Digital Commons Network^™

Structuring And Restructuring Sovereign Debt: The Role Of Seniority, Patrick Bolton, Olivier Jeanne

Center for Contract and Economic Organization

In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show, however, that competition for repayment between lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.

Abortion, Equality, And Administrative Regulation, Gillian E. Metzger

Faculty Scholarship

Abortion and equality are a common pairing; courts as well as legal scholars have noted the importance of abortion and a woman's ability to control whether and when she has children to her ability to participate fully and equally in society. Abortion and administrative regulation, on the other hand, are a more unusual combination. Most restrictions on abortion are legislatively imposed, while guarantees of reproductive freedom are constitutionally derived, so administrative law does not frequently figure in debates about access to abortion.

Precontractual Liability And Preliminary Agreements, Alan Schwartz, Robert E. Scott

Faculty Scholarship

For decades, there has been substantial uncertainty regarding when the law will impose precontractual liability. The confusion is partly due to scholars' failure to recover the law in action governing precontractual liability issues. In this Article, Professors Schwartz and Scott show first that no liability attaches for representations made during preliminary negotiations. Courts have divided, however, over the question of liability when parties make reliance investments following a "preliminary agreement." A number of modern courts impose a duty to bargain in good faith on the party wishing to exit such an agreement. Substantial uncertainty remains, however, regarding when this duty …

The Rise Of Independent Directors In The United States, 1950-2005: Of Shareholder Value And Stock Market Prices, Jeffrey N. Gordon

Faculty Scholarship

Between 1950 and 2005, the composition of large public company boards dramatically shifted towards independent directors, from approximately 20% independents to 75% independents. The standards for independence also became increasingly rigorous over the period. The available empirical evidence provides no convincing explanation for this change. This Article explains the trend in terms of two interrelated developments in U.S. political economy: first, the shift to shareholder value as the primary corporate objective; second, the greater informativeness of stock market prices. The overriding effect is to commit the firm to a shareholder wealth maximizing strategy as best measured by stock price performance. …

China's Courts: Restricted Reform, Benjamin L. Liebman

Faculty Scholarship

Recent developments in China’s courts reflect a paradox largely avoided in literature on the subject: Can China’s courts play an effective role in a non-democratic governmental system? Changes to courts’ formal authority have been limited, courts still struggle to address basic impediments to serving as fair adjudicators of disputes, and courts continue to be subject to Communist Party oversight. Courts have also confronted new challenges, in particular pressure from media reports and popular protests. At the same time, however, the Party-state has permitted, and at times encouraged, both significant ground-up development of the courts and expanded use of the courts …

A Marriage Of Convenience? A Comment On The Protection Of Databases, Jane C. Ginsburg

Faculty Scholarship

Daniel Gervais concluded his analysis of the protection of databases with three options for the future. I would like to examine a fourth. Let us assume no future flurry of national or supranational legislative activity because the content of databases is in fact already being protected. Not through copyright or sui generis rights, but through other means. Databases are an object of economic value, and they will conveniently wed whatever legal theory or theories will achieve the practical objective of preventing unauthorized exploitation of the works' contents. To beat the marriage metaphor into the ground, I'd like to suggest that, …

Odious Debts Or Odious Regimes?, Patrick Bolton, David Skeel

Center for Contract and Economic Organization

Odious regimes have always been with us. That there is no silver-bullet solution that will prevent odious regimes from arising, or stymie them once they do, is evident from the plethora of responses employed by the international community once a regime’s odiousness becomes clear. Trade sanctions may be used to try to choke off a malignant regime’s access to weapons or other goods. In egregious cases, such as Milosevic’s Serbian regime, the international community may take military action. Still another strategy, more talked about than implemented, is the one considered in this article: the use of the odious debt (or, …

The Dilemma Of Odious Debts, Lee C. Buchheit, G. Mitu Gulati, Robert B. Thompson

Center for Contract and Economic Organization

When a corrupt governmental regime borrows money in the name of the state, and then steals or squanders the proceeds, must the future citizens of that country repay the loan? The law says yes, but the moral instinct of most people says no.

