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
Message froM the Co-Chairs: 1
Board of advisors: 2
Message froM the dean: 6
Message froM the Co-direCtors: 7
roundtaBle PrograMs: 9
Corporate Roundtable, Spring 2016: 10
Corporate Roundtable, Fall 2015: 12
Corporate Roundtable, Spring 2015: 14
Corporate Roundtable, Fall 2014: 14
Corporate Roundtable, Spring 2014: 16
Corporate Roundtable, Fall 2013: 16
Panel PrograMs: 19
Chancery Court Program, April 5, 2016: 20
Chancery Court Program, February 16, 2016: 22
Chancery Court Programs, Spring 2015: 24
Insights from Practice: 26
leCtures: 29
Law and Entrepreneurship: 30
Distinguished Jurist: 32
Past Lectures: 34
aCadeMiC events: 37
Penn/NYU Conference, Spring 2016: 38
NYU/Penn Conference, Spring 2015: 38
ILE/Wharton Finance Seminars: 40
Curricular Partnerships: 42
assoCiate faCulty: 46
Publications and Papers: 52
institute investors: 55
MESSAGE FROM THE CO-CHAIRS
For three decades, Penn’s Institute for Law and Economics has contributed to scholarship, policy, and practice on significant issues of law and economics that affect our country’s businesses and financial institutions.
The Institute’s programs have become increasingly important, focusing on issues of relevance to the academic, legal, and business communities. Today, the Institute enjoys an outstanding international reputation for the excellence of its programs, where leaders in business, law, finance and academic scholarship candidly discuss the intersection of theory and practice on a host of matters.
On behalf of the Institute’s Board of Advisors, we want to express our gratitude to everyone who has contributed to the achievements of the Institute during this past year. In particular, we would like to thank those members of the Board who have participated in ILE’s programs and have been a vital component of their success.
We are delighted to report some superb additions to our Board of Advisors during the past year. We are pleased to welcome Marc Bryant, Steven Cohen, Michael Holston, and Joseph Stern as new members of our Board and welcome back Bill Anderson and Stuart Grant. These accomplished individuals will greatly enhance the work of the Institute.
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 grateful for their contributions. Very special thanks must be given to ILE Benefactors Bob Friedman and Skadden, Arps, Slate, Meagher & Flom LLP (through Eric Friedman). Their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express our sincere appreciation to both of them.
Bill Bratton, Jill Fisch, and Michael Wachter continued to be truly outstanding leaders of the Institute. The co-directors’ dedication to all aspects of the Institute’s work, and their ability to originate timely programing and attract ideal participants, are the reasons for the unqualified success of the Institute’s programs. This is why ILE is world-renowned as a major forum for substantive discussions of topical issues relevant to corporations and their legal and financial advisors. While Jill will continue her work as a Co-Director this year, she will do so from the West Coast as she spends a year visiting at UC Berkeley School of Law. We also look forward to the addition of Larry Hamermesh, who will be joining ILE this year as our Executive Director. Finally, we are very grateful for the outstanding efforts of Nadia Jannetta, our Program Coordinator, in making ILE run so efficiently.
CHARLES “CASEY” COGUT
Simpson Thacher & Bartlett LLP
JOSEPH B. FRUMKIN
Sullivan & Cromwell LLP
September 2016
James H. Agger Chair, 1994-2001 Retired Senior Vice President, General Counsel and Secretary Air Products and Chemicals, Inc. Allentown, PA
Martin J. Bienenstock Proskauer Rose LLP New York, NY
Steven M. Cohen Executive Vice President, Chief Administrative Officer and General Counsel MacAndrews & Forbes Incorporated New York, NY
BOARD OF ADVISORS
B. Aldridge Morgan, Lewis & Bockius LLP Philadelphia, PA
Marc Bryant Senior Vice President and Deputy General Counsel Fidelity Management & Research Company Boston, MA
Marcy Engel Chief Operating Officer and General Counsel Eton Park Capital Management New York, NY
D. Anderson, Jr. Senior Managing Director Evercore New York, NY
Daniel H. Burch Chairman & CEO MacKenzie Partners, Inc. New York, NY
John G. Finley Senior Managing Director and Chief Legal Officer The Blackstone Group L.P. New York, NY
George A. Casey Shearman & Sterling LLP New York, NY
Stacy Fox Vice President and Assistant General Counsel E. I. du Pont de Nemours and Company Wilmington, DE
Fraidin Vice Chairman Pershing Square Capital Management Group, L.P. New York, NY
Richard
William
Marshall B. Babson Seyfarth Shaw LLP New York, NY
Louis J. Bevilacqua Cadwalader, Wickersham & Taft LLP New York, NY
Stephen
Charles I. Cogut Co-Chair, 2008–Simpson Thacher & Bartlett LLP New York, NY
BOARD OF ADVISORS
Joel E. Friedlander Friedlander & Gorris, P.A. Wilmington, DE
Eric J. Friedman Executive Partner Skadden, Arps, Slate, Meagher & Flom LLP New York, NY
Robert L. Friedman Chair, 2001–2007 Senior Advisor The Blackstone Group L.P. New York, NY
Joseph B. Frumkin Co-Chair, 2008–Sullivan & Cromwell LLP New York, NY
Eduardo Gallardo Gibson, Dunn & Crutcher LLP New York, NY
Joseph D. Gatto Perella Weinberg Partners New York, NY
Perry Golkin Chief Executive Officer PPC Enterprises LLC New York, NY
Stuart M. Grant Managing Director Grant & Eisenhofer P.A.
Mark I. Greene Cravath, Swaine & Moore LLP New York, NY
Keir D. Gumbs Covington & Burling LLP Washington, DC
William R. Harker Co-Founder and President Ashe Capital Management, LLC Old Tappan, NJ
Michael J. Holston Executive Vice President and General Counsel Merck & Co., Inc. Kenilworth, NJ
Leon C. Holt, Jr. Retired Vice Chairman and Chief Administrative Officer Air Products and Chemicals, Inc. Allentown, PA
Hon. Jack B. Jacobs Justice, Delaware Supreme Court, 2003–2014 Sidley Austin LLP New York, NY, and Wilmington, DE
Sarkis Jebejian Kirkland & Ellis LLP New York, NY
BOARD OF ADVISORS
Simon
James
Morton A. Pierce White & Case LLP New York, NY
Helen P. Pudlin
Mawr, PA
Cynthia
Brendan R. Kalb General Counsel AQR Capital Management, LLC Greenwich, CT
Roy J. Katzovicz Chairman Saddle Point Group, LLC. New York, NY
Eric Klinger-Wilensky Morris, Nichols, Arsht & Tunnell LLP Wilmington, DE
Mark Lebovitch Bernstein Litowitz Berger & Grossmann LLP New York, NY
Kenneth A. Lefkowitz Hughes Hubbard & Reed LLP New York, NY
BOARD OF ADVISORS
Joseph A.
Managing Director; M&A Advisory General Counsel
Hon. Leo E. Strine, Jr. Chief Justice Delaware Supreme Court Wilmington, DE
John J. Suydam Chief Legal Officer Apollo Global Management, LLC New York, NY
Andrea E. Utecht Executive Vice President, General Counsel and Secretary FMC Corporation Philadelphia, PA
Hon. E. Norman Veasey Chief Justice, Supreme Court of Delaware, 1992–2004 Gordon, Fournaris & Mammarella, P.A.
Marc Weingarten Schulte Roth & Zabel LLP New York, NY
Peter L. Welsh Ropes & Gray LLP Boston, MA
Gregory P. Williams Richards, Layton & Finger, P.A. Wilmington, DE
Jennifer Shotwell Founding Managing Director Innisfree M&A Incorporated New York, NY
David M. Silk Wachtell, Lipton, Rosen & Katz New York, NY
Bruce L. Silverstein Young Conaway Stargatt & Taylor, LLP Wilmington, DE
Richard D. Smith Reed Smith LLP New York, NY
Heidi Stam Managing Director and General Counsel Vanguard Wayne, PA
Stern
Goldman, Sachs & Co.
Donald J. Wolfe, Jr. Potter Anderson & Corroon LLP Wilmington, DE
Christopher Young Managing Director and Head of the Contested Situations Practice Credit Suisse New York, NY
MESSAGE FROM THE DEAN
The Institute for Law and Economics continues to demonstrate the benefits of a cross-disciplinary perspective.
ILE is at the forefront of cross-disciplinary programming and serves as a model for bridge-building between disciplines by creating ties between schools, between faculty members, between students, and between experts in the field. 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.
Penn Law’s commitment to a cross-disciplinary mission continues to grow even stronger, as we create new partnerships within the University and pursue the cross-disciplinary vision that is at the core of the Institute for Law and Economics and its programs. It is no longer enough to approach complicated questions such as financial regulation, shareholder empowerment, or investment management solely from a legal, economic, or business perspective. Indeed, no significant business issue can be addressed without paying attention to both 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. During the past year, the outstanding talks, panels, and conferences organized by the Institute covered a wide range of topics, including settlement practice, shareholder activism, financial adviser misconduct, appraisal, B Corporations, and Revlon duties.
We are proud of the generous support the Institute receives from contributors who understand the importance of what we do and the unique position the Institute holds. Many of the ILE 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.
ILE’s extraordinary co-chairs, Casey Cogut and Joe Frumkin, have my particular thanks for their many exceptional contributions. Like all who serve as advisors for ILE, Casey and Joe contribute their very valuable time and expertise, in addition to their numerous contacts in the legal and business communities. ILE has benefited substantially from their leadership.
I must also thank the three eminent professors who lead the Institute for Law and Economics—Michael Wachter, Jill Fisch, and Bill Bratton. It is because of their commitment and enthusiasm that ILE ranks among the premier institutions of its kind.
I look forward to the Institute’s continued growth and prosperity. I extend the deepest appreciation to all ILE supporters and participants for their commitment and investment over the years.
THEODORE RUGER, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School
September 2016
The Institute for Law and Economics continues to host corporate law programs that provide a unique venue for high level conversations about important and timely issues in law and business among practitioners, lawmakers, and academics.
This year’s Corporate Roundtables focused on current issues in corporate governance and shareholder litigation. At the Fall Roundtable, the first morning paper examined “golden leash” payments made to activist designees on corporate boards. The second paper reviewed the terms and growing usage of exclusive forum provisions in corporate bylaws. The afternoon panelists discussed disclosure-only settlements in M&A litigation. At our Spring Roundtable, the first morning paper looked at dismissal standards and showed how the Delaware courts’ active judicial supervision of public company shareholder litigation at an early stage reduces the costs of frivolous litigation and promotes settlement of meritorious litigation. The second paper presented a novel empirical study of the impact of hedge fund activism on firm value, showing that companies targeted by hedge funds underperformed comparable untargeted firms. The afternoon panel looked at Revlon at 30, bringing together observations concerning the case's past impact and its role in current developments in M&A practice and litigation.
Our public lecture series featured two engaging speakers and a unique panel program. Our Distinguished Jurist lecturer, Barrington D. Parker, Jr., United States Court of Appeals for the Second Circuit, spoke about the value that immigrants have contributed to the United States and the U.S. economy. Our fall Law and Entrepreneurship lecture came from Steven Cohen, who explained his career path from an Assistant U.S. Attorney, private practice, and top aide to New York Governor Andrew Cuomo to his current position at MacAndrews & Forbes. In the spring, our Law and Entrepreneurship lecturer, Phil De Picciotto, Founder and President of Octagon, spoke about the many complex legal issues raised by the world of professional sports.
Our Insights from Practice program, “The ‘Institutionalization’ of Activism and the Impact on M&A and Board/Shareholder Dynamics,” looked at the trends and emerging dynamics in activism, including hostile takeovers, activist board representation, and going private transactions. The panel in our first Chancery Court program addressed taking a benefit corporation public and, specifically, how the public capital markets can value benefit corporations. Our second Chancery Court program continued our inquiry into the financial economic inputs in appraisal valuation, this year looking at how fair value is measured in appraisal – deal price or discounted cash flow.
We successfully continued our cross-disciplinary initiatives. The Law and Finance series, held in cooperation with Wharton’s Finance Department, featured, in the fall, Eric Posner, from the University of Chicago Law School presenting two chapters from his forthcoming book, Age of Bailouts. In the spring, Amit Seru of Chicago’s Booth School of Business discussed his empirical study
of the extent to which the labor market disciplines financial advisors for misconduct. In February, we hosted the annual Penn/NYU Law and Finance Conference together with Wharton Finance and the Pollack Center for Law and Business at New York University.
As in the past, our Institute’s greatest resource is the quality of our supporters and their active participation in our programs. Our board members and sponsors play a critical role in organizing and participating in our programs as well as providing valuable financial support. We continue to benefit from the generous involvement of our board chairs, Casey Cogut of Simpson Thacher & Bartlett LLP and Joseph Frumkin of Sullivan & Cromwell LLP. We are also pleased to welcome six new board members this year: Bill Anderson, Marc Bryant, Steve Cohen, Stuart Grant, Michael Holston, and Joe Stern. Bill Anderson, who had served on our Board as the representative of Goldman, Sachs, moved to Evercore in January. Marc Bryant is the new representative from Fidelity. Steve Cohen is at MacAndrews & Forbes. Stuart Grant, of Grant & Eisenhofer, has re-joined the Board. Michael Holston is the new representative from Merck & Co. Finally, Joe Stern is the new representative at Goldman, Sachs. We regret that Paul Haaga has stepped down from the ILE Board. Paul has been a tremendous supporter of Penn Law, as well as ILE. We are also losing John Stanley from the Board due to his retirement from Air Products, but we wish him the best in this next phase.
With gratitude and sorrow, we acknowledge that Edward Rock is leaving Penn Law to go to NYU School of Law. His role as a Co-Director from 1998-2010 was instrumental in making ILE what it is today. He will be greatly missed.
