Law Commons^™

Law School News: Rewards Of The Road Less Traveled 10-13-2022, Michelle Choate

Life of the Law School (1993- )

No abstract provided.

Innovation Versus Encrustation: Agency Costs In Contract Reproduction, Stephen J. Choi, Mitu Gulati, Robert E. Scott

Faculty Scholarship

This article studies the impact of exogenous legal change on whether and how lawyers across four different deal types revise their contracts’ governing law clauses in order to solve the problem that the legal change created. The governing law clause is present in practically every contract across a wide range of industries and, in particular, it appears in deals as disparate as private equity M&A transactions and sovereign bond issuances. Properly drafted, the clause increases the ex ante economic value of the contract to both parties by reducing uncertainty and litigation risk. We posit that different levels of agency costs …

Enhancing Efficiency At Nonprofits With Analysis And Disclosure, David M. Schizer

Faculty Scholarship

The U.S. nonprofit sector spends $2.54 trillion each year. If the sector were a country, it would have the eighth largest economy in the world, ahead of Brazil, Italy, Canada, and Russia. The government provides nonprofits with billions in tax subsidies, but instead of evaluating the quality of their work, it leaves this responsibility to nonprofit managers, boards, and donors. The best nonprofits are laboratories of innovation, but unfortunately some are stagnant backwaters, which waste money on out-of-date missions and inefficient programs. To promote more innovation and less stagnation, this Article makes two contributions to the literature.

First, this Article …

Theory, Evidence And Policy On Dual-Class Shares: A Country-Specific Response To A Global Debate, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Dual-class shares have become one of the most controversial issues in today´s capital markets and corporate governance debates around the world. Namely, it is not clear whether companies should be allowed to go public with dual-class shares and, if so, which restrictions (if any) should be imposed. Three primary regulatory models have been adopted to deal with dual-class shares: (i) prohibitions, existing in countries like the United Kingdom, Germany, Spain, Colombia, or Argentina; (ii) the permissive model adopted in several jurisdictions, including Canada, Sweden, the Netherlands, and particularly the United States; and (iii) the restrictive approach recently implemented in Hong …

Startup Governance, Elizabeth Pollman

All Faculty Scholarship

Although previously considered rare, over three hundred startups have reached valuations over a billion dollars. Thousands of smaller startups aim to follow in their paths. Despite the enormous social and economic impact of venture-backed startups, their internal governance receives scant scholarly attention. Longstanding theories of corporate ownership and governance do not capture the special features of startups. They can grow large with ownership shared by diverse participants, and they face issues that do not fit the dominant principal-agent paradigm of public corporations or the classic narrative of controlling shareholders in closely held corporations.

This Article offers an original, comprehensive framework …

Tech, Regulatory Arbitrage, And Limits, Elizabeth Pollman

All Faculty Scholarship

Regulatory arbitrage refers to structuring activity to take advantage of gaps or differences in regulations or laws. Examples include Facebook modifying its terms and conditions to reduce the exposure of its user data to strict European privacy laws, and Uber and other platform companies organizing their affairs to categorize workers as non-employees. This essay explores the constraints and limits on regulatory arbitrage through the lens of the technology industry, known for its adaptiveness and access to strategic resources. Specifically, the essay explores social license and the bundling of laws and resources as constraining forces on regulatory arbitrage, and the legal …

Corporate Disobedience, Elizabeth Pollman

All Faculty Scholarship

Corporate law has long taken a dim view of corporate lawbreaking. Corporations can be chartered only for lawful activity. Contemporary case law characterizes intentional violations of law as a breach of the fiduciary duties of good faith and loyalty. While recognizing that rule breaking raises significant social and moral concerns, this Article suggests that corporate law and academic debate have overlooked important aspects of corporate disobedience. This Article provides an overview of corporate disobedience and illuminates the role that it has played in entrepreneurship and legal change. Corporations violate laws for a variety of reasons, including as part of efforts …

The Evolution Of Entrepreneurial Finance: A New Typology, J. Brad Bernthal

Publications

There has been an explosion in new types of startup finance instruments. Whereas twenty years ago preferred stock dominated the field, startup companies and investors now use at least eight different instruments—six of which have only become widely used in the last decade. Legal scholars have yet to reflect upon the proliferation of instrument types in the aggregate. Notably missing is a way to organize instruments into a common framework that highlights their similarities and differences.

