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Full-Text Articles in Business Law, Public Responsibility, and Ethics

The Reverse Agency Problem In The Age Of Compliance, Asaf Eckstein, Gideon Parchomovsky Sep 2019

The Reverse Agency Problem In The Age Of Compliance, Asaf Eckstein, Gideon Parchomovsky

Faculty Scholarship at Penn Law

The agency problem, the idea that corporate directors and officers are motivated to prioritize their self-interest over the interest of their corporation, has had long-lasting impact on corporate law theory and practice. In recent years, however, as federal agencies have stepped up enforcement efforts against corporations, a new problem that is the mirror image of the agency problem has surfaced—the reverse agency problem. The surge in criminal investigations against corporations, combined with the rising popularity of settlement mechanisms including Pretrial Diversion Agreements (PDAs), and corporate plea agreements, has led corporations to sacrifice directors and officers in order to reach ...


Bankruptcy’S Uneasy Shift To A Contract Paradigm, David A. Skeel Jr., George Triantis Jun 2018

Bankruptcy’S Uneasy Shift To A Contract Paradigm, David A. Skeel Jr., George Triantis

Faculty Scholarship at Penn Law

The most dramatic development in twenty-first century bankruptcy practice has been the increasing use of contracts to shape the bankruptcy process. To explain the new contract paradigm—our principal objective in this Article-- we begin by examining the structure of current bankruptcy law. Although the Bankruptcy Code of 1978 has long been viewed as mandatory, its voting and cramdown rules, among others, invite considerable contracting. The emerging paradigm is asymmetric, however. While the Code and bankruptcy practice allow for ex post contracting, ex ante contracts are viewed with suspicion.

We next use contract theory to assess the two modes of ...


The Shifting Tides Of Merger Litigation, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall S. Thomas Jan 2018

The Shifting Tides Of Merger Litigation, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall S. Thomas

Faculty Scholarship at Penn Law

In 2015, Delaware made several important changes to its laws concerning merger litigation. These changes, which were made in response to a perception that levels of merger litigation were too high and that a substantial proportion of merger cases were not providing value, raised the bar, making it more difficult for plaintiffs to win a lawsuit challenging a merger and more difficult for plaintiffs’ counsel to collect a fee award.

We study what has happened in the courts in response to these changes. We find that the initial effect of the changes has been to decrease the volume of merger ...


The Rule Of Reason, Herbert J. Hovenkamp Jan 2018

The Rule Of Reason, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Antitrust’s rule of reason was born out of a thirty-year (1897-1927) division among Supreme Court Justices about the proper way to assess multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established. Antitrust policy toward vertical restraints remained much more unstable, however, largely because their effects were so poorly understood.

This article provides a litigation field guide for antitrust claims under the rule of reason – or more precisely, for situations when application of the rule of reason is likely. At the time pleadings are drafted and even up ...


Antitrust Balancing, Herbert J. Hovenkamp Apr 2016

Antitrust Balancing, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Antitrust litigation often confronts situations where effects point in both directions. Judges sometimes describe the process of evaluating these factors as “balancing.” In its e-Books decision the Second Circuit believed that the need to balance is what justifies application of the rule of reason. In Microsoft the D.C. Circuit stated that “courts routinely apply a…balancing approach” under which “the plaintiff must demonstrate that the anticompetitive harm…outweighs the procompetitive benefit.” But then it decided the case without balancing anything.

The term “balancing” is a very poor label for what courts actually do in these cases. Balancing requires that ...


The New Governance And The Challenge Of Litigation Bylaws, Jill E. Fisch Jan 2016

The New Governance And The Challenge Of Litigation Bylaws, Jill E. Fisch

Faculty Scholarship at Penn Law

Corporate governance mechanisms designed to ensure that managers act in shareholders’ interest have evolved dramatically over the past forty years. “Old governance” mechanisms such as independent directors and performance-based executive compensation have been supplemented by innovations that give shareholders greater input into both the selection of directors and ongoing operational decisions. Issuer boards have responded with tools to limit the exercise of shareholder power both procedurally and substantively. This article terms the adoption and use of these tools, which generally take the form of structural provisions in the corporate charter or bylaws, the “new governance.”