WILLIAM W. BRATTON, Co-Director, Institute for Law and Economics; Nicholas F. Gallicchio Professor of Law
JILL E. FISCH, Co-Director, Institute for Law and Economics; Perry Golkin Professor of Law
MICHAEL L. WACHTER, Co-Director, Institute for Law and Economics; William B. and Mary Barb Johnson Professor of Law and Economics
September 2016
ROUNDTABLE PROGRAMS
At the heart of the Institute’s work is the roundtable series, which brings members of the Institute’s associate faculty and other academics together with corporate executives, practicing attorneys, judges, and public policymakers. Each roundtable takes up current issues that emerge from the research and teaching of the Institute and provides a forum for lively discussion.
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 ROUNDTABLE
The Importance of
Being
Dismissive: The
Efficiency
Role of Pleading Stage Evaluation of Shareholder Litigation
Lawrence Hamermesh, Ruby R. Vale Professor, Widener University Delaware Law School
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
Fee-shifting charter and bylaw provisions may be too blunt a tool to control agency costs associated with excessive shareholder litigation, and are in any event now prohibited by Delaware statute. Active judicial supervision of public company shareholder litigation at an early stage, however, reduces the costs of frivolous litigation to shareholders by separating meritorious from unmeritorious litigation before the full costs of discovery are incurred. That early stage supervision relies on procedures and doctrines that have not previously been catalogued and appreciated as a coherent set of interrelated dynamics. It depends upon the availability of facts to the plaintiff shareholder through sources that compensate for the problem of asymmetric access to relevant information. The motion to dismiss in representative shareholder litigation has thus come to resemble, and substitute for, the motion for summary judgment. The Delaware courts’ atypical demand for, and unusual willingness to consider, extensive facts in resolving motions to dismiss encourage defendants to supply relevant information voluntarily, on a cost efficient basis that avoids largely unlimited discovery. Where time constraints preclude disposition via a motion to dismiss, the motion for expedited discovery has come to serve the same efficiency promoting functions as the motion to dismiss, and has involved essentially the same level of substantive factual review of the merits encountered in resolving motions to dismiss. The result is a system in which cases are dismissed or settled at an early stage: from 2011 through 2015, for example, there were only five public company shareholder class or derivative suits that were resolved after trial. With deal litigation likely to concentrate in the Delaware courts due to increasingly prevalent exclusive forum charter and bylaw provisions, the motion to dismiss and the motion to expedite discovery are likely to become even more important in promoting the efficient conduct of shareholder class and derivative litigation involving public companies.
Hedge Fund Activism and Long-Term Firm Value
K.J. Martijn Cremers, Professor of Finance, Mendoza College of Business, University of Notre Dame
Simone M. Sepe, Professor of Law and Finance, James E. Rogers College of Law, University of Arizona
The paper considers the role of hedge fund activism on firm value, testing conflicting theoretical hypotheses about the long-term association between hedge fund activism and firm value. The authors match firms targeted by hedge fund activists to non-targeted control firms showing that, in the years following the intervention of activist hedge funds, the value of hedge fund targets deteriorates (sizably) compared to control firms. These results are robust to accounting for the potentially higher premium that hedge fund targets receive in follow-up mergers and to incorporating time-varying industry fixed effects. The authors also find the decrease in firm value for target firms (compared to control firms) to be particularly sizable for firms that are more likely to be affected by the limited commitment problems, such as firms that rely more intensively on R&D investments, intangible assets, and patents, or firms in industries characterized by high contract specificity, high labor productivity, and intensive use of unsecured debt.
MAY 6, 2016
Welcome
Theodore W. Ruger, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School
Morning Session
The Importance of Being Dismissive: The Efficiency Role of Pleading Stage Evaluation of Shareholder Litigation
Lawrence Hamermesh, Ruby R. Vale Professor, Widener University Delaware Law School
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
commentators
Minor Myers, Professor of Law, Brooklyn Law School
Hon. Leo E. Strine, Jr., Chief Justice, Delaware Supreme Court
Hedge Fund Activism and Long-Term Firm Value
K.J. Martijn Cremers, Jr., Professor of Finance, Mendoza College of Business, University of Notre Dame
Simone M. Sepe, Professor of Law and Finance, James E. Rogers College of Law, University of Arizona
commentators
Cindy Alexander, Assistant Chief Economist, U.S. Securities and Exchange Commission
Eileen T. Nugent, Skadden, Arps, Slate, Meagher & Flom LLP
Afternoon Session
Revlon at 30
moderators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
panelists
Hon. Jack B. Jacobs, Sidley Austin LLP
Renier H. Kraakman, Ezra Ripley Thayer Professor of Law, Harvard Law School
Hon. J. Travis Laster, Vice Chancellor, Delaware Court of Chancery
Jeffrey J. Rosen, Debevoise & Plimpton LLP
William D. Savitt, Wachtell, Lipton, Rosen & Katz
Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP
1 Michael Wachter, University of Pennsylvania Law School; Larry Hamermesh, Widener University Delaware Law School.
2 First Row: Larry Hamermesh, Widener University Delaware Law School; Eileen Nugent, Skadden, Arps, Slate, Meagher & Flom LLP; Eduardo Gallardo, Gibson, Dunn & Crutcher LLP; Second row: Omari Simmons, Wake Forest University School of Law; Brad Davey, Potter Anderson & Corroon LLP; Chris Couvelier, Lazard.
3 First Row: Ronald Gilson, Columbia Law School; Minor Myers, Brooklyn Law School; Simone Sepe, James E. Rogers College of Law, University of Arizona; Second row: Anthony Casey, The University of Chicago Law School; Christine Hurt, J. Reuben Clark Law School, Brigham Young University.
4 Front row: Casey Cogut, Simpson Thacher & Bartlett, LLP; Hon. Leo Strine, Jr., Delaware Supreme Court; Joel Friedlander, Friedlander & Gorris, P.A.; Second row: Simone Sepe, James E. Rogers College of Law, University of Arizona; Ed Rock, University of Pennsylvania Law School; Paul Davies, Oxford University; Marcel Kahan, New York University School of Law; Third row: Christine Hurt, J. Reuben Clark Law School, Brigham Young University; Donna Nagy, Maurer School of Law, Indiana University; Robert Miller, The University of Iowa College of Law.
5 Front row: Lou Bevilacqua, Cadwalader, Wickersham & Taft LLP; Hon. Travis Laster, Delaware Court of Chancery; Bill Savitt, Wachtell, Lipton, Rosen & Katz; Bruce Silverstein, Young Conaway Stargatt & Taylor, LLP; Second row: Larry Hamermesh, Widener University Delaware Law School; Eileen Nugent, Skadden, Arps, Slate, Meagher & Flom LLP; Eduardo Gallardo, Gibson, Dunn & Crutcher LLP; Richard Smith, Reed Smith LLP; Third row: Robert Jackson, Columbia Law School; Omari Simmons, Wake Forest University School of Law.
6 Front row: Reinier Kraakman, Harvard Law School; Jeffrey Rosen, Debevoise & Plimpton LLP; Hon. Jack Jacobs, Sidley Austin LLP; Joel Friedlander, Friedlander & Gorris, P.A.; Second row: Jesse Fried, Harvard Law School; Ronald Gilson, Columbia Law School; Minor Myers, Brooklyn Law School; Simone Sepe, James E. Rogers College of Law, University of Arizona; Third row: Anthony Casey, The University of Chicago Law School; Christine Hurt, J. Reuben Clark Law School, Brigham Young University; Donna Nagy, Maurer School of Law, Indiana University.
CORPORATE ROUNDTABLE
How Corporate Governance is Made: The Case of the Golden Leash
Matthew D. Cain, Financial Economist, U.S. Securities and Exchange Commission
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
Sean J. Griffith, T.J. Maloney Chair in Business Law, Fordham Law School
Steven Davidoff Solomon, Professor of Law, University of California, Berkeley School of Law
The authors presented a case study of a corporate governance innovation—the incentive compensation arrangement for activist-nominated director candidates colloquially known as the “golden leash.” Golden leash compensation arrangements are a potentially valuable tool for activist shareholders in election contests. In response to their use, several issuers adopted bylaw provisions banning incentive compensation arrangements. Investors, in turn, viewed director adoption of golden leash bylaws as problematic and successfully pressured issuers to repeal them.
The article demonstrates how corporate governance provisions are developed and deployed, the sequential response of issuers and investors, and the central role played by governance intermediaries—activist investors, institutional advisors, and corporate law firms. The article also presents the results of two cross-sectional event studies around key dates that affected the availability of the golden leash. The core finding is that share prices of those firms facing activist intervention reacted positively to events that make golden leashes more available and negatively to events that make golden leashes less available. The article contributes to the debate over how corporate governance is made and its economic significance and demonstrates the key role of intermediaries and interest groups in the evolution of corporate governance.
The Private Ordering Solution to Multiforum Shareholder Litigation
Roberta Romano, Sterling Professor of Law and Director, Yale Law School Center for the Study of Corporate Law, Yale Law School
Sarath Sanga, Visiting Assistant Professor of Law, University of California, Berkeley School of Law
This paper analyzes a private ordering solution to multiforum shareholder litigation: exclusive forum provisions in corporate charters and bylaws. These provisions require that all corporate law-related disputes be brought in a single forum, typically a court in the statutory domicile. Using hand-collected data on the 746 U.S. public corporations that have adopted the provision, the authors examined what drives the growth in these provisions and whether, as some critics contend, their adoption reflects managerial opportunism.
The authors find that nearly all new Delaware corporations adopt the provision at the IPO stage, and that the transition from zero to near-universal IPO adoption over 2007-14 is driven by law firms. Characteristics of individual companies appear to play little or no role in adoption decisions. Instead, the pattern of adoption follows what can be described as a light switch model, in which law firms suddenly switch from never adopting to always adopting the provision in the IPOs they advise.
For post-IPO (or “midstream”) adoptions, they compare corporate governance features of adopters to a matched sample of non-adopters to test the hypothesis that midstream bylaw adoption reflects managerial opportunism. If the hypothesis were correct, then they would expect to find that the midstream adopters exhibit poor corporate governance compared to non-adopters (using the metrics of good governance practices as identified by critics of the provisions). They find, however, that there are either no significant differences in governance or that it is adopters that have higher quality governance features. They also find no significant differences in governance and ownership structures between firms whose boards adopt the provisions as bylaws and those who obtain shareholder approval. The absence of significant differences across firms using disparate adoption procedures suggests that the method of adopting an exclusive forum provision – whether with or without shareholder approvalshould not be a matter of import for investors.
DECEMBER 18, 2015
Welcome
Theodore W. Ruger, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School
Morning Session
How Corporate Governance is Made:
The Case of the Golden Leash
Matthew D. Cain, Financial Economist, U.S. Securities and Exchange Commission
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
Sean J. Griffith, T.J. Maloney Chair in Business Law, Fordham Law School
Steven Davidoff Solomon, Professor of Law, University of California, Berkeley School of Law
commentators
Wei Jiang, Sidney Taurel Associate Professor of Business, Columbia Business School
Roy J. Katzovicz, Chairman, Saddle Point Group, LLC
The Private Ordering Solution to Multiforum Shareholder Litigation
Roberta Romano, Sterling Professor of Law and Director, Yale Law School Center for the Study of Corporate Law, Yale Law School
Sarath Sanga, Visiting Assistant Professor of Law, University of California, Berkeley School of Law
commentators
Hon. William B. Chandler, III, Wilson Sonsini Goodrich & Rosati
Michael Klausner, Nancy and Charles Munger Professor of Business and Professor of Law, Stanford Law School
Afternoon Session
Settlement Practice
moderators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
panelists
Hon. Andre Bouchard, Chancellor, Delaware Court of Chancery
Joel E. Friedlander, Friedlander & Gorris, P.A.
Sean J. Griffith, T.J. Maloney Chair in Business Law, Fordham Law School
William M. Lafferty, Morris, Nichols, Arsht & Tunnell LLP
Gregory P. Williams, Richards Layton & Finger, P.A.
1 Front row: Roy Katzovicz, Saddle Point Group, LLC; Roberta Romano, Yale Law School; Sarath Sanga, UC Berkeley School of Law; Wei Jiang, Columbia Business School; Second row: Chris Couvelier, Lazard; Tom Lin, Temple University Beasley School of Law; David Skeel, University of Pennsylania Law School.
2 Louis Bevilacqua, Cadwalader, Wickersham & Taft LLP.
3 Hon. William Chandler, III, Wilson Sonsini Goodrich & Rosati.
4 Hon. Andre Bouchard, Delaware Court of Chancery.
5 Front row: Hon. Andre Bouchard, Delaware Court of Chancery; Gregory Williams, Richards, Layton & Finger, P.A.; William Lafferty, Morris, Nichols, Arsht & Tunnell LLP; Second row: Eric Talley, Columbia Law School; Larry Hamermesh, Widener University Delaware Law School; John DiTomo, Morris, Nichols, Arsht & Tunnell LLP; Hon. Abigail LeGrow, Master, Delaware Court of Chancery; Third row: Richard Booth, Villanova University School of Law; James Fanto, Brooklyn Law School; Christine Hurt, Reuben Clark Law School, Brigham Young University; Omari Simmons, Wake Forrest University School of Law.
6 Front row: Sean Griffth, Fordham Law School; Joel Friedlander, Friedlander & Gorris, P.A.; Casey Cogut, Simpson Thacher & Bartlett LLP; Second Row: Todd Russo, Buckeye Partners, L.P.; Henry Hu, The University of Texas; Merritt Fox, Columbia Law School; Third Row: Michael White, Vanguard; Eric Roiter, Boston University School of Law; David Hoffman, Temple University Beasley School of Law.
CORPORATE ROUNDTABLE
MAY 1, 2015
Welcome
Theodore W. Ruger, Deputy Dean and Professor, University of Pennsylvania Law School
Morning Session
The Eclipse of the Shareholder Paradigm
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
commentators
Hon. J. Travis Laster, Vice Chancellor, Delaware Court of Chancery
Steven Davidoff Solomon, Professor of Law, Co-Director, Center for Law, Business and the Economy, University of California, Berkeley Law School
Did Harvard Violate Federal Securities Law?
