide range of topics and programs, from corporate finance and corporate governance to private equity and hedge funds, as well as large-scale entrepreneurship and management.

Since my cross-disciplinary vision for the Law School and the purposes of the Institute for Law and Economics are so similar, it is personally gratifying to me that the Institute is generously supported by contributors who understand the importance of what we do and the unique position the Institute holds. many of these contributors 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 panelists and commentators for Institute events.

I would particularly like to welcome the new co-chairs of the Board, Casey Cogut and Joe Frumkin. After the untimely passing of mike Biondi in november 2007, Casey and Joe agreed to take on this role and contribute their valuable time and expertise to ILE. over the years both Casey and Joe have been actively involved as alumni of the Law School, and I am certain that the addition of their talents to this role promises great things for ILE.

I extend the deepest appreciation 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 join in backing and participating in this extremely worthwhile endeavor.

Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

Message from the Co-Directors

the institute for law and economics presented an ambitious program schedule this past year, as is evident in this report.

ThE FALL CoRPoRATE FInAnCE RoUnDTABLE addressed how the changing credit market has affected hedge funds and private equity (pages 10–11). The European financial markets were the focus of our spring roundtable, held in conjunction with the University of oxford (pages 8–9). We held two Chancery Court programs in the spring, one addressing the topic of “say on pay”—giving shareholders a vote on executive compensation—and one dealing with the independent director’s role in planning for CEo succession (pages 14–15). In addition, we presented two fascinating Law and Entrepreneurship lectures (page 20). In the fall, board member Robert L. Friedman, Senior managing Director and Chief Legal officer of The Blackstone group, spoke to an overflow audience about the challenges of Blackstone’s recent IPo. In the spring, Safra Catz, President and Chief Financial officer for oracle Corporation, gave the audience insight on driving strategic change in global business. For our Distinguished Jurist lecture, Brian g. Cartwright, the general Counsel of the Securities and Exchange Commission spoke on “The Future of Securities Regulation” (page 24). our more “academic” programs also flourished. The Law and Finance series, held jointly with The Wharton School’s Finance Department, continued with presentations by Bernard S. Black (hayden W. head Regents Chair for Faculty Excellence, The University of Texas at Austin School of Law) and Colin mayer (Peter moores Dean and Peter moores Professor of management Studies, University of oxford), (page 34). In February, ILE hosted the fourth annual Penn/nYU Law and Finance Conference, a joint venture of Penn Law, Wharton Finance, new York University School of Law, and the Finance Department of the Leonard n. Stern School of Business (page 32). And throughout the year scholars from around the country came to present papers in the Law and Economics seminar series, organized this year by Penn Law professors Aditi Bagchi, gideon Parchomovsky, and David Skeel (page 35).

The Institute’s greatest strength lies in the quality of our supporters and their active, enthusiastic participation in our programs. our board members and sponsors make our programs possible, both as key participants and with their financial support. We would particularly like to acknowledge our new board chairs, Casey Cogut of Simpson Thacher & Bartlett LLP and Joe Frumkin of Sullivan & Cromwell LLP. After the setback occasioned by the tragic loss of mike Biondi, we are pleased to welcome Casey and Joe and we look forward to working productively with them in the future.

We are delighted to have added seven new members to the board, and we welcome them: Richard B. Aldridge (morgan Lewis & Bockius LLP); Joseph glatt (Apollo Capital management, L.P.); Andrew Jacobs (hutchin hill Capital, L.P.); Bruce n. Kuhlik (merck & Co., Inc.); mark Lebovitch (Bernstein Litowitz Berger & grossmann LLP); Peter g. Samuels (Proskauer Rose LLP); and gregory P. Williams (Richards, Layton & Finger, P.A.). We also welcome back one returning member, Joseph gatto (Lehman Brothers Inc.).

We are pleased to announce that Jill Fisch has accepted a professorship at Penn Law, and in academic year 2008–2009, she will be joining us as co-director of the Institute for Law and Economics. Jill comes to us from Fordham University School of Law, where she was the T.J. maloney Chair in Business Law and director of the Fordham Corporate Law Center. She has been an active participant in ILE programs over the years, and we are privileged to have her as a partner moving forward.

We also extend our heartfelt thanks to all of our supporters for bringing your perspective, your ideas, 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 Institute directors immensely satisfying and worthwhile.

Edward B. Rock, Co-Director, Institute for Law and Economics

Saul A. Fox Distinguished Professor of Business Law

Michael L. Wachter, Co-Director, Institute for Law and Economics

William B. Johnson Professor of Law and Economics

September 2008

Roundtable Programs

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.

Corporate Finance

6 June 2008

Hedge Fund Activism in Europe

marco Becht, Director, European Corporate Governance Institute; Professor of Finance and Economics, Université Libre Bruxelles

Julian Franks, Professor of Finance, London Business School

Jeremy grant, Executive Director of the Centre for Corporate Governance, London Business School

marco Becht presented preliminary results from recent work with Julian Franks and Jeremy grant on the returns to public and private shareholder activism in Europe. With access to the full information on both public and private engagements from four funds, Becht and his co-authors were able to study many important aspects of shareholder activism including: identifying a variety of never-made-public engagements, identifying the changes induced by these private engagements and their effects on stock price; comparing the characteristics of private and public engagements, including the holdings periods, magnitude and timing of investments, and shareholder returns; and understanding the variables that lead to some engagements going from private to public.

Hedge Fund Activism in the Enforcement of Bond Covenants

marcel Kahan, George T. Lowy Professor of Law, New York University School of Law

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania

Activist hedge funds have transformed how bondholders respond to violations of their contractual rights. Alas, the remedy scheme for violations of bondholders rights—in particular, the centrality of the acceleration remedy—introduces its own set of imperfections. When treasury interest rates have increased or the stock price of a company that has issued convertible bonds has declined, acceleration generates a windfall: bondholders receive compensation in excess of the harm associated with the violation. In these cases, activists will spend excessive resources in detecting and pursuing potential claims and companies have excessive incentives to stave off potential violations. When treasury rates have declined, the tables are turned, and bondholder rights are under-enforced.

Whether this selective enforcement has generated aggregate benefits for bondholders and companies in the short term is unclear. over the long term, however, the market will adjust to hedge fund activism by changing other terms in corporate bond indentures. In particular, we suggest that the contractual remedy scheme be revised by giving companies an expanded defeasance option and offering bondholders a make-whole premium upon acceleration, which would reduce, respectively, the incentives for over-enforcement and under-enforcement.

Saïd Business School, University of Oxford

Opening Address

Colin mayer and Timothy Endicott, Deans of Saïd Business School and Faculty of Law, University of Oxford

Morning Session

Hedge Fund Activism in Europe

Marco Becht, Director, European Corporate Governance Institute; Professor of Finance and Economics, Université Libre de Bruxelles

Julian Franks, Professor of Finance, London Business School

Jeremy Grant, Executive Director of the Centre for Corporate Governance, London Business School

Commentators

John Armour, Lovells Professor of Law and Finance, University of Oxford

Roy Katzovicz, Chief Legal Officer, Pershing Square Capital Management, L.P.

Hedge Fund Activism in the Enforcement of Bond Covenants

Marcel Kahan, George T. Lowy Professor of Law, New York University School of Law

edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Commentators

horst Eidenmüller, Professor, University of Munich

Carolyn Conner, Allen & Overy LLP

Afternoon Session

Panel Discussion on Doing Deals When the Sky Is Falling

Panelists

David S. Blitzer, The Blackstone Group International Limited

Charles Crawshay, The Takeover Panel

Todd Fisher, Kohlberg Kravis Roberts & Co.

Chris hale, Travers Smith

Tim Jenkinson, Saïd Business School, University of Oxford

Stephanie Keen Lovells LLP

Simon Walker, British Venture Capital Association

6 Marco Becht, European Corporate Governance Institute and Université Libre de

7 Hon. Stephen P. Lamb, Delaware Court of Chancery; Peter Doralt, Austrian Takeover Commission; Hon. Jack B. Jacobs, Supreme Court of Delaware; Jenny Payne, Faculty of Law, University of Oxford.

1 Roy J. Katzovicz, Pershing Square Capital Management, L.P.; Edward Braham, Freshfields, Bruckhaus & Deringer.

2 Front row: Carolyn Conner, Allen & Overy LLP; David Jackson, BP plc. Back row: Joshua Getzler, Faculty of Law, University of Oxford; Wanjiru Njoya, Faculty of Law, University of Oxford.

3 Front row: Stephanie Keen, Lovells LLP; Charles Crawshay, Takeover Panel; Simon Walker, British Venture Capital Association. Back row: David Jackson, BP plc; Joseph B. Frumkin, Sullivan & Cromwell LLP; Jill Fisch, Fordham University School of Law.

Bruxelles.

4 David S. Blitzer, The Blackstone Group International Limited; Chris Hale, Travers Smith; Tim Jenkinson, Saïd Business School, University of Oxford.

5 Front row: Simon Walker, British Venture Capital Association; Todd Fisher, Kohlberg Kravis Roberts & Co. Back row: Joseph B. Frumkin, Sullivan & Cromwell LLP; Jill Fisch, Fordham University School of Law.

Corporate Finance

Edward

Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Anti-Bankruptcy: Hedge Fund Activity in Corporate Reorganizations

Douglas g Baird, Harry A. Bigelow Distinguished Service Professor of Law, University of Chicago Law School Robert K. Rasmussen, Dean and Carl Mason Franklin Chair in Law, USC Gould School of Law

When the next wave of corporate bankruptcies crests, corporate reorganization law will be put under new stress. Since the last round of large Chapter 11s, financial markets have undergone a revolution. Financial innovation has allowed investors to slice and dice cash flow rights and control rights into smaller and smaller pieces. Those charged with shepherding the business through the reorganization face a daunting challenge in trying to bring together the various stakeholders and accommodate the interests of each.

The challenge the legal system faces is much like assembling a city block that has been broken up into many parcels. This is quite at odds with the standard account of corporate reorganizations— that it deals with a tragedy of the commons, a world in which general creditors share dispersed, but otherwise similar interests. Instead, we face an anti-commons problem, a world in which ownership interests are fragmented and conflicting. Senior creditors used to press for a sale; now they often favor a reorganization. Junior parties who used to fear sales now see them as a way to protect their interests. In the past, creditors wanted a prominent seat at the bargaining table; now many large players want to stay in the shadows. Bankruptcy has become anti-bankruptcy. In this article, we take stock of the recent changes and show how they will come to the fore when reorganization activity increases.

Welcome

michael A. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

Morning Session

Hedge Fund Activism in the Enforcement of Bondholder Rights

Marcel Kahan, George T. Lowy Professor of Law, New York University School of Law

edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Commentators

Isaac D. Corré, Senior Managing Director, Eton Park Capital Management

michael R. Roberts, Assistant Professor of Finance, The Wharton School, University of Pennsylvania

Anti-Bankruptcy: Hedge Fund Activity in Corporate Reorganizations

Douglas G. Baird, Harry A. Bigelow Distinguished Service Professor of Law, University of Chicago Law School

Robert K. Rasmussen, Dean and Carl Mason Franklin Chair in Law, USC Gould School of Law

Commentators

Barry E. Adler, Charles Seligson Professor of Law, New York University School of Law

Paul S. Levy, Founder, JLL Partners

Afternoon Session

Panel Discussion on How Is the Changing Credit Environment Affecting Private Equity, Hedge Funds, and Strategic Buyers?

Moderators

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law

michael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

Panelists

Brendan Connolly, Managing Director/Leveraged Capital Markets, Group Head, UBS Investment Bank

Robert L. Friedman, The Blackstone Group L.P.

Joseph D. gatto, Vice Chairman and Co-Head of Corporate Finance, Lehman Brothers Inc.

Perry golkin, Member, Kohlberg Kravis Roberts & Co.

Andrew metrick, Professor of Finance, Yale School of Management

Duncan o’Brien, General Manager, Global Business Development, General Electric Company

marc Weingarten, Schulte Roth & Zabel LLP

1 Front row: James E. Odell, UBS Investment Bank; J. Gregory Milmoe, Skadden, Arps, Slate, Meagher & Flom LLP. Back row: William W. Lafferty, Morris, Nichols, Arsht & Tunnell LLP; Richard Booth, Villanova University School of Law.

2 Front row: Charles I. Cogut, Simpson Thacher & Bartlett LLP; Paul S. Levy, JLL Partners. Middle row: Isaac D. Corré, Eton Park Capital Management; Douglas G. Baird, University of Chicago Law School; Robert K. Rasmussen, USC Gould School of Law. Back row: David A. Skeel, Jr., University of Pennsylvania Law School; Jonathan Klick, Florida State University College of Law.

