Law Commons^™

Vultures Or Vanguards?: The Role Of Litigation In Sovereign Debt Restructuring, Jill E. Fisch, Caroline M. Gentile

All Faculty Scholarship

The market for sovereign debt differs from the market for corporate debt in several important ways including the risk of opportunistic default by sovereign debtors, the importance of political pressures, and the presence of international development organizations. Moreover, countries are subject to neither liquidation nor standardized processes of debt reorganization. Instead, negotiations between a sovereign debtor and its creditors lead to a voluntary restructuring of the sovereign's debt. One of the greatest difficulties in restructuring claims against sovereign debtors is balancing the interests of the majority of the creditors with those of minority creditors. Holdout creditors serve as a check …

Of Predatory Lending And The Democratization Of Credit: Preserving The Social Safety Net Of Informality In Small-Loan Transactions, Regina Austin

All Faculty Scholarship

No abstract provided.

Rules, Principles, And The Accounting Crisis In The United States, William W. Bratton

All Faculty Scholarship

The Sarbanes-Oxley Act and the Securities Exchange Commission move too quickly ·when they prod the Financial Accounting Standards Board, the standard setter for US GAAP, to move immediately to a principles-based system. Priorities respecting reform of corporate reporting in the US need to be ordered more carefully. Incentive problems impairing audit performance should be solved first through institutional reform insulating the audit from the negative impact of rent-seeking and solving adverse selection problems otherwise affecting audit practice. So long as auditor independence and management incentives respecting accounting treatments remain suspect. the US reporting system holds out no actor plausibly positioned …

Takeover Defense When Financial Markets Are (Only) Relatively Efficient, Michael L. Wachter

All Faculty Scholarship

This paper evaluates the impact of developments in the understanding of asset value pricing for alternative legal standards for takeover defenses: the management discretion and the shareholder rights positions. Both sides place considerable, albeit implicit, reliance on alternative views of the efficiency of financial markets. Developments in finance theory show that when financial markets are only "relatively efficient," stock prices can incorrectly value the corporation at any point in time, at the same time as investors cannot outperform the market on an ongoing basis. I focus on financial market anomalies arising from the failure of the capital asset pricing model …

Venture Capital On The Downside: Preferred Stock And Corporate Control, William W. Bratton

All Faculty Scholarship

No abstract provided.

Invisible Markets Netting Visible Results: When Sub-Prime Lending Becomes Predatory, Cassandra Jones Havard

All Faculty Scholarship

In this article, I argue that Ellison's metaphor of social invisibility—the societal undervaluing of minorities—is analogous to economic invisibility—the denial of fair access to credit to minorities. I then use the metaphor of invisibility as a basis for understanding the contemporary legal problem of predatory lending, or making credit available to borrowers at unreasonably high interest rates. Disguised as credit access to high-risk, underserved borrowers, predatory lending helps to create risk by offering borrowers products that do not adequately measure risk and that are not fairly priced.

African-American Farmers And Fair Lending: Racializing Rural Economic Space, Cassandra Jones Havard

All Faculty Scholarship

This article critiques the federal policy and legislation that makes USDA a financial intermediary designed to give farmers access to credit in light of the federal class action settlement of claims between African-American farmers and USDA. The challenged statutory scheme allows locally elected farmers to make decisions regarding these low-cost loan funds. USDA's approach has both federalist and economic underpinnings. The article identifies the arguments supporting devolution of power from the federal government to local jurisdictions and examines the competing theories of information costs, transaction costs, and agency costs as they relate to USDA as a financial intermediary. Finally, it …

Securities Fraud In Cyberspace: Reaching The Outer Limits Of The Federal Securities Laws, Constance Z. Wagner

All Faculty Scholarship

This article discusses the increasing use of the Internet for securities transactions, the growth of securitiesfraud perpetrated through that medium and the Securities and Exchange Commission (“SEC”) enforcement program initiated to combat it. The author critiques the position taken by the SEC that the existing anti-fraudprovisions of the federal securities laws can be stretched to cover Internet fraud. Using an enforcement action brought by the SEC against an online stock trading guru named Tokyo Joe as an example of the confused jurisprudence that results when pre-cyberspace law is applied to securities fraud in cyberspace, the author proposes a different regulatory …

