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Full-Text Articles in Law
The Case For A Market In Debt Governance, Yesha Yadav
The Case For A Market In Debt Governance, Yesha Yadav
Vanderbilt Law School Faculty Publications
Scholars have long lamented that the growth of modern finance has given way to a decline in debt governance. According to current theory, the expansive use of derivatives that enable lenders to trade away the default risk of their loans has made these lenders uninterested, even reckless, when it comes to exercising creditor discipline. In contrast to current theory, this Article argues that such derivatives can prove a positive and powerful influence in debt governance. Theory has overlooked those who sell credit protection to lenders and assume default risk on the borrower. These protection sellers are left holding the economic …
A Derivatives Market In Legal Academia, Paul H. Edelman
A Derivatives Market In Legal Academia, Paul H. Edelman
Vanderbilt Law School Faculty Publications
Building on the success of derivatives markets in the financial arena, I show how similar markets can be used to hedge risk in legal academia. Prudent use of these markets will generate cash, mitigate errors in hiring, and increase the academic prestige of law schools. In short, they can do for legal academia what they have already done to the financial world.
Does Private Equity Create Wealth? The Effects Of Private Equity And Derivatives On Corporate Governance, Randall Thomas, Ronald W. Masulis
Does Private Equity Create Wealth? The Effects Of Private Equity And Derivatives On Corporate Governance, Randall Thomas, Ronald W. Masulis
Vanderbilt Law School Faculty Publications
Private equity has reaped large rewards in recent years. We claim that one major reason for this success is due to the corporate governance advantages of private equity over the public corporation. We argue that the development of substantial derivative contracts and trading has significantly weakened the governance of public corporations and has created a need for financially sophisticated directors and much closer supervision of management. The private equity model delivers these benefits and allows corporations to be better governed, creating wealth gains for investors.