3 Front row: Robert L. Friedman, The Blackstone Group L.P.; Joseph D. Gatto, Lehman Brothers Inc. Middle row: James E. Odell, UBS Investment Bank; Gerald Rosenfeld, Rothschild North America. Back row: William W. Lafferty, Morris, Nichols, Arsht & Tunnell LLP; Richard Booth, Villanova University School of Law.

4 Front row: Perry Golkin, Kohlberg Kravis Roberts & Co.; Marc Weingarten, Schulte Roth & Zabel LLP. Middle row: Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP; Richard B. Aldridge, Morgan Lewis & Bockius LLP; David C. McBride, Young Conaway Stargatt & Taylor, LLP. Back row: William H. Schorling, Buchanan Ingersoll & Rooney, P.C.; Neela Mookerjee (JD’08), University of Pennsylvania Law School; Christopher Foulds (JD’08), University of Pennsylvania Law School.

5 Front row: Roberta Romano, Yale Law School; G. Daniel O’Donnell, Dechert LLP; Michael Klausner, Stanford Law School.

Back row: Yair J. Listokin, Yale Law School; James D. Cox, Duke University School of Law; Edward M. Iacobucci, Faculty of Law, University of Toronto; Edmund W. Kitch, University of Virginia School of Law.

Hedge Fund Activism in the Enforcement of Bondholder Rights

marcel Kahan, George T. Lowy Professor of Law, New York University School of Law

B. Rock,

Corporate Governance

20 ApRil 2007

Welcome

michael A. Fitts, Bernard G. Segal Professor of Law Dean, University of Pennsylvania Law School

Morning Session

The Hanging Chads of Corporate Voting

marcel Kahan, George T. Lowy Professor of Law, New York University School of Law

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Commentators

henry T. C. hu, Allan Shivers Chair in the Law of Banking and Finance, The University of Texas Law School

hon. Leo E. Strine, Jr., Vice Chancellor, Delaware Court of Chancery

Institutional Investors and Proxy Voting:

The Impact of the 2003 Mutual Fund Voting Disclosure Regulation

Roberta Romano, Oscar M. Ruebhausen Professor of Law, Yale Law School

Commentators

Peter Friz, Vice President of Global Voting and Transaction Services, Institutional Shareholder Services

Lynn A. Stout, Paul Hastings Professor of Corporate and Securities Law, University of California-Los Angeles School of Law

Afternoon Session

Panel Discussion on What Is Wrong with Corporate Voting and How to Fix It

Moderators

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law

michael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

Panelists

hon. Carolyn Berger, Justice, Supreme Court of Delaware

James F. Duffy, Executive Vice President and General Counsel, NYSE Regulation, Inc.

Cary I. Klafter, Vice President, Legal and Government Affairs, Intel Corporation

Alan miller, Co-Chairman, Innisfree M&A Incorporated

David K. musto, Associate Professor of Finance, The Wharton School, University of Pennsylvania

A. gilchrist Sparks III, Morris, Nichols, Arsht & Tunnell LLP

John C. Wilcox, Senior Vice President and Head of Corporate Governance, TIAA-CREF

Corporate Finance

8 DeceMBeR 2006

Welcome

michael A. Fitts, Bernard G. Segal Professor of Law Dean, University of Pennsylvania Law School

Morning Session

The Short and Puzzling Life of the ‘Implicit Minority Discount’ in Appraisal Law

Lawrence hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law

michael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Commentators

Thomas J. Allingham II, Skadden, Arps, Slate, Meager & Flom LLP

Andrew metrick, Associate Professor of Finance, The Wharton School, University of Pennsylvania

The Value of Control: Implications for Control Premia, Minority Discounts, and Voting Share Differentials

Aswath Damodaran, Professor of Finance and David Margolis Teaching Fellow, Stern School of Business, New York University

Commentators

John C. Coates, John F. Cogan, Jr. Professor of Law and Economics, Harvard Law School

Joel E. Friedlander, Bouchard Margules & Friedlander

Afternoon Session

Panel Discussion on Delaware Appraisal Law: Challenges and Proposals for Change

Moderators

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law

michael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

Panelists

William A. Ackman, Managing Member, Pershing Square Capital Management, L.P.

Robert W. holthausen, Nomura Securities Company

Professor of Accounting and Finance, Chair, Department of Accounting, The Wharton School, University of Pennsylvania

hon. Stephen P. Lamb, Vice Chancellor, Delaware Court of Chancery

David C. mcBride, Young Conaway Stargatt & Taylor, LLP

A. gilchrist Sparks III, Morris, Nichols, Arsht & Tunnell LLP

Randall S. Thomas, John S. Beasley II Professor of Law and Business, Vanderbilt University Law School

Corporate Governance

1 Front row: Charles I. Cogut, Simpson Thacher & Bartlett LLP; Hon. Carolyn Berger, Supreme Court of Delaware; John C. Wilcox, TIAA-CREF; David K. Musto, The Wharton School, University of Pennsylvania. Middle row: Roy J. Katzovicz, Pershing Square Capital Management, L.P.; Yair J. Listokin, Yale Law School. Back row: Jonathan C. Lipson, James E. Beasley School of Law, Temple University.

2 Front row: Cary I. Klafter, Intel Corporation; James F. Duffy, NYSE Regulation, Inc. Back row: Lynn A. Stout, University of California-Los Angeles School of Law; Marcel Kahan, New York University School of Law; Peter Friz, Institutional Shareholder Services.

3 Alan Miller, Innisfree M&A Incorporated.

4 David C. McBride, Young Conaway Stargatt & Taylor, LLP, and James E. Odell, UBS Investment Bank.

5 William D. Anderson, Jr., Goldman Sachs.

6 A. Gilchrist Sparks III, Morris, Nichols, Arsht & Tunnell LLP.

Corporate Finance

7 Front row: William A. Ackman, Pershing Square Capital Management, L.P. Middle row: Jill Fisch, Fordham University School of Law; Roy J. Katzovicz, Pershing Square Capital Management, L.P. Back row: Benjamin Strauss, Pepper Hamilton LLP.

8 Front row: Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; David C. McBride, Young Conaway Stargatt & Taylor, LLP; Hon. Stephen P. Lamb, Delaware Court of Chancery. Middle row: Merritt B. Fox, Columbia Law School; Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP. Back row: James G. McMillan, Bouchard Margules & Friedlander.

9 Roy J. Katzovicz, Pershing Square Capital Management, L.P.

10 Michael E. Lubowitz, Weil, Gotshal & Manges LLP.

11 Front row: Merritt B. Fox, Columbia Law School; Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP; Roberta Romano, Yale University Law School. Back row: David G. Clarke, The Griffing Group, Inc.; Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP.

12 Eileen Nugent, Skadden, Arps, Slate, Meagher & Flom LLP.

Chancery Court Programs

25 March 2008

Moderators

Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware

michael L. Wachter, University of Pennsylvania Law School

Panelists

Robert C. Clark, Harvard Law School, Director: TIAA-CREF and Time Warner

Charles m Elson, Weinberg Center for Corporate Governance, University of Delaware, Director: Autozone, Inc. and HealthSouth Corp.

V. Janet hill, Alexander & Associates, Inc., Director: Sprint Nextel and Wendy’s

Susan m Stalnecker, E. I. du Pont de Nemours and Company, Director: PPL Corporation

4 March 2008

Moderators

Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware

michael L. Wachter, University of Pennsylvania Law School

Speakers

Stephen m. Bainbridge, William D. Warren Professor of Law, University of CaliforniaLos Angeles School of Law

harvey J. goldschmid, Dwight Professor of Law, Columbia Law School, Securities and Exchange Commission, 2002–2005

ThE ChAnCERY CoURT PRogRAmS are a component of a Penn Law course on corporate law and finance co-taught by Leo E. Strine, Jr., Vice Chancellor of the Delaware Chancery Court, and michael L. Wachter, William B. Johnson Professor of Law and Economics. The topic of this year’s seminar was the evolving role of independent directors in corporate governance. Two special sessions of the class are opened to the entire University community, as well as to ILE board members and invited guests, under the auspices of ILE.

The Chancery Court Programs are followed by Corporate governance Dinners with further commentary and discussion. The Corporate governance Dinners provide an opportunity for off-the-record commentary and conversation among presenters and members of the board of advisors, their invited colleagues, and the Institute’s associate faculty.

25 march 2008

The Independent Director’s Most Important Role?: Selecting, Compensating, Overseeing, and Planning For the Succession of the CEO

This panel discussion featured several well-respected and experienced independent directors. The panelists shared their perspectives on how boards carry out these important functions, how boards should ideally organize themselves to effectively address these responsibilities, and what, if any, public policy changes would better aid independent directors in this vital area.

4 march 2008

Say On Pay: A Positive Contribution To Corporate Effectiveness and Accountability Or An Unprincipled and Costly Incursion Into Director Authority?

In this program, two distinguished academics debated the question of whether and to what extent stockholders should vote on executive compensation. Professor goldschmid argued that shareholders should be given advisory votes on executive compensation, while Professor Bainbridge took the opposite position. The participants articulated their views on whether increased stockholder voting rights over executive compensation is compatible with the traditional American approach to corporation law and what effects the creation of such a right would have on the authority of boards of directors, and on their behavior.

Chancery Court Program, March 4, 2008

6 Robert A. Lonergan, Rohm and Haas Company; Steven A. Reed, Harkins Cunningham LLP; and Joseph B. Frumkin, Sullivan & Cromwell LLP.

7 Hon. Leo E. Strine, Jr., Delaware Chancery Court; Harvey J. Goldschmid, Columbia Law School; and Stephen M. Bainbridge, University of California-Los Angeles School of Law.

8 Hon. Leo E. Strine, Jr., Delaware Chancery Court; Harvey J. Goldschmid, Columbia Law School; and Stephen M. Bainbridge, University of California-Los Angeles School of Law.

9 Hon. Leo E. Strine, Jr., Delaware Chancery Court; Harvey J. Goldschmid, Columbia Law School; Stephen M. Bainbridge, University of California-Los Angeles School of Law; and Michael L. Wachter, University of Pennsylvania School of Law.

10 Harvey J. Goldschmid, Columbia Law School and Stephen M. Bainbridge, University of California - Los Angeles School of Law.

Chancery Court Program, March 25, 2008

1 Hon. Leo E. Strine, Jr., Delaware Chancery Court; Charles M. Elson, University of Delaware; V. Janet Hill, Alexander & Associates, Inc.; Robert Clark, Harvard Law School; Susan M. Stalnecker, E. I. du Pont de Nemours and Company; and Michael L. Wachter, University of Pennsylvania Law School.

2 Robert Clark, Harvard Law School and Susan M. Stalnecker, E. I. du Pont de Nemours and Company.

3 Robert Clark, Harvard Law School; Susan M. Stalnecker, E. I. du Pont de Nemours and Company; and Michael L. Wachter, University of Pennsylvania Law School.

4 V. Janet Hill, Alexander & Associates, Inc.

5 Hon. Leo E. Strine, Jr., Delaware Chancery Court; Charles M. Elson, University of Delaware; V. Janet Hill, Alexander & Associates, Inc.; and Robert Clark, Harvard Law School.

Chancery Court Programs

5 April 2007

Moderators

Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware

michael L. Wachter, University of Pennsylvania Law School

Panelists

Richard C. Ferlauto, Director of Pension and Benefit

Policy, American Federation of State, County and Municipal Employees (AFSCME)

michael musuraca, Assistant Director, Department

of Research and Negotiations, District Council 37, American Federation of State, County and Municipal Employees (AFSCME)

Damon Silvers, Associate General Counsel, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)

13 March 2007

Moderators

Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware

michael L. Wachter, University of Pennsylvania Law School

Panelists

mark J. gentile, Richards, Layton & Finger, P.A.

Janet L. Kelly, Deputy General Counsel, ConocoPhillips Company

Simon m Lorne, Vice Chairman and Chief Legal Counsel, Millennium Management LLC

Robert h mundheim, Shearman & Sterling LLP

Victoria E. Silbey, Senior Vice President-Legal and General Counsel, SunGard Data Systems, Inc.

5 April 2007

Labor’s Views on Corporate Governance and the Role of the Corporate Board: How Has Labor’s Perspective Changed over the Decades? What Are the Current Objectives?

Since the mid-1990s, the labor movement has sought to define a governance agenda for workers as long-term investors that is distinct from the agendas of both self-interested managers and short-term investors like day traders, leveraged buyout players and hedge funds. This perspective is now being challenged by the rise of hedge funds and private equity. This program focused on the evolution of labor’s perspectives about corporate directors and officers and what corporate governance initiatives are in labor’s best interests as owners and stakeholders.

