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Full-Text Articles in Law
Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz
Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz
William & Mary Law Review
This Article makes two arguments that, combined, demonstrate an important synergy: first, including bondholders in corporate governance could help to reduce systemic risk because bondholders are more risk averse than shareholders; second, corporate governance should include bondholders because bonds now dwarf equity as a source of corporate financing and bond prices are increasingly tied to firm performance.
Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz
Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz
Faculty Scholarship
This Article makes two arguments that, combined, demonstrate an important synergy: first, including bondholders in corporate governance could help to reduce systemic risk because bondholders are more risk averse than shareholders; second, corporate governance should include bondholders because bonds now dwarf equity as a source of corporate financing and bond prices are increasingly tied to firm performance.
The Greek Debt Restructuring: An Autopsy, Jeromin Zettelmeyer, Christoph Trebesch, Mitu Gulati
The Greek Debt Restructuring: An Autopsy, Jeromin Zettelmeyer, Christoph Trebesch, Mitu Gulati
Faculty Scholarship
The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief—over 50 percent of 2012 GDP—with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key creditors. But it did so at a cost. The timing and design of the restructuring left money on the table from the perspective of Greece, created a large risk for European taxpayers, and set precedents—particularly in its very generous treatment of holdout creditors—that are likely to make future debt restructurings in Europe more difficult.
Cds Zombies, Anna Gelpern, Mitu Gulati
Cds Zombies, Anna Gelpern, Mitu Gulati
Faculty Scholarship
This paper examines the contract interpretation strategies adopted by the International Swaps and Derivatives Association (ISDA) for its credit derivatives contracts in the Greek sovereign debt crisis. The authors argue that the economic function of sovereign credit default swaps (CDS) after Greece is limited and uncertain, partly thanks to ISDA’s insistence on textualist interpretation. Contract theory explanations for textualist preferences emphasise either transactional efficiency or relational factors, which do not fit ISDA or the derivatives market. The authors pose an alternative explanation: the embrace of textualism in this case may be a means for ISDA to reconcile the competing political …
An Economic Analysis Of The Potential For Coercion In Consent Solicitations For Bonds, Royce De R. Barondes
An Economic Analysis Of The Potential For Coercion In Consent Solicitations For Bonds, Royce De R. Barondes
Faculty Publications
This Article examines why issuers frequently cannot present bondholders with an offer that draws on collective action problems to force the acceptance of the offer by the bondholders. The analysis is restricted to publicly offered bonds. For a number of reasons, privately placed debt presents fewer opportunities for coercion. A prior business relationship among various purchasers, which facilitates cooperation, may be more likely with respect to privately placed debt. Privately placed debt often has more significant protection for the bondholders than public debt with the same level of seniority
Corporations - Modification Provisions Of Corporate Mortgages And Trust Indentures, Charles H. Haines Jr.
Corporations - Modification Provisions Of Corporate Mortgages And Trust Indentures, Charles H. Haines Jr.
Michigan Law Review
As early as the late 1800's it was not uncommon to find included in corporate mortgages and trust indentures provisions looking to the modification of the rights of the bondholders by action of a given majority of such holders. Ordinarily the power conferred could not be exercised by the holders of less than seventy-five per cent in value of the outstanding bonds; the modification authorized might be the alteration of security rights, the deferment of payments of interest or principal, the reduction of interest, or even the reduction of the debt. Inasmuch as the same equitable doctrines limit their use, …
Corporations-Trust Indenture-Notice To Security Holders Of Contents Of Indenture
Corporations-Trust Indenture-Notice To Security Holders Of Contents Of Indenture
Michigan Law Review
Ever since corporate bonds made their appearance more than a century ago, there has been a steady increase in difficult problems relating thereto. Not the least interesting of these problems pertains to the matter of notice to holders of the bonds and other securities of the contents of the indenture under which they are generally issued. The question becomes acute when one of these bondholders starts suit in law or in equity, and is met by the proposition that his right to so sue is limited by the trust indenture. There are two aspects to the matter, and it is …