The odious debt controversy is, at base, a struggle to find a workable legal doctrine that will avoid a morally repugnant result (visiting the sins of corrupt governors on innocent citizens), without undermining the legal basis of all sovereign borrowing. No counterparty, at least no commercial counterparty, would lend money to a sovereign believing that the loan …

Corporate Law And Governance, Marco Becht, Patrick Bolton, Ailsa Röell

Center for Contract and Economic Organization

This chapter surveys the theoretical and empirical research on the main mechanisms of corporate law and governance, discusses the main legal and regulatory institutions in different countries, and examines the comparative governance literature. Corporate governance is concerned with the reconciliation of conflicts of interest between various corporate claimholders and the resolution of collective action problems among dispersed investors. A fundamental dilemma of corporate governance emerges from this overview: large shareholder intervention needs to be regulated to guarantee better small investor protection; but this may increase managerial discretion and scope for abuse. Alternative methods of limiting abuse have yet to be …

Does "Say On Pay" Work? Lessons On Making Ceo Compensation Accountable, Stephen Davis

Ira M. Millstein Center for Global Markets and Corporate Ownership

Based on a review of UK experience, advisory shareowner votes on executive compensation policies (“say on pay”) appear practical for adaptation in North America and other markets. They represent a lever that could strengthen both boards and shareholders in the quest to better align top corporate pay with performance. But they are hardly a panacea on their own. They are likely to spur dialogue between boards and shareholders. However, market parties in the UK—which pioneered the advisory vote concept — remain concerned that boards and investors are each falling short of success in tethering pay to performance. US players may …

Hamdan Confronts The Military Commissions Act Of 2006, George P. Fletcher

Faculty Scholarship

In 2006 the law of war experienced two major shock waves. The first was the decision of the Supreme Court in Hamdan, which represented the first major defeat of the President's plan, based on an executive order of November 2001, to use military tribunals against suspected international terrorists. The majority of the Court held the procedures used in the military tribunal against Hamdan violated common article three of the Geneva Conventions. A plurality offour, with the opinion written by Justice Stevens, based their decision as well on afar-reaching interpretation of the substantive law of war. They held that conspiracy …

Economic Policy In The Public Interest, Jagdish N. Bhagwati

Faculty Scholarship

Economists, whose discipline has always had a strong relationship to moral philosophy (Adam Smith, the author of The Wealth of Nations, also wrote the celebrated Theory of Moral Sentiments), have always seen their role in society as that of pursuing the public good. They properly see themselves as guardians of the public interest, and to be engaged in public-policy debates against special interests who wish to ‘capture’ policy to advance their narrowly circumscribed, self-serving agendas.

Stricter Rules On Storm Water Discharges Taking Effect, Michael B. Gerrard

Faculty Scholarship

On. 8, 2008, new requirements will take effect in New York requiring some previously unregulated entities to file for permits to discharge storm water, and imposing stricter or different requirements on those entities that are already regulated.

The state is requiring urbanized communities and publicly owned institutions, referred to as municipal separate storm sewer systems (MS4s), to establish fully functional stormwater management programs (SWMPs) by that date. The state has issued new draft permits for MS4s and also for operators of construction sites over one acre, which go into effect on Jan. 8.

Two Puerto Rican Senators Stay Home, Christina D. Ponsa-Kraus

Faculty Scholarship

José R. Coleman Tió proposes that Congress grant Puerto Rico equal representation in the House of Representatives through simple legislation. Although Puerto Rico has been subject to U.S. sovereignty since 1898 and Puerto Ricans have been U.S. citizens since 1917, they cannot vote in federal elections — not for Congressmen, not for Senators, not for the President of the United States. This is because Puerto Rico is not a state: the Constitution provides that “[t]he House of Representatives shall be composed of Members chosen ... by the People of the several States.” But Coleman does not see this constitutional provision …

Disparity Rules, Olatunde C.A. Johnson

Faculty Scholarship

In 1992, Congress required states receiving federal juvenile justice funds to reduce racial disparities in the confinement rates of minority juveniles. This provision, now known as the disproportionate minority contact standard (DMC), is potentially more far-reaching than traditional disparate impact standards: It requires the reduction of racial disparities regardless of whether those disparities were motivated by intentional discrimination orjustified by "legitimate" agency interests. Instead, the statute encourages states to address how their practices exacerbate racial disadvantage.