Structuring The Financial Service Conglomerates Of The Future: Does The Choice Of Corporate Form To House New Financial Activities Of National Banks Matter?, Constance Z. Wagner

All Faculty Scholarship

The Gramm-Leach-Bliley Act became law on November 12, 1999, bringing to an end a twenty year effort to expand bank powers by amending the Glass-Steagall Act and the Bank Holding Company Act of 1956. Although styled as banking reform legislation, the new law will have a wide ranging impact on the financial services industry generally. A wave of merger activity will likely occur in this industry because many of the legal restrictions on bank affiliations with other financial services providers have been removed. An end result of the new legislation will be the creation of financial services conglomerates offering a …

Corporate Finance, Corporate Law And Finance Theory, Peter H. Huang, Michael S. Knoll

All Faculty Scholarship

No abstract provided.

Understanding Lockups: Effects In Bankruptcy And The Market For Corporate Control, Kermit Roosevelt Iii

All Faculty Scholarship

The article investigates the effects of lockups, devices used to compensate unsuccessful bidders. Lockups are relevant in contexts in which sales have auction-like characteristics. Bankruptcy and the market for corporate control are two such situations, since the governing legal regimes prevent sales from being swiftly consummated and require sellers to take the most favorable offer that emerges during the waiting period. Existing scholarship has considered lockups in both areas. The analysis of lockups in the market for corporate control is fairly well developed. This article shows that it is importantly incomplete because it fails both to distinguish between ex ante …

Delaware Law As Applied Public Choice Theory: Bill Cary And The Basic Course After Twenty-Five Years, William W. Bratton

All Faculty Scholarship

No abstract provided.

The Scope Of Private Securities Litigation: In Search Of Liability Standards For Secondary Defendants, Jill E. Fisch

All Faculty Scholarship

Recent federal court decisions have struggled to apply the Supreme Court's decision in Central Bank v. First Interstate to determine when outside professionals should be held liable as primary violators under section IO(b) of the Securities Exchange Act. In keeping with the Court's current interpretive methodology, Central Bank and its progeny employ a textualist approach. In this Article, Professor Fisch argues that literal textualism is an inappropriate approach for interpreting the federal securities laws generally and misguided in light of legislative developments post-dating the Central Bank decision. Instead, Professor Fisch advocates an approach that weighs Congress 's recent endorsement of …

Assignments Of International Interests In Mobile Equipment And Related Receivables Under The Unidroit Convention: When Should The Tail Wag The Dog?, Charles W. Mooney Jr.

All Faculty Scholarship

No abstract provided.

The Market Revolution In Bank And Insurance Firm Governance: Its Logic And Limits, David A. Skeel Jr.

All Faculty Scholarship

No abstract provided.

The Genius Of The 1898 Bankruptcy Act, David A. Skeel Jr.

All Faculty Scholarship

No abstract provided.

How Successful Was The Revision Of Ucc Article 9?: Reflections Of The Reporters, Steven L. Harris, Charles W. Mooney Jr.

All Faculty Scholarship

No abstract provided.

An Evolutionary Theory Of Corporate Law And Corporate Bankruptcy, David A. Skeel Jr.

All Faculty Scholarship

In this Article, Professor Skeel argues that the important recent literature exploring historical and political influences on American corporate law has neglected a crucial component of corporate governance: corporate bankruptcy. Only by appreciating the complementary relationship between corporate law and corporate bankruptcy can we understand how corporate governance operates in any given nation. To show this, the Article contrasts American corporate governance with that of Japan and Germany. America's market-driven corporate governance can only function effectively if the bankruptcy framework includes a manager-driven reorganization option. The relational shareholding that characterizes Japanese and German corporate governance, by contrast, requires a much …

Bankruptcy Judges And Bankruptcy Venue: Some Thoughts On Delaware, David A. Skeel Jr.

All Faculty Scholarship

No abstract provided.

