Law Commons^™

The Economics Of Limited Liability: An Empirical Study Of New York Law Firms, Scott Baker, Kimberly D. Krawiec

ExpressO

Since the rapid rise in organizational forms for business associations, academics and practitioners have sought to explain the choice of form rationale. Each form contains its own set of default rules that inevitably get factored into this decision, including the extent to which each individual firm owner will be held personally liable for the collective debts and obligations of the firm. The significance of the differences in these default rules continues to be debated. Many commentators have advanced theories, most notably those based on unlimited liability, profit-sharing, and illiquidity, asserting that the partnership form provides efficiency benefits that outweigh any …

A Culturally Correct Proposal To Privatize The British Columbia Salmon Fishery, D. Bruce Johnsen

George Mason University School of Law Working Papers Series

Canada now faces two looming policy crises that have come to a head in British Columbia. The first is long-term depletion of the Pacific salmon fishery by mobile commercial ocean fishermen racing to intercept salmon under the rule of capture. The second results from Canadian Supreme Court case law recognizing and affirming “the existing aboriginal and treaty rights of the aboriginal peoples of Canada” under Section 35(1) of the Constitution Act, 1982. This essay shows that the economics of property rights provides a joint solution to these crises that would promote the Canadian commonwealth by way of a privatization auction …

Strict Liability For Gatekeepers: A Reply To Professor Coffee, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

This article responds to a proposal by Professor John C. Coffee, Jr. for a modified form of strict liability for gatekeepers. Professor Coffee’s proposal would convert gatekeepers into insurers, but cap their insurance obligations based on a multiple of the highest annual revenues the gatekeepers recently had received from their wrongdoing clients. My proposal, advanced in 2001, would allow gatekeepers to contract for a percentage of issuer damages, after settlement or judgment, subject to a legislatively-imposed floor. This article compares the proposals and concludes that a contractual system based on a percentage of the issuer’s liability would be preferable to …

Encumbered Shares, Shaun Martin, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

The fundamental assumptions in the law and economics literature about shareholder voting and the one-share/one-vote rule are flawed. The classic view is that share ownership is necessary and sufficient to create voting rights and that such rights should be directly proportional to share ownership. We demonstrate that this assumption is unfounded, both for shares that are “economically encumbered” (held by shareholders who are not pure residual claimants; e.g., a shareholder who owns one share and is also short one or more shares) as well as shares that are “legally encumbered” (held or associated with more than one shareholder; e.g., shares …

Does The Tax Law Discriminate Against The Majority Of American Children: The Downside Of Our Progressive Rate Structure And Unbalanced Incentives For Higher Education?, Lester B. Snyder

University of San Diego Law and Economics Research Paper Series

Our graduate income tax structure provides an incentive to shift income to lower-bracket family members. However, some parents have much more latitude to shift income to their children than do others. Income derived from services and private business-by far the majority of American income-is less favored than income derived from publicly traded securities. The rationale given for this discrimination is that parents in services or private business, as opposed to those in securities, do not actually part with control of their property. This article explores these tax broader (yet subtle) tax benefits and their impact on the majority of children …

Good Faith In The Cisg: Interpretation Problems In Article 7, Benedict C. Sheehy

ExpressO

ABSTRACT: This article examines the dispute concerning the meaning of Good Faith in the CISG. Although there are good reasons for arguing a more limited interpretation or more limited application of Good Faith, there are also good reasons for a broader approach. Regardless of the correct interpretation, however, practitioners and academics need to have a sense of where the actual jurisprudence is going. This article reviews every published case on Article 7 since its inception and concludes that while there is little to suggest a strong pattern is developing, a guided pattern while incorrect doctrinally is preferable to the current …

Expensing Isn't The Only Option: Alternatives To The Fasb's Stock Option Expensing Proposal, Benjamin A. Templin

ExpressO

This paper reviews the arguments for and against the Financial Accounting Standard Board's (FASB) proposal to require that corporations expense options. It identifies two major goals of the proposed rule -- 1) clarity in financial statements and 2) a reduction of corporate fraud by removing the incentive of options. To address these two goals, I adopt a framework of Information Reforms v. Rules of the Game Reforms. The article starts with a history of FASB Statement No. 123 Accounting for Stock-based Compensation and also analyzes the Congressional legislation that attempts to block the measure, the Stock Option Accounting Reform Act. …

The Importance Of Corporate Models, Benedict C. Sheehy

ExpressO

This article argues that the debate concerning the nature of the corporation is not finished and nor a mere intellectual exercise for interested legal academics. The current model of the corporation as an economic entity—the firm—has a number of imbedded value assumptions. Given the common territory between corporate law and economics, some scholars have come to identify the two as equal partners striving for the same ends. This is a serious error which has had and continues to have significant negative consequences for both the economic situation of the majority and justice in society. These value assumptions are being seriously …

Tax, Corporate Governance, And Norms, Steven Bank

ExpressO

This paper examines the use of federal tax provisions to effect changes in state law corporate governance. There is a growing academic controversy over these provisions, fueled in part by their popularity among legislators as a method of addressing the recent spate of corporate scandals. In order to better understand and distinguish between the possible uses of tax as a tool of corporate governance, this paper takes a historical approach by focusing on two measures enacted during the New Deal – the undistributed profits tax in 1936 and the overhaul of the tax-free reorganization provisions in 1934 – and considers …

Comparisons Among Firms: (When) Do They Justify Mandatory Disclosure?, Sharon Hannes

ExpressO

Comparisons among firms play a major role in securities analysis. This essay asks if this fact justifies the mandatory nature of securities regulation. Once a firm approaches the public securities markets, federal securities regulations compel it to disclose financial information to the public. A seminal theory argues that firms would not otherwise commit to maintain optimal disclosure levels, since a disclosing firm bears all disclosure costs but does not gain all disclosure benefits.

This paper examines the robustness of this argument in relation to disclosure benefits which arise from comparisons among firms. Financial data of peer firms allows shareholders to …

The Role Of Government In Corporate Governance, Cary Coglianese, Elizabeth K. Keating, Michael L. Michael, Thomas J. Healey

All Faculty Scholarship

Numerous corporate scandals in the past several years have fueled widespread debate over proposals for government action. The central challenge for government is how to restore corporate integrity and market confidence without overreacting and stifling the dynamism that underlies a strong economy. To examine this challenge, the Center for Business and Government's Regulatory Policy Program organized a conference in May 2004 on The Role of Government in Corporate Governance. The conference brought together government officials, business leaders, and academic researchers to discuss three fundamental public policy issues raised by recent corporate abuses. First, who should regulate corporate management - government …

The New Federal Regulation Of Corporate Governance, Jill E. Fisch

All Faculty Scholarship

No abstract provided.

Gaming Delaware, William W. Bratton

All Faculty Scholarship

No abstract provided.