This Article makes four contributions. First, it catalogues the variety of startup investment forms. I describe novel instruments, such as revenue-based financing, which remain …

Corporate Governance As Privately-Ordered Public Policy: A Proposal, Lynn A. Stout, Sergio Alberto Gramitto Ricci

Faculty Works

In this Article, we show how our society can use corporate governance shifts to address, if not entirely resolve, a number of currently pressing social and economic problems. These problems include: rising income inequality; demographic disparities in wealth and equity ownership; increasing poverty and income insecurity; a need for greater innovation and investment in solving problems like disease and climate change; the “externalization” of many costs of corporate activity onto third parties such as customers, employees, creditors, and the broader society; the corrosive influence of corporate money in politics; and discontent and loss of trust in the capitalist system among …

Disruptive Platforms, Margot Kaminski

Publications

No abstract provided.

El Ineficiente Diseño De La Legislación Concursal Española: Una Propuesta De Reforma A Partir De La Experiencia Comparada Y De Un Análisis Económico Del Derecho Concursal [The Inefficient Design Of The Spanish Bankruptcy Act: A Proposal To Enhance The Attractiveness Of The Spanish Bankruptcy Regime Based On An Economic And Comparative Analysis Of Insolvency Law] In Spanish, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Spain has one of the world´s lowest business bankruptcy rates (that is, number of business bankruptcies per firm). Some authors have argued that the low usage of bankruptcy procedures in Spain is due to a ‘cultural’ problem faced by Spanish entrepreneurs. According to this hypothesis, the lack of a ‘bankruptcy culture’ makes Spanish entrepreneurs to be afraid of the use of the bankruptcy system. In this paper, however, I advocate for a totally different hypothesis. In my opinion, the low rate of business bankruptcies in Spain is not due to a ‘cultural’ problem but to an institutional one. Namely, I …

Investment Accelerators, Brad Bernthal

Publications

This Article documents and explains the legal and extralegal dimensions of Investment Accelerator (IA) systems. Accelerators are a new class of institution that supports entrepreneurs and early stage startups. Investment Accelerators take an ownership stake in companies that participate in an intensive, time-limited program. Interviews reveal the surprising extent to which parties in many Investment Accelerators exchange economic value in the absence of formal agreement. Startups share proprietary information with highly accomplished mentors who, in turn, contribute their time and connections without direct compensation. This under-contracted and informal arrangement raises concerns about opportunism. Data from an original investigation presents a …

Agenda: Innovations In Managing Western Water: New Approaches For Balancing Environmental, Social, And Economic Outcomes, University Of Colorado Boulder. Getches-Wilkinson Center For Natural Resources, Energy, And The Environment

Innovations in Managing Western Water: New Approaches for Balancing Environmental, Social and Economic Outcomes (Martz Summer Conference, June 11-12)

Many aspects of western water allocation and management are the product of independent and uncoordinated actions, several occurring a century or more ago. However, in this modern era of water scarcity, it is increasingly acknowledged that more coordinated and deliberate decision-making is necessary for effectively balancing environmental, social, and economic objectives. In recent years, a variety of forums, processes, and tools have emerged to better manage the connections between regions, sectors, and publics linked by shared water systems. In this event, we explore the cutting edge efforts, the latest points of contention, and the opportunities for further progress.

The Green Option, Gideon Parchomovsky, Endre Stavang

All Faculty Scholarship

We introduce an innovative market-based mechanism that may be used to advance environmental goals. Our mechanism employs option theory to give established businesses a financial stake in the success of green technologies. We show why and how green companies should be given an option to transfer a block of their shares to any corporation of their choice, incentivize them to switch to environmentally friendly technologies and to use their political clout to alleviate legal, regulatory and political barriers to the adoption of such technologies. In short, giving established corporations a stake in green companies will give them a stake in …

Connecting Law And Creativity: The Role Of Lawyers In Supporting Creative And Innovative Economic Development, Amanda M. Spratley

Faculty Publications

This article explores multiple ways in which lawyers and the legal community can connect with arts-oriented and other creative businesses to both invigorate the experience of the lawyers offering assistance and highlight ways for the legal community to position itself as relevant and helpful in the new creative economy.

