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Full-Text Articles in Law
Racial Rhetoric Or Reality? Cautious Optimism On The Link Between Corporate #Blm Speech And Behavior, Lisa Fairfax
Racial Rhetoric Or Reality? Cautious Optimism On The Link Between Corporate #Blm Speech And Behavior, Lisa Fairfax
All Faculty Scholarship
The summer of 2022 marks the two-year anniversary of the dramatic rekindling of the #BlackLivesMatter movement because of the murders of George Floyd, Breonna Taylor and other unarmed Black people at the hands of police. The summer of 2020 saw cities in the United States and around the world erupt in protest, with calls to dismantle racist policies and practices both in the criminal system and within the broader society, with a particular emphasis on policies and practices impacting Black people. The summer of 2022 also marks the two-year anniversary of the visible and somewhat surprising avalanche of corporate statements …
Becoming Global Lawyers? A Comparative Study Of Civic Professionalism, John Bliss
Becoming Global Lawyers? A Comparative Study Of Civic Professionalism, John Bliss
Sturm College of Law: Faculty Scholarship
Through their professional education and training, new lawyers are generally encouraged to adopt a civic vision of professional identity. This article explores convergences and diverges in how new lawyers entering an increasingly globalized legal profession conceive of their civic roles in different national contexts. In particular, I examine corporate lawyers-in-training in the U.S. and China, drawing on interviews and a cross-cultural identity mapping method to compare their accounts of the lived experiences of civic professionalism. I find that professional identity formation in the U.S. sample is largely marked by role distancing and a sense of constrained public-interest expression. In contrast, …
Disregarding The Salomon Principle: An Empirical Analysis, 1885–2014, Peter B. Oh, Alan J. Dignam
Disregarding The Salomon Principle: An Empirical Analysis, 1885–2014, Peter B. Oh, Alan J. Dignam
Articles
For over a century UK courts have struggled to negotiate a coherent approach to the circumstances in which the Salomon principle –that a corporation is a separate legal entity–will be disregarded. Empirical analysis can facilitate our understanding of this mercurial area of the law. Examining UK cases from 1885 to 2014, we created a final dataset of 213 cases coded for 15 different categories. Key findings confirm historical patterns of uncertainty and a low but overall fluctuating disregard rate, declining recently. Criminal/fraud/deception claims link strongly to disregard outcomes. Private law rates are low but tort claims have a higher disregard …
Mootness Fees, Randall S. Thomas, Matthew D. Cain, Jill E. Fisch, Steven D. Solomon
Mootness Fees, Randall S. Thomas, Matthew D. Cain, Jill E. Fisch, Steven D. Solomon
Vanderbilt Law School Faculty Publications
In response to a sharp increase in litigation challenging mergers, the Delaware Chancery Court issued the 2016 Trulia decision, which substantively reduced the attractiveness of Delaware as a forum for these suits. In this Article, we empirically assess the response of plaintiffs'attorneys to these developments. Specifically, we document a troubling trend-the flight of merger litigation to federal court where these cases are overwhelmingly resolved through voluntary dismissals that provide no benefit to the plaintiff class but generate a payment to plaintiffs'counsel in the form of a mootness fee. In 2018, for example, 77% of deals with litigation were challenged in …
Mootness Fees, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall Thomas
Mootness Fees, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall Thomas
All Faculty Scholarship
In response to a sharp increase in litigation challenging mergers, the Delaware Chancery Court issued the 2016 Trulia decision, which substantively reduced the attractiveness of Delaware as a forum for these suits. In this Article, we empirically assess the response of plaintiffs’ attorneys to these developments. Specifically, we document a troubling trend—the flight of merger litigation to federal court where these cases are overwhelmingly resolved through voluntary dismissals that provide no benefit to the plaintiff class but generate a payment to plaintiffs’ counsel in the form of a mootness fee. In 2018, for example, 77% of deals with litigation were …
Confronting The Peppercorn Settlement In Merger Litigation: An Empirical Analysis And A Proposal For Reform, Jill E. Fisch, Sean J. Griffith, Steven M. Davidoff
Confronting The Peppercorn Settlement In Merger Litigation: An Empirical Analysis And A Proposal For Reform, Jill E. Fisch, Sean J. Griffith, Steven M. Davidoff
All Faculty Scholarship
Shareholder litigation challenging corporate mergers is ubiquitous, with the likelihood of a shareholder suit exceeding 90%. The value of this litigation, however, is questionable. The vast majority of merger cases settle for nothing more than supplemental disclosures in the merger proxy statement. The attorneys that bring these lawsuits are compensated for their efforts with a court-awarded fee. This leads critics to charge that merger litigation benefits only the lawyers who bring the claims, not the shareholders they represent. In response, defenders of merger litigation argue that the lawsuits serve a useful oversight function and that the improved disclosures that result …
Gender And Securities Law In The Supreme Court, Lyman P.Q. Johnson, Michelle Harner, Jason A. Cantone
Gender And Securities Law In The Supreme Court, Lyman P.Q. Johnson, Michelle Harner, Jason A. Cantone
Scholarly Articles
The 2010 appointment of Elena Kagan to the United States Supreme Court meant that, for the first time, three female justices would serve together on that court. Less clear is whether Justice Kagan’s gender will really matter in how she votes as a justice. This question is an especially visible aspect of a larger issue: do female judges display gendered voting patterns in the cases that come before them?
