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- " by saddling them with high debt levels. The higher rate of refiling that resulted was nevertheless efficient because refiling costs were low. In this essay we respond that the Ayotte-Skeel model is based on the assumption of a selection effect for which there is neither a shred of empirical evidence nor even a variable proposed for measurement. We demonstrate that it is mathematically impossible for the cost savings from Delaware's shorter bankruptcies to offset the cost of so many second bankruptcies. We also note that the Ayotte-Skeel model leads to several predictions in conflict with the empirical evidence. We argue that refailure is costly and propose an empirical approach to quantify those costs. We praise Ayotte and Skeel's discovery that the EBITDA of firms emerging from Delaware bankruptcy was not significantly different from the EBITDA of firms emerging from bankruptcy in other courts during the period of ascendency. We agree that their findings suggest leverage played a greater role in the failure of the Delaware companies than we had previously thought. Lastly (1)
- 73 University of Chicago Law Review 425 (2006) (1)
- AI (1)
- An Efficiency-Based Explanation for Current Corporate Reorganization Practice (1)
- And bankruptcy courts can prevent the case placers from using their leverage over the bankruptcy courts to externalize costs. The DIP lenders will not prevent the externalization because they are themselves case placers. Other creditors cannot prevent the externalization because no procedural means exist by which they could do so. The bankruptcy courts cannot prevent the externalization because the case placers avoid courts that attempt to place limits on them. (1)
- And compliance (1)
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- As compared with only 6% of those filing in courts other than Delaware and New York. In a later study (1)
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Articles 1 - 15 of 15
Full-Text Articles in Law
Tort Liability For Physical Harm To Police Arising From Protest: Common-Law Principles For A Politicized World, Ellen M. Bublick, Jane R. Bambauer
Tort Liability For Physical Harm To Police Arising From Protest: Common-Law Principles For A Politicized World, Ellen M. Bublick, Jane R. Bambauer
UF Law Faculty Publications
When police officers bring tort suits for physical harms suffered during protest, courts must navigate two critically important sets of values—on the one hand, protesters’ rights to free speech and assembly, and on the other, the value of officers’ lives, health, and rights of redress. This year courts, including the United States Supreme Court, must decide who, if anyone, can be held accountable for severe physical harms suffered by police called upon to respond to protest. Two highly visible cases well illustrate the trend. In one, United States Capitol Police officers were injured on January 6, 2021, during organized attempts …
Shields Up For Software, Derek E. Bambauer, Melanie J. Teplinsky
Shields Up For Software, Derek E. Bambauer, Melanie J. Teplinsky
UF Law Faculty Publications
This Article contends that the National Cybersecurity Strategy's software liability regime should incorporate two safe harbors. The first would shield software creators and vendors from liability for decisions related to design, implementation, and maintenance, as long as those choices follow enumerated best practices. The second—the “inverse safe harbor”—would have the opposite effect: coders and distributors who engaged in defined worst practices would automatically become liable. This Article explains the design, components, and justifications for these twin safe harbors. The software safe harbors are key parts of the overall design of the new liability regime and work in tandem with the …
Assuming The Risks Of Artificial Intelligence, Amy L. Stein
Assuming The Risks Of Artificial Intelligence, Amy L. Stein
UF Law Faculty Publications
Tort law has long served as a remedy for those injured by products—and injuries from artificial intelligence (“AI”) are no exception. While many scholars have rightly contemplated the possible tort claims involving AI-driven technologies that cause injury, there has been little focus on the subsequent analysis of defenses. One of these defenses, assumption of risk, has been given particularly short shrift, with most scholars addressing it only in passing. This is intriguing, particularly because assumption of risk has the power to completely bar recovery for a plaintiff who knowingly and voluntarily engaged with a risk. In reality, such a defense …
Troll Storms And Tort Liability For Speech Urging Action By Others: A First Amendment Analysis And An Initial Step Toward A Federal Rule, Clay Calvert
UF Law Faculty Publications
This Commentary examines when, consistent with First Amendment principles of free expression, speakers can be held tortiously responsible for the actions of others with whom they have no contractual or employer-employee relationship. It argues that recent lawsuits against Daily Stormer publisher Andrew Anglin for sparking “troll storms” provide a timely analytical springboard into the issue of vicarious tort liability. Furthermore, such liability is particularly problematic when a speaker’s message urging action does not fall into an unprotected category of expression, such as incitement or true threats, and thus, were it not for tort law, would be fully protected. In examining …