The Campaign against Classified Boards of Directors
Joseph Grundfest, Jr., W.A. Franke Professor of Law and Business, Stanford University Law School
DECEMBER 12, 2014
Welcome
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
Morning Session
Does Majority Voting Improve Board Accountability?
Stephen Choi, Murray and Kathleen Bring Professor of Law, New York University School of Law
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
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
John Coates, John F. Cogan, Jr. Professor of Law and Economics, Harvard Law School
Jennifer Shotwell, Founding Managing Director, Innisfree M&A Incorporated
Equity Vesting and Managerial Myopia
Alex Edmans, Professor of Finance, London Business School, The Wharton School
Vivian W. Fang, Carlson School of Management, University of Minnesota
Katherine A. Lewellen, Associate Professor of Business Administration, Tuck School of Business at Dartmouth
commentators
Donald C. Langevoort, Thomas Aquinas Reynolds Professor of Law, Georgetown University Law Center
Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP
Afternoon Session
Litigation By-Laws and Appraisal Arbitrage
moderators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
panelists
T. Brad Davey, Potter Anderson & Corroon LLP
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
Stephen Fraidin, Vice Chairman, Pershing Square Capital Management, L.P
Hon. Sam Glasscock, Vice Chancellor, Delaware Court of Chancery
Sandra Goldstein, Cravath, Swaine & Moore LLP
Larry Hamermesh, Ruby R. Vale Professor, Widener University Delaware Law School, Member, Council of the Delaware State Bar Association Corporation Law Section
commentators
Geoffrey Tate, Associate Professor of Finance, UNC Kenan-Flagler Business School
Marc Trevino, Sullivan & Cromwell LLP
Afternoon Session
Shareholder Voting: How Far Do We Go?
moderators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
panelists
Daniel H. Burch, Chairman & CEO, MacKenzie Partners, Inc
Chris Cernich, Deputy Director of Global Research, Institutional Shareholder Services
Sarah Goller, Senior Manager, Vanguard
Roy J. Katzovicz, Partner, Investment Team Member and Chief Legal Officer, Pershing Square Capital Management, L.P.
Mark Morton, Potter Anderson & Corroon LLP
David Silk, Wachtell, Lipton, Rosen & Katz
1 Front row: Larry Hammermesh, Delaware Law School; Steve Fraidin, Pershing Square Capital Management, L.P.; Hon. Sam Glassock, Delaware Court of Chancery; Second row: Bruce Silverstein, Young Conaway Stargatt & Taylor LLP; Third row: Omari Simmons, Wake Forest University School of Law; Gordon Smith, J. Reuben Clark Law School, Brigham Young University; Eric Roiter, Boston University School of Law; Robert Miller, The University of Iowa College of Law.
2 William Bratton, University of Pennsylvania Law School.
3 Front row: Sandra Goldstein, Cravath, Swain, & Moore LLP; Brad Davey, Potter Anderson & Corroon LLP; Jill Fisch, University of Pennsylvania Law School; Second row: Joseph Grundfest, Stanford Law School; Roberta Romano, Yale Law School; Jesse Fried, Harvard Law School; Albert Choi, University of Virginia School of Law; Third row: David Hoffman, Temple University Beasley School of Law; Christine Hurt, J. Reuben Clark Law School, Brigham Young University; Tom Lin, Temple University Beasley School of Law; Sean Griffith, Fordham Law School.
4 Front row: Roy Katzovicz, Pershing Square Capital Management, L.P.; David Silk, Wachtel, Lipton, Rosen & Katz; Chris Cernich, Institutional Shareholder Services; Second row: Keith Gottfried, Morgan Lewis & Bockius LLP; Richard Smith, Reed Smith LLP; Third row: Omari Simmons, Wake Forest University School of Law; Sam Buell, Duke University School of Law; John DiTomo, Morris, Nichols, Arsht & Tunnell LLP; Robert Rasmussen, USC Gould School of Law.
5 Front row: Joseph Frumkin, Sullivan & Cromwell LLP; James Rossman, Lazard Freres; Joel Friedlander, Friedlander & Gorris, P.A.; Second row: Jennifer Shotwell, Innisfree M&A Incorporated; Alex Edmunds, London Business School, The Wharton School; John Coates, Harvard Law School; Third row: Tom Lin, Temple University Beasley School of Law; Sean Griffith, Fordham Law School; Richard Booth, Villanova University School of Law; David Ross, Seitz Ross Aronstam & Moritz LLP.
6 Front row: Sarah Goller, Vanguard; Mark Morton, Potter Anderson & Corroon LLP; Daniel Burch, MacKenzie Partners, Inc.; Joseph Frumkin, Sullivan & Cromwell LLP; Second Row: William Harker, Ashe Capital Management, LLC; Martin Lessner, Young Conaway Stargatt & Taylor, LLP; Jeremy Delman, Debevoise & Plimpton LLP; Merritt Fox, Columbia Law School; Jennifer Shotwell, Innisfree M&A Incorporated; Third Row: Anthony Casey, The University of Chicago Law School; Fred Tung, Boston University School of Law; Verity Winship, University of Illinois College of Law; Tom Lin, Temple University Beasley School of Law.
CORPORATE ROUNDTABLE
MAY 2, 2014
Welcome
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
Morning Session
The Pricing of Bond Covenants
David Musto, Ronald O. Perelman Professor in Finance, The Wharton School
Jillian Popadak, Business Economics Doctoral Student, The Wharton School
commentators
Martin Fridson, Chief Executive Officer, Fridson Vision LLC
Michael Klausner, Nancy & Charles Munger Professor of Business and Law, Stanford Law School
For Diversity in the International Regulation of Financial Institutions: Critiquing and Recalibrating the Basel Architecture
Roberta Romano, Sterling Professor of Law, Yale Law School
DECEMBER 13, 2013
Welcome
Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School
Morning Session
Bankers and Chancellors
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
commentators
Deborah DeMott, David F. Cavers Professor of Law, Duke Law School
Casey Kobi, Managing Director, Barclays
No Free Shop: Why Target Companies in MBOs and Private Equity Transactions Sometimes Choose Not to Buy ‘Go Shop’ Options
Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University Graduate School of Business
Donna M. Hitscherich, Senior Lecturer in Discipline in Business, Finance and Economics, Director, Private Equity Program, Columbia University Graduate School of Business
commentators
Richard J. Herring, Jacob Safra Professor of International Banking, The Wharton School
Mark J. Welshimer, Deputy Managing Partner, Sullivan & Cromwell, LLP
Afternoon Session
Panel on Short Term Credit Markets
moderators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
panelists
Matthew J. Eichner, Deputy Director, Federal Reserve Board
Daniel M. Gallagher, Commissioner, Securities and Exchange Commission
Randall D. Guynn, Davis Polk & Wardell LLP
Adam J. Levitin, Professor of Law, Georgetown Law
Annette L. Nazareth, Davis Polk & Wardell LLP
commentators
Marcel Kahan, George T. Lowy Professor of Law, New York University School of Law
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
panelists
Charles I. Cogut, Simpson Thacher & Bartlett LLP
Joseph B. Frumkin, Sullivan & Cromwell LLP
Jeffrey J. Rosen, Debevoise & Plimpton LLP
Steven A. Rosenblum, Wachtell, Lipton, Rosen & Katz
Matthew Schoenfeld, Associate, Special Situations Group, Morgan Stanley
Christopher A. Wightman, Principal, CamberView Partners, LLC
1 Richard J. Herring, The Wharton School.
2 Front row: Richard D. Smith, Reed Smith LLP; David M. Silk, Wachtell, Lipton, Rosen & Katz; Second row: Frederick Tung, Boston University School of Law.
3 Front row: Matthew J. Eichner, Federal Reserve Board; Annette L. Nazareth, Davis Polk & Wardwell LLP; Second row: Joseph A. McCahery, Tilburg University; Merritt B. Fox, Columbia Law School; Albert H. Choi, University of Virginia School of Law; Third row: Morgan Ricks, Vanderbilt Law School; James A. Fanto, Brooklyn Law School.
4 Michael L. Wachter, University of Pennsylvania Law School.
5 Joseph B. Frumkin, Sullivan & Cromwell LLP.
6 William W. Bratton, University of Pennsylvania Law School.
7 Front row: Robert E. Spatt, Simpson Thatcher & Bartlett LLP; Joseph D. Gatto, Perella Weinberg Partners; Frederick H. Alexander, Morris, Nichols, Arsht & Tunnell LLP; Second row: Allison R. Schneirov, Skadden, Arps, Slate, Meagher & Flom LLP; Deborah DeMott, Duke Law School; Marcel Kahan, New York University School of Law; Third row: Christopher Foulds, Skadden, Arps, Slate, Meagher & Flom LLP; Justin Greenbaum, Hughes Hubbard & Reed LLP; Frederick Tung, Boston University School of Law; Christine Hurt, University of Illinois College of Law.
PANEL PROGRAMS
In addition to the roundtable series, the Institute hosts several panel programs each year that explore important topics in the areas of law and finance. The panelists on these programs provide students and other attendees with real-world examples of the complex situations they face in their professional careers.
THESE PROGRAMS ARE usually followed by Corporate Governance Dinners with further commentary and discussion. The Corporate Governance Dinners provide an opportunity for off-the-record conversation among presenters and members of the board of advisors, their invited colleagues, and the Institute’s associate faculty.
CHANCERY COURT PROGRAM
APRIL 5, 2016
Measuring Fair Value in Appraisal: Deal Price or Discounted Cash Flow
The program focused on interrelations between fair value, merger price, and synergistic gain in the context of Delaware statutory appraisal. Under the statute, appraisal petitioners are awarded the “fair value” of their shares independent of any value arising in respect of the merger, a measure that excludes synergistic gain. The typical practice is to use traditional discounted cash flow (DCF) analysis to estimate pre-merger going concern value. In some situations, however, critical parameter values are either unavailable or are known in a range of possible values. In some recent cases, the Chancery Court has relied on the deal price, particularly where the deal has been fully shopped and vetted. Questions follow concerning synergistic gain, for the deal price is likely to be heavily influenced by the value of the synergies created by the merger. The value of the synergies, moreover, is specific to the buyer and the sharing of the synergies is specific to the outcome of the negotiations between the target and buyer. Consequently, the “deal price minus synergies” estimate of the
appraisal award is subject to its own set of difficult estimation problems. The panelists spoke to the context where the “DCF— going concern value” or “deal price minus synergies” is more likely to be used, with the bankers favoring going concern value. There was also a lively discussion of how to measure synergies.
moderator Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
panelists
James Del Favero, Managing Director, Global Head of Raid and Activism Defense, Goldman, Sachs & Co.
Eric Gilje, Assistant Professor of Finance, The Wharton School
John Suydam, Chief Legal Officer, Apollo Global Management, LLC
commentators
Lawrence Hamermesh, Ruby R. Vale Professor, Widener University Delaware Law School
3 Front row: Joseph Frumkin, Sullivan & Cromwell LLP; Cynthia Kane, Office of the Secretary of State, Delaware Department of State; Hon. Leo Strine Jr., Delaware Supreme Court; Second row: Peter Welsh, Ropes & Gray LLP; Jon Abranczyk, Morris, Nichols, Arsht & Tunnell LLP; Richard Aldridge, Morgan Lewis & Bockius LLP.
CHANCERY COURT PROGRAM
FEBRUARY 16, 2016
Taking a Benefit Corporation Public: Are Shareholders in the Public Markets Ready for Benefit Corporations?
The panel addressed the particular challenges that benefit corporations are likely to face in the public markets. After covering some of the basic principles of benefit corporations, including the rejection of shareholder primacy and their broader responsibility to stakeholders, the panel discussed the theoretical basis for such a move. The panel discussed evidence that both individual and institutional investors are increasingly recognizing benefit corporations as viable investments. The panel further noted that benefit corporations are beginning to make their ways into the public markets, in part as wholly owned subsidiaries of traditional corporations and how, as such, they are achieving increasing credibility in the market. One threshold question is whether normal valuation metrics apply to benefit corporations. The panel specifically considered the experience of Laureate Education, which is in the process of registering to go public as a benefit corporation. They also addressed the type of companies
that might actually use the benefit corporation form as a value enhancer. They then addressed the market acceptance of the benefit corporation structure and the potential legal challenges to operating in the public markets as a benefit corporation. They discussed the fact that some public companies were already subject to constituency statutes, so that the public markets had exposure to stakeholder concepts. Finally, the panel addressed the ways that institutional investors could invest in benefit corporations and satisfy their fiduciary duties.
moderator
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
panelists
Frederick Alexander, Head of Legal Policy, B Lab
Joseph H. Kaufman, Simpson Thacher & Bartlett LLP
David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School
Adam J. Norin, Managing Director, Investment Banking, Barclays PLC
Robert W. Zentz, Senior Vice President and General Counsel, Laureate Education
1 Michael Wachter, University of Pennsylvania Law School; Frederick Alexander, B Lab; Joseph Kaufman, Simpson, Thacher & Bartlett LLP; David Musto, The Wharton School; Adam Nordin, Barclays PLC; Robert Zentz, Laureate Education.
2 Hon. Leo Strine, Jr., Delaware Supreme Court.
3 Joseph Kaufman, Simpson, Thatcher & Bartlett LLP; David Musto, The Wharton School; Adam Nordin, Barclays PLC.
CHANCERY COURT PROGRAMS
APRIL 7, 2015
Beta: Has Experience Proved its Utility?
What is the State of the Art Now?
Appraisal jurisprudence does not lie at the core of Delaware corporate law, but its position in law and economics is unique nonetheless. Appraisal is the one space where educated and astute legal decision-makers must confront cutting-edge financial economics in a fact-finding process. This program was the second of a series of Chancery Court Programs directed to the key financial economic inputs in appraisal valuation. Last year’s event looked into one component of the Capital Asset Pricing Model, the equity risk premium. This year’s program took up another, beta. As in the previous year, the panel brought together investment bankers with extensive practical experience in valuation and leading academics on asset pricing from the Wharton faculty. The spirited debate revealed that beta determinations are considerably less cut-and-dried than basic finance textbooks would lead one to understand.