13 march 2007

Structuring the Board’s Compliance Function: Should the Corporation Continue to ‘Dump It into Audit’ or Are Fresher Approaches Needed?

how should corporations best organize their board committees and officer structure to address the myriad, increasingly complex and diverse legal and financial mandates that corporations must contend with? The traditional boardroom approach to addressing legal and financial compliance —to “dump it into audit,” which is what Enron did—remains the prevalent model. This program considered whether that is the most prudent way to use the board’s talents and to organize the corporation’s compliance function, and whether there are other models that might be more effective and efficient.

Deal Day

SpRinG 2007

Moderators

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law

michael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

Presenter

Brian gavin, Senior Managing Director, The Blackstone Group L.P.

Commentators

Timothy L. Barefield, Chief Operating Officer, Pershing Square Capital Management, L.P.

george J. mazin, Dechert LLP

gerald Rosenfeld, Chief Executive Officer, Rothschild North America

4 may 2007

Monitoring Hedge Funds: Investor Due Diligence

Deal Day taps the expertise of our board and sponsors to examine in depth current opportunities and challenges. By looking at the details of complex transactions, we examine cutting edge issues at the intersection of law, finance, governance and operations. The goal of these programs is to allow the participants to understand the “guts of the deal” as a way of understanding the issues at the cutting edge of deal making.

In may 2007, Brian gavin, head of Blackstone’s hedge fund monitoring group, presented Blackstone’s approach to evaluating hedge funds in its $20 billion fund of hedge funds. In previous years, we’ve held Deal Days in new York, London and Tel Aviv that have examined international and domestic private equity transactions, the role of the investment banker for a special committee in a management buyout, as well as the role of a specialty corporate court.

Chancery Court Programs

1 Robert H. Mundheim, Shearman & Sterling LLP.

2 Victoria Silbey, SunGard Data Systems, Inc.

3 Michael Musuraca, AFSCME and Richard C. Ferlauto, AFSCME.

4 Damon Silvers, AFL-CIO.

5 Simon M. Lorne, Millennium Management, LLC; Janet L. Kelly, ConocoPhillips Company; Michael L. Wachter, University of Pennsylvania Law School; and Hon. Leo E. Strine, Jr., Delaware Chancery Court.

6 Michael L. Wachter, University of Pennsylvania Law School; Hon. Leo E. Strine, Jr., Delaware Chancery Court; Damon Silvers, AFL-CIO; Michael Musuraca, AFSCME; and Richard C. Ferlauto, AFSCME.

10 Eric L.

Deal Day

7 Timothy L. Barefield, Pershing Square Capital Management, L.P.; George J. Mazin, Dechert LLP; and Gerald Rosenfeld, Rothschild North America.

8 Timothy L. Barefield, Pershing Square Capital Management, L.P.; George J. Mazin, Dechert LLP; Gerald Rosenfeld, Rothschild North America; Michael L. Wachter, University of Pennsylvania Law School; and Edward B. Rock, University of Pennsylvania Law School.

9 Brian Gavin, The Blackstone Group L.P.

Talley, School of Law - Boalt Hall, University of California, Berkeley.

Lectures

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 jurists 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

31 march 2008

Making Every Mistake Once Safra catz, President and Chief Financial Officer, Oracle Corporation

Safra Catz is President and Chief Financial officer (CFo) of oracle Corporation. In her lecture for ILE, Catz spoke on how to drive strategic change in a complex, global business.

Catz has been a member of oracle’s Board of Directors since october 2001. She serves on oracle’s Executive management Committee and is responsible for global operations. Previously, she served as Executive Vice President and Senior Vice President.

Prior to joining oracle, Catz was at Donaldson, Lufkin & Jenrette, a global investment bank that has since merged with Credit Suisse First Boston, where she was a managing Director from February 1997 to march 1999, and a Senior Vice President from January 1994 until February 1997.

Catz is a graduate of the Wharton School and the University of Pennsylvania Law School.

19 September 2007

Tales from Blackstone’s IPO

Robert l. Friedman, Senior Managing Director and Chief Legal Officer, The Blackstone Group L.P.

Robert L. Friedman is a senior managing director at Blackstone and he also serves as the chief legal officer. his talk for ILE focused on his experiences as part of the team that took Blackstone public on June 22. At that time, Blackstone’s IPo was the third-largest public offering in history, and the first by a large private equity house.

Friedman has been with Blackstone since 1999. he has worked primarily in Blackstone’s Private Equity group and has also participated in the work of the Corporate and mergers and Acquisitions Advisory group. Since early 2003, he has also been the Chief Legal officer. Before joining Blackstone, mr. Friedman had been a partner with Simpson Thacher & Bartlett for 25 years, where he was a senior member of that law firm’s mergers and acquisitions practice. At Simpson Thacher, mr. Friedman advised The Blackstone group since the firm was founded in 1985.

Friedman graduated from Columbia College and received a JD from the University of Pennsylvania Law School. he is a member of the Board of Advisors for the Institute for Law and Economics of the University of Pennsylvania, and he served as its chair from 2001 to 2007. he also serves as a member of the Board of Visitors of Columbia College, a Trustee of the nantucket Land Council, and a Trustee of Chess-in-the-Schools and new Alternatives for Children, two charitable organizations with programs for disadvantaged youth in new York City.

“some

of the worst mistakes in business could have been avoided if someone had just challenged convention.”—safra catz

Law and Entrepreneurship Lectures

28 February 2007

Law, Legal Risks, and the Financial Markets

isaac D. corré, Senior Managing Director, Eton Park Capital Management

Isaac D. Corré is responsible for the event oriented activities of Eton Park. In his talk for ILE, Corré spoke on how he used his legal training in the world of investing by evaluating legal risks when a company’s situation may be significantly affected by an uncertain legal outcome. Prior to joining Eton Park, Corré was a partner at Scoggin Capital management, a new York-based multi-strategy hedge fund. At Scoggin, Corré managed the merger arbitrage and special situations portfolio that included investments in complex restructurings, stub trades and securities affected by legal and regulatory changes. Corré also managed the firm’s investment in a sovereign trade claims business. he was deeply involved in managing the distressed debt and value equities portfolios.

Before joining Scoggin, Corré practiced law for more than nine years. his legal practice focused principally on complex commercial litigation, involving mergers and acquisitions, securities issuance, corporate governance and bankruptcy.

he graduated with a BA, summa cum laude, from Yeshiva University in 1985 and a JD, cum laude, from harvard Law School in 1989. Corré serves on the Board of Trustees of the Yeshiva University business school.

29 november 2006

Large-Scale Entrepreneurship: Business Development at GE pamela Daley, Senior Vice President for Corporate Business Development, General Electric Company

Pamela Daley is responsible for gE’s mergers, acquisitions, and divestiture activities worldwide. In her november lecture, Daley described gE’s evolution into one of the largest companies in the world, and gE’s recent initiatives to invest in new fields and sectors.

Before assuming her present position, she was Vice President and Senior Counsel for Transactions at gE. Before arriving at gE in 1989, Daley was a tax partner of the national law firm of morgan, Lewis & Bockius where she specialized in tax-oriented financings and m&A. From 1982 to 1989, she was an adjunct professor at the University of Pennsylvania Law School, where she taught federal income taxation of partners and partnerships.

Daley serves on the Board of Directors of general Electric Capital Corporation, gE Capital Services, Inc., the gE Foundation, and the World Wildlife Fund, and is a past director of genworth Financial, Inc. (2004–2006). She also serves on the Board of overseers of the University of Pennsylvania Law School.

Daley received her B.A. degree with highest honors from Princeton University in 1974 in Romance Languages and Literatures. In 1979, she graduated first in her class from the University of Pennsylvania Law School, where she served as Editor-in- Chief of the Law Review. She is a member of Phi Beta Kappa and order of the Coif.

“the united states features what many rightly consider the world’s most efficient capital markets and stable legal regime. these are mutually reinforcing, but the financial markets have a lot to learn about the legal system and the law has a lot to learn about the financial markets. perhaps forums such as this will facilitate the critical transfer of knowledge between these two systems.”— isaac corré

Distinguished Jurist Lectures

24 october 2007

The Future of Securities Regulation

Brian G. cartwright, General Counsel, Securities and Exchange Commission

Brian g. Cartwright currently serves as the general counsel for the Securities and Exchange Commission.

Cartwright began his legal career in 1980 after earning a J.D. from harvard Law School, where he was President of the Harvard Law Review and winner of the Sears Prize. he served as a law clerk to Judge malcolm R. Wilkey of the U.S. Court of Appeals for the District of Columbia Circuit and to Associate Justice Sandra Day o’Connor of the U.S. Supreme Court.

Cartwright then joined the law firm of Latham & Watkins in 1982, and became a partner in 1988. Among the management positions he held at Latham & Watkins, mr. Cartwright served as global Chair of the firm’s practice representing public companies. While a member of the firm’s Executive Committee, he was one of five partners responsible for the management of the firm as a whole.

Prior to joining the legal profession, mr. Cartwright was an astrophysicist. Following his graduation from Yale University in 1967, he earned a Ph.D. in physics from the University of Chicago in 1971. From 1973 to 1977, he was a Research Physicist in the Department of Physics and Space and Sciences Laboratory of the University of California, Berkeley. While working as an astrophysicist, mr. Cartwright published many articles in scholarly journals, such as the Astrophysical Journal

11 october 2006

The Embattled Corporation Hon. Richard A. posner, U.S. Seventh Circuit Court of Appeals and University of Chicago Law School

Richard Posner, as an academic and as a judge, is one of the pioneers of Law and Economics. In numerous books, articles and judicial opinions, he has examined legal issues through the lens of economic analysis.

he came to Law and Economics indirectly after graduating from Yale College in 1959, summa cum laude, junior Phi Beta Kappa, and an English major. Three years later, after graduating from harvard Law School first in his class, magna cum laude, and president of the Law Review, he went to work in Washington— as law clerk to Justice William J. Brennan, Jr., as an assistant to Commissioner Philip Elman of the Federal Trade Commission, as an assistant to the Solicitor general of the U.S., Thurgood marshall, and as general counsel of President Johnson’s Task Force on Communications Policy.

Posner entered law teaching in 1968 at Stanford as an associate professor, and became professor of law at the University of Chicago Law School in 1969, where he remained (later as Lee and Brena Freeman Professor of Law) until his appointment to the Seventh Circuit in 1981. During this period Posner wrote a number of books (including Antitrust Law: An Economic Perspective, Economic Analysis of Law, and The Economics of Justice) and many articles exploring the application of economics to a variety of legal subjects, including antitrust, public utility and common carrier regulation, torts, contracts, and procedure. he founded the Journal of Legal Studies, primarily to encourage economic analysis of law, and was a research associate of the national Bureau of Economic Research. In his talk for ILE, Posner discussed the ways in which his thoughts on law and economics have changed since Economic Analysis of the Law was first published, and his current thoughts on executive compensation, organizational dynamics, and irrationality in the market.

Posner became a Judge of the U.S. Court of Appeals for the Seventh Circuit in December 1981 and served as Chief Judge from 1993 to 2000. he has written almost 2200 published judicial opinions. he continues to teach part time at the University of Chicago Law School, where he is Senior Lecturer, and to write academic articles and books. he has written 38 books and more than 300 articles and book reviews. his academic work since becoming a judge has included studies in the economics of criminal law, labor law, and intellectual property; in jurisprudence, law and literature, and the interpretation of constitutional and statutory texts; and in the economics of sexuality and of old age.

“retail investors continue to invest very large dollar amounts indirectly in stock and other public securities—but only indirectly. this means that, increasingly, retail investors are not the ones deciding whether to buy, sell, or hold individual stocks—or, and this is very important, how to vote them.”

—brian cartwright

“the stock option is not a very tailored way of motivating chief executive officers to do their best, because a lot of things affect the price of stock other than the efforts of the ceo. to tie a ceo’s income to the value of his company’s stock is a little like if the salary of the president of the united states was tied to the gnp.”

—richard a. posner

Distinguished Jurist Lectures

16 march 2006

Technology Mergers in a Shrinking World

Hon. Vaughn R. Walker, Chief Judge, U.S. District Court for the Northern District of California

hon. Vaughn R. Walker became a federal judge in 1990 after having been nominated by Presidents Reagan and george h. W. Bush and confirmed by the Senate. he studied law at the University of Chicago and Stanford and practiced law in San Francisco, handling antitrust and other business cases, from 1972 until his appointment to the bench. As a federal judge, Walker has been described as “a pioneer who understands business law.” In his Distinguished Jurist talk he shared insights gained in presiding over the oracle antitrust trial and other high-profile litigation involving mergers and intellectual property issues in tech companies, such as the landmark case that pitted Apple against microsoft. his lecture focused on the implications for antitrust merger analysis of the increasing importance of intellectual property in commercial activity, and the impact of globalization.