This article makes a novel contribution to the growing literature on female voting patterns. We investigated whether female justices on the United States Supreme Court voted differently than, or otherwise influenced, …
U.S. Chamber Of Commerce Liability Survey: Inaccurate, Unfair, And Bad For Business, Theodore Eisenberg
U.S. Chamber Of Commerce Liability Survey: Inaccurate, Unfair, And Bad For Business, Theodore Eisenberg
Cornell Law Faculty Publications
The U.S. Chamber of Commerce uses its Survey of State Liability to criticize judiciaries and seek legal change but no detailed evaluation of the survey’s quality exists. This article presents evidence that the survey is substantively inaccurate and methodologically flawed. It incorrectly characterizes state law; respondents provide less than 10 percent correct answers for objectively verifiable responses. It is internally inconsistent; a state threatened with judicial hellhole status ranked first in the survey while venues not on the list ranked lower. The absence of correlation between survey rankings and observable activity suggests that other factors drive the rankings. Two factors …
Do Juries Add Value? Evidence From An Empirical Study Of Jury Trial Waiver Clauses In Large Corporate Contracts, Theodore Eisenberg, Geoffrey P. Miller
Do Juries Add Value? Evidence From An Empirical Study Of Jury Trial Waiver Clauses In Large Corporate Contracts, Theodore Eisenberg, Geoffrey P. Miller
Cornell Law Faculty Publications
We study jury trial waivers in a data set of 2,816 contracts contained as exhibits in Form 8-K filings by reporting corporations during 2002. Because these contracts are associated with events deemed material to the financial condition of SEC-reporting firms, they likely are carefully negotiated by sophisticated, well-informed parties and thus provide presumptive evidence about the value associated with the availability of jury trials. A minority of contracts, about 20 percent, waived jury trials. An additional 9 percent of contracts had arbitration clauses that effectively preclude jury trials though the reason for arbitration clauses need not specifically relate to juries. …
The Flight From Arbitration: An Empirical Study Of Ex Ante Arbitration Clauses In The Contracts Of Publicly Held Companies, Theodore Eisenberg, Geoffrey P. Miller
The Flight From Arbitration: An Empirical Study Of Ex Ante Arbitration Clauses In The Contracts Of Publicly Held Companies, Theodore Eisenberg, Geoffrey P. Miller
Cornell Law Faculty Publications
Informed parties bargaining for their mutual advantage will tend to agree to provisions that maximize the social surplus. Such bargaining includes provisions regarding the resolution of disputes that might arise under the contract. Thus, if a form of alternative dispute resolution, such as binding arbitration, provides greater social benefits than litigation, the dynamics of the process should tend to induce the parties to include a clause submitting future disputes to arbitration. This Article studies the actual contracting practices of large, sophisticated actors with respect to arbitration clauses. We examined over 2800 contracts, filed with the Securities Exchange Commission (SEC) in …
Ex Ante Choices Of Law And Forum: An Empirical Analysis Of Corporate Merger Agreements, Theodore Eisenberg, Geoffrey P. Miller
Ex Ante Choices Of Law And Forum: An Empirical Analysis Of Corporate Merger Agreements, Theodore Eisenberg, Geoffrey P. Miller
Cornell Law Faculty Publications
Legal scholars have focused much attention on the incorporation puzzle—why business corporations so heavily favor Delaware as the site of incorporation. This paper suggests that the focus on the incorporation decision overlooks a broader but intimately related set of questions. The choice of Delaware as a situs of incorporation is, effectively, a choice of law decision. A company electing to charter in Delaware selects Delaware law (and authorizes Delaware courts to adjudicate legal disputes) regarding the allocation of governance authority within the firm. In this sense, the incorporation decision is fundamentally similar to any setting in which a company selects …
The Fate Of Firms: Explaining Mergers And Bankruptcies, Clas Bergström, Theodore Eisenberg, Stefan Sundgren, Martin T. Wells
The Fate Of Firms: Explaining Mergers And Bankruptcies, Clas Bergström, Theodore Eisenberg, Stefan Sundgren, Martin T. Wells
Cornell Law Faculty Publications
Using a uniquely complete data set of more than 50,000 observations of approximately 16,000 corporations, we test theories that seek to explain which firms become merger targets and which firms go bankrupt. We find that merger activity is much greater during prosperous periods than during recessions. In bad economic times, firms in industries with high bankruptcy rates are less likely to file for bankruptcy than they are in better years, supporting the market illiquidity arguments made by Shleifer and Vishny (1992). At the firm level, we find that, among poorly performing firms, the likelihood of merger increases with poorer performance, …
Was Arthur Andersen Different? An Empirical Examination Of Major Accounting Firm Audits Of Large Clients, Theodore Eisenberg, Jonathan R. Macey