Chief Justice Leo E. Strine, Jr. introduced Chancellor Andre Bouchard, Delaware Court of Chancery, to members of the Institute’s Board of Advisors prior to the program.
FEBRUARY 3, 2015
Documenting the Deal:
What is the State of the Art and Does it Make Sense?
It is said that the sale of a public company is inevitably accompanied by litigation — such litigation has been characterized as a "merger tax." A natural result of the litigation challenges is that the actions of those who put the transaction together become the subject of the second-guessing.
This program looked into various steps that legal and financial advisors in mergers and acquisitions can take to conduct a sale process in a manner that deflects challenge. The program identified the ways in which conflicts of interest can be reduced, eliminated, or addressed most effectively. The program highlighted the critical importance of maintaining appropriate records that contemporaneously document the decision-making process both to demonstrate the basis for strategic judgments and to assist transaction participants in accounting reconstructing that process after-the-fact. The panelists compellingly demonstrated the practical payoff to a careful deal process — not only does a high quality process reduce the target zone for plaintiffs' lawyers but it fosters better deals.
moderators
Hon. Leo E. Strine, Jr., Chief Justice, Delaware Supreme Court
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
panelists
James Del Favero, Managing Director, Global Head of Raid and Activism Defense, Goldman, Sachs & Co.
Robert W. Holthausen, Professor of Accounting and Finance, Chairperson, Accounting Department, Ernst and Young Professor and The Nomura Securities Professor, The Wharton School
Jonathan Mir, Managing Director, Lazard
Larry Nath, Senior Managing Director, The Blackstone Group
Jessica Wachter, Richard B. Worley Professor of Financial Management, Professor of Finance, The Wharton School
moderators
Hon. Leo E. Strine, Jr., Chief Justice, Delaware Supreme Court
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School
1 Jessica Wachter, The Wharton School; Larry Nath, The Blackstone Group; Jonathan Mir, Lazard; James Del Favero, Goldman, Sachs & Co.; Robert Holthausen, The Wharton School.
2 Daniel O’Donnell, Dechert LLP; Joseph Frumkin, Sullivan & Cromwell LLP.
3 Michael Wachter, University of Pennsylvania Law School; Gregory Varallo, Richards Layton & Finger, P.A.; Stephen Kotran, Sullivan & Cromwell LLP; David Katz, Wachtell, Lipton, Rosen & Katz; Hon. Leo Strine, Jr., Delaware Supreme Court.
4 Hon. Andre Bouchard, Delaware Court of Chancery; Hon. Leo Strine, Jr., Delaware Supreme Court.
INSIGHTS FROM PRACTICE
FEBRUARY 24, 2016
The ‘Institutionalization’ of Activism and the Impact on M&A and Board/Shareholder Dynamics
The panel looked at the trends and emerging dynamics in activism, including hostile takeovers, board representation, and going private transactions. The panelists noted a number of trends. Numbers of activist funds are increasing, as is the amount of capital at these funds’ disposal. Numbers of activist campaigns are also increasing. Larger companies are being targeted. More activists are obtaining board seats. The dissident success rate has also increased. With respect to activism and hostile takeovers, the panel looked at the Allergan case, discussing issues respecting the tender offer, the special meeting, and the definition of a “group” for poison pill purposes. The panel went on to discuss board representation noting that the rise in overall shareholder activism, coupled with the increasing tendency of target companies to settle, has resulted in a growing number of activist designees (“blockholder directors”) being elected to companies’ boards. The fact that these blockholder directors owe (or are perceived to
NOVEMBER 5, 2014
The Sotheby’s Case
Hedge fund activists have become increasingly aggressive in challenging issuers’ business plans, and issuers have responded with creative new defensive measures. Despite the frequency of hostile campaigns, little in the way of new law has resulted. That’s why Third Point v. Ruprecht emerged as a leading case even before it was decided. The defending board in a proxy fight promulgated a poison pill with a 10 percent trigger that applied only to activists rather than the 20 percent trigger that applied to passive investors. The pill cut off the hedge fund’s ability to purchase more stock and so increase its vote in the imminent election contest. The hedge fund failed to persuade the court to issue an injunction precluding the application of the pill. In the process, the court reaffirmed the authority of a board to defend against an activist campaign, bringing to bear the law of takeover defense.
Our panelists included Vice-Chancellor Parsons, who ruled on the motion, and counsel for both sides. They took us through the litigation point by point, highlighting layers of complexity and planning that are invisible to a reader of the final opinion.
owe) allegiances to particular investors who may have unique agendas raises a number of corporate law questions, some of which can be answered by Delaware corporate law, but others of which remain unresolved and for which there is tension between the Delaware General Corporate Law and case law. Finally, the panelists discussed issues arising in connection with activists and going private transactions.planning that are invisible to a reader of the final opinion.
panelists
Mark I. Greene, Cravath, Swaine & Moore LLP
Sarkis Jebejian, Kirkland & Ellis LLP
Roy J. Katzovicz, Chairman, Saddle Point Group, LLC
Jeffrey J. Rosen, Debevoise & Plimpton LLP
David M. Silk, Wachtell, Lipton, Rosen & Katz
Marc Weingarten, Schulte Roth & Zabel LLP
moderator
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
panelists
William M. Lafferty, Morris, Nichols, Arsht & Tunnell LLP
Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP
Hon. Donald F. Parsons, Jr., Vice Chancellor, Delaware Court of Chancery
William D. Savitt, Wachtell, Lipton, Rosen & Katz
Kevin R. Shannon, Potter Anderson & Corroon LLP
moderators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School
1 Hon. Donald Parsons, Delaware Court of Chancery; William Lafferty, Morris, Nichols, Arsht & Tunnell LLP; Mark Lebovitch, Bernstein Litowitz Berger & Grossman LLP; William Savitt, Wachtel, Lipton, Rosen & Katz; Kevin Shannon, Potter Anderson & Corroon LLP.
2 Jeffrey Rosen, Debeviose & Plimpton LLP; Sarkis Jebejian, Kirkland & Ellis LLP; Roy Katzovicz, Saddle Point Group, LLC; David Silk, Wachtell, Lipton, Rosen & Katz; Mark Greene, Cravath, Swaine & Moore LLP; Marc Weingarten, Schulte Roth & Zabel LLP.
LECTURES
The Law and Entrepreneurship Lecture and the Distinguished Jurist Lecture are the Institute’s principal public programs. 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 and 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
MARCH 16, 2016
Off the Field and Off the Record: The Future Through the Prism of Sports
Philip de Picciotto, Founder and President, Octagon
As Founder and President of Octagon, Phil de Picciotto has built the brands and overseen the careers of many of the world’s most recognizable and talented athletes and celebrities, ranging from Super Bowl champions to Olympic gold medalists to royalty to network broadcasters. Under his leadership and direction, Octagon has achieved a position of leadership in the areas of talent representation, property ownership, event management, and sports and entertainment marketing.
Mr. de Picciotto graduated magna cum laude from Amherst College in 1977, and received his Juris Doctor from the University of Pennsylvania in 1981. While pursuing his law degree, he worked at Dell, Craighill, Fentress & Benton. In 1983, he co-founded Advantage International, which was later re-branded to Octagon.
NOVEMBER 11, 2015
Counselor as Entrepreneur or Law as a Dynamic Venture
Steven M. Cohen, Executive Vice President, Chief Administrative Officer and General Counsel, MacAndrews & Forbes Incorporated
At MacAndrews & Forbes, a company that acquires and manages a diversified portfolio of public and private companies, Mr. Cohen serves as the senior legal adviser to its Chairman Ronald O. Perelman. Mr. Cohen previously served as the senior advisor to New York’s Governor Andrew M. Cuomo. Mr. Cohen also worked as a federal prosecutor in the Southern District of New York where he focused on the prosecution of violent gangs.
Mr. Cohen graduated from the University of Pennsylvania Law School in 1988, and earned his B.A. from New York University in 1985. Following law school, Mr. Cohen served as law clerk to the Honorable Stanley Sporkin of the U.S. District Court for the District of Columbia and the Honorable Frank X. Altimari of the U.S. Court of Appeals for the Second Circuit.
DISTINGUISHED JURIST LECTURES
OCTOBER 14, 2015
Science, Technology and Immigration in the 21st Century
Hon. Barrington D. Parker, Jr., U.S. Court of Appeals for the Second Circuit
Judge Parker posed the question of why the public debate about immigration is so distorted when the case for the contribution that immigration makes is so powerful. The judge commented that the current round of immigrant bashing in the public sphere, unfortunate as it is, shares similarities to outbreaks of nativism that have recurred since this country was founded. He explained his opinion that this round is especially dangerous because it detracts from our understanding of how our nation’s wealthgenerating capacity has now become heavily dependent on foreign intellectual talent. Nowhere, according to the judge, is this more evident than when we examine what drives science, technology, engineering and innovation in America.
The Honorable Barrington D. Parker, Jr. has been a federal judge on the United States Court of Appeals for the Second Circuit since 2001. He had been a United States District Judge for the Southern District of New York for the previous seven years. Judge Parker began his legal career as a law clerk to Judge Aubrey Robinson of the United States District Court for the District of Columbia, where his father, the Hon. Barrington D. Parker, Sr. also sat. He then went into private law practice in New York in 1970, serving first at Sullivan & Cromwell until 1977, then as a partner at Parker, Auspitz, Neesemann & Delehanty, P.C. from 1977 to 1987, then as a partner at Morrison & Foerster from 1987 until his appointment in 1994 to the United States District Court for the Southern District of New York. He is a 1965 graduate of Yale College and a 1969 graduate of Yale Law School.
MARCH 19, 2015
Fixing Lawyers’ Mistakes: The Court’s Role in Administering Delaware’s Corporate Statute
Hon. John W. Noble, Vice Chancellor, Delaware Court of Chancery
Vice Chancellor Noble spoke about what the Court of Chancery can do to fix defective corporate acts. Delaware law has demanding requirements for some corporate actions, particularly those affecting the capital structure and, prior to 2013, some actions that failed to meet the statutory requirements could not be cured despite the unfair results that might ensue. The Delaware legislature enacted sections 204 and 205 of the General Corporation Law in 2013 to address this problem. Section 204 sets out a procedure for ex post ratification of defective corporate actions, particularly defective issues of stock. Section 205 allows the Court to exercise its equitable powers to achieve a comparable result. Vice Chancellor Noble explained how the new legislation fits within the Chancery Court’s historical tradition, spanning almost 225 years, of using equitable considerations to fix mistakes.
Nonetheless, Vice Chancellor Noble warned that the new legislation is potentially far-reaching in that it grants the court a wide range of discretion, leaving it to the court to determine how best to exercise that discretion.
The Honorable John W. Noble has been a Vice Chancellor of the Delaware Court of Chancery since November 2000. Vice Chancellor Noble is a graduate of Bucknell University (B.S. in Chemical Engineering, magna cum laude, 1972) and the University of Pennsylvania Law School (J.D., cum laude, 1975), where he was an Editor of its Law Review and elected to the Order of the Coif. Following law school, he clerked for the Chief Judge of the United States District Court for the District of Delaware. From 1977 until his appointment, he was a principal in Parkowski, Noble & Guerke, P.A., in Dover, Delaware.
PAST LECTURES
Past Law and Entrepreneurship Lectures
17 February 2015
Doing Well and Doing Good: The Story of Plum Organics and the New Benefit Corporation Movement
Frederick Alexander, Counsel, Morris, Nichols, Arsht & Tunnell LLP and Advisor for Legal Policy, B Lab
Neil Grimmer, CEO and Co-Founder, Plum Organics
Bart Houlahan, Co-Founder, B Lab
Ray Liguori, Vice President of Corporate Development, Campbell Soup Company
Keely Stewart, Associate Corporate Counsel, Campbell Soup Company
18 November 2014
Happy Guy in Distressed… From Pre-Med to JD to Distressed Investing
Steven T. Shapiro, Founding Partner and Senior Portfolio Manager, GoldenTree Asset Management
23 April 2014
Blackstone Navigating a Sea of Regulatory Change
John G. Finley, Senior Managing Director and Chief Legal Officer, The Blackstone Group
12 November 2013
Shazam! – A ’63 Law Grad is Transformed into a High Tech Entrepreneur
J. Haig Farris, President, Fractal Capital Corporation
25 February 2013
From Corporate Management to Sports Management: Turning Around the 76ers
Adam Aron, CEO and Co-Owner, Philadelphia 76ers
Past Distinguished Jurist Lectures
19 March 2015
Fixing Lawyers’ Mistakes: The Court’s Role in Administering Delaware’s Corporate Statute
Hon. John W. Noble, Vice Chancellor, Delaware Court of Chancery
19 November 2013
The Paucity of Criminal Prosecutions Arising from the Financial Crisis: Unaccountable?
Hon. Jed S. Rakoff, United States District Judge, Southern District of New York
10 October 2012
Financial Stability Regulation
Daniel K. Tarullo, Governor, Board of Governors of the Federal Reserve System
15 February 2012
Regular Order as Equity
Hon. Leo E. Strine, Jr., Chancellor, Delaware Court of Chancery
25 October 2011
The Delaware Court of Chancery from 1989 – 2011: An Insider’s View
Hon. William B. Chandler III, Chancellor, Delaware Court of Chancery
18 October 2012
The Cross-Cultural CEO: Growing a Business in a World Without Borders
David Perla, Co-Chief Executive Officer, Pangea3 LLC
15 November 2011
Too Dull for Davos: My Life in Long-Only, Objective-Based, Active Money Management and Why I Think It Still Makes Sense
Paul G. Haaga, Jr., Chairman of the Board, Capital Research and Management Company
2 March 2011
Competitive Places and Inner City
Opportunities: Reflections on 25 Years of Community Investment
Jeremy Nowak, President and Chief Executive Officer, The Reinvestment Fund
2 November 2010
The Financial Crisis: Aftermath and Implications
H. Rodgin Cohen, Sullivan & Cromwell LLP
3 March 2010
Managing Through Change, Managing Through Crisis in Financial Services
Joseph D. Gatto, Chairman of Investment Banking, Barclays Capital Americas
30 September 2009
The ‘Ten Points’ for Maintaining a Risk-Taking Entrepreneurial Spirit in a Large Corporation
J.P. Suarez, Senior Vice President and General Counsel, Wal-Mart Stores International Division
31 March 2009
The PeopleSoft Deal
Safra Catz, President, Oracle Corporation
23 March 2011
Treasury’s Performance as Pay Tsar: Precedent or Aberration?