3 march 2005

Corporate Federalism: Event Horizons in Corporate Governance

Hon. Myron T. Steele, Chief Justice, Delaware Supreme Court

The honorable myron T. Steele is a former Vice Chancellor of the Delaware Court of Chancery, Resident Judge of Superior Court, Deputy Attorney general, Senate (Delaware) Attorney and Chairman of the Consumer Affairs Board. he has presided over major corporate litigation, LLC and limited partner governance disputes, and he writes frequently on issues of corporate document interpretation and corporate governance. he has published more than 300 opinions disposing of disputes among members of limited liability companies, and limited partnerships, and between shareholders and management of both publicly traded and closed corporations.

In his talk, Chief Justice Steele described how the federal government’s desire to protect shareholders in corporations has led to a “one-size-fits-all regulatory model” that is often less sensitive to a corporation’s particular situation than the corresponding state laws would be. As early as the Securities Act of 1933 and the Exchange Act of 1934, the federal regulation of corporations has been creeping further and further into the domain of individual states’ regulation, he said.

“the larger the federal presence, the less scope to the states’ radically different approaches and their influence in shaping corporate governance. like black holes, the federal government’s gravitational pull inevitably swallows everything in its path.”

—myron steele

he sees the Sarbanes-oxley Act, passed in 2002 in response to corporate financial and accounting scandals, as a troubling harbinger of growing federal control. Since 2002, corporations have spent $8 billion attempting to comply with the new restrictions, the Chief Justice said, and he expressed concern that there would be further costs, not only in direct compliance expenditures, but in losses from restricted business practices.

“in an industry whose products derive their value from their intellectual or conceptual content, not from their physical characteristics, the traditional tools we’ve used in merger analysis are much less useful. they don’t fit the kinds of dynamics that a technology industry displays in quite the same way that the traditional physical kind of product fits those standards.”

—vaughn r. walker

Past Law and Entrepreneurship Lectures

26 october 2006 Managing in the 21st Century henry R. Silverman, Chairman & CEO, Realogy Corporation

16 February 2006 The Banker as Entrepreneur michael J. Biondi, Co-Chairman, Investment Banking, Lazard Frères & Co. LLC

26 october 2005 Founding and Building a New Venture: The Story of the National Women’s Law Center

marcia greenberger, Founder and Co-President, National Women’s Law Center

7 April 2005

A Swing of the Pendulum: 20 Years in M&A Joseph D. gatto, Managing Director, Goldman, Sachs & Co.

24 march 2004

The WNBA and Women’s Team Sports: A New Sports Marketing Proposition for the New Millennium

Val Ackerman, President, Women’s National Basketball Association

30 october 2003 The Role of Entrepreneurship in Urban Education: Past, Present and Future

James E. nevels, Chairman and CEO, The Swarthmore Group, Inc.; Chairman, Philadelphia School Reform Commission

6 november 2002 Public Trust—and Distrust—in American Business: What Needs to Be Done

Peter g Peterson, Chairman, The Blackstone Group; Chairman, Federal Reserve Bank of New York; Co-Chair, Conference Board Commission on Public Trust and Private Enterprise

26 September 2002 What They Did Not Teach Me in Law School

Robert m Potamkin, Co-Chairman and Co-CEO, Planet Automotive Group, Inc.

19 April 2002 Smart People Making and Losing Money: Some Recent Examples Perry golkin, Kohlberg Kravis Roberts & Co.

25 october 2001

The Economics of Sports Team Franchises for Cities

hon. Edward g Rendell, Governor, Commonwealth of Pennsylvania

21 February 2001 Private Equity: Difficult Investing in a Difficult Time

Paul S. Levy, Senior Managing Director, Joseph Littlejohn & Levy

2 march 2000 Perspectives on the Health Care Revolution

Charles A. heimbold, Jr., Chairman and CEO, BristolMyers Squibb Company

18 november 1999 Ethics in Sports: Deciding the Game Anita DeFrantz, Vice President, International Olympic Committee; President, Amateur Athletic Foundation

23 october 1997 How to Maintain Entrepreneurial Values While Your Company Climbs into the Fortune 500

Brian L. Roberts, President, Comcast Corporation

27 march 1997

The Unique Impact of the Law on the Leveraged Buyout Business

Saul A. Fox, Fox Paine & Company, LLC

Past Distinguished Jurist Lectures

28 october 2004 A Twelve-Year Retrospective on Delaware Corporate Jurisprudence and Governance Issues hon. E. norman Veasey, Chief Justice, Delaware Supreme Court

4 march 2004 Corporate DecisionMaking in Delaware Courts

The honorable Carolyn Berger, Justice, Delaware Supreme Court

27 February 2003 The Effects of Collegiality on Judicial Decision Making

The honorable harry T. Edwards, Circuit Judge, U.S. Court of Appeals for the D.C. Circuit

29 november 2001

Fee Shifting as a Control Against the Rogue Litigant

The honorable Jack B. Jacobs, Justice, Supreme Court of Delaware

6 march 2001

Administering Capital Punishment: Is Texas Different?

The honorable Patrick E. higginbotham, U.S. Court of Appeals for the Fifth Circuit

24 February 2000

The Court of Chancery as Teacher of Corporate Law

The honorable William B. Chandler III, Chancellor, Delaware Court of Chancery

11 February 1999

Why Do People Bring Employment Discrimination Cases When They Usually Lose?

The honorable Diane Wood, U.S. Court of Appeals for the Seventh Circuit

12 February 1998

The Value of Predictability in Corporate Law

The honorable E. norman Veasey, Chief Justice, Delaware Supreme Court

11 February 1997

What Economics of Law Must Address Next: Some Thoughts on Theory

The honorable guido Calabresi, U.S. Court of Appeals for the Second Circuit

7 February 1996

The MTV Constitution The honorable Alex Kozinski, U.S. Court of Appeals for the Ninth Circuit

22 march 1995

Accountability: Popular Will, Interest Groups, or the Invisible Hand

The honorable Stephen F. Williams, U.S. Court of Appeals for the District of Columbia

13 April 1994

On the Constitution

The honorable Antonin Scalia, Associate Justice, U.S. Supreme Court

14 october 1992

Nonprice Competition

The honorable Douglas h ginsberg, U.S. Court of Appeals for the District of Columbia

3 December 1991 Corporate Takeovers and Our Schizophrenic Conception of the Corporation

The honorable William T. Allen, Chancellor, Delaware Court of Chancery

1990

The Constitution and the Spirit of Freedom

The honorable Anthony m Kennedy, Associate Justice, U.S. Supreme Court

Academic Events

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.

In FEBRUARY 2005 we launched an annual conference on Law and Finance, jointly sponsored by ILE, the Wharton Finance Department, the Center for Law and Business at nYU Law School, and the nYU 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. 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-and-take 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 website at www.law.upenn.edu/ile/seminarseries. html and copies are provided to faculty and advanced students upon request. The 2007–2008 ILE Seminar Series was organized by Professors Aditi Bagchi, gideon Parchomovsky, and David Skeel.

Penn/NYU Conference on Law and Finance

29 FeBRuARy AnD 1 MARcH, 2008

University of Pennsylvania Law School

Jointly sponsored by Institute for Law and Economics

University of Pennsylvania

Financial Institutions Center

The Wharton School

Center for Law & Business

New York University

Organized by

Yakov Amihud, Stern School of Business, New York University

marcel Kahan, New York University School of Law

h Franklin Allen, The Wharton School, University of Pennsylvania

michael L. Wachter, University of Pennsylvania Law School

Session I

Rating the Ratings: How Good Are Commercial Governance Ratings?

Robert m Daines, Stanford Law School

Ian gow, Stanford Graduate School of Business

David F. Larcker, Stanford Graduate School of Business

Commentator

David Yermack, Stern School of Business, New York University

Moderator:

hon. Leo E. Strine, Jr., Delaware Court of Chancery

Session II

Creditor Rights and Corporate Risk-Taking

Viral Acharya, London Business School

Yakov Amihud, Stern School of Business, New York University

Lubomir Litov, Olin School of Business, Washington University in St. Louis

Commentator Katharina Pistor, Columbia Law School

Moderator

hon. Leo E. Strine, Jr., Delaware Court of Chancery

Session III

Attorneys as Arbitrators

Stephen Choi, New York University School of Law

Jill Fisch, Fordham University School of Law

Adam Pritchard, The University of Michigan Law School

Commentator

Antoinette Schoar, Sloan School of Management, MIT

Moderator

hon. Stephen P. Lamb, Delaware Court of Chancery

Session IV

Blockholders, Market Efficiency, and Managerial Myopia

Alex Edmans, The Wharton School, University of Pennsylvania

Commentator

Alan Schwartz, Yale Law School

Moderator

hon. Stephen P. Lamb, Delaware Court of Chancery

Session V

Hedge Fund Activism in the Enforcement of Bondholder Rights

marcel Kahan, New York University School of Law

Edward B. Rock, University of Pennsylvania Law School

Commentator Wei Jiang, Columbia Business School

Moderator

hon. Stephen P. Lamb, Delaware Court of Chancery

Session VI

Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?

Steven n Kaplan, The University of Chicago

Graduate School of Business

Joshua Rauh, The University of Chicago Graduate School of Business

Commentator

David I. Walker, Boston University School of Law

Moderator

Richard E. Kihlstrom

The Wharton School, University of Pennsylvania

Session VII

Value Destruction in the New Era of Chapter 11

Barry E. Adler, New York University School of Law

Vedran Capkun, HEC School of Management

Lawrence A. Weiss, McDonough School of Business, Georgetown University

Commentator

Julian Franks, London Business School

Moderator

Richard E. Kihlstrom, The Wharton School, University of Pennsylvania

Session VIII

Differences in Governance Practices between U.S. and Foreign Firms: Measurements, Causes, and Consequences

Reena Aggerwal, McDonough School of Business, Georgetown University

Isil Erel, Fisher College of Business, The Ohio State University

René Stulz, Fisher College of Business, The Ohio State University

Rohan Williamson

McDonough School of Business, Georgetown University

Commentator

Edward m. Iacobucci, Faculty of Law, University of Toronto

Moderator

Richard E. Kihlstrom, The Wharton School, University of Pennsylvania

NYU/Penn Conference on Law and Finance

23–24 FeBRuARy 2007

Jointly sponsored by Institute for Law and Economics

University of Pennsylvania

Commentator

David L. Yermack, Stern School of Business, New York University

Financial Institutions Center

The Wharton School Center for Law & Business

New York University

Organized by Yakov Amihud, Stern School of Business, New York University

Stephen Choi, New York University School of Law

Richard Kihlstrom

The Wharton School, University of Pennsylvania

Edward B. Rock, University of Pennsylvania Law School

Session I

The Short and Puzzling

Life of the “Implicit

Minority Discount” in Delaware Appraisal Law

Lawrence A. hamermesh, Widener University School of Law

michael L. Wachter, University of Pennsylvania

Law School

Chair

Stephen Choi, New York University School of Law

Session II Governance Problems in Close Corporations

Venky nagar, Ross School of Business, The University of Michigan

Kathy R. Petroni, The Eli Broad College of Business and The Eli Broad Graduate School of Management, Michigan State University

Daniel Wolfenzon, Stern School of Business, New York University; National Bureau of Economic Research

Commentator

Jill Fisch, Fordham University School of Law

Chair

William T. Allen, Stern School of Business, New York University; New York University School of Law

Session III

Institutional Investors and Proxy Voting: The Impact of the 2003 Mutual Fund

Voting Disclosure Regulation

martijn Cremers, Yale School of Management

Roberta Romano, Yale Law School

Commentator

Joy Ishii, Stanford Graduate School of Business

Chair

William T. Allen, Stern School of Business, New York University; New York University School of Law

Session IV

Predatory Lending in a Rational World

Philip Bond, The Wharton School, University of Pennsylvania

David K. musto, The Wharton School, University of Pennsylvania

Bilge Yılmaz, The Wharton School, University of Pennsylvania

Commentator

michael Barr, The University of Michigan Law School

Chair

Andrew metrick, The Wharton School, University of Pennsylvania

Session V Pay Distribution in the Top Executive Team

Lucian Arye Bebchuk, Harvard Law School

martijn Cremers, Yale School of Management

Urs Peyer, INSEAD

Commentator

Steven Kaplan, The University of Chicago Graduate School of Business

Chair Andrew metrick, The Wharton School, University of Pennsylvania

Session VI

Corporate Financing Decisions When Investors Take the Path of Least Resistance

malcolm Baker, Harvard Business School; National Bureau of Economic Research

Joshua Coval, Harvard Business School; National Bureau of Economic Research

Jeremy C. Stein, Harvard Business School; National Bureau of Economic Research

Commentator

Robert m Daines, Stanford Law School

Chair

Edward B. Rock, University of Pennsylvania Law School

Session VII

Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation?

max m Schanzenback, Northwestern University School of Law

Robert h. Sitkoff, New York University School of Law

PENN/NYU 08

1 Alex Edmans, The Wharton School, University of Pennsylvania.

2 Andrew Metrick, Yale School of Management.

3 Katharina Pistor, Columbia Law School.

4 Gerald Rosenfeld, Rothschild North America, and Robert H. Mundheim, University of Pennsylvania and Shearman & Sterling.