Was Arthur Andersen Different? An Empirical Examination Of Major Accounting Firm Audits Of Large Clients, Theodore Eisenberg, Jonathan R. Macey
Cornell Law Faculty Publications
Enron and other corporate financial scandals focused attention on the accounting industry in general and on Arthur Andersen in particular. Part of the policy response to Enron, the criminal prosecution of Andersen eliminated one of the few major audit firms capable of auditing many large public corporations. This article explores whether Andersen's performance, as measured by frequency of financial restatements, measurably differed from that of other large auditors. Financial restatements trigger significant negative market reactions and their frequency can be viewed as a measure of accounting performance. We analyze the financial restatement activity of approximately 1,000 large public firms from …
Secured Debt And The Likelihood Of Reorganization, Clas Bergström, Theodore Eisenberg, Stefan Sundgren
Secured Debt And The Likelihood Of Reorganization, Clas Bergström, Theodore Eisenberg, Stefan Sundgren
Cornell Law Faculty Publications
Theory suggests that secured creditors may increasingly oppose a debtor’s reorganization as the value of their collateral approaches the amount of their claims. If reorganization occurs and the value of the firm appreciates, the secured creditor receives only part of the gain. But if the firm’s value depreciates, the secured creditor bears all of the cost. Secured claimants, thus, often have more to lose than to gain in reorganizations. This study of Finnish reorganizations filed in districts that account for most of the country’s reorganizations finds that creditor groups most likely to be well-secured are most likely to oppose reorganization. …
Larger Board Size And Decreasing Firm Value In Small Firms, Theodore Eisenberg, Stefan Sundgren, Martin T. Wells
Larger Board Size And Decreasing Firm Value In Small Firms, Theodore Eisenberg, Stefan Sundgren, Martin T. Wells
Cornell Law Faculty Publications
Several studies hypothesize a relation between board size and financial performance. Empirical tests of the relation exist in only a few studies of large U.S. firms. We find a significant negative correlation between board size and profitability in a sample of small and midsize Finnish firms. Finding a board-size effect for a new and different class of firms affects the range of explanations for the board-size effect.
Realigning Corporate Governance: Shareholder Activism By Labor Unions, Stewart J. Schwab, Randall S. Thomas
Realigning Corporate Governance: Shareholder Activism By Labor Unions, Stewart J. Schwab, Randall S. Thomas
Cornell Law Faculty Publications
No abstract provided.
Is Chapter 11 Too Favorable To Debtors? Evidence From Abroad, Theodore Eisenberg, Stefan Sundgren
Is Chapter 11 Too Favorable To Debtors? Evidence From Abroad, Theodore Eisenberg, Stefan Sundgren
Cornell Law Faculty Publications
Chapter 11 is widely believed to be among the industrialized world's most debtor-oriented reorganization laws. Critics assert that Chapter 11 is too easily available and that it allows debtors too much control by, inter alia, not requiring appointment of a trustee. One criticism of Chapter 11, low returns to unsecured creditors, resonates with an important theme of this Symposium, the Bebchuk-Fried proposal to reduce secured creditor priority in insolvency proceedings. The Chapter 11 criticisms and the Bebchuk-Fried proposal raise the question whether less easy access to Chapter 11, reduced debtor control, diminished secured creditor priority, or other changes could reduce …
The Value Of Obvious Empirical Results And The Omniscient Mr. Palans: Response To Mr. Palans' Comments, Theodore Eisenberg
The Value Of Obvious Empirical Results And The Omniscient Mr. Palans: Response To Mr. Palans' Comments, Theodore Eisenberg
Cornell Law Faculty Publications
Mr. Palans' comment raises one worthwhile question. Most of the rest of his rant is either off the subject or too shallow to warrant extended discussion. The useful question Mr. Palans raises is whether this research is of value. The article did not defend this mode of work; perhaps I am too immersed in it to always keep in mind the merits of discussing the question. So let me spell out its benefits here.
Should We Abolish Chapter 11? The Evidence From Japan, Theodore Eisenberg, Shoichi Tagashira
Should We Abolish Chapter 11? The Evidence From Japan, Theodore Eisenberg, Shoichi Tagashira
Cornell Law Faculty Publications
Optimizing reorganization proceedings for small and midsized businesses is an important issue in every industrial country. But little information exists about the actual operation of such proceedings. Recent U.S. bankruptcy studies focus either on consumer bankruptcies or on large Chapter 11 cases involving publicly listed firms. This article presents the results of a comprehensive empirical study of Japan's most frequently used business bankruptcy reorganization provision. Small and midsized reorganizations have become important for several reasons. First, unlike large firms, the vast majority of small businesses fail to obtain confirmation of a Chapter 11 plan and end up in liquidation, thus …