This Article casts the DMC standard as a partial response to the failure of constitutional and statutory standards to discourage actions that produce racial …

The Future Of Internet Governance, Tim Wu, David A. Gross

Faculty Scholarship

The issues surrounding Internet naming and Internet governance have been controversial since the mid-1990s. But public attention was drawn to Internet governance in the early 2000s when Europe and other countries declared themselves unhappy with how Internet governance was working, how the domain names were being assigned, and other issues. David, can you summarize what was happening in the early 2000s that created controversy in this area?

Sarbanes-Oxley's Effects On Small Firms: What Is The Evidence?, Ehud Kamar, Pinar Karaca-Mandic, Eric L. Talley

Faculty Scholarship

This article presents an overview of the regulatory regime created by the Sarbanes-Oxley Act of 2002 (SOX) and its implications for small firms. We review the available evidence in three distinct domains: compliance costs, stock price reactions, and firms' decisions to exit regulated securities markets.

Making Judicial Recusal More Rigorous, James J. Sample, David Pozen

Faculty Scholarship

The right to an impartial arbiter is the bedrock of due process. Yet litigants in most state courts face judges subject to election and reelection – and therefore to majoritarian political pressures that would appear to undermine the judges' impartiality. This tension has existed for as long as judges have been elected (and, to some extent, for as long as they have been appointed, in which case campaigns often take a less public but equally politicized form).

In recent years, however, this tension has become more acute. Today, state courts around the country increasingly resemble – and are increasingly perceived …

Lawyers Asleep At The Wheel? The Gm-Fisher Body Contract, Victor P. Goldberg

Faculty Scholarship

In the analysis of vertical integration by contract versus ownership one event has dominated the discussion – General Motors' merger with Fisher Body in 1926. The debates have all been premised on the assumption that the ten-year contract between the parties signed in 1919 was a legally enforceable agreement. However, it was not. Because Fisher's promise was illusory the contract lacked consideration. This note suggests that GM's counsel must have known this. It raises a significant question in transactional engineering: what is the function of an agreement that is not legally enforceable.

Hidden Foreign Aid, David Pozen

Faculty Scholarship

Few issues in global politics are as contentious as foreign aid – how much rich countries should give, in what ways, to whom. For years, it has been a commonplace that U.S. policies are stingy. The Organization for Economic Cooperation and Development (OECD) routinely ranks the United States far behind its industrialized peers in official development assistance (ODA), measured as a percentage of gross national income (GNI). An endless parade of critics has implored the government to do more; some suggest that the Bush Administration's support for the Monterrey Consensus, which sets a goal of increasing assistance to 0.7% of …

Kernochan Center News - Fall 2007, Kernochan Center For Law, Media And The Arts

Kernochan Center for Law, Media, and the Arts

No abstract provided.

Kernochan Center News - Spring 2007, Kernochan Center For Law, Media And The Arts

Kernochan Center for Law, Media, and the Arts

No abstract provided.

A Critique Of The Efficient Performance Hypothesis, Jody S. Kraus

Faculty Scholarship

The classic economic justification of contract law’s default remedy of expectation damages is grounded on the efficient breach hypothesis: that promisors should be permitted and encouraged to breach when the net gains from breach exceed the net gains from performance. Expectation damages ensure that all and only efficient breaches will occur because promisors will find breach profitable only if its benefits exceed the value of performance to the promisee. The efficient breach hypothesis, and the defense of expectation damages that rests on it, has long been criticized for being inconsistent with the moral intuition that promisors necessarily forfeit their right …

