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Business Law, Public Responsibility, and Ethics Commons

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Articles 1 - 4 of 4

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

Bankruptcy Or Bailouts?, Kenneth M. Ayotte, David A. Skeel Jr. Mar 2009

Bankruptcy Or Bailouts?, Kenneth M. Ayotte, David A. Skeel Jr.

Faculty Scholarship at Penn Law

The usual reaction if one mentions bankruptcy as a mechanism for addressing a financial institution’s default is incredulity. Those who favor the rescue of troubled financial institutions, and even those who prefer that their assets be promptly sold to a healthier institution, treat bankruptcy as anathema. Everyone seems to agree that nothing good can come from bankruptcy. Indeed, the Chapter 11 filing by Lehman Brothers has been singled out by many the primary cause of the severe economic and financial contraction that followed, and proof that bankruptcy is disorderly and ineffective. As a result, ad-hoc rescue lending to avoid ...


Confronting The Circularity Problem In Private Securities Litigation, Jill E. Fisch Jan 2009

Confronting The Circularity Problem In Private Securities Litigation, Jill E. Fisch

Faculty Scholarship at Penn Law

Many critics argue that private securities litigation fails effectively either to deter corporate misconduct or to compensate defrauded investors. In particular, commentators reason that damages reflect socially inefficient transfer payments—the so-called circularity problem. Fox and Mitchell address the circularity problem by identifying new reasons why private litigation is an effective deterrent, focusing on the role of disclosure in improving corporate governance. The corporate governance rationale for securities regulation is more powerful than the authors recognize. By collecting and using corporate information in their trading decisions, informed investors play a critical role in enhancing market efficiency. This efficiency, in turn ...


Top Cop Or Regulatory Flop? The Sec At 75, Jill E. Fisch Jan 2009

Top Cop Or Regulatory Flop? The Sec At 75, Jill E. Fisch

Faculty Scholarship at Penn Law

In their forthcoming article, Redesigning the SEC: Does the Treasury Have a Better Idea?, Professors John C. Coffee, Jr., and Hillary Sale offer compelling reasons to rethink the SEC’s role. This article extends that analysis, evaluating the SEC’s responsibility for the current financial crisis and its potential future role in regulation of the capital markets. In particular, the article identifies critical failures in the SEC’s performance in its core competencies of enforcement, financial transparency, and investor protection. The article argues that these failures are not the result, as suggested by the Treasury Department Blueprint, of a balkanized ...


Bankruptcy Boundary Games, David A. Skeel Jr. Jan 2009

Bankruptcy Boundary Games, David A. Skeel Jr.

Faculty Scholarship at Penn Law

For the past several decades, Congress has steadily expanded the exclusion of securities market operations from core bankruptcy protections. This Article focuses on three of the most important of these issues: the exclusion of brokerage firms from Chapter 11; the protection of settlement payments from avoidance as preferences or fraudulent conveyances; and the exemption of derivatives from the automatic stay and other basic bankruptcy provisions. In Parts I, II and III of the Article, I consider each of the issues in turn, showing that each has had serious unintended consequences. Both Drexel Burnham and Lehman Brothers evaded the brokerage exclusion ...