d

ILE INSTITUT E for LAW and ECONOMICS

ANNUAL REPