Broker-Dealer Law Reform: Financial Intermediaries In A State Of Limbo,
2016
Brooklyn Law School
Broker-Dealer Law Reform: Financial Intermediaries In A State Of Limbo, Alexander R. Tiktin
Brooklyn Law Review
No abstract provided.
The Value Of Uncertainty,
2015
Northwestern Pritzker School of Law
The Value Of Uncertainty, Cathy Hwang, Benjamin P. Edwards
Northwestern University Law Review
In recent years, federal courts have heard, without clear subject matter jurisdiction, contract disputes involving billions of dollars worth of securitized financial instruments (SFIs). These SFI disputes are litigated in federal court under the federal interpleader statute, which specifies that a federal court has subject matter jurisdiction over these cases only when parties deposit the disputed amount with the court. SFI litigants have ignored this requirement, so courts have, at best, uncertain jurisdiction over these cases. Why have no parties raised the jurisdictional defect, even though some would stand to gain from raising it? This Essay advances game theoretical explanations …
Constitutional Law And Secured Transactions: State Action V. Private Action - Uniform Commercial Code Self-Help; Repossession Provisions - Do Not Violate Due Process Requirements; Adams V. Southern California First National Bank,
2015
The University of Akron
Constitutional Law And Secured Transactions: State Action V. Private Action - Uniform Commercial Code Self-Help; Repossession Provisions - Do Not Violate Due Process Requirements; Adams V. Southern California First National Bank, David M. Hunter
Akron Law Review
Several years ago, the United States Supreme Court, in Sniadach v. Family Finance Corp.,' signaled what has been eventually interpreted in subsequent decisions as the strict measurement of creditors' rights against the requirements of due process set forth in the fourteenth amendment. What has since transpired has been an onslaught of litigation in this area of such magnitude that the due process requirements of prior notice and hearing found in Sniadach have been extended to virtually all forms of prejudgment remedies available to the aggrieved creditor. Despite all of this, the rationale of the Court of Appeals for the Ninth …
In Re Montierth, 131 Nev. Adv. Op. 55,
2015
Nevada Law Journal
In Re Montierth, 131 Nev. Adv. Op. 55, Walter Fick
Nevada Supreme Court Summaries
The Court held that the separation of a promissory note, held by a principal, and the deed of trust, held by an agent of the principal, does not render either instrument “void,” or require the reunification of the note and the deed of trust in order to foreclose. The Court further held that, under Nevada law and in the case of a contractual principal-agent relationship, the recordation of an assignment of a deed of trust is a “ministerial act.”
Plan Sponsor Fiduciary Duty For The Selection Of Options In Participant-Directed Defined Contribution Plans And The Choice Between Stable Value And Money Market,
2015
The University of Akron
Plan Sponsor Fiduciary Duty For The Selection Of Options In Participant-Directed Defined Contribution Plans And The Choice Between Stable Value And Money Market, Paul J. Donahue
Akron Law Review
This Article is divided into two parts. In Part I, this Article summarizes the scope of a Plan Sponsor’s fiduciary duty under ERISA and explains why that fiduciary duty extends to the selection of investment options for Participant-directed DC Plans (i.e., 404(c) Plans). In this context, the Article will then examine some of the safe harbor provisions applicable to 404(c) Plans, including the requirement that such Plans offer a low-risk-investment alternative and the requirement that such Plans provide adequate disclosure to Plan Participants about each investment alternative. In Part II, this Article will apply the law explicated in Part I …
The Art Of A Loan: “When The Loan Sharks Meet Damien Hirst’S ‘$12-Million Stuffed Shark’”,
2015
Chicago Stock Exchange
The Art Of A Loan: “When The Loan Sharks Meet Damien Hirst’S ‘$12-Million Stuffed Shark’”, Valerie Medelyan
Pace Law Review
Part I of this Article introduces the reader to the typical types of loans that banks make, includes an in-depth description of a secured loan, and finishes with a discussion of the due diligence requirements of banks. Part II identifies the unique complexities posed by art when it is used as collateral, comparing and contrasting the banks’ process when approving a loan secured by commonly-used assets versus a loan secured by art. Part III discusses the banks’ growing willingness to approve art-backed loans, and identifies the safeguards built into such deals. Part IV introduces the sub-prime lenders of the art …
Credit Rating Agency Review Board: The Challenges And Implications Of Implementing The Franken-Wicker Amendment To Dodd-Frank,
2015
Pepperdine University
Credit Rating Agency Review Board: The Challenges And Implications Of Implementing The Franken-Wicker Amendment To Dodd-Frank, Christopher R. Dyess
The Journal of Business, Entrepreneurship & the Law
The purpose of this paper is to analyze, critically review, and determine whether a hypothetical credit rating agency board, as suggested in the Franken-Wicker Amendment to the Dodd-Frank Act, is a viable option for combating the conflict of interest problem between credit rating agencies and issuers. Research methodology includes a careful review of various ways to structure the board and the potential unintended consequences of doing so. The Author uses original research hand-collected from video of the Credit Ratings Roundtable conducted in Washington D.C. on May 14, 2013. The Credit Ratings Roundtable brought together experts from the credit rating industry …
A Sea Change In Creditor Priorities,
2015
Loyola University New Orleans College of Law
A Sea Change In Creditor Priorities, Kristen Van De Biezenbos
University of Michigan Journal of Law Reform
This Article argues that the operation of maritime law undermines a primary justification for creditor priorities under U.S. law. Under current law, when a debtor becomes insolvent, its secured creditors will be paid the full amount of their debt to the extent of their security interest, even if that leaves nothing to pay unsecured creditors. This is controversial with respect to involuntary unsecured creditors, particularly those with tort claims against the debtor. Defenders of this scheme of priorities have argued that allowing greater priority to involuntary creditors would hinder the availability or increase the cost of credit. However, involuntary creditors …
An Fda For Financial Innovation: Applying The Insurable Interest Doctrine To Twenty-First-Century Financial Markets,
2015
Northwestern Pritzker School of Law
An Fda For Financial Innovation: Applying The Insurable Interest Doctrine To Twenty-First-Century Financial Markets, Eric A. Posner, E. Glen Weyl
Northwestern University Law Review
The financial crisis of 2008 was caused in part by speculative investment in complex derivatives. In enacting the Dodd–Frank Act, Congress sought to address the problem of speculative investment, but it merely transferred that authority to various agencies, which have not yet found a solution. We propose that when firms invent new financial products, they be forbidden to sell them until they receive approval from a government agency designed along the lines of the FDA, which screens pharmaceutical innovations. The agency would approve financial products if they satisfy a test for social utility that focuses on whether the product will …
Balance And Team Production,
2015
Seattle University School of Law
Balance And Team Production, Kelli A. Alces
Seattle University Law Review
For decades, those holding the shareholder primacy view that the purpose of a corporation is to earn a profit for its shareholders have been debating with those who believe that corporations exist to serve broader societal interests. Adolph Berle and Merrick Dodd began the conversation over eighty years ago, and it continues today, with voices at various places along a spectrum of possible corporate purposes participating. Unfortunately, over time, the various sides of the debate have begun to talk past each other rather than engage with each other and have lost sight of whatever common ground they may be able …
The Boundaries Of "Team" Production Of Corporate Governance,
2015
Seattle University School of Law
The Boundaries Of "Team" Production Of Corporate Governance, Anthony J. Casey, M. Todd Henderson
Seattle University Law Review
We examine the cooperative production of corporate governance. We explain that this production does not occur exclusively within a “team” or “firm.” Rather, several aspects of corporate governance are quintessentially market products. Like Blair and Stout, we view the shareholder as but one of many stakeholders in a corporation. Where we depart from their analysis is in our view of the boundaries of a firm. We suggest that they overweight the intrafirm production of control. Focusing on the primacy of a board of directors, Blair and Stout posit a hierarchical team that governs the economic enterprise. We observe, however, that …
The Team Production Model As A Paradigm,
2015
Seattle University School of Law
The Team Production Model As A Paradigm, Brian R. Cheffins
Seattle University Law Review
Margaret Blair and Lynn Stout suggested a few years after the publication of their 1999 Virginia Law Review article, A Team Production Theory of Corporate Law, that their team production model was poised to emerge as part of a new corporate law “paradigm.” In so doing, they specifically invoked Thomas Kuhn’s well-known analysis of scientific revolutions. This Article revisits Blair and Stout’s team production theory by offering a critique of their claim that their model is destined to become a new corporate law paradigm in the Kuhnian sense. In so doing the Article draws upon key corporate law theories and …
Testing The Normative Desirability Of The Mediating Hierarch,
2015
Seattle University School of Law
Testing The Normative Desirability Of The Mediating Hierarch, Zachary J. Gubler
Seattle University Law Review
In their influential article, A Team Production Theory of Corporate Law, Professors Margaret Blair and Lynn Stout explained how corporate law might be viewed as an attempt at solving what is known as the team production problem. At its core, this problem has to do with the opportunistic behavior that arises when multiple economic actors make investments—whether of labor, capital, or otherwise—in a business venture where these investments are said to be “firm specific” because they cannot be easily withdrawn and redeployed in other projects. The problem is how to construct a governance regime that will create incentives for the …
Team Production & The Multinational Enterprise,
2015
Seattle University School of Law
Team Production & The Multinational Enterprise, Virginia Harper Ho
Seattle University Law Review
Margaret Blair and Lynn Stout’s path-breaking article, A Team Production Theory of Corporate Law, advances a dual thesis: first, that team production theory does a better job than its competitors (in particular, principal–agent theory) of explaining the advantages of the public corporation and key features of corporate law; and second, that, as a matter of corporate law, corporate boards are charged with advancing the collective interest of all the contributors to the corporate enterprise rather than the shareholders’ interests alone. Its central insight is that the role of the independent, or insulated, corporate board is to serve as a “mediating …
Hostile Takeovers And Overreliance,
2015
Seattle University School of Law
Hostile Takeovers And Overreliance, Anthony Niblett
Seattle University Law Review
Commentators have argued that employees should be compensated in the event of a hostile takeover; otherwise, the threat of such a takeover will fail to incentivize firm-specific investments by employees. Such deferred compensation is analogous to the payment of damages following a breach of contract. The analogous breach, here, is the breach of an implicit contract between management and employees. Employees trusted management to compensate them for firm-specific investments not explicitly contracted for. This Article uses a familiar result from the contract law literature: There is no measure of damages for breach of contract that can generate both efficient breach …
Buying Teams,
2015
Seattle University School of Law
Buying Teams, Andres Sawicki
Seattle University Law Review
The Sixth Annual Berle Symposium reflects on Margaret Blair and Lynn Stout’s classic article: A Team Production Theory of Corporate Law. Blair and Stout recast the modern law of public corporations through the lens of the team production theory of the firm. Here, I apply Blair and Stout’s insights—emphasizing the value of team production, independent monitors, and intellectual property rights—to a novel corporate transaction structure: the acqui-hire. In an acqui-hire, a publicly owned technology firm wants to add a start-up’s engineers. Instead of simply hiring them, though, it buys the start-up, discards most of its assets, and retains the start-up’s …
Team Production And Securities Laws,
2015
Seattle University School of Law
Team Production And Securities Laws, Urska Velikonja
Seattle University Law Review
In the seminal paper that this symposium celebrates, A Team Production Theory of Corporate Law, Margaret Blair and Lynn Stout made two related points. First, that Delaware law does not require shareholder primacy in public corporations. Rather, the broad deference afforded to the decisions of predominantly independent corporate boards of directors is consistent with a contrary theory, that of team production, or, as they call it, “the mediating hierarch” theory. The fundamental role of the board of directors is to mediate between the interests of various stakeholders that contribute to the corporation’s output. As a result, Delaware courts have repeatedly …
With The Emergence Of Public Benefit Corporations, Directors Of Traditional For-Profit Companies Should Tread Cautiously, But Welcome The Opportunity To Invest In Social Enterprise,
2015
Seattle University School of Law
With The Emergence Of Public Benefit Corporations, Directors Of Traditional For-Profit Companies Should Tread Cautiously, But Welcome The Opportunity To Invest In Social Enterprise, Mckenzie Holden Granum
Seattle University Law Review
Social entrepreneurship has become the popular term used to describe business forms that aim to produce profits while also seeking to significantly advance one or more social or environmental goals. In response to an increase in social entrepreneurship across sectors—from progressive industries like organic farming to conservative industries such as insurance and banking—several states have adopted new corporate governance structures. Such legislation allows incorporating businesses to choose an off-the-shelf formation type that embeds a social mission into its legal structure. The bulk of the newly implemented statutory forms provide not only a new framework for social entrepreneurs to work within, …
Shareholder Wealth Maximization As Means To An End,
2015
Seattle University School of Law
Shareholder Wealth Maximization As Means To An End, Robert P. Bartlett, Iii
Seattle University Law Review
In several recent cases, the Delaware Chancery Court has emphasized that where a conflict of interest exists between holders of a company’s common stock and holders of its preferred stock, the standard of conduct for directors requires that they strive to maximize the value of the corporation for the benefit of its common stockholders rather than for its preferred stockholders. This article interrogates this view of directors’ fiduciary duties from the perspective of incomplete contracting theory. Building on the seminal work of Sanford Grossman and Oliver Hart, incomplete contracting theory examines the critical role of corporate control rights for addressing …
Lobbying, Pandering, And Information In The Firm,
2015
Seattle University School of Law
Lobbying, Pandering, And Information In The Firm, Adam B. Badawi
Seattle University Law Review
In their classic and insightful article on team production in corporate law, Margaret Blair and Lynn Stout identify the minimization of rent-seeking as one of the chief benefits of vesting ultimate authority over a firm with the board of directors. In their analysis, this problematic rent-seeking arises when parties need to divide the gains from production after the fact. The squabbling that is likely to ensue may threaten to eat away most, or all, of the gains that come from productive activity. If parties know that this sort of rent-seeking will occur, they may not engage in productive activity in …