Kenneth R. Feinberg, Feinberg Rozen, LLP
29 October 2009
Private Securities Litigation — Time for a Fresh Start?
Hon. Lewis A. Kaplan, United States District Judge, Southern District of New York
11 November 2008
Delaware Directors’ Fiduciary Duties:
The Focus on Loyalty
Hon. Randy Holland, Justice, Supreme Court of Delaware
24 October 2007
The Future of Securities Regulation
Brian G. Cartwright, General Counsel, Securities and Exchange Commission
11 October 2006
The Embattled Corporation
Hon. Richard A. Posner, U.S. Seventh Circuit Court of Appeals and University of Chicago Law School
3 March 2009
Defining the 21st Century Campus: The Intersection of Education and Community Hon. Michael Nutter, Mayor, City of Philadelphia
17 September 2008
Retailers in a Recession: A Fireside Chat on Investing with Bill Ackman
William A. Ackman, Managing Member, Pershing Square Capital Management, L.P.
31 March 2008
Making Every Mistake Once Safra Catz, President, Oracle Corporation
19 September 2007
Tales from Blackstone’s IPO
Robert L. Friedman, Senior Managing Director and Chief Legal Officer, The Blackstone Group L.P.
28 February 2007
Law, Legal Risks, and the Financial Markets
Isaac D. Corré, Senior Managing Director, Eton Park Capital Management
29 November 2006
Large-Scale Entrepreneurship: Business Development at GE Pamela Daley, Senior Vice President for Corporate Business Development, General Electric Company
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
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
3 March 2005
Corporate Federalism: Event Horizons in Corporate Governance
Hon. Myron T. Steele, Chief Justice, Delaware Supreme Court
28 October 2004
A Twelve-Year Retrospective on Delaware Corporate Jurisprudence and Governance Issues
Hon. E. Norman Veasey, Chief Justice, Delaware Supreme Court
The Effects of Collegiality on Judicial Decision Making
Hon. Harry T. Edwards, Circuit Judge, U.S. Court of Appeals for the D.C. Circuit
26 October 2005
Founding and Building a New Venture:
The Story of the National Women’s Law Center
Marcia Greenberger, Founder and CoPresident, 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.
29 November 2001
Fee Shifting as a Control Against the Rogue Litigant
Hon. Jack B. Jacobs, Justice, Supreme Court of Delaware
6 March 2001
Administering Capital Punishment: Is Texas Different?
Hon. Patrick E. Higginbotham, U.S. Court of Appeals for the Fifth Circuit
24 February 2000
The Court of Chancery as Teacher of Corporate Law
Hon. William B. Chandler III, Chancellor, Delaware Court of Chancery
11 February 1999
Why Do People Bring Employment Discrimination Cases When They Usually Lose?
Hon. Diane Wood, U.S. Court of Appeals for the Seventh Circuit
12 February 1998
The Value of Predictability in Corporate Law
Hon. E. Norman Veasey, Chief Justice, Delaware Supreme Court
Past Law and Entrepreneurship Lectures
1 Neil Grimmer, Roy Liguori, Keely Stewart, Frederick Alexander, Bart Houlahan
2 Steven T. Shapiro
3 John Finley
Past Distinguished Jurist Lectures
15 Hon. John W. Noble
16 Hon. Jed S. Rakoff
17 Daniel K. Tarullo
18 Hon. Leo E. Strine, Jr.
19 Hon. William B. Chandler III
20 Kenneth R. Feinberg
21 Hon. Lewis A. Kaplan
22 Hon. Randy Holland
Brian G. Cartwright
ACADEMIC EVENTS
The Institute of Law and Economics organizes a variety of symposia.
IN FEBRUARY 2005, we launched an annual two-day academic conference on Law and Finance, jointly sponsored by ILE, the Wharton School’s Financial Institutions Center, and NYU’s Pollack Center for Law and Business. The conference location alternates between Penn and NYU. The Law and Finance conference offers leading scholars the opportunity to present cutting edge research to a community of legal and business school academics.
IN OCTOBER 2002, ILE started the 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. Each seminar features a guest speaker presenting interdisciplinary work. A dinner follows each presentation, with commentary presented by members of ILE’s Associate Faculty.
PENN/NYU CONFERENCE ON LAW AND FINANCE
February 19-20, 2016
University of Pennsylvania Law School
Jointly sponsored by Institute for Law and Economics, University of Pennsylvania
Pollack Center for Law & Business, New York University
Organized by
William T. Allen, New York University School of Law
Yakov Amihud, Stern School of Business, New York University
Stephen Choi, New York University School of Law
Jill E. Fisch, University of Pennsylvania Law School
Itay Goldstein, The Wharton School, University of Pennsylvania
David Yermack, Stern School of Business, New York University
Session I
A Positive Theory of Retirement Plan
Design
Ryan Bubb, New York University School of Law
Patrick L. Warren, John E. Walker Department of Economics, Clemson University
Commentator
Lauren H. Cohen, Harvard Business School
Moderator
William W. Bratton, University of Pennsylvania Law School
February 20–21, 2015
New York University School of Law
Jointly sponsored by Institute for Law and Economics, University of Pennsylvania
Pollack Center for Law & Business, New York University
Organized by
Stephen Choi, New York University School of Law
Jill E. Fisch, University of Pennsylvania Law School
Itay Goldstein, The Wharton School, University of Pennsylvania
David Yermack, Stern School of Business, New York University
Session I
Passive Investors, Not Passive Owners
Ian Appel, The Wharton School, University of Pennsylvania
Todd Gormley,The Wharton School, University of Pennsylvania
Donald B. Keim, The Wharton School, University of Pennsylvania
Commentator
Robert Jackson, Columbia Law School
Moderator
Jennifer Arlen, New York University School of Law
Session II
Shall We Haggle in Pennies at the Speed of Light or in Nickels in the Dark? How
Session II
Investor Flows and Fragility in Corporate Bond Funds
Itay Goldstein, The Wharton School, University of Pennsylvania
Hao Jiang, Eli Broad College of Business, Michigan State University
David T. Ng, The Charles H. Dyson School of Applied Economics and Management, Cornell University
Commentator
Kathryn Judge, Columbia Law School
Moderator
Michael L. Wachter, University of Pennsylvania Law School
Session III
After Halliburton: Event Studies and Their Role in Federal Securities Fraud Litigation
Jill E. Fisch, University of Pennsylvania Law School
Jonah Gelbach, University of Pennsylvania Law School
Jonathan Klick, University of Pennsylvania Law School
Commentator
Jerold Warner, University of Rochester Simon Business School
Moderator
Stephen Choi, New York University School of Law
Session IV
Who is Afraid of BlackRock?
Massimo Massa, INSEAD
David Schumacher, McGill University
Yan Wang, Erasmus University
Commentator
Katherine Litvak, Northwestern University School of Law
Moderator
David Yermack, Stern School of Business, New York University
Session V
Short-Termism and Long-Termism
Michal Barzuza, University of Virginia School of Law
Eric Talley, Columbia Law School
Commentator
Laura Starks, University of Texas McCombs School of Business
Moderator
Jill E. Fisch, University of Pennsylvania Law School
Session VI
The End of Market Discipline? Investor Expectations of Implicit Government Guarantees
Viral V. Acharya, Stern School of Business, New York University, CEPR and NBER
Deniz Anginer, Virginia Tech
A. Joseph Warburton, Syracuse University
Commentator
Allen Ferrell, Harvard Law School
Moderator
Itay Goldstein, The Wharton School, University of Pennsylvania
Session VII
Stock Market Prices and the Market for Corporate Control
John Armour, University of Oxford and ECGI
Brian Cheffins, University of Cambridge and ECGI
Commentator
Audra Boone, U.S. Securities and Exchange Commission
Moderator
Itay Goldstein, The Wharton School, University of Pennsylvania
Session VIII
Wolf Pack Activism
Alon Brav, Duke University: The Fuqua School of Business and NBER
Amil Dasgupta, London School of Economics, CEPR, and ECGI
Richmond Mathews, University of Maryland, College Park
Commentator
Edward Rock, University of Pennsylvania Law School
Moderator
Doron Levit, The Wharton School, University of Pennsylvania
Minimum Price Variation Regulates High Frequency Trading and Dark Liquidity
Robert Bartlett, University of California, Berkeley Law School
Justin McCrary, University of California, Berkeley Law School
Commentator
Chester Spatt, Carnegie Mellon, Tepper School of Business
Moderator
William T. Allen, New York University School of Law
Session III
The Price of Political Uncertainty: Theory and Evidence from the Option Market
Bryan Kelly, University of Chicago Booth School of Business
Lubos Pastor, University of Chicago Booth School of Business
Pietro Veronesi, University of Chicago Booth School of Business
Commentator
Eric Talley, University of California, Berkeley Law School
Moderator
Michael Wachter, University of Pennsylvania Law School
Session IV
Does Majority Voting Improve Board
Accountability?
Stephen Choi, New York University School of Law
Jill E. Fisch, University of Pennsylvania Law School
Marcel Kahan, New York University School of Law
Edward Rock, University of Pennsylvania Law School
Commentator
Wei Jiang, Columbia Business School
Moderator
Michael Klausner, Stanford Law School
Session V
Liquidity and Governance
Kerry Back, Rice University Jones Graduate School of Business
Tao Li, City University of Hong Kong
Alexander Ljungqvist, Stern School of Business, New York University
Commentator
Quinn Curtis, University of Virginia Law School
Moderator
Jill E. Fisch, University of Pennsylvania Law School
Session VI
The Law and Finance of Anti-Takeover Statutes
Emiliano Catan, New York University School of Law
Marcel Kahan, New York University School of Law
Commentator
Espen Eckbo, Dartmouth College Tuck School of Business
Moderator
William W. Bratton, University of Pennsylvania Law School
Session VII
Do Managers Do Good with Other People’s Money?
Ing-Haw Cheng, Dartmouth College Tuck School of Business
Harrison G. Hong, Princeton University Department of Economics
Kelly Shue, Chicago Booth School of Business
Commentator
Brett McDonnell, University of Minnesota Law School
Moderator
Itay Goldstein, The Wharton School, University of Pennsylvania
Session VIII
The Costs and Benefits of Mandatory
Securities Regulation: Evidence from the Market Reactions to the Jobs Act of 2012
Dhammika Dharmapala, University of Chicago Law School
Vikramaditya S. Khanna, University of Michigan Law School
Commentator
Craig Lewis, Vanderbilt University Owen School of Business
Moderator
Todd Gormley, The Wharton School, University of Pennsylvania
1 Jerold Warner, University of Rochester Simon Business School.
2 John Armour, University of Oxford; Brian Cheffins, University of Cambridge.
3 Audra Boone, U.S. Securities and Exchange Commission.
4 Kathryn Judge, Columbia Law School; Itay Goldstein, The Wharton School.
5 Front row: Jill Fisch, University of Pennsylvania Law School; William Bratton, University of Pennsylvania Law School; Second row: Albert Choi, University of Virginia School of Law; Holger Spamann, Harvard Law School; Third row: Richmond Mathews, University of Maryland, College Park; Alon Brav, The Fuqua School of Business, Duke University; Christoph Herpfer, Doctoral Student, Stern School of Business, NYU.
6 Laura Starks, University of Texas at Austin McCombs School of Business.
ILE/WHARTON FINANCE SEMINARS
APRIL 14, 2016
The Market for Financial Adviser Misconduct
(with Mark Egan and Gregor Matvos)
Amit Seru, Dennis and Karen Chookaszian Professor of Finance and David Booth Faculty Fellow, Booth School of Business, University of Chicago
The paper seeks to evaluate the presence of financial advisor misconduct, asking whether it persists and whether the system forces out bad advisors or allows them to be recycled. To answer these questions, the authors construct a novel database containing the universe of financial advisers in the United States from 2005 to 2015, representing approximately 10% of employment of the finance and insurance sector. Their research shows that roughly 7% of advisers have misconduct records. At some of the largest financial advisory firms in the United States, more than 15% of advisers have misconduct records. Prior offenders are five times as likely to engage in new misconduct as the average financial adviser. Firms discipline misconduct: approximately half of financial advisers lose their job after misconduct. The labor market partially undoes firm-level discipline: of these advisers, 44% are reemployed in the financial services industry within a year. Reemployment is not costless. Following misconduct, advisers face longer unemployment spells, and move to less reputable firms, with a 10%
OCTOBER 8, 2015
Use and Abuse of Government Power to Bail Out
Firms During the Financial Crisis
Eric Posner, Kirkland and Ellis Distinguished Service Professor of Law and Arthur and Esther Kane Research Chair, University of Chicago Law School
Professor Posner presented two chapters of his forthcoming book, Age of Bailouts. One chapter was on the trial of AIG and the other was on the bailout of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, so-called government-sponsored enterprises (GSEs). He noted that there are striking parallels between the AIG and GSE bailouts. In both cases, the rescue began with a “deal” that shareholder plaintiffs later argued was coerced by the government. In both cases, the plaintiffs accused the government of using the companies to funnel resources to other financial institutions and to enrich itself. The merits of the arguments ultimately depend on whether the companies were insolvent based on fundamental values or instead were solvent victims of a liquidity crisis that affected everyone. The author concludes that, if the firms were insolvent, the government’s treatment of them was not harsh. If they were
reduction in compensation. Additionally, firms that hire these advisers also have higher rates of prior misconduct themselves. They find similar results for advisers of dissolved firms, in which all advisers are forced to find new employment independent of past misconduct or performance. Firms that persistently engage in misconduct coexist with firms that have clean records. The authors show that differences in consumer sophistication may be partially responsible for this phenomenon: misconduct is concentrated in firms with retail customers and in counties with low education, elderly populations, and high incomes. Their findings suggest that some firms “specialize” in misconduct and cater to unsophisticated consumers, while others use their clean reputation to attract sophisticated consumers.
commentators
Todd Gormley, Assistant Professor of Finance, The Wharton School
David Hoffman, Visiting Professor of Law, University of Pennsylvania Law School
Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School
Nikolai Roussanov, Associate Professor of Finance, The Wharton School
merely cash-constrained, the government’s treatment of them raises troubling questions about policy and legality. He goes on to say that the government’s defensive arguments at best justify the emergency actions taken in 2008; they do not provide a basis for denying compensation to the shareholders of AIG and the GSEs based on later developments.
commentators
William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School
Itay Goldstein, Joel S. Ehrenkranz Family Professor, Professor of Finance, The Wharton School
David Musto, Ronald O. Perelman Professor in Finance, The Wharton School
David Arthur Skeel, S. Samuel Arsht Professor of Corporate Law, University of Pennsylvania Law School
1 Eric Posner, The University of Chicago Law School.
2
Amit Seru, The University of Chicago Booth School of Business.