Delaware law has largely taken ...


The Importance Of Being Dismissive: The Efficiency Role Of Pleading Stage Evaluation Of Shareholder Litigation, Lawrence A. Hamermesh, Michael L. Wachter Aug 2015

The Importance Of Being Dismissive: The Efficiency Role Of Pleading Stage Evaluation Of Shareholder Litigation, Lawrence A. Hamermesh, Michael L. Wachter

Faculty Scholarship at Penn Law

It has been claimed that the risk/reward dynamics of shareholder litigation have encouraged quick settlements with substantial attorneys’ fee awards but no payment to shareholders, regardless of the merits of the case. 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. We claim, however, that active judicial supervision of public company shareholder litigation at an early stage reduces the costs of frivolous litigation to shareholders by separating meritorious from unmeritorious litigation before the full costs of discovery are ...


Federal Securities Fraud Litigation As A Lawmaking Partnership, Jill E. Fisch Jan 2015

Federal Securities Fraud Litigation As A Lawmaking Partnership, Jill E. Fisch

Faculty Scholarship at Penn Law

In its most recent Halliburton II decision, the Supreme Court rejected an effort to overrule its prior decision in Basic Inc. v. Levinson. The Court reasoned that adherence to Basic was warranted by principles of stare decisis that operate with “special force” in the context of statutory interpretation. This Article offers an alternative justification for adhering to Basic—the collaboration between the Court and Congress that has led to the development of the private class action for federal securities fraud. The Article characterizes this collaboration as a lawmaking partnership and argues that such a partnership offers distinctive lawmaking advantages.

Halliburton ...


The Political Economy Of Fraud On The Market, William W. Bratton, Michael L. Wachter Jan 2011

The Political Economy Of Fraud On The Market, William W. Bratton, Michael L. Wachter

Faculty Scholarship at Penn Law

No abstract provided.


Transparency Through Insurance: Mandates Dominate Discretion, Tom Baker Apr 2008

Transparency Through Insurance: Mandates Dominate Discretion, Tom Baker

Faculty Scholarship at Penn Law

This chapter describes how liability insurance has contributed to the transparency of the civil justice system. The chapter makes three main points. First, much of what we know about the empirics of the civil justice system comes from access to liability insurance data and personnel. Second, as long as access to liability insurance data and personnel depends on the discretion of liability insurance organizations, this knowledge will be incomplete and, most likely, biased in favor of the public policy agenda of the organizations providing discretionary access to the data. Third, although mandatory disclosure of liability insurance data would improve transparency ...


On Beyond Calpers: Survey Evidence On The Developing Role Of Public Pension Funds In Corporate Governance, Stephen Choi, Jill E. Fisch Jan 2008

On Beyond Calpers: Survey Evidence On The Developing Role Of Public Pension Funds In Corporate Governance, Stephen Choi, Jill E. Fisch

Faculty Scholarship at Penn Law

No abstract provided.


Criminalization Of Corporate Law: The Impact On Shareholders And Other Constituents, Jill E. Fisch Jan 2007

Criminalization Of Corporate Law: The Impact On Shareholders And Other Constituents, Jill E. Fisch

Faculty Scholarship at Penn Law

No abstract provided.


Reasonable Emissions Of Greenhouse Gases: Efficient Abatement For A Stock Pollutant, Howard F. Chang Jan 2007

Reasonable Emissions Of Greenhouse Gases: Efficient Abatement For A Stock Pollutant, Howard F. Chang

Faculty Scholarship at Penn Law

No abstract provided.