Synergy And Friction – Cra, Bhcs, Sba And Community Development Lending, Cassandra Jones Havard

All Faculty Scholarship

The era of federal funding retrenchment makes acute the need for community businesses to have access to capital. The Small Business Administration (SBA) provides small businesses with access to low-cost loans funds. The existing SBA regulatory scheme fosters an approach which allows a private mechanism, lenders, to make public policy decisions about the socio-economic character of communities. Implicit in the Community Reinvestment Act (CRA) and its recent reforms are a recognition of the complex interdependence among policy objectives. The reform statute specifically recognizes that geographical disinvestment has an equally deleterious effect on small business lending as it does on residential …

Reconciling The Dormant Conflict: Crafting A Banking Exception To The Fraudulent Conveyance Provision Of The Bankruptcy Code For Bank Holding Company Asset Transfers, Cassandra Jones Havard

All Faculty Scholarship

Banking law and bankruptcy law clash. This is most evident when a bank holding company (parent company) becomes insolvent after it has made an asset transfer to its financially troubled bank subsidiary.

The Bankruptcy Code (Code) governs the insolvency proceedings of the bank holding company. Predictably, the parent company's trustee, appointed for the protection of all the creditors of the bankrupt entity, uses the fraudulent conveyance provision of the Code to have any asset transfers that were made to the bank subsidiary returned to the debtor's estate. The good faith exception to that provision will protect the asset transfer only …

Night Landings On An Aircraft Carrier: Hospital Mergers And Antitrust Law, Thomas L. Greaney

All Faculty Scholarship

Abstract: Analysis of the competitive effects of hospital mergers requires antitrust tribunals to make exceedingly fine-tuned appraisals of complex economic relationships. The law requires fact finding in a number of complex areas, e.g., defining product and geographic markets, predicting the possibility of that firms will engage in coordinated behavior; and assessing efficiencies flowing from the merger. Further complicating the process is the fact that these decisions require judgments regarding what the future may hold in an industry undergoing revolutionary change. Like pilots landing at night aboard an aircraft carrier, courts are aiming for a target that is small, shifting and …

America's Shifting Fascination With Comparative Corporate Governance, Edward B. Rock

All Faculty Scholarship

No abstract provided.

A Reliance Damages Approach To Corporate Lockups, David A. Skeel Jr.

All Faculty Scholarship

No abstract provided.

Back To The Parent: Holding Company Liability For Subsidiary Banks — A Discussion Of The Net Worth Maintenance Agreement, The Source Of Strength Doctrine, And The Prompt Corrective Action Provision, Cassandra Jones Havard

All Faculty Scholarship

Given the statutory goal of parental accountability, this Article focuses on a narrow issue: Whether parental guarantees are the most effective regulatory tool for shielding the federal deposit insurance fund from losses when insured banking subsidiaries that are members of a multibank holding company system are insolvent. This Article posits that a needed complement to parental guarantees is temporary substantive consolidation of a holding company's affiliated banks. This would require the parent company to combine the assets of its banking siblings to facilitate the reorganization of a financially troubled subsidiary. Temporary enterprise consolidation is a necessary regulatory tool because it …

Foxes And Hen Houses?: Personal Trading By Mutual Fund Managers, Edward B. Rock

All Faculty Scholarship

No abstract provided.

A Contractual Approach To Data Privacy, Stephanos Bibas

All Faculty Scholarship

No abstract provided.

Controlling The Dark Side Of Relational Investing, Edward B. Rock

All Faculty Scholarship

No abstract provided.

Good Faith Transferees Of U.S. Treasury Securities And Other Weird Ideas: Making Federal Commercial Law, Charles W. Mooney Jr.

All Faculty Scholarship

No abstract provided.

Lawyer Liability In Third Party Situations: The Meaning Of The Kaye Scholar Case, Geoffrey C. Hazard Jr.

All Faculty Scholarship

The Kaye Scholer I case has excited much attention and alarm within the legal profession. 2 It is interpreted as greatly expanding the scope of lawyer liability to third parties and heralding much greater regulatory intervention into the relationship between lawyer and client. In some respects this interpretation is accurate. The Kaye Scholer proceeding is at least a "wake up call" to the legal profession, signalling that lawyers should be much more attentive to their legal and ethical obligations in transactional and regulatory matters. However, there is also much misunderstanding about Kaye Scholer, particularly the supposition that it created novel …