The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee
The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee
UF Law Faculty Publications
This Article corrects a misconception in corporation law – the belief that principles of tort law do not apply to the liability scheme of fiduciary duty. A board’s duty of care implies exposure to liability, but the business judgment rule precludes it. Tort law finds fault; corporation law excuses it. The conventional wisdom says that the tort analogy fails. This dismissal of tort prinicples is wrong. Although shareholder derivative suits and ordinary tort cases properly yield systemically antipodal outcomes, they are bound by a common analytical framework. The principles of board liability are rooted in tort doctrines governing duty, customs, …
Loss Of Chance, Probabilistic Cause, And Damage Calculations: The Error In Matsuyama V. Birnbaum And The Majority Rule Of Damages In Many Jurisdictions More Generally, Robert J. Rhee
UF Law Faculty Publications
This short commentary corrects an erroneous understanding of probabilistic causation in the loss-of-chance doctrine and the damage calculation method adopted in Matsuyama v. Birnbaum. The Supreme Judicial Court of Massachusetts is not alone. Many other common law courts have made the same error, including Indiana, Nevada, New Mexico, Ohio, and Oklahoma. The consistency in the mistake suggests that the error is the majority rule of damages. I demonstrate here that this majority rule is based on erroneous mathematical reasoning and the fallacy of probabilistic logic.
A Financial Economic Theory Of Punitive Damages, Robert J. Rhee
A Financial Economic Theory Of Punitive Damages, Robert J. Rhee
UF Law Faculty Publications
This Article provides a financial economic theory of punitive damages. The core problem, as the Supreme Court acknowledged in Exxon Shipping Co. v. Baker, is not the systemic amount of punitive damages in the tort system; rather, it is the risk of outlier outcomes. Low frequency, high severity awards are unpredictable, cause financial distress, and beget social cost. By focusing only on offsetting escaped liability, the standard law and economics theory fails to account for the core problem of variance. This Article provides a risk arbitrage analysis of the relationship between variance, litigation valuation, and optimal deterrence. Starting with settlement …
Bond Limited Liability, Robert J. Rhee
Bond Limited Liability, Robert J. Rhee
UF Law Faculty Publications
Limited liability is considered a “birthright” of corporations. The concept is entrenched in legal theory, and it is a fixed reality of the political economy. But it remains controversial. Scholarly debate has been engaged in absolute terms of defending the rule or advocating its abrogation. Though compelling, these polar positions, often expressed in abstract arguments, are associated with disquieting effects. Without limited liability, efficiency may be severely compromised. With it, involuntary tort creditors bear some of the cost of an enterprise. Most other proposals for reforming limited liability have been incremental, such as modifying veil piercing. However, neither absolutism nor …
A Production Theory Of Pure Economic Loss, Robert J. Rhee
A Production Theory Of Pure Economic Loss, Robert J. Rhee
UF Law Faculty Publications
Although the pure economic loss rule has been remarkably durable in the common law, it suffers from a theoretical deficit. The rule has not been properly framed within the broader context of Anglo-American political economy. Any theory must recognize that the rule fundamentally deals with business risk and economic organization. Two conceptions of risk are important: risk to economic assets essential to the production function (loss of a factor of production), and risk to outcomes (loss of production). This Article proposes a production theory of the pure economic loss rule, which is rooted in the neoclassical economic understanding of the …
Tort Arbitrage, Robert J. Rhee
Tort Arbitrage, Robert J. Rhee
UF Law Faculty Publications
The economic models of bargaining and tort law have not been integrated into a coherent theory that reflects the empirical world. This Article models the interaction of settlement dynamics and the theory of negligence. It shows that tort claims are systematically devalued during settlement relative to the legal standard. Central to this thesis is a proper conception and accounting of cost. Cost is typically viewed as the transaction cost of litigation processing. Cost, however, encompasses more than this. Each dispute has a cost of resolution, defined as the discounting effect of risk on legal valuation. A spread between the parties' …
Palsgraf Revisited (Again), Joseph W. Little
Palsgraf Revisited (Again), Joseph W. Little
UF Law Faculty Publications
Dean Prosser wrote Palsgraf Revisited because he believed that courts had inadequate standards to make predictable and consistent duty decisions. He expressed his discontent by providing a thumbnail description of decisions that appeared to him to be rationally irreconcilable. Acknowledging that Cardozo's powerful Palsgraf imagery had been persuasive to most courts, Prosser fastened upon it as the focus of his dissatisfaction. Hence, Prosser provided us Palsgraf Revisited.