Aggregation On The Couch: The Strategic Uses Of Ambiguity And Hypocrisy, Stephen B. Burbank Jan 2006

Aggregation On The Couch: The Strategic Uses Of Ambiguity And Hypocrisy, Stephen B. Burbank

Faculty Scholarship at Penn Law

In this Essay, Professor Burbank comments on the essays by Professors Nagareda and Issacharoff. Welcoming the opportunity to revisit the interplay between procedure and substantive law and the question of democratic accountability that Professor Nagareda’s essay presents, Professor Burbank concludes that the parts of that essay are greater than the whole. He finds that Professor Nagareda’s pursuit of unifying themes and a general normative theory leads to inconsistencies in classification between procedure and substance and to an impoverished vision of institutional legitimacy. Professor Burbank voices concern that this quest, which is also evident in the current draft of ...


Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Stephen Choi, Jill E. Fisch, A. C. Pritchard Jan 2005

Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Stephen Choi, Jill E. Fisch, A. C. Pritchard

Faculty Scholarship at Penn Law

When Congress enacted the Private Securities Litigation Reform Act in 1995 (“PSLRA”), the Act’s “lead plaintiff” provision was the centerpiece of its efforts to increase investor control over securities fraud class actions. The lead plaintiff provision alters the balance of power between investors and class counsel by creating a presumption that the investor with the largest financial stake in the case will serve as lead plaintiff. The lead plaintiff then chooses class counsel and, at least in theory, negotiates the terms of counsel’s compensation.

Congress’s stated purpose in enacting the lead plaintiff provision was to encourage institutional ...


Vultures Or Vanguards?: The Role Of Litigation In Sovereign Debt Restructuring, Jill E. Fisch, Caroline M. Gentile Jan 2004

Vultures Or Vanguards?: The Role Of Litigation In Sovereign Debt Restructuring, Jill E. Fisch, Caroline M. Gentile

Faculty Scholarship at Penn Law

No abstract provided.


Is There A Role For Lawyers In Preventing Future Enrons?, Jill E. Fisch, Kenneth M. Rosen Jan 2003

Is There A Role For Lawyers In Preventing Future Enrons?, Jill E. Fisch, Kenneth M. Rosen

Faculty Scholarship at Penn Law

Following the collapse of the Enron Corporation, the ethical obligations of corporate attorneys have received increased scrutiny. The Sarbanes-Oxley Act of 2002, enacted in response to calls for corporate reform, specifically requires the Securities and Exchange Commission to address the lawyer’s role by requiring covered attorneys to “report up” evidence of corporate wrongdoing to key corporate officers, and, in some circumstances, to the board of directors. Failure to “report up” subjects a lawyer to liability under federal law.

This Article argues that the reporting up requirement reflects a second-best approach to corporate governance reform. Rather than focusing on the ...


Aggregation, Auctions, And Other Developments In The Selection Of Lead Counsel Under The Pslra, Jill E. Fisch Apr 2001

Aggregation, Auctions, And Other Developments In The Selection Of Lead Counsel Under The Pslra, Jill E. Fisch

Faculty Scholarship at Penn Law

No abstract provided.


Two Observations On Holocaust Claims, William W. Bratton Jan 2001

Two Observations On Holocaust Claims, William W. Bratton

Faculty Scholarship at Penn Law

No abstract provided.


Class Action Reform, Qui Tam, And The Role Of The Plaintiff, Jill E. Fisch Oct 1997

Class Action Reform, Qui Tam, And The Role Of The Plaintiff, Jill E. Fisch

Faculty Scholarship at Penn Law

No abstract provided.


Class Action Reform: Lessons From Securities Litigation, Jill E. Fisch Jan 1997

Class Action Reform: Lessons From Securities Litigation, Jill E. Fisch

Faculty Scholarship at Penn Law

No abstract provided.


Start Making Sense: An Analysis And Proposal For Insider Trading Regulation, Jill E. Fisch Jan 1991

Start Making Sense: An Analysis And Proposal For Insider Trading Regulation, Jill E. Fisch

Faculty Scholarship at Penn Law

No abstract provided.


Developments In Law - Toxic Waste Litigation, Howard F. Chang Jan 1986

Developments In Law - Toxic Waste Litigation, Howard F. Chang

Faculty Scholarship at Penn Law

No abstract provided.