Commentator

William n goetzmann, Yale School of Management

Chair

Edward B. Rock, University of Pennsylvania Law School

Session VIII

Who Blows the Whistle on Corporate Fraud?

Alexander Dyck, Rotman School of Management, University of Toronto

Adair morse, The University of Michigan

Luigi Zingales, The University of Chicago Graduate School of Business; National Bureau of Economic Research; Centre for Economic Policy Research

Commentator

Jeffrey n gordon, Columbia Law School

Chair

Kose John, Stern School of Business, New York University

6 Gerald Rosenfeld, Rothschild North America, and William T. Allen, Stern School of Business, New York University and New York University School of Law.

7 Daniel Wolfenzon, Stern School of Business, New York University and National Bureau of Economic Research; Jill Fisch, Fordham University School of Law; and Yakov Amihud, Stern School of Business, New York University.

8 Hon. Stephen P. Lamb, Delaware Court of Chancery; Yakov Amihud, Stern School of Business, New York University; Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; and William T. Allen, Stern School of Business, New York University and New York University School of Law.

New York University School of Law

NYU/PENN 07 5 Foreground: David K. Musto, The Wharton School, University of Pennsylvania. Background: Michael Barr, The University of Michigan Law School.

ILE/Wharton Finance Seminars

Co-Sponsored by Institute for Law and Economics and Department of Finance, The Wharton School

27 march 2008

Where Do Firms Incorporate: Deregulation and the Cost of Entry (co-authored with Marco Becht and Hannes F. Wagner)

Colin mayer, Peter Moores Dean of the Saïd Business School and Peter Moores Professor of Management Studies, University of Oxford

8 november 2007

Identifying the Effect of Board Structure on Firm Value: Event Study, DiD, Firm Fixed Effects, and IV Evidence from Korea (co-authored with Woochan Kim)

Bernard S. Black, Hayden W. Head Regents Chair for Faculty Excellence, The University of Texas at Austin School of Law

Commentators

Assaf hamdani, Penn Law (visiting)

Jonathan Klick, Penn Law (visiting)

Andrew metrick, Wharton Finance

David K. musto, Wharton Finance

27 march 2008

Where Do Firms Incorporate: Deregulation and the Cost of Entry

(co-authored with Marco Becht and Hannes F. Wagner)

colin Mayer, Peter Moores Dean of the Saïd Business School and Peter Moores Professor of Management Studies, University of Oxford

We study how deregulation of corporate law affects the decision of entrepreneurs of where to incorporate. Recent rulings by the European Court of Justice (ECJ) have enabled entrepreneurs to select their country of incorporation independently of their real seat. We analyze foreign incorporations in the U.K., where incorporations of limited liability companies can be arranged at low cost. Using data for over 2 million companies from around the world incorporating in the U.K., we find a large increase in cross-country incorporations from E.U. member States following the ECJ rulings. In line with regulatory cost theories, incorporations are primarily driven by minimum capital requirements and setup costs in home countries. We record widespread use of special incorporation agents to facilitate legal mobility across countries.

8 november 2007

Identifying the Effect of Board Structure on Firm Value: Event Study, DiD, Firm Fixed Effects, and IV Evidence from Korea (co-authored with Woochan Kim)

Bernard S. Black, Hayden W. Head Regents Chair for Faculty Excellence, The University of Texas at Austin School of Law

outside directors and audit committees are widely considered to be central elements of good corporate governance. Yet evidence supporting this conventional wisdom is limited. A core problem is that board structure is endogenous to other firm characteristics. good identification strategies are rarely available. Korea provides a unique laboratory for assessing whether there is a causal connection between board structure and firm value in an emerging market. We rely on a 1999 Korean law which mandates 50% outside directors, an audit committee, and a director nominating committee for large public firms, but not for smaller public firms. We use a combination of event study, difference-in-difference, firm fixed effects, instrumental variable, and regression discontinuity methods, and exploit the synergies between different methods to improve identification. We find consistent evidence across methods of economically important share price increases for large firms. Large firms’ share prices jump relative to small firms when the reforms are announced, and thereafter remain higher than those of small firms. Several years after the reforms, large firms’ profitability rises relative to small firms and their asset sales to related parties decline, suggesting channels through which board structure affects firm value. In a firm fixed effects framework, we find (i) similar share price gains for large firms, which are legally required to change board structure, and smaller firms which do so voluntarily; and (ii) evidence for the separate value of board independence and board committee structure (largely audit committee).

Past ILE/Wharton Finance Seminars

22 march 2007

Law and the Market: The Impact of Enforcement

John C. Coffee, Jr., Adolf A. Berle Professor of Law, Columbia University School of Law

Commentators

Philip Bond, Wharton Finance

Jill Fisch, Penn Law (visiting)

Wayne R. guay, Wharton Finance

Tobias B. Wolff, Penn Law

30 november 2006

Who Blows the Whistle on Corporate Fraud?

(co-authored with Alexander Dyck and Adair morse)

Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

Commentators

Aditi Bagchi, Penn Law

John E. Core, Wharton Finance

Andrew metrick, Wharton Finance

Edward B. Rock, Penn Law

6 April 2006

The States as Laboratory: Legal Innovation and State Competition for Corporate Charters

Roberta Romano, Allen Duffy/Class of 1960 Professor of Law, Yale University Law School

Commentators

Richard E. Kihlstron, Wharton Finance

Andrew metrick, Wharton Finance

Chris W. Sanchirico, Penn Law

Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP

20 october 2005

Creating Constituencies for Reform

Raghuram g Rajan, Economic Counsellor and Director, Research International Monetary Fund

Commentators

William W. Burke-White, Penn Law

Robert P. Inman, Wharton Finance

Jason Scott Johnston, Penn Law

Bilge Yilmaz, Wharton Finance

31 march 2005

What Matters in Corporate Governance?

Lucian Arye Bebchuk, Harvard Law School

Commentators

hulya Eraslan, Wharton Finance

Andrew metrick, Wharton Finance

Edward B. Rock, Penn Law

David A. Skeel, Penn Law

11 november 2004

Venture Capital Investment Cycles:

The Role of Experience and Specialization

Paul A. gompers, Graduate School of Business

Administration, Harvard University

Commentators

Rafi Amit, Wharton Finance

Sean griffith, Penn Law (visiting)

Richard Kihlstrom, Wharton Finance Polk Wagner, Penn Law

ILE Seminar series

21 April 2004

The State of U.S. Corporate Governance: What’s Right and What’s Wrong Steven Kaplan, Graduate School of Business, University of Chicago

Commentators

Franklin Allen, Wharton Finance

Andrew metrick, Wharton Finance

Katharina Pistor, Penn Law (visiting)

9 october 2003

Understanding Material Adverse Change Clauses: Moral Hazard in Acquisitions (co-authored with Alan Schwartz)

Ronald J. gilson, Columbia Law School and Stanford Law School

Commentators

Franklin Allen, Wharton Finance

Kristin madison, Penn Law

Andy Postlewaite, Penn Economics

31 october 2002 Law and Finance: The Practice of

Publications and Papers

Listed below is a sampling of recently published papers and work in progress by members of the Associate Faculty of the Institute for Law and Economics. ILE maintains a series of research papers and provides copies—electronic or paper—to interested parties upon request to vhewitt@law.upenn.edu.

The Institute is a member of the Legal Scholarship network (LSn), a subset of the Social Science Research network. Current ILE research papers are posted in the University of Pennsylvania Law and Economics Research Paper Series on the LSn Web site. Abstracts as well as complete papers can be downloaded (www.ssrn.com/link/penn-lawecon. html).

Faculty appointments are in the University of Pennsylvania Law School unless otherwise noted.

Matthew D. Adler, Leon Meltzer Professor of Law

happiness Research and CostBenefit Analysis (with Eric Posner), Journal of Legal Studies forthcoming 2008.

Risk Equity: A new Proposal, Harvard Environmental Law Review 2008.

New Foundations of Cost-Benefit Analysis (with Eric Posner), harvard University Press, 2006.

Franklin Allen Nippon Life

Professor of Finance and Professor of Economics, The Wharton School

mark-to-market Accounting and Liquidity Pricing (with E. Carletti), Journal of Accounting and Economics forthcoming.

Understanding Financial Crises (with D. gale), oxford University Press, 2007.

Beauty Contests, Bubbles and Iterated Expectations in Asset Prices (with S. morris and h Shin), Review of Financial Studies, 2006.

Aditi Bagchi, Assistant Professor of Law

Distributive Injustice and Private Law, Hastings Law Journal, forthcoming.

Varieties of Employee ownership: Some Unintended Consequences of Corporate Law and Labor Law, University of Pennsylvania Journal of Business and Employment Law 2008.

The Accidental Promise: Remaking the Law of misrepresented Intent, University of Illinois Law Review 2008.

Howard F. Chang Earle Hepburn Professor of Law

The Economics of International Labor migration and the Case for global Distributive Justice in Liberal Political Theory, Cornell International Law Journal 2008.

The Effect of Joint and Several Liability under Superfund on Brownfields (with hilary Sigman), International Review of Law and Economics 2007.

Cultural Communities in a global Labor market: Immigration Restrictions as Residential Segregation, University of Chicago Legal Forum 2007.

Cary Coglianese, Edward B. Shils Professor of Law and Professor of Political Science

The Rhetoric and Reality of Regulatory Reform, Yale Journal on Regulation, 2008.

Constructing the License to operate: Internal Factors and their Influence on Corporate Environmental Decisions (with Jennifer A. howard-grenville and Jennifer nash), Law & Policy 2008.

Legitimacy and Corporate governance, Delaware Journal of Corporate Law 2007.

John E. Core, Ira A. Lipman Professor of Accounting, The Wharton School

Improved Estimates of marginal Tax Rates: Why They Are needed, Approach, and Implications (with J. Blouin and W. guay), Working Paper.

Can Differences in U.S. and U.K. CEo Pay Be Explained by Differences in Equity Incentives? (with W. guay and m Conyon), Working Paper.

Agency Problems of Excess Endowments in not-for-Profit Firms (with W. guay and R. Verdi), Journal of Accounting and Economics 2006.

Gerald R. Faulhaber Professor of Business and Public Policy and Management, The Wharton School; Professor of Law

network neutrality: The Debate Evolves, International Journal of Communication 2007.

Solving the Interoperability Problem: Are We on the Same Channel?, Federal Communications Law Review 2007.

File Sharing, Copyright, and the optimal Production of music, Michigan Telecommunications and Technology Law Review 2006.

Lawrence A. Hamermesh Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law

The Short and Puzzling Life of the “Implicit minority Discount” in Delaware Appraisal Law (with michael Wachter), University of Pennsylvania Law Review, 2007.

The Fair Value of Cornfields in Delaware Appraisal Law (with michael Wachter), Journal of Corporation Law 2006.

The Policy Foundations of Delaware Corporate Law, Columbia Law Review 2006.

Robert P. Inman, Richard King Mellon Professor of Finance; Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School

Making Cities Work: Prospects and Policies for Urban America, Princeton University Press, forthcoming 2009.

Federalism’s Values and the Value of Federalism, CESifo Economic Studies 2007.

Federalism and the Democratic Transition: Lessons from South Africa, American Economic Review, Papers and Proceedings 2005.

Jason Scott Johnston, Robert G. Fuller Jr., Professor of Law and Director, Program on Law, the Environment and the Economy

Consumer harm Acts? An Economic Analysis of State Consumer Protection Acts (with henry n Butler), Working Paper, 2008.

Climate Change hysteria and the Supreme Court: The Economic Impact of global Warming on the U.S. and the misguided Regulation of greenhouse gas Emissions under the Clean Air Act, Working Paper, 2008.

The Law and Economics of Environmental Federalism: Europe and the United States Compared (with michael g Faure), Working Paper, 2008.

Michael S. Knoll, Theodore K. Warner Professor of Law, Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy

The UBIT: Leveling an Uneven Playing Field or Tilting a Level one, Fordham Law Review, 2007.

Prejudgment Interest in International Arbitration, Transnational Dispute Management 2007.

Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law

Recht und Sozialwissenschaften—herausforderungen und Chancen der Verhaltensökonomie (Law and Social Sciences—the Challenge and the Promise of Behavioral Economics) (with Dorothea Kubler), Kritische Vierteljahresschrift für Gesetzgebung und Rechtswissenschaft 2007.

Gesellschaftsrecht (comprehensive treatise of german corporate law) (with hansDieter Assmann), 2006.

The Shifting Paradigm of European Company Law, The Columbia Journal of European Law 2005.

Peter D. Linneman, Albert Sussman Professor of Real Estate, Finance, and Public Policy, The Wharton School

The Sub-Prime Credit Crisis: how Did We get here? Wharton Real Estate Review, forthcoming 2008.

how Should Commercial Real Estate Be Priced? (with David Rubenstein), Wharton Real Estate Review forthcoming 2008.

Evaluating the Decision to own Corporate Real Estate (with Frank Pfirsching), Wharton Real Estate Review forthcoming 2008.

Kristin Madison, Professor of Law

hospital mergers in an Era of Quality Improvement, Houston Journal of Health Law and Policy, 2007.

Consumer-Directed health Care (with Peter D. Jacobson), University of Pennsylvania Law Review 2007.

Regulating health Care Quality in an Information Age, U.C. Davis Law Review 2007.

George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences

Common Learning (with martin W. Cripps, Jeffrey C. Ely, and Larry Samuelson), Econometrica forthcoming.

Purification in the InfinitelyRepeated Prisoners’ Dilemma (with V. Bhaskar and Stephen morris), Review of Economic Dynamics forthcoming.

Does Competitive Pricing Cause market Breakdown Under Extreme Adverse Selection? (with georg nöldeke), Journal of Economic Theory, forthcoming.

Charles W. Mooney, Jr. Charles A. Heimbold, Jr. Professor of Law

Law and Systems for Intermediated Securities and the Relationship of Private Property Law to Securities Clearance and Settlement: United States, Japan, and the UnIDRoIT Draft Convention, Institute for Monetary and Economic Studies, 2008.

Introductory note to Convention on the Law Applicable to Certain Rights in respect of Securities held with an Intermediary, International Legal Materials 2007.

The “Consumer Compromise” in Revised UCC Article 9: The Shame of it All, Ohio State Law Journal 2007.

David K. Musto, Ronald O. Perelman Associate Professor of Finance, The Wharton School

Failure Is an option: Impediments to Short-Selling and option Prices (with Rich Evans, Chris geczy, and Adam Reed), Review of Financial Studies forthcoming.

Vote Trading and Information Aggregation (with Susan Christoffersen, Chris geczy, and Adam Reed), Journal of Finance 2007.

A Portfolio View of Consumer Credit (with nicholas Souleles), Journal of Monetary Economics, 2006.

Gideon Parchomovsky, Professor of Law

Tort Law and Innovation (with Alex Stein), Michigan Law Review 2008.

The Evolution of Private and open Access Property (with Abraham Bell), Theoretical Inquiries in Law 2008.

Reconfiguring Property in Three Dimensions (with Abraham Bell), University of Chicago Law Review 2008.

Mark V. Pauly, Bendheim Professor, Department of Health Care Systems, and Professor of Health Care Systems, Business and Public Policy, and Insurance and Risk Management, The Wharton School; Professor of Economics, School of Arts and Sciences; CoDirector, Vagelos Life Sciences and Management Program

Markets Without Magic: How Competition Might Save Medicare AEI Press, 2008.

Death Spiral or Euthanasia? The Demise of generous group health Insurance Coverage (with o mitchell and Y. Zeng), Inquiry 2007/2008.

Drug and Vaccine Pricing and Innovation: What is the Story?, Managerial and Decision Economics, 2007.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School

Reputation and Rhetoric in Elections (with E. Aragones and T. Palfrey), Journal of the European Economic Association, forthcoming.

Courts of Law and Unforeseen Contingencies (with L. Anderlini and L. Felli), Journal of Law, Economics and Organization, forthcoming.

Social Assets (with g mailath), International Economic Review, 2006.

Edward B. Rock. Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics; Associate Dean, University of Pennsylvania Law School

The hanging Chads of Corporate Voting (with marcel Kahan), Georgetown Law Journal 2008.

Corporate Taxation and International Charter Competition (with mitchell Kane), Michigan Law Review 2008.

hedge Funds in Corporate governance and Corporate Control (with marcel Kahan), University of Pennsylvania Law Review 2007.

Chris W. Sanchirico, Professor of Law, Professor of Business and Public Policy, The Wharton School

The Tax Advantage of Paying Private Equity Fund managers with Profits Shares: What is it? Why is it Bad?, University of Chicago Law Review, 2008

Progressivity and Potential Income: measuring the Effect of Changing Work Patterns on Income Tax Progressivity, Columbia Law Review, 2008.

Inequality and Uncertainty: Theory and Legal Applications, University of Pennsylvania Law Review 2006.

Reed Shuldiner, Alvin Snowiss Professor of Law

Comment on “Does the United States Tax Capital Income,” in Taxing Capital Income, Brookings Institution and Urban Institute, 2007.

Taxation of Risky Investments, 2005.

David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law

Who makes the Rules for hostile Takeovers, and Why?

The Peculiar Divergence of US and UK Takeover Regulation (with John Armour), Georgetown Law Journal 2007.

The Promise and Perils of Credit Derivatives (with Frank Partnoy), University of Cincinnati Law Review 2007.

odious Debt or odious Regimes? (with Patrick Bolton), Journal of Law and Contemporary Problems 2007.

Michael L. Wachter, William B. Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

Shareholder Primacy’s Corporatist origins: Adolf Berle and The modern Corporation (with William W. Bratton), Journal of Corporate Law forthcoming 2008.

The Short and Puzzling Life of the “Implicit minority Discount” in Delaware Appraisal Law (with Lawrence A. hamermesh), University of Pennsylvania Law Review 2007.

Labor Unions: A Corporatist Institution in a Competitive World, University of Pennsylvania Law Review 2007.

Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research

State and Local Anti-Predatory Lending Laws: The Effect of Legal Enforcement mechanisms (with Raphael W. Bostic, Kathleen C. Engel, Patricia A. mcCoy, and Anthony n PenningtonCross), Journal of Economics and Business 2008.

What is a Tree Worth? greenCity Strategies and housing Prices (with grace Wong), Real Estate Economics, 2008.

The Inevitability of market-Wide Underpriced Risk (with Andrey Pavlov), Real Estate Economics, 2006.

Amy Wax, Robert Mundheim Professor of Law

mothers Alone, Policy Review 2008.

Engines of Inequality: Race, Class, and Family Structure, Family Law Quarterly, 2007.

musical Chairs and Tall Buildings: Teaching Poverty Law in the 21st Century, Fordham Urban Law Journal, 2007.

Associate Faculty

Matthew D. Adler, Leon Meltzer Professor of Law

Professor Adler is a graduate of Yale College, St. Antony’s College of oxford University, and the Yale Law School. Prior to teaching at Penn, he worked as a law clerk for Judge harry Edwards, U.S. Court of Appeals for the D.C. Circuit, and for Justice Sandra Day o’Connor, U.S. Supreme Court, and practiced law at Paul, Weiss, Rifkind, Wharton & garrison in new York City. At the Penn Law School, Professor Adler teaches administrative law, constitutional law, and regulation. his current research focuses on policy analysis and on risk regulation.

Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School

Franklin Allen is the nippon Life Professor of Finance and Professor of Economics at the Wharton School of the University of Pennsylvania. he has been on the faculty since 1980. he is currently Co-Director of the Wharton Financial Institutions Center. he was formerly Vice Dean and Director of Wharton Doctoral Programs and Executive Editor of the Review of Financial Studies, one of the leading academic finance journals. he is a past President of the American Finance Association, the Western Finance Association and the Society of Financial Studies. he received his doctorate from oxford University. Dr. Allen’s main areas of interest are corporate finance, asset pricing, financial innovation and comparative financial systems. he is a co-author with Richard Brealey and Stewart myers of the eighth and ninth editions of the textbook Principles of Corporate Finance

Aditi Bagchi, Assistant Professor of Law

Professor Bagchi received a J.D. from Yale Law School in 2003 and a m.Sc. in economic and social history from oxford University in 2000. She clerked for United States Court of Appeals Judge Julio Fuentes and practiced law with Cravath, Swaine & moore LLP in new York. She joined the Penn Law faculty in 2006 and currently teaches contracts and labor law. her areas of research include normative theories of private law and comparative political economy.

Elizabeth Bailey, John C. Hower Professor of Business and Public Policy, The Wharton School

Professor Bailey received her Ph.D. in economics from Princeton University in 1972. From 1983 until 1990, Professor Bailey served as dean of the graduate School of Industrial Administration at Carnegie mellon University. She joined the Wharton faculty in 1991 where she served as Chair, Department of Business and Public Policy from 1997 to 2005. She served as head of the Economics Research Department and member of the Technical Staff at Bell Laboratories between 1960 and 1977 and was commissioner and vice-chairman of the Civil Aeroneutics Board from 1977 until 1983. She has served on the boards of many organizations, including the Brookings Institution and Bancroft neurohealth, and she currently serves on the boards of Altria group, Inc., CSX, TIAA/CREF, and the national Bureau of Economic Research. her research interests concern public policies that affect business, particularly those involving regulation, deregulation, and corporate governance.

Howard F. Chang, Earle Hepburn Professor of Law

Professor Chang received a Ph.D. in economics from the massachusetts Institute of Technology in 1992, a J.D. from harvard Law School in 1987, a master in Public Affairs from Princeton University in 1985, and an A.B. from harvard College in 1982. Prior to joining the Penn faculty in 1999, he was a Professor of Law at the University of Southern

California Law School, where he began teaching in 1992. he was a Visiting Professor of Law at Stanford Law School in 1998, at harvard Law School and at the new York University School of Law in 2001, at the University of michigan Law School in 2002, and at the University of Chicago Law School in 2007, and a Visiting Associate Professor of Law at the georgetown University Law Center from 1996 to 1997. he served as a law clerk for the honorable Ruth Bader ginsburg on the U.S. Court of Appeals for the D.C. Circuit from 1988 to1989. he served on the Board of Directors of the American Law and Economics Association from 2004 to 2007. he has written on a wide variety of subjects including environmental protection, international trade, immigration, intellectual property, and the economics of litigation and settlement.

Cary Coglianese, Edward B. Shils Professor of Law and Professor of Political Science

Cary Coglianese is the Edward B. Shils Professor of Law and Professor of Political Science at the University of Pennsylvania Law School. he is also the director of the Penn Program on Regulation. Coglianese is the founder and co-chair of the Law & Society Association’s international collaborative research network on regulatory governance, a council member of the American Bar Association’s section on Administrative Law and Regulatory Practice, and a Vice Chair of the Innovation, management Systems, and Trading Committee of the American Bar Association’s section on Environment, Energy, and Resources. he is also a founder and co-editor of the peer-reviewed journal Regulation & Governance

Coglianese received his J.D., m.P.P., and Ph.D. in political science from the University of michigan, and for twelve years served on the faculty of the John F. Kennedy School of government at harvard University. he has also been a visiting professor of law at Stanford University and Vanderbilt University and an affiliated scholar at the harvard Law School.

John E. Core, Ira A. Lipman Professor of Accounting, The Wharton School

John Core joined the Wharton School in 1996. he has a B.A. from Yale University and a Ph.D. from The Wharton School. he has worked as an investment banker for PaineWebber, as a compensation consultant for Ernst & Young, and as an assistant professor at mIT Sloan School of management. he is an editor of The Accounting Review and an associate editor of the Journal of Accounting and Economics, and he serves on the editorial boards of the Journal of Accounting Research and the Journal of Management Accounting Research his primary research interest is executive compensation and executive stock and option incentives, and he has also published work in the areas of corporate governance, equity valuation, and corporate disclosure.

Patricia M. Danzon, Celia Z. Moh Professor of Health Care Systems, Insurance and Risk Management, The Wharton School

Professor Danzon received her Ph.D. in economics from the University of Chicago in 1973 and joined the Penn faculty from Duke University in 1985. She is a member of the Institute of medicine and the national Academy of Social Insurance, and she has served as a consultant to many private and public institutions in the U.S. and worldwide. Professor Danzon’s research interests are in health care, pharmaceuticals, insurance, law and economics. She has published widely in scholarly journals on a broad range of subjects related to medical care, pharmaceuticals, insurance, and the economics of law.