I fault Prosser for looking for a nirvana that has no existence in law. Rarely will a court make a difficult, fact based, policy driven decision that all thoughtful legal commentators will …
A Principled Solution For Negligent Infliction Of Emotional Distress Claims, Robert J. Rhee
A Principled Solution For Negligent Infliction Of Emotional Distress Claims, Robert J. Rhee
UF Law Faculty Publications
This article examines negligent infliction of emotional distress, one of the most controversial and least uniform fields of tort law. A review of the judicial and scholarly literature has shown that traditional tort analysis fails. In its stead, the common law has not found an alternative theory of liability that balances the competing interests. Rather, the approach has been to create rules of law based on probabilistic templates. Its dual purpose is to preclude individualized analysis and to limit aggregate liability. This article rejects the current doctrines as inherently arbitrary and proposes a complete overhaul of the law. To find …
The Application Of Finance Theory To Increased Risk Harms In Toxic Tort Litigation, Robert J. Rhee
The Application Of Finance Theory To Increased Risk Harms In Toxic Tort Litigation, Robert J. Rhee
UF Law Faculty Publications
In toxic tort litigation, a plaintiff has no cause of action for increased risk of harm unless that risk is proven by a preponderance of the evidence to lead to a future physical injury. This rule of law is based on an antiquated concept of uncertainty, and evinces the law's detachment from the knowledge gained from other intellectual disciplines and the everyday workings of the world. This article argues that freedom from increased risk should be a legally cognizable interest, the violation of which gives rise to an independent cause of action. When analyzed under finance theory, increased risk harms …
Toward A Trademark-Based Liability System, Lynn M. Lopucki
Toward A Trademark-Based Liability System, Lynn M. Lopucki
UF Law Faculty Publications
No general rule of law renders trademark owners liable for products sold or business conducted under the trademark. This essay proposes the adoption of such a rule. The rationale for the change is that businesses are known by their trademarks, not their entity names, in the marketplace. The vast majority of customers - both businesses and consumers - select the persons with whom they will deal, and contract with those persons, on the basis of trademarks. The entity structures of businesses (corporate groups, franchises, joint ventures, etc.) are generally invisible to customers. Yet under current law the businesses' liabilities to …
Teaching Torts Without Insurance: A Second-Best Solution, David A. Fischer, Robert H. Jerry Ii
Teaching Torts Without Insurance: A Second-Best Solution, David A. Fischer, Robert H. Jerry Ii
UF Law Faculty Publications
Teachers, scholars and practitioners have long appreciated the symbiotic relationship of torts and insurance. The authors examine how the study of torts is enriched when insurance concepts play a role in students' analysis. The discussion is divided into two parts. Part I offers a "macro" perspective on the connections between tort and insurance, summarizing the principal issues in play when the purposes of tort law are analyzed against the backdrop of first-party and third-party insurance compensation mechanisms. Part II provides a "micro" perspective on tort-insurance connections, taking a sample of discrete tort law principles, representative of those discussed in a …