This article's discussion is directed to lawyers who wish to know more about the creative economy and their position within it, but may also be informative to artists and professionals in creative enterprises by highlighting some of the legal considerations that may affect them and examining ways that seeking legal assistance …

Fragmentation Nodes: A Study In Financial Innovation, Complexity, And Systemic Risk, Kathryn Judge

Faculty Scholarship

This Article resents a case study in how complexity arising from the evolution and proliferation of a financial innovation can increase systemic risk. The subject of the case study is the securitization of home loans, an innovation which played a critical and still not fully understood role in the 2007-2009 financial crisis. The Article introduces the term "fragmentation node" for these transaction structures, and it shows how specific sources of complexity inherent in fragmentation nodes limited transparency and flexibility in ways that undermined the stability of the financial system. In addition to shedding new light on the processes through which …

Locating Innovation: The Endogeneity Of Technology, Organizational Structure, And Financial Contracting, Ronald J. Gilson

Faculty Scholarship

There is much we do not understand about the "location" of innovation: the confluence, for a particular innovation, of the technology associated with the innovation; the innovating firm's size and organizational structure; and the financial contracting that supports the innovation. This Essay suggests that these three indicia are determined simultaneously and discusses the interaction among them through four examples of innovative activity whose location is characterized by tradeoffs between pursuing the activity in an established company, in a smaller, earlier-stage company, or some combination of the two. It first considers the dilemma faced by an established company in deciding whether …

Agenda: Best Practices For Community And Environmental Protection, University Of Colorado Boulder. Natural Resources Law Center. Intermountain Oil And Gas Bmp Project, Colorado. Oil And Gas Conservation Commission

Best Practices for Community and Environmental Protection (October 14)

The first Intermountain BMP Project workshop, sponsored by the Natural Resources Law Center and the Colorado Oil and Gas Conservation Commission, was held in Rifle, Colorado on October 14, 2009 at the Garfield County Fairground for over 170 participants.

Speakers from Federal, state and local governments, the community, industry and environmental consultants, and conservation groups focused presentations and discussion on a greater understanding of what Best Management Practices (BMPs) are appropriate to the western slope of Colorado and how they are integrated into developments.

Slides: Innovative Best Practices For The Western Slope: Stormwater Management Solutions And Philosophy For The Oil And Gas Industry, Kyle N. Schildt

Best Practices for Community and Environmental Protection (October 14)

Presenter: Kyle N. Schildt, P.E., LT Environmental, Inc.

12 slides

Slides: Bmp Project, Kent Kuster

Best Practices for Community and Environmental Protection (October 14)

Presenter: Kent Kuster, Consultation Coordinator, Colorado Department of Public Health and Environment (CDPHE)

17 slides

Securities Class Actions As Pragmatic Ex Post Regulation, Elizabeth Chamblee Burch

Scholarly Works

Securities class actions are on the chopping block-again. Traditional commentators continue to view class actions with suspicion; they see class suits as nonmeritorious byproducts of self-interest and the attorneys who bring them as rent-seekers. Their conventional approach has popularized securities class actions' negative effects. High-profile commissions capitalizing on this rhetoric, such as the Committee on Capital Markets Regulation, have recently recommended eliminating or severely curtailing securities class actions. But this approach misses the point: in the ongoing push and pull of securities regulation, corporations are winning the battle.

Thus, understanding the full picture and texture of securities class actions necessitates …

Agenda: Water And Growth In The West, University Of Colorado Boulder. Natural Resources Law Center, The William And Flora Hewlett Foundation

Water and Growth in the West (Summer Conference, June 7-9)

1 v. (various pagings) : ill., maps ; 29 cm. + 1 CD-ROM (4 3/4 in.) + supplement (207 p. ; 29 x 24 cm.)

"Conference co-sponsor The William and Flora Hewlett Foundation."

Conference moderators included University of Colorado School of Law professors Gary C. Bryner, James N. Corbridge, Jr., David H. Getches, Douglas S. Kenney, Kathryn M. Mutz, Peter D. Nichols and Charles F. Wilkinson.

Accompanied by: CD-ROM (4 3/4 in.) and supplement (xiv, 140, [49] p.)

Includes bibliographical references

The event will cover a breadth of issues, including demographics and water-use trends, improved planning and efficient use, implementation …

Asset Securitization And Corporate Risk Allocation, Christopher W. Frost

Law Faculty Scholarly Articles

Asset securitization is a financial innovation in which corporations sell financial assets to a specially formed entity that in turn taps financial markets for the purchase price. The device provides firms an alternative to raising capital through traditional debt and equity markets. Practitioners of the approach tout securitization as a means through which a firm can lower its overall cost of capital by limiting the risk facing investors in the securitized assets. Commentators have described asset securitization as "one of the most important financing vehicles in the United States." Interest in the device is increasing dramatically as more companies see …