Gerald R. Faulhaber, Professor of Business and Public Policy and Management, The Wharton School; Professor of Law Professor Faulhaber has published extensively on telecommunications and Internet economics and policy, focusing particularly on the interaction of business and public policy. his most recent work has focused on network neutrality, public safety communications, and file sharing and intellectual property. he spent a year on scholarly leave at Penn Law, after which he was granted a secondary appointment at the Law School. he served as Chief Economist at the Federal Communications Commission for the year ending June 30, 2001. At the FCC he worked on telecommunications and Internet issues, including the AoL-Time Warner merger. he has served on numerous scholarly boards and review committees and was Vice-President of the Board of Directors of the Telecommunications Policy Research Conference in Washington, D.C. Professor Faulhaber was the founding director of Wharton’s Fishman-Davidson Center for the Study of the Service Sector, from 1984 to 1989. Prior to his academic career, Professor Faulhaber was Director of Strategic Planning and Financial management at AT&T, after holding the position of head, Economics Research at Bell Laboratories. As a Visiting Scholar at InSEAD, Fontainebleau, France, and at the Institut d’Analisi Economica in Barcelona, Spain, Professor Faulhaber engaged in political economy research. he held an appointment at Tsinghua University School of Economics and management, Beijing, China, as a Visiting Professor, where he lectured on technology management. his current research is in the area of public policy and broadband infrastructure for the Internet, and the use of markets and property rights for the allocation of the electromagnetic spectrum.

Michael A. Fitts, Dean of the Law School and Bernard G. Segal Professor of Law

michael A. Fitts was named Dean of the Law School in march 2000. Before joining the Penn Law faculty in 1985, Dean Fitts served as clerk to the honorable A. Leon higginbotham, Jr., U.S. Court of Appeals for the Third Circuit, and as attorney advisor in the office of Legal Counsel in the U.S. Department of Justice. At Penn he was appointed Associate Professor of Law in 1990, Professor of Law in 1992 and Robert g. Fuller, Jr. Professor of Law in 1996. From 1996 to 1998 he served as Associate Dean for Academic Affairs at the Law School and was active in establishing a variety of joint programs with other schools within the University. In 1999 he served as Visiting Professor in Political Science at Swarthmore College. Dean Fitts’ current research focuses on the effect of various structural changes (e.g. stronger political parties, presidents or centralized legal institutions) on government budgeting and legislation. he has authored numerous law review and political science articles in this area, several co-authored with political scientists.

Richard J. Herring, Jacob Safra Professor of International Banking, Professor of Finance, The Wharton School; Co-Director, Wharton Financial Institutions Center

Richard J. herring is Jacob Safra Professor of International Banking and Professor of Finance at The Wharton School, University of Pennsylvania where he is also founding director of The Wharton Financial Institutions Center, one of Wharton’s largest research centers. From 2000 to 2006, he served as the Director of the Lauder Institute of International management Studies and from 1995 to 2000, he served as Vice Dean and Director of Wharton’s Undergraduate Division. During 2006, he was a Professorial Fellow at the Reserve Bank of new Zealand and Victoria University.

he is the author of more than 90 articles, monographs and books on various topics in financial regulation, international banking and international finance. At various times his research has been funded by grants from the national Science Foundation, the Ford Foundation, the Brookings Institution, the Sloan Foundation and the Council on Foreign Relations. outside the university, he is co-chair of the US Shadow Financial Regulatory Committee. he is a member of the Financial Economist’s Roundtable, the Advisory Board of the European Banking Report in Rome and the Institute for Financial Studies in Frankfurt. he served as co-chair of the multinational Banking seminar from 1992–2004 and was a Fellow of the World Economic Forum in Davos from 1992–95. he was a member of the recent group of 30 task force on the reinsurance industry and as well as an earlier study group on international supervision and regulation. Currently, he is an independent director of the DWS Scudder mutual fund complex and has served on the predecessor Deutsche Asset management and Bankers Trust boards since 1990. herring received his undergraduate degree from oberlin College in 1968 and his PhD from Princeton University in 1973. he has been a member of the Finance Department since 1972. he is married, with two children, and lives in Bryn mawr, Pennsylvania.

Robert W. Holthausen, The Nomura Securities Company Professor, Professor of Accounting and Finance and Management, and Chairman, Accounting Department, The Wharton School

Professor holthausen earned his doctorate and his m.B.A. at the University of Rochester. Prior to his academic career, he was a C.P.A. he worked at Price Waterhouse and was also a financial analyst with mobil. he was on the accounting and finance faculty at the graduate School of Business of the University of Chicago for ten years, joining the Penn faculty in 1989. During the 2001–2002 academic year, he was a visiting professor at harvard Business School. Since 1998 he has served as the academic director of Wharton’s mergers and Acquisitions program. Professor holthausen’s research interests include the effects of management compensation and governance structures on firm performance, the effects of information on volume and prices, corporate restructuring and valuation, the effects of large block sales on common stock prices, and numerous other topics. he is widely published in both finance and accounting journals and is currently an editor of the Journal of Accounting and Economics

Robert P. Inman, Richard King Mellon Professor of Finance, Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School Professor Inman received his Ph.D. in economics from harvard University and joined the Penn faculty in 1972. he is a senior fellow of Wharton’s Leonard Davis Institute of health Economics. he is also a research associate of the national Bureau of Economic Research. he has served as a consultant to the city of Philadelphia, the state of Pennsylvania, Citigroup, Chemical Bank, the U.S. Department of the Treasury, the Financial and Fiscal Commission of the Republic of South Africa, the national Bank of Sri Lanka, the national Academy of Sciences, and numerous U.S. federal government agencies. his research is currently focused on fiscal federalism, the urban fiscal crisis, and the political and legal institutions of fiscal policymaking. Professor Inman held the Florence Chair in Economics at the European University Institute, Florence, Italy, for the spring quarter of 2000. he was a Visiting Scholar at the Rockefeller Foundation’s Bellagio Study Center, Fall 2007.

Jason Scott Johnston, Robert G. Fuller Jr. Professor of Law and Director, Program on Law, the Environment and the Economy

After graduating summa cum laude from Dartmouth College, Professor Johnston obtained both his J.D. and Ph.D. in economics from the University of michigan, where he was an Alcoa Fellow in Law and Economics and was elected to order of the Coif. he served as law clerk for United States Court of Appeals Judge gilbert merritt, was a civil liability fellow at Yale Law School, and in 1995 came to the University of Pennsylvania Law School from Vanderbilt University Law School. Johnston is the founding Director of the Program on Law and the Environment at Penn Law School, and in 2001 became the Robert g. Fuller Jr. Professor of Public Law. Professor Johnston’s research includes both theoretical and empirical projects exploring various aspects of natural resource and environmental law and policy, as well as more general studies of legal rights and entitlements. he is currently in the midst of book-length projects on the law and economics of corporate environmentalism and the centralization of environmental and natural resource regulation, and is organizing a first-of-its kind interdisciplinary conference on the law, economics and science of liability for global warming. Johnston has published dozens of articles, both in various major American law journals such as the Yale Law Journal, Virginia Law Review, and Columbia Law Review as well as in peer-reviewed economics journals such as the Journal of Law, Economics and Organization and the Journal of Legal Studies he has served as a Regent for the Policy Academy of the multistate Working group on Environmental management Systems, on the Board of Directors of the American Law and Economics Association and on the national Science Foundation’s Law and Social Science grant review panel. he was an olin Visiting Fellow at the University of Southern California Law Center and Visiting Professor at the University of Virginia School of Law. In Fall 2007, he was in residence as the Bosch Public Policy Fellow at the American Academy of Berlin.

Richard E. Kihlstrom, Ervin Miller-Arthur M. Freedman Professor of Finance and Economics, Chairman, Finance Department, The Wharton School

Richard Kihlstrom holds a doctorate from the University of minnesota. he has been a member of the Wharton faculty since 1979, was named to the miller-Freedman professorship in 1986, and previously served as Chair of the Finance Department from 1988 to 1994. Before coming to Penn, he taught at northwestern University, the University of Illinois, the State University of new York at Stony Brook, and the University of massachusetts. he is a Fellow of the Econometric Society. his areas of research interest include information and uncertainty in economics, financial market equilibrium, and corporate finance.

Michael S. Knoll, Theodore K. Warner Professor of Law; Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy Professor Knoll joined the Penn Law and Wharton faculties from the University of Southern California Law School in 2000. he teaches courses in corporate finance and taxation in the Law School, the Wharton School, and the Wharton Executive Program. he is also an affiliate of the Zell/Lurie Real Estate Center at the Wharton School, and the editor of Forensic Economic Abstracts, an electronic journal published by the Social Science Research network. Professor Knoll’s undergraduate and J.D. degrees are from the University of Chicago. he also earned a Ph.D. in Economics at the University of Chicago. In 1990 he joined the USC Law faculty as an Assistant Professor, and in 1995 he was promoted to full Professor. he has been a Visiting Professor of Law at georgetown (1999), Penn (1998–99), and Virginia (2000). Professor Knoll was also a John m olin Senior Research Scholar at Columbia University School of Law (1996–97), a Visiting Scholar at new York University Law School (1996–97), and a John m olin Distinguished Visiting Professor of Law at Toronto University. he clerked for the honorable Alex Kozinski on the U.S. Court of Appeals,

ninth Circuit, from January to August 1986, when he was appointed legal advisor to the Vice Chairman of the U.S. International Trade Commission. he has published extensively in the fields of corporate finance, taxation, economics, and real estate finance.

Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law

After earning a Dr. iur. from the University of Tübingen in 1961, Professor Kübler held appointments as teaching assistant in Tübingen and Paris; Professor of Law, University of giessen (1966–70); Visiting Lecturer, harvard Law School (1968–69); Professor of Law and Dean of the graduate School of Social Sciences, University of Konstanz (1971–76); and Professor of Law, University of Frankfurt (1976–98). he first came to Penn in 1975 and again in 1983 as a Visiting Professor of Law, and in 1985 he joined the faculty as Professor of Law. he has served on the board of the Deutscher Juristentag and is a member of the American Law Institute. he was one of the six commissioners regulating concentration in the german television industry and is a member of the European Shadow Financial Regulatory Committee as well as of the Frankfurt Academy of Arts and Sciences. Professor Kübler’s teaching interests are the European Union, corporations, international finance, and mass communication. his current (comparative) research interests are in the areas of corporate governance and finance, the supervision of transnational financial markets, and broadcast regulation.

Peter D. Linneman, Albert Sussman Professor of Real Estate, Finance, and Public Policy, The Wharton School

Dr. Peter Linneman is the principal of Linneman Associates and the Albert Sussman Professor of Real Estate, Finance, and Public Policy at the Wharton School of Business. he is widely recognized as one of the leading strategic thinkers in the real estate industry and was named one of the 25 most influential people in real estate by Realtor Magazine he is a co-coordinator, co-sponsor and co-moderator with Samuel Zell of the prestigious industry roundtable, The marshall Bennett Classic. Dr. Linneman holds a master’s degree and a doctorate in economics from the University of Chicago. A member of Wharton’s faculty since 1979, he served as the founding chairman of Wharton’s Real Estate Department and was the director of Wharton’s Zell/Lurie Real Estate Center for 13 years. he is a founding co-editor of The Wharton Real Estate Review

Kristin Madison, Professor of Law

After receiving a J.D. from Yale Law School and a Ph.D. in economics from Stanford University, Kristin madison joined the Penn Law faculty in 2001. She currently teaches contracts and health care law. her main areas of research interest are health economics and the regulation of the health care industry. Professor madison is currently studying the diffusion of new forms of health care regulation, particularly health care quality reporting requirements.

George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences

Professor mailath received his Ph.D. in economics from Princeton University in 1985. he is a Fellow of the Econometric Society, a member of the Council of the game Theory Society, a co-founder of the journal Theoretical Economics and is or has served as an associate editor or editorial board member of Econometrica, the Review of Economic Studies, the Journal of Economic Theory Games and Economic Behavior, the International Economic Review, and Economic Theory he is co-editor of the Econometric Society monograph Series and is a member of the Economics Advisory Panel of the national Science Foundation. his research interests include the organization of the firm, noncooperative game theory, evolutionary game theory, social norms, and the foundations of reputations, law, and authority.

Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law Professor mooney received his J.D. from harvard Law School in 1972. he practiced law with the oklahoma firm of Crowe and Dunlevy and as a partner of the new York firm of Shearman & Sterling. Professor mooney joined the Penn faculty in 1986, and during 1999 and 2000 he served as Interim Dean of the Law School. From 1998 to 2000 he served as Associate Dean for Academic Affairs. he is an active member of the American Law Institute and the American Bar Association. he served as a member of the Uniform Commercial Code Permanent Editorial Board Article 2 (Sales) Study Committee and also served as a reporter for that Board’s Article 9 (Secured Transactions) Study Committee and as a reporter for the Revised Article 9 drafting committee. he served as a member of the U.S. Security and Exchange Commission’s Advisory Committee on market Transactions. mooney was awarded the Distinguished Service Award, presented by the American College of Commercial Finance Lawyers. he also served as U.S. Delegate and Position Coordinator (appointed by U.S. Department of State) at the Diplomatic Conference for the Cape Town Convention on International Interests in mobile Equipment and the Protocol on matters Specific to Aircraft Equipment, in Cape Town, South Africa. he currently serves as a U.S. Delegate for the UnIDRoIT draft convention on intermediated securities. his current research centers on intermediated securities, security interests in bankruptcy, and bankruptcy theory.