Leo Strine's Third Way: Responding To Agency Capitalism, Ronald J. Gilson

Faculty Scholarship

Ten years ago, Tony Blair's "New Labour" government sought an agenda that replaced ideology with a pragmatic focus on both the creation of wealth and its distribution. Not surprisingly, part of this effort involved proposals to bridge the gap between capital and labor through refraining corporate governance. A "third way" as it was then styled, would walk a fine line between privileging markets and allocational efficiency at the cost of social justice on the one hand, and accepting less for everyone as long as the distribution was fair on the other. Motivated by changes in how we save for retirement …

Panel One: Lessons Learned: Gender Analyses Of Past Policies And Practices: Introduction, Suzanne B. Goldberg

Faculty Scholarship

Hello. I'm Suzanne Goldberg. I am pleased to welcome you to the first of two afternoon panels as part of the Women's Rights Law Reporter Symposium, "Lessons Learned: Gender Analyses of Past Policies and Practices." Thank you to Dr. Enarson for the wonderful opening to our conversation today. She has inspired us to think about broadening our analytic lens by foregrounding questions of gender in our consideration of disasters and disaster relief.

The Imagination Of James Boyd White, Lee C. Bollinger

Faculty Scholarship

For several decades, James Boyd White has been a unique voice in the law. It is a voice of extraordinary intellectual range, of erudition, and of deep commitment to a life of self-understanding and of humane values. His point of access is language – all language, in every context. Armed by a lifetime of thought about words, he justifiably has regarded no field or discipline or communicative activity as foreign and outside his ken. Whoever reads him must feel his sense of intellectual empowerment that our world, sectioned as it is by expertise, would deny us.

Moral And Religious Convictions As Categories For Special Treatment: The Exemption Strategy, Kent Greenawalt

Faculty Scholarship

My topic differs from the usual inquiries about morality and law, such as how far law should embody morality, whether legal interpretation (always or sometimes) includes moral judgment, and whether an immoral law really counts as law. Concentrating on exemptions from ordinary legal requirements, I am interested in instances when the law might make especially relevant the moral judgments of individual actors. I am particularly interested in whether the law should ever treat moral judgments based on religious conviction differently from moral judgments that lack such a basis.

A striking example for both questions is conscientious objection to military service. …

People As Resources: Recruitment And Reciprocity In The Freedom-Promoting Approach To Property, Jedediah S. Purdy

Faculty Scholarship

Theorists usually explain and evaluate property regimes either through the lens of economics or by conceptions of personhood. This Article argues that the two approaches are intertwined in a way that is usually overlooked. Property law both facilitates the efficient use and allocation of scarce resources and recognizes and protects aspects of personhood. It must do both, because human beings are both resources for one another and the persons whose moral importance the legal system seeks to protect. This Article explores how property law has addressed this paradox in the past and how it might in the future.

Two bodies …

The Council Of Europe Addresses Cia Rendition And Detention Program, Monica Hakimi

Faculty Scholarship

In November 2005, the U.S. media reported that the Central Intelligence Agency was operating secret detention facilities in a handful of foreign countries, including two in eastern Europe, and that detainees were often transferred between those facilities and states known to engage in torture. The news that terrorism suspects may have been denied their human rights in member states of the Council of Europe caused concern within the Council and triggered several responses. Within days of the media reports, the Council's Parliamentary Assembly appointed a rapporteur to investigate the extent to which member states were participating in the CIA program. …

Dividend Taxation In Europe: When The Ecj Makes Tax Policy, Alvin C. Warren, Michael J. Graetz

Faculty Scholarship

This article analyzes a complex line of recent decisions in which the European Court of Justice has set forth its vision of a nondiscriminatory system for taxing corporate income distributed as dividends within the European Union. We begin by identifying the principal tax policy issues that arise in constructing a system for taxing cross-border dividends and then review the standard solutions found in national legislation and international tax treaties. Against that background, we examine in detail a dozen of the Court's decisions, half of which have been handed down since 2006. Our conclusion is that the ECJ is applying a …