CURRICULAR PARTNERSHIPS
FALL 2014 - SPRING 2016
The Institute for Law and Economics engages in curricular partnerships that serve the educational mission of Penn Law School. Members of our board of advisors share their professional expertise with Penn Law students as adjunct members of the Penn Law faculty and as participants in our classes and seminars.
COURSES
Business Strategy, Private Equity and Corporate Law
Perry Golkin
Challenges Facing the General Counsel
Helen Pudlin and Michael Holston
Corporate Governance Seminar
Jill E. Fisch and William W. Bratton
Cross Border M&A
George Casey and Scott Petepiece
M&A Through the Business Cycle
Joseph Gatto and Joseph Frumkin
Professional Responsibility: Real World Ethical Corporate Lawyering
Hon. Norm Veasey
Strategic Equity Seminar
Jill E. Fisch and David Erickson
Transactional Drafting
Eric Klinger-Wilensky
Transactional Lawyering
Casey Cogut
Venture Capital Finance
Eric Klinger-Wilensky and William W. Bratton
Widening the Lens on Corporate Law
Michael L. Wachter and Hon. Leo E. Strine, Jr.
JD/MBA LUNCHEONS
Keir Gumbs, Covington & Burling LLP
Jannie K.M. Lau, Executive Vice President, General Counsel, and Secretary, Inter-Digital, Inc.
John Page, Senior Corporate Vice President, Chief Corporate Social Responsibility and Legal Officer, Golden State Foods
Seth Plattus, Senior Managing Director, CAO, Cerebus Capital Management LP
Todd R. Snyder, Managing Director, Rothschild Inc.
Hon. Karen Valihura, Delaware Supreme Court
Greg Weinberger, Co-Head of Global M&A, Credit Suisse Securities (USA) LLC
L. Andrew Zausner, Greenberg Traurig LLP
PROGRAMS
Free Trade Agreements and Multilateralism: The Next Frontier for the EU and the US Fireside Chat with Ambassador David O’Sullivan, EU Ambassador to the United States
Jill E. Fisch, Perry Golkin Professor of Law and Co-Director, Institute for Law and Economics, University of Pennsylvania Law School
William Burke-White, Richard Perry Professor and Inaugural Director, Perry World House; Professor of Law, University of Pennsylvania Law School
Volkswagen Emissions Scandal: Corporate Governance and Regulatory Issues
panelists
Hon. Cheryl Ann Krause, U.S. Court of Appeals for the Third Circuit
Martin Gelter, Associate Professor of Law, Fordham University School of Law
Jason M. Halper, Orrick, Herrington & Sutcliffe LLP
John Paul MacDuffie, Professor of Management, The Wharton School
moderator
Jill E. Fisch, Perry Golkin Professor of Law and Co-Director, Institute for Law and Economics, University of Pennsylvania Law School
1 Helen Pudlin; Jamie Lau, Interdigital; Michael Holston, Merck & Co., Inc.
2 Eric Klinger-Wilensky, Morris, Nichols, Arsht & Tunnell, LLP; William Bratton, University of Pennsylvania Law School.
3 Jill Fisch, University of Pennsylvania Law School; Roy Katzovicz, Saddle Point Group, LLC; William Bratton, University of Pennsylvania Law School.
4 Hon. Cheryl Ann Krause, U.S. Court of Appeals for the Third Circuit; Martin Gelter, Fordham University School of Law; Jason M. Halper, Orrick, Herrington & Sutcliffe LLP; John Paul MacDuffie, The Wharton School.
5 Keir Gumbs, Covington & Burling LLP; Michael Wachter, University of Pennsylvania Law School.
6 Jill Fisch, University of Pennsylvania Law School; Ambassador David O'Sullivan, EU Ambassador to the United States; William Burke-White, University of Pennsylvania Law School.
ASSOCIATE FACULTY
1 Tom Baker
2 Howard F. Chang
3 Cary Coglianese
4 Jonah B. Gelbach
5 Itay Goldstein
6 Lawrence Hamermesh
7 Richard J. Herring
8 Robert W. Holthausen
9 Robert P. Inman
10 Richard E. Kihlstrom
11 Jonathan Klick
12 Michael S. Knoll
13 George Malaith 14 Charles W. Mooney, Jr.
15 David K. Musto 16 Gideon Parchomovsky 17 Andrew Postlewaite
18 Michael R. Roberts
19 Edward B. Rock
20 Reed Shuldiner
21 David A. Skeel, Jr.
22 Susan M. Wachter
23 Amy L. Wax 24 Bilge Yilmaz
ASSOCIATE FACULTY
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. He is currently Managing Editor of the Review of Finance, the journal of the European Finance Association. He is a past President of the American Finance Association, the Western Finance Association, the Society of Financial Studies, and the Financial Intermediation Research Society. He is a Fellow of the Econometric Society. He received his doctorate from Oxford University. Dr. Allen’s main areas of interest are comparative financial systems, banking, and financial crises. He is a co-author with Richard Brealey and Stewart Myers of the eighth through tenth editions of the textbook Principles of Corporate Finance
Tom Baker
William Maul Measey Professor of Law and Health Sciences
Tom Baker is the William Maul Measey Professor of Law and Health Sciences at Penn Law School. His work explores insurance, risk, and responsibility in a wide variety of settings, using methods and perspectives drawn from economics, sociology, psychology, and history. He is the author of The Medical Malpractice Myth (U. Chicago P. 2005) and a contributing editor of Embracing Risk: The Changing Culture of Insurance and Responsibility (U. Chicago P. 2002). His latest book Ensuring Corporate Misconduct: How Liability Insurance Undermines Shareholder Litigation, co-authored with Sean Griffith, analyzes the relationship between D&O insurance and securities litigation based on in-depth interviews with underwriters, claims managers, plaintiffs and defense lawyers, actuaries, brokers and others. He has a secondary appointment in the Business Economics and Public Policy Department at Wharton, where he teaches risk management. He is the Reporter for the American Law Institute's Principles of Liability Insurance Project. He was the Connecticut Mutual Professor and Director of the Insurance Law Center at the University of Connecticut before joining the Penn Law faculty. He clerked for United States Court of Appeals Judge Juan Torruella and practiced with the firm of Covington and Burling.
William W. Bratton
Nicholas F. Gallicchio Professor of Law; Co-Director, Institute for Law and Economics
Professor Bratton joined the Penn Law faculty in 2010. He graduated in 1976 from Columbia Law School where he was articles editor of the Law Review and a James Kent Scholar. He clerked for the Honorable William H. Timbers on the U.S. Court of Appeals for the Second Circuit and practiced for several years at Debevoise & Plimpton in New York. He served on the Cardozo, Rutgers, and George Washington law faculties before joining the faculty of the Georgetown University Law Center, where he was the Peter P. Weidenbruch, Jr., Professor of Business Law. He also has been the Unilever Visiting Professor at the Faculty of Law of the University of Leiden, the Simizu Visiting Professor at the Faculty of Law of the London School of Economics, and a visiting professor at the Duke and Stanford law schools. He is a Research Associate of the European Corporate Governance Institute and in 2010 was the Anton Philips Professor at the faculty of law of the University of Tilburg. He has published many articles and book chapters on topics in corporate law, the theory of the firm, law and economics, and legal history, and is the editor of the leading law school casebook on corporate finance.
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 to 1989. 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 at the University of Pennsylvania Law School, as well as Professor of Political Science and the director of the Penn Program on Regulation. Coglianese is the founder of the Law & Society Association’s international collaborative research network on regulatory governance, a chair of the e-government committee of the American Bar Association’s section on Administrative Law and Regulatory Practice, and a fellow of the American Bar Foundation. He is also a founder of the peer-reviewed journal Regulation & Governance, for which he now serves on the editorial board, as well as the founder and faculty advisor to RegBlog.org, the first university-based online source of daily regulatory news and analysis. 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. Previously he served as the Associate Dean and then Deputy Dean for Academic Affairs at Penn Law.
Jill E. Fisch
Perry Golkin Professor of Law; Co-Director, Institute for Law and Economics
Professor Fisch received her J.D. from Yale Law School in 1985. Before joining the Penn faculty in 2008, she held the T.J. Maloney Chair in Business Law at Fordham Law School and served as founding director of the Fordham Corporate Law Center. She has also been a visiting professor at Harvard Law School, Columbia Law School and Georgetown University Law Center. Prior to entering academia, Professor Fisch practiced law with the United States Department of Justice and the New York office of Cleary, Gottlieb, Steen and Hamilton. Her research focuses on corporate governance, business litigation, and securities regulation. Professor Fisch is a director of the European Corporate Governance Institute.
Jonah Gelbach Professor of Law
Jonah B. Gelbach is Professor of Law at Penn Law School. He joined the Penn faculty in 2013, having previously been on the permanent economics faculty at the University of Maryland for nine years (1998-2007) and the University of Arizona for three (2007-2010). He received his J.D. from the Yale Law School in 2013, his Ph.D. in economics from MIT in 1998, and his B.A. from the University of Massachusetts at Amherst in 1993. His interests in law teaching and scholarship include civil procedure, statutory interpretation and legislation, law and economics, event study methodology, applied statistical methodology and econometrics, and applied microeconomics. He has taught students at the J.D., Ph.D., M.B.A., and undergraduate levels.
His scholarship has appeared in the Stanford Law Review, the Yale Law Journal, the University of Chicago Law Review, the University of Pennsylvania Law Review, the American Economic Review, the Journal of Political Economy, the Review of Economics and Statistics, the American Law and Economics Review, the Journal of Labor Economics, and the Journal of Public Economics, as well as a number of other journals.
Itay Goldstein
Joel S. Ehrenkranz Family Professor, Professor of Finance, The Wharton School
Itay Goldstein is the Joel S. Ehrenkranz Family Professor in the Finance Department at the Wharton School of the University of Pennsylvania. He is also the coordinator of the Ph.D. program in Finance. He has been on the faculty of the Wharton School since 2004. Professor Goldstein earned his Ph.D. in Economics in 2001 from Tel Aviv University. He is an expert in the areas of corporate finance, financial institutions, and financial markets, focusing on financial fragility and crises and on the feedback effects between firms and financial markets. His research has been published in top academic journals, including the American Economic Review, the Journal of Finance, the Journal of Financial Economics, the Review of Economic Studies, and the Review of Financial Studies. His research has also been featured in the popular press in the Economist, Financial Times, Bloomberg, Forbes, National Public Radio, and others. Professor Goldstein is an editor of the Review of Financial Studies. He has been an editor of the Finance Department in Management Science and an editor of the Journal of Financial Intermediation. He has served as an academic advisor at the Federal Reserve Banks of New York, Philadelphia, and Richmond, the Bank of Canada, and the Committee for Capital Markets Regulation. He was the co-founder and the first president of the Finance Theory Group. He has taught various undergraduate, M.B.A., Ph.D., and executive education courses in finance and economics. Prior to joining Wharton, Professor Goldstein has served on the faculty of Duke University’s Fuqua School of Business. He had also worked in the research department of the bank of Israel.
Lawrence Hamermesh
Ruby R. Vale Professor of Corporate and Business Law, Widener University Delaware Law School (Senior Special Counsel, Securities and Exchange Commission Division of Corporation Finance, 2010–2011)
Professor Hamermesh received a B.A. from Haverford College in 1973, and a J.D. from Yale Law School in 1976. Professor Hamermesh practiced law with Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware, as an associate from 1976–84, and as a partner from 1985–94. Professor Hamermesh joined the faculty at Delaware Law School in 1994, and teaches and writes in the areas of corporate finance, mergers and acquisitions, securities regulation, business organizations, and professional responsibility. Since 1995, Professor Hamermesh has been a member of the Council of the Corporation Law Section of the Delaware State Bar Association, which is responsible for the annual review and modernization of the Delaware General Corporation Law, and
ASSOCIATE FACULTY
served as Chair of the Council from 2002 to 2004. In 2002 and 2003 he also served as the Reporter for the American Bar Association’s Task Force on Corporate Responsibility. Since 2013 he has been the Reporter for the American Bar Association Business Law Section’s Corporate Laws Committee, which supervises the drafting of the Model Business Corporation Act. He is a member of the American Law Institute. Professor Hamermesh is also a member of the Board of Directors of the Music School of Delaware.
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 100 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 and Executive Director of the Financial Economist’s Roundtable, a member of the Advisory Board of the European Banking Report in Rome, the Institute for Financial Studies in Frankfurt, and the International Centre for Financial Regulation in London. In addition, he is a member of the FDIC Systemic Risk Advisory Committee. 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 Group of 30 task force on the reinsurance industry, 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. He is also an independent director of the Daiwa closed end funds and of Barclays Bank, Delaware.