Robert H. Mundheim, University Professor of Law and Finance Emeritus, University of Pennsylvania; Of Counsel, Shearman & Sterling; formerly General Counsel, U.S. Treasury and Senior Executive Vice President and General Counsel of Salomon Smith Barney Holdings, Inc. Professor mundheim received his LL.B. from harvard Law School in 1957. he joined the new York firm of Shearman & Sterling, of which he is now of Counsel, and then served as special counsel to the U.S. Securities and Exchange Commission before joining the Penn faculty in 1965. Professor mundheim served as Dean of the Law School from 1982 to 1989. he has been a visiting professor at harvard Law School, UCLA Law School, the James E. Rogers College of Law at The University of Arizona, and the University of Konstanz in germany. Between 1977 and 1980, he served as general counsel to the U.S. Department of the Treasury. he also has served as chairman of the U.S. Tax Court nominating Commission, a director of the Securities Investor Protection Corporation and general counsel to the Chrysler Loan guarantee Board. he was co-chairman of the new York firm Fried, Frank, harris, Shriver and Jacobson from 1989 to 1992. In 1992, he joined Salomon Inc. as its general Counsel and as a managing Director and member of the Executive Committee of Salomon Brothers. Professor mundheim is the organizer and presiding officer emeritus of the International Faculty for Corporate and Capital market Law, a former Trustee and President of the American Academy in Berlin, a Trustee of the new School University, a former director and President of the Appleseed Foundation, and a member of the Council of the American Law Institute and Chairman of its governance Committee. he also serves on the American Bar Association’s Standing Committee on Ethics and Professional Responsibility. he most recently served as the chairman of the Quadra Realty Trust Board of Directors and as a director of eCollege, Inc. and of Arnhold & S. Bleichroeder holdings, Inc. he is also the Chairman of the Legal Advisory Board of nASDAQ. mr. mundheim has served as a Consultant to the American Law Institute’s Principles of Corporate governance: Analysis and Recommendations (1978–1994), as a member of the American Bar Association President’s Task Force on Corporate Responsibility (2002–2003), and as a member of the Association of the Bar of the City of new York’s Presidential Task Force on Lawyers’ Role in Corporate governance. he has written in the areas of corporate governance, securities regulation, corporations, and professional responsibility.

David K. Musto, Ronald O. Perelman Associate Professor of Finance, The Wharton School

David K. musto is the Ronald o Perelman Associate Professor of Finance at the Wharton School, where he has been on the faculty since 1995. he has a B.A. from Yale University and a Ph.D. from the University of Chicago, and between college and graduate school he worked for Roll and Ross Asset management in Los Angeles. he is an editor of the Journal of Financial Services Research and an Associate Editor of the Journal of Finance most of his work, both theoretical and empirical, is in the area of consumer financial services, mutual funds and consumer credit in particular. he has also published work on corporate and political voting, option pricing, short selling and cross-border taxation.

Gideon Parchomovsky, Professor of Law

Professor Parchomovsky received his LL.B. from the hebrew University of Jerusalem in 1993, his LL.m from the University of California at Berkeley in 1995, and his S.J.D. from Yale Law School in 1998. Prior to joining the Penn Law faculty in fall 2002, Professor Parchomovsky served as an Associate Professor at Fordham Law School and a Visiting Lecturer at Yale Law School. his research interests include intellectual property law and property theory. his recent work focuses on unlocking synergies among sub-fields of intellectual property and devising innovative mechanisms for protecting property entitlements.

Mark V. Pauly, Bendheim Professor, Department of Health Care Systems, and Professor of Health Care Systems, Business and Public Policy, and Insurance and Risk Management, The Wharton School; Professor of Economics, School of Arts and Sciences; Co-Director, Vagelos Life Sciences and Management Program

Dr. Pauly is a former commissioner on the Physician Payment Review Commission and an active member of the Institute of medicine. he has made significant contributions to the fields of medical economics and health insurance. his classic study on the economics of moral hazard was the first to point out how health insurance coverage may affect patients’ use of medical services. Subsequent work, both theoretical and empirical, has explored the impact of conventional insurance coverage on preventive care, on outpatient care, and on prescription drug use in managed care. In addition, he has explored the influences that determine whether insurance coverage is available and, through several cost effectiveness studies, the influence of use on health outcomes and cost. his interests in health policy deal with ways to reduce the number of uninsured through tax credits for public and private insurance, and appropriate design for medicare in a budget-constrained environment. Dr. Pauly is a co-editorin-chief of the International Journal of Health Care Finance and Economics and an associate editor of the Journal of Risk and Uncertainty he has served on Institute of medicine panels on public accountability for health insurers under medicare and on improving the financing of vaccines. Dr. Pauly recently served on the medicare Technical Advisory Panel, and is currently a member of the national advisory committees for the nIh national Center for Research Resources, the national Academy of Sciences’ Committee to Study the Veterinary Workforce, and the national Vaccine Advisory Commission.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School Professor Postlewaite received his Ph.D. from northwestern University in 1974 and joined the Penn faculty from the University of Illinois in 1980. he is editor of American Economic Journal: Microeconomics, past editor of the International Economic Review and past co-editor of Econometrica he serves on the Board of Directors of the national

Bureau of Economic Research, the Executive Committee of the game Theory Society and on the Executive Committee of the American Economic Association. he has published widely in the areas of strategic behavior and industrial organization.

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics; Associate Dean, University of Pennsylvania Law School

Professor Rock received his J.D. from the University of Pennsylvania in 1983. he joined the Penn faculty in 1989 from the Philadelphia law firm of Fine, Kaplan and Black, where he specialized in antitrust, corporate and securities litigation. he has written widely in corporate law, on topics including: hedge funds; the role of institutional investors in corporate governance; close corporations; the role of norms in corporate law; the overlap between corporate law and antitrust; the overlap between corporate law and labor law; comparative corporate law; and the regulation of mutual funds. In 1994, Professor Rock was a Visiting Professor of International Banking and Capital markets at the Institut für Arbeits-, Wirtschafts- und Zivil Recht, Johann Wolfgang goethe - Universität, Frankfurt am main, germany. During the 1995–96 academic year, he was a Fulbright Senior Scholar and Visiting Professor of Law at the Law Faculty of the hebrew University of Jerusalem, Israel. In 2001, he was appointed the first Saul A. Fox Distinguished Professor of Business Law. During 2005–06, he was again a Visiting Professor of Law, and Lady Davis Fellow, at hebrew University. Professor Rock’s current research focuses on mergers and acquisitions, hedge funds, and corporate voting.

Chris W. Sanchirico. Professor of Law; Professor of Business and Public Policy, The Wharton School

Professor Sanchirico received his A.B. from Princeton and both his law degree and his Ph.D. in economics from Yale. Before joining the Penn Law and Wharton faculties in 2003, he was a law professor at the University of Virginia and an economics professor at Columbia. Professor Sanchirico has written widely on tax policy, distributive justice, the information problems of legal enforcement, the rules governing trial evidence and pretrial discovery, and the evolution and stability of social norms. Professor Sanchirico has published extensively in top law reviews as well as the premier peer-reviewed journals in both law and economics and economic theory.

Reed Shuldiner, Alvin L. Snowiss Professor of Law

Professor Shuldiner is a recognized expert in the taxation of financial instruments and transactions. his area of research is taxation and tax policy. his current research includes the taxation of risk under income, wealth and consumption taxes and the viability and effects of a federal wealth tax (with David Shakow). Professor Shuldiner served as Associate Dean at Penn Law from 2000–02. During spring 2005, Professor Shuldiner was the William K. Jacobs, Jr. Visiting Professor of Law at harvard Law School. he was a Visiting Assistant Professor at Yale Law School during 1994–95. Before joining the Penn law faculty in 1990, he served in the office of Tax Legislative Counsel of the U.S. Department of the Treasury, was counsel to the law firm of Cadwalader, Wickersham and Taft, and was an associate with the Washington, D.C., law firm of Wilmer, Cutler and Pickering. Professor Shuldiner received his J.D. from harvard University in 1983 and his Ph.D. in economics from the massachusetts Institute of Technology in 1985.

David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law Professor Skeel joined the Penn faculty in 1999. he graduated in 1987 from the University of Virginia School of Law, where he was editor of the Virginia Law Review and a member of the order of the Coif. he clerked for the honorable Walter K. Stapleton on the U.S. Court of

Appeals for the Third Circuit, and practiced for several years at Duane, morris & heckscher in Philadelphia, before joining the Temple University School of Law in 1990. Professor Skeel has also held visiting appointments at the University of Wisconsin Law School (1993–94), the University of Virginia School of Law (spring 1994), georgetown University Law Center (fall 2004), and the University of Pennsylvania Law School (fall 1997). Professor Skeel specializes in corporate and commercial law and has written widely on corporate law, bankruptcy and sovereign debt. he has also has written on law and religion, and poetry and law.

Michael L. Wachter, William B. Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

Professor Wachter received his Ph.D. in economics from harvard University and joined the Penn faculty in 1970. he has held full professorships in three of Penn’s schools: the School of Arts and Sciences, where he has been professor of economics since 1976; the Wharton School, where he was professor of management, 1980–92; and the Law School, where he became professor of law and economics in 1984. he has been senior advisor to the Brookings Panel on Economic Activity in addition to consulting for the Federal Reserve’s Board of governors and the Council of Economic Advisors. he has also served as a member of the national Council on Employment Policy and as a commissioner on the minimum Wage Study Commission. Professor Wachter served as Deputy Provost of the University of Pennsylvania from July 1995 to January 1998, and as Interim Provost from January to December 1998. he is the author of numerous articles in law and economics as well as in corporation law and labor law and economics.

Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research

From 1998 to 2001, as Assistant Secretary for Policy Development and Research, U.S. Department of housing and Urban Development, Dr. Wachter served as the senior urban policy official and principal advisor to the Secretary on overall hUD policies and programs. At Wharton, Dr. Wachter was Chairperson of the Real Estate Department and Professor of Real Estate and Finance from July 1997 until her 1998 appointment to hUD. She founded and currently serves as Director of Wharton’s geographical Information Systems Lab. Dr. Wachter served as a member of the Board of Directors of the Beneficial Corporation from 1985 to 1998 and of the mIg Residential REIT from 1994 to 1998. She was the editor of Real Estate Economics from 1997 to 1999 and serves on the editorial boards for several real estate journals. Dr. Wachter has been a member of the Advanced Studies Institute of the homer hoyt Institute since 1989. She is author of more than 100 scholarly publications and is the recipient of several awards for teaching excellence at the Wharton School.

Amy

Wax, Robert Mundheim Professor of Law

A graduate of Yale College and harvard medical School, Professor Wax trained as a neurologist at new York hospital before completing a law degree at Columbia Law School in 1987. She served as a clerk to the honorable Abner J. mikva of the U.S. Court of Appeals for the D.C. Circuit and worked for six years at the office of the Solicitor general at the U.S. Department of Justice, where she argued 15 cases before the U.S. Supreme Court. She taught from 1994 to 2001 at the University of Virginia Law School. her areas of teaching and research included civil procedure, remedies, labor and employment law, poverty law and welfare policy, the law and economics of work and family, and social science and the law. Professor Wax joined the Penn Law Faculty in fall 2001.

ILE Investors, 2007–2008

funding for the institute for law and economics

comes from a diverse group of individuals, law firms, corporations, and foundations who endorse our work each year. we are pleased and privileged to recognize and thank the ile investors whose generous contributions underwrite the activities described in this report. we deeply appreciate their support and their active participation in institute programs.

Benefactors

$25,000 or above

Robert L. Friedman

Paul S. Levy

Skadden, Arps, Slate, meagher & Flom LLP

Sullivan & Cromwell LLP

Wachtell, Lipton, Rosen & Katz

ILE

Michael L. Wachter, Co-Director

William B. Johnson Professor of Law and Economics

215.898.7852 mwachter@law.upenn.edu

Edward B. Rock, Co-Director

Saul A. Fox Distinguished Professor of Business Law

215.898.8631 erock@law.upenn.edu

Vicki L. Hewitt, Program Director

215.898.7719

215.573.2025 fax vhewitt@law.upenn.edu