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 and Ernst and Young Professor, Professor of Accounting and Finance
Professor Holthausen earned his Ph.D. and his M.B.A. at the University of Rochester. He joined the Wharton School in 1989. Prior to joining the Penn faculty, he was a member of the accounting and finance faculty at the Graduate School of Business of the University of Chicago. Professor Holthausen teaches Corporate Valuation, a course he created for Wharton when he arrived and has been teaching ever since. 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. He is also the author of a detailed book on valuation entitled Corporate Valuation: Theory, Evidence and Practice
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 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.
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.
Jonathan Klick Professor of Law
Professor Klick earned his Ph.D. in economics in 2002 and his J.D. in 2003 from George Mason University. He was the Jeffrey A. Stoops Professor of Law and Economics at Florida State University from 2005-2008. He has been a visiting professor at Columbia University, Northwestern University, the University of Southern California, and the University of Hamburg, and he was an Erskine Fellow in the Department of Finance and Economics at the University of Canterbury in Christchurch, New Zealand. Klick’s work lies in the area of empirical law and economics, and every year he thinks the Flyers will win the Stanley Cup.
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), Virginia (2000), and Columbia (2009). 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), a John M. Olin Distinguished Visiting Professor of Law at Toronto University (1998), and a John Raneri Atax Fellow at the University of New South Wales (2011). Prior to entering teaching, he clerked for the Honorable Alex Kozinski on the U.S. Court of Appeals, Ninth Circuit, and served as 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.
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 American Academy of Arts and Sciences and of the Econometric Society. He served on the Council of the Econometric Society 2013-2015 and on the Council of the Game Theory Society 2005-2011, and is one of the founders of the journal Theoretical Economics. He has been a
member of the Executive and Supervisory Committee of CERGEEI, Prague, Czech Republic, since 2013. He is currently editor of Theoretical Economics, and 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 was co-editor of the Econometric Society Monograph Series and has been 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 and from 2008 to 2009 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 is a Fellow and Director of the American College of Bankruptcy. 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 also served as a U.S. Delegate for the UNIDROIT Geneva Securities Convention at the Diplomatic Conferences in Geneva. His current research centers on intermediated securities, sovereign debt restructuring, security interests in bankruptcy, and bankruptcy theory.
Robert H. Mundheim
University Professor of Law and Finance Emeritus and former Dean, University of Pennsylvania; Of Counsel, Shearman & Sterling; Professor of Corporate Law and Finance, University of Arizona Law School; formerly General Counsel, U.S. Treasury and Executive Vice President and General Counsel of Salomon, Inc.
Mr. Mundheim is Vice Chair of the Board of Trustees of the New School University, a member of the Council and Executive Committee of the American Law Institute, a Trustee of the Curtis Institute of Music, and was Chairman of the American Bar Association’s Standing Committee on Ethics and Professional Responsibility.
ASSOCIATE FACULTY
David K. Musto
Ronald O. Perelman Professor in Finance, The Wharton School
David K. Musto is the Ronald O. Perelman Professor in Finance and Chair of the Finance Department 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 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
Robert G. Fuller, Jr. 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.
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 and on the Executive Committee of the American Economic Association. He has published widely in the areas of strategic behavior and industrial organization.
Michael R. Roberts
William H. Lawrence Professor of Finance, The Wharton School
Michael R. Roberts is a tenured Professor of Finance at the Wharton School of the University of Pennsylvania and a Research Associate of the National Bureau of Economic Research. Professor Roberts earned his B.A. in Economics from the University of
California at San Diego, and his M.A. in Statistics and Ph.D. in Economics from the University of California at Berkeley.
His primary research is in the area of corporate finance and in particular: capital structure, investment policy, financial contracting, and payout policy. Recent work has examined issues at the intersection of macroeconomics and finance including the role of government borrowing in affecting the supply of credit to and investment behavior of corporations. His research has received several awards including two Brattle Prizes for Distinguished Paper published in the Journal of Finance, and Best Paper awards at the Financial Management Association and Southwestern Finance Association annual conferences. Professor Roberts has served on nine journal editorial boards and is currently the co-editor of the Journal of Finance.
In addition to his research, Professor Roberts has earned a number of teaching awards at the Wharton School including the David W. Hauk Award, multiple Excellence in Teaching awards, and a nomination for the Helen Kardon Moss Anvil Teaching Award. While at Duke University, he also won the DaimlerChrysler Core Teaching Award at the Fuqua School of Business. He has taught undergraduate, M.B.A., Ph.D., and executive education courses in Finance, Economics, and Statistics. Prior to joining academia, Professor Roberts was a Financial Engineer at Financial Engineering Associates Inc. and a Senior Analyst for Regional Economic Research Inc.
Edward B. Rock
Saul A. Fox Distinguished Professor of Business Law
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: proxy access, corporate voting, government ownership, hedge funds, and comparative corporate law. He has taught as a visiting professor at Columbia, NYU, Hebrew University, Israel, and the Johann Wolfgang Goethe-Universität, Frankfurt am Main, Germany. Professor Rock served as co-director of ILE from 1998-2010.
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. and Mary Barb 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
Albert E. Sussman Professor of Real Estate, Professor of Finance, The Wharton School; Co-Director, Penn 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 and is currently on the Board of Advisors to Momentum Realty. 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. Wachter co-founded and is co-director of the Institute for Urban Research at Penn. She is author of more than 150 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 include 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.
Bilge Yilmaz
Wharton Private Equity Professor, Professor of Finance, The Wharton School
Bilge Yılmaz is the Wharton Private Equity Professor and Professor of Finance at the Wharton School. Prior to his current appointment, he taught at the Graduate School of Business, Stanford University, and held visiting positions at the University of Chicago and INSEAD. He received his BS degrees in Electrical Engineering and Physics from Bo˘gaziçi University, and his PhD in Economics from Princeton University. His research focuses on corporate finance, political economy and game theory. Recently, he has written articles on corporate governance, credit rating agencies, hedge funds, private equity, security design, shortselling constraints, corporate bankruptcy, predatory lending and strategic voting.
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 ile@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.
Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School
The IPO of Industrial and Commercial Bank of China and the ‘Chinese Model’ of Privatizing Large Financial Institutions (with J. Qian, S. Chan and M. Zhao), Euro. J. of Fin. (forthcoming).
Stakeholder Governance, Competition and Firm Value (with E. Carletti and R. Marquez), Rev. of Fin. 19, 2015, 1315-1346. Money, Financial Stability, and Efficiency (with E. Carletti and D. Gale), 149 J. of Econ. Th. 100 (2014).
Tom Baker, William Maul Measey Professor of Law and Health Sciences
Liability Insurer Data as a Window on Lawyers’ Professional Liability (with R. Swedloff), U.C. Irvine L. Rev. (forthcoming 2016).
Everything’s Bigger in Texas except the Medmal Settlements (with Eric Helland and Jonathan Klick), Conn. Ins. L. J. (forthcoming 2016).
Mandatory Rules and Default Rules in Insurance Contracts (with K. Logue), in Law and Economics of Insurance, D. Schwarcz, ed. (2015).
Putting the Health Back in Health Insurance (with P. Atanasov), 71 Med. Care Res. and Rev. 337 (2014).
Behavioral Economics and Insurance Law: The Importance of Equilibrium Analysis (with P. Siegleman), in Handbook of Behavioral Economics and Law, Eyal Zamir and Doron Teichman, eds. (2014).
William W. Bratton, Nicholas F. Gallicchio Professor of Law; Co-Director, Institute for Law and Economics
Corporate Finance: Cases and Materials, 8th ed., Foundation Press (2016).
Institutional Investor Activism: Hedge Funds and Private Equity, Economics and Regulation (with Joseph A. McCahery), Oxford University Press (2015).
Bankers and Chancellors (with M. Wachter), 93 Tex. L. Rev. 1 (2014).
Howard F. Chang, Earle Hepburn Professor of Law
Law and Economics of Immigration, Edward Elgar Publishing (2015).
An Empirical Analysis of Cost Recovery in Superfund Cases: Implications for Brownfields and Joint and Several Liability (with H. Sigman), J. of Empirical Legal Studies (2014).
Endogenous Decentralization in Federal Environmental Policies (with H. Sigman & L. Traub), Int’l Rev. of L. and Econ. (2014).
Cary Coglianese, Edward B. Shils Professor of Law and Professor of Political Science
Performance-Based Regulation: Concepts and Challenges, in Francesca Bignami and David Zaring, eds., Elgar Handbook of Comparative Law and Regulation (forthcoming).
Using Public Law to Shape Private Organizations (with J. Nash), in Austin Sarat and Patricia Ewick, eds., The Wiley Handbook of Law and Society (forthcoming).
Administrative Law: The U.S. and Beyond, in James D. Wright, ed., International Encyclopedia of Social and Behavioral Sciences, 2d ed. (Elsevier, 2015).
Capturing Regulatory Reality: Stigler’s The Theory of Economic Regulation (with Christopher Carrigan), in Steven Balla, Martin Lodge and Edward Page, eds., Oxford Handbook of the Classics of Public Policy (2015).
Performance Track’s Postmortem: Lessons from the Rise and Fall of EPA’s ‘Flagship’ Voluntary Program (with J. Nash), Harv. Envtl. L. Rev. 38:1-86 (2014).
Jill E. Fisch, Perry Golkin Professor of Law; Co-Director, Institute for Law and Economics
Does Majority Voting Improve Board Accountability? (with S. Choi, M. Kahan and E. Rock), U. Chi. L. Rev. (forthcoming).
Corporate Governance Innovation: The Case of the Golden Leash (with M.D. Cain,
S.J. Griffith, and S. Davidoff Solomon), 164 U. Penn. L. Rev. 649 (2016).
Federal Securities Fraud Litigation as a Lawmaking Partnership, Wash. U. L. Rev. (forthcoming).
Confronting the Peppercorn Settlement in Merger Litigation: An Empirical Analysis and a Proposal for Reform (with S. Griffith and S. Solomon), 93 Tex. L. Rev. 557 (2015).
The Mess at Morgan: Risk, Incentives and Shareholder Empowerment, 2015 Robert S. Marx Lecture, 83 U. Cin. L. Rev. 651 (2015).
The Future of Price Distortion in Federal Securities Fraud Litigation, 10 Duke J. Const’l. L. Pub. Pol’y. 87 (2015).
Jonah B. Gelbach, Professor of Law Can Variation in Subgroups' Average Treatment Effects Explain Treatment Effect Heterogeneity? Evidence from a Social Experiment (with M. Bitler and H. Hoynes), Rev. Econ. & Stat. (forthcoming).
Empirical Law and Economics (with J. Klick), Oxford Handbook series, edited by Francesco Parisi, (forthcoming).
The Law and Economics of Proportionality in Discovery (with B. Kobayashi), 50 Ga. L. Rev. (forthcoming).
Can Simple Mechanism Design Results be Used to Implement the Proportionality Standard in Discovery? 172 J. Inst’l & Theor. Econ. 200 (2016).
Material Facts in the Debate over Twombly and Iqbal, 68 Stan. L. Rev. 369 (2016).
When Do Covariates Matter? And Which Ones, and How Much? 34 J. Labor Econ. 509 (2016).
Can We Learn Anything About Pleading Changes from Existing Data?, 44 Int’l Rev. L. & Econ. 72 (2015).
Can the Dark Arts of the Dismal Science Shed Light on the Empirical Reality of Civil Procedure? 2 Stan. J. Complex Litig. 223 (2014).
Rethinking Summary Judgment Empirics: The Life of the Parties, 162 U. Pa. L. Rev. 1663 (2014).
Expert Mining and Required Disclosure, 81 U. Chi. L. Rev. 131 (2014).
Itay Goldstein, Joel S. Ehrenkranz Family Professor, Professor of Finance, The Wharton School
Feedback Effects, Asymmetric Trading, and the Limits to Arbitrage (with A. Edmans and W. Jiang), Amer. Econ. Rev. (December, 2015).
Government Intervention and Information Aggregation by Prices (with P. Bond), J. Finance (December, 2015).
Information Diversity and Complementarities in Trading and Information Acquisition (with L. Yang), J. Finance (August, 2015).
Speculation and Hedging in Segmented Markets (with Y. Li and L. Yang), Rev. of Financial Studies (March, 2014).
Trading Frenzies and Their Impact on Real Investment (with E. Ozdenoren and K. Yuan), J. Financial Economics (August, 2013).
Lawrence A. Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University Delaware Law School (Senior Special Counsel, Securities and Exchange Commission Division of Corporation Finance, 2010–2011)
The Importance of Being Dismissive: The Efficiency Role of Pleading Stage Evaluation of Shareholder Litigation (with M.Wachter), J. Corp. L. (forthcoming 2016).
Director Nominations, Dela. J. Corp. L. (2014).
Putting Stockholders First, Not the FirstFiled Complaint (with L. Strine, Jr. and M. C. Jennejohn), The Business Lawyer (2013).
Who Let You Into the House?, Wisc. L. Rev. (2012).
Richard J. Herring, Jacob Safra Professor of International Banking, Professor of Finance, The Wharton School; Co-Director, Wharton Financial Institutions Center
How to Reform the Credit-Rating Process to Support a Revival of Private-Label Securitization (with E. Kane), Quarterly Journal of Finance (forthcoming 2012).
Fair Value Accounting and Financial Stability: Does How We Keep Score Affect How the Game is Played?, in Handbook of Key Global Financial Markets, Institutions, and Infrastructure (forthcoming, 2012).
How to Use Contingent Capital Buffers (with C. Calomiris), in The Future of Central Banking, Central Banking Publications (2011).
Robert W. Holthausen, The Nomura Securities Company Professor and Ernst and Young Professor, Professor of Accounting and Finance, The Wharton School
Corporate Valuation: Theory, Evidence and Practice (with M. Zmijewski), Cambridge Business Publishers (2014).
Valuation with Market Multiples: How to Avoid Pitfalls When Identifying and Using Comparable Companies, J. App. Corp. Fin. (2012).
Pitfalls in Levering and Unlevering Beta and Cost of Capital Estimates in DCF Valuations, J. App. Corp. Fin. (2012).
Robert P. Inman, Richard King Mellon Professor of Finance; Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School Federal Institutions and the Democratic Transition: Learning from South Africa, Journal of Law, Economics, and Organizations (2011).
How Should Suburbs Help Their Central Cities? Growth and Welfare Enhancing Intra-Metropolitan Fiscal Distributions, Annals of the American Academy of Political and Social Sciences (2009).
Making Cities Work: Prospects and Policies for Urban America, Princeton University Press (2009).
Jonathan Klick, Professor of Law
The Value of the Right to Exclude: An Empirical Assessment (with G. Parchomovsky), 165 U. Pa. L. Rev. (forthcoming 2016).
Discounting and Criminals' Implied Risk Preferences (with M. Mungan), 11 L. Rev. & Econ. 19 (2015).
Functional Law and Economics: The Search for Value-Neutral Principles of Lawmaking (with F. Parisi), in LAW AND ECONOMICS: PHILOSOPHICAL ISSUES AND FUNDAMENTAL QUESTIONS, Aristides N. Hatzis and Nicholas Mercuro, eds., Routledge (2015).
Forfeiture of Illegal Gains and Implied Risk Preferences (with M. Mungan), 43 J. Legal Stud. 137 (2014).
Michael S. Knoll, Theodore K. Warner Professor of Law, Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy
Comptroller v. Wynne: Internal Consistency, A National Marketplace, and Limits on State Sovereignty to Tax, 163 U. of Pa. L. Rev. Online 267 (2015) (coauthor).
Wynne: It’s Not About Double Taxation, 75 State Tax Notes 413 (2015) (coauthor).
What is Tax Discrimination? (with R. Mason), Yale L. J. (2012).
The Connection between Competitiveness and International Taxation, Tax L. Rev. (2012).
Prejudgment Interest (with J. Colon), chapter 15 in Litigation Services Handbook: The Role of the Financial Expert, 5th ed. (2012).
George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences
When and How the Punishment Must Fit the Crime (with V. Nocke and L. White), Int’l Econ. Rev. (forthcoming).
Premuneration Values and Investments in Matching Markets (with A. Postlewaite and L. Samuelson), Econ. J. (forthcoming).
Buying Locally (with A. Postlewaite and L. Samuelson), Int’l Econ. Rev. (forthcoming).
Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law
Security Interests in Book-Entry Securities in Japan: Should Japanese Law Embrace Perfection by Control Agreement and Security Interests in Securities Accounts? (with K. Koens), 38 U. Penn. J. Int’l L. (forthcoming 2017).
A No-Tribunal SDRM and the Means of Binding Creditors to the Terms of a Restructuring Plan, J. Globalization & Dev. (De Gruyter Online 2016) http://papers. ssrn.com/sol3/papers.cfm?abstract_ id=2703555.
A Framework for a Formal Sovereign Debt Restructuring Mechanism: The KISS (Keep it Simple, Stupid) Principle and Other Guiding Principles, 37 Mich. J. Int’l L. 57 (2015).
The MAC Protocol: Some Comments and a Challenge, 4 Cape Town Convention J. (2015).
SECURITY INTERESTS IN PERSONAL PROPERTY (with S.L. Harris), Foundation Press, 2d ed. 1992, Supp. 1999, 3d ed. 2000, 4th ed. 2006, 5th ed. 2011, 6th ed. (2015).
The Cape Town Convention’s Improbablebut-Possible Progeny Part Two: Bilateral Investment Treaty-Like Enforcement Mechanism, 55 Va. J. Int’l L. 451 (2015).
The (Il)Legitimacy of Bankruptcies for the Benefit of Secured Creditors, 2015 U. Ill. L. Rev. 735.
David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School What do Consumers’ Fund Flows Maximize? Evidence from their Brokers’ Incentives (with S. Christoffersen and R. Evans), Journal of Finance (2013).
Notes on Bonds: Liquidity at all Costs in the Great Recession (with G. Nini and K. Schwarz), Wharton School Working Paper.
Does Junior Inherit? Refinancing and the Blocking Power of Second Mortgages (with P. Bond, R. Elul and S. Garyn-Tal), Working Paper.
Gideon Parchomovsky, Robert G. Fuller Jr. Professor of Law
The Value of the Right to Exclude: An Empirical Assessment (with J. Klick), 165 U. Pa. L. Rev. (forthcoming 2016).
Equity's Unstated Domain: The Role of Equity in Shaping Copyright Law (with S. Balganesh), 163 U. Pa. L. Rev. 1845 (2015).
Copyright Trust (with A. Bell), 100 Cornell L. Rev. 1015 (2015).
The Green Option (with E. Stavang), 99 Minn. L. Rev. 967 (2015)
Catalogs (with A. Stein), 115 Colum. L. Rev. 165 (2015).
Structure and Value in the Common Law (with S. Balganesh), 163 U. Pa. L. Rev. 1241 (2015).
Reinventing Copyright and Patent (with A. Bell), 113 Mich. L. Rev. 231 (2014).
Governing Communities by Auction (with A. Bell), 81 U. Chi. L. Rev. 1 (2014).
Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School
Economic Models as Analogies (with I. Gilboa, L. Samuelson and D. Schmeidler), Economic Journal (forthcoming).
Should Courts Always Enforce What Contracting Parties Write? (with L. Anderlini and L. Felli), Review of Law and Economics (2011).
Political Reputations and Campaign Promises (with E. Aragones and T. Palfrey), Journal of the European Economic Association (2007).
Michael R. Roberts, William H. Lawrence Professor of Finance, The Wharton School
A Century of Capital Structure: The Leveraging of Corporate America (with J. Graham and M. Leary), J. Financ. Econ. (2015).
Do Peer Firms Affect Corporate Capital Structure (with M. Leary), J. Finance (2014).
Corporate Dividend Policies: Lessons from Private Firms (with R. Michaely), Review of Financial Studies (2012).
Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law
Corporate Law Doctrine and the Legacy of American Legal Realism, 163 U. Pa. L. Rev. 2019 (2015).
Symbolic Corporate Governance Politics (with Marcel Kahan), B. U. L. Rev. (2014).
Adapting to the New Shareholder-Centric Reality, U. Pa. L. Rev. (2013).
Shareholder Eugenics in the Public Corporation, Cornell L. Rev. (2012).
David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law
Governance Reform and the Judicial Role in Municipal Bankruptcy (with C. Gillette), 125 Yale L. J. 1150 (2016).
Rediscovering Corporate Governance in Bankruptcy, 87 Temple L. Rev. 1021 (2015).
Financing Systemically Important Financial Institutions in Bankruptcy, in MAKING FAILURE FEASIBLE: HOW BANKRUPTCY REFORM CAN END "TOO BIG TO FAIL," Kenneth E. Scott, Thomas H. Jackson, & John B. Taylor, eds., Hoover Institution Press (2015).
What is a Lien? Lessons from Municipal Bankruptcy, 2015 U. Ill. L. Rev. 675.
From Chrysler and General Motors to Detroit, 24 Widener L. J. 121 (2015).
Single Point of Entry and the Bankruptcy Alternative, in ACROSS THE GREAT DIVIDE: NEW PERSPECTIVES ON THE FINANCIAL CRISIS, Hoover Institution (2014).
Corporate Governance and Social Welfare in the Common Law World, 92 Tex. L. Rev. 973 (2014).
Behaviorism in Finance and Securities Law, 21 Sup. Ct. Econ. Rev. 77.
When Should Bankruptcy Be an Option (for People, Places or Things)?, 55 Wm. & Mary L. Rev. 2217 (2014).
Panel Discussion on Stability, Resolution, and Dodd-Frank (with J. Barth, J. Dearie, and A. Wilmarth), in PERSPECTIVES ON DODD-FRANK AND FINANCE, Paul H. Schultz ed., MIT Press (2014).
Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics
The Importance of Being Dismissive: The Efficiency Role of Pleading Stage Evaluation of Shareholder Litigation (with L. A. Hamermesh), J. Corp. L. (forthcoming 2016).
Bankers and Chancellors (with W. W. Bratton), 93 Tex. L. Rev. 1, 2014.
The Striking Success of the National Labor Relations Act, 37 REGULATION 20 (Spring, 2014).
A Theory of Preferred Stock (with W. W. Bratton), University of Pennsylvania Law Review (2013).
Susan M. Wachter, Albert E. Sussman Professor of Real Estate, Professor of Finance, The Wharton School; Co-Director, Penn Institute for Urban Research
Borrowing Constraints and Homeownership (with A. Acolin, J. Bricker, and P. Calem), American Economic Review: Papers and Proceedings (forthcoming 2016).
Transparency in the Mortgage Market (with A. Pavlov and A. Zevelev), Journal of Financial Services Research (forthcoming).
Second Liens and the Leverage Option (with A. Levitin), 68 Vand. L. Rev. (forthcoming 2015).
The Housing and Credit Bubbles in the United States and Europe: A Comparison, 47 J. of Money, Credit and Banking 37-42 (March/April, 2015).
Borrowing Constraints During the Housing Bubble (with I. Barakova and P. Calem), 24 J. of Housing Economics 4-20 (June, 2014).
Amy Wax, Robert Mundheim Professor of Law
And We Shall Not All Be Dentists, reviewing Elizabeth Armstrong and Laura Hamilton, Paying for the Party: How College Maintains Inequality, Academic Questions (Winter, 2014).
Diverging Destinies Redux, 112 Mich. L. Rev. (April, 2014).
Seduced and Betrayed, reviewing Paul Bloom’s “Just Babies: The Origins of Good and Evil,” First Things (December, 2014).
Trashing the Ivies, Commentary (January, 2015).
On Not Dreaming of Affirmative Action, 17 U. of Pa. J. of Con. Law 757 (2015).
Negatively 6th Street: A Review of Alice Goffman, On the Run: Fugitive Life in an American City, Commentary (June, 2015).
Solving the Poor: On Robert Putnam’s Our Kids, First Things (October, 2015).
The Dead End of Disparate Impact: Recent Developments, in Title VII of the Civil Rights Act After 50 Years: Proceedings of the New York University 67th Annual Conference on Labor (Lexis Publishing, 2016).
Bilge Yilmaz, Wharton Private Equity Professor, Professor of Finance, The Wharton School
Adverse Selection and Convertible Bonds (with A. Chakraborty), Review of Economic Studies (2011).
Predatory Mortgage Lending (with P. Bond and D. Musto), Journal of Financial Economics (2009).
Information and Efficiency in Tender Offers (with R. Marquez), Econometrica (2008).
ILE INVESTORS 2015–2016
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
Charles I. Cogut and Simpson Thacher & Bartlett LLP
Robert L. Friedman
Skadden, Arps, Slate, Meagher & Flom LLP
Sullivan & Cromwell LLP
Sponsors
$10,000 to $24,999
Apollo Global Management, LLC
AQR Capital Management, LLC
Ashe Capital Management
Bernstein Litowitz Berger & Grossmann LLP
Martin J. Bienenstock
Cadwalader, Wickersham & Taft LLP
Covington & Burling LLP
Cravath, Swaine & Moore LLP
Credit Suisse
Debevoise & Plimpton LLP
Dechert LLP
Delaware Department of State
E. I. du Pont de Nemours and Company
Eton Park Capital Management
Evercore
Fidelity Management & Research Company
John G. Finley
FMC Corporation
Joel E. Friedlander
Joseph D. Gatto
Gibson, Dunn & Crutcher LLP
Goldman, Sachs & Co.
Perry Golkin, Mrs. Donna O’Hara Golkin, and The Perry and Donna Golkin Family Foundation
Grant & Eisenhofer P.A.
Leon C. Holt, Jr.
Hughes Hubbard & Reed LLP
Innisfree M&A Incorporated
Sarkis Jebejian
Roy J. Katzovicz
Kirkland & Ellis LLP
Lazard
MacAndrews & Forbes Incorporated
MacKenzie Partners, Inc.
Merck & Co., Inc.
Millennium Management
Foundation
Morgan, Lewis & Bockius LLP
Morris, Nichols, Arsht & Tunnell LLP
Pershing Square Capital
Management, L.P.
Potter Anderson & Corroon LLP
Allan N. Rauch
Reed Smith LLP
Richards, Layton & Finger, P.A.
Ropes & Gray LLP
Schulte Roth & Zabel LLP
Seyfarth Shaw LLP
Shearman & Sterling LLP
Sidley Austin LLP
Vanguard Wachtell, Lipton, Rosen & Katz White & Case LLP
Young Conaway Stargatt & Taylor, LLP
Members
$5,000 to $9,999
James H. Agger
Myron J. Resnick
Kenneth W. Willman
Donors
$1,000 up to $4,999
John DiTomo
Christopher Foulds
Jeffrey M. Gorris
Edmund Kitch
Hon. John Noble
James A. Ounsworth
Helen P. Pudlin
Donors
Up to $999
Mary J. Grendell
David Ross
Institute for Law & Economics University of Pennsylvania 3501 Sansom Street, Philadelphia, PA 19104–6204 215.898.7719, www.law.upenn.edu/ile/ September 2016
Michael L. Wachter, Co-Director
William B. and Mary Barb Johnson Professor of Law and Economics 215.898.7852
mwachter@law.upenn.edu
Jill E. Fisch, Co-Director Perry Golkin Professor of Law 215.746.3454
jfisch@law.upenn.edu
William W. Bratton, Co-Director Nicholas F. Gallicchio Professor of Law 215.898.6911 wbratton@law.upenn.edu
Nadia Jannetta, Program Coordinator 215.898.7719 njannett@law.upenn.edu
FOUNDED IN 1980, the Institute for Law and Economics at the University of Pennsylvania has an ambitious agenda that is timelier than ever. The study of law and economics remains the most rapidly growing movement in legal scholarship and jurisprudence. Under the sponsorship of the Law School, the Wharton School, and the Department of Economics in Penn’s School of Arts and Sciences, the Institute has played a leading role in this expanding field.
Cross-disciplinary research, the cornerstone of 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 stay on the leading edge of this crossdiscipline.
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 and panels through our closed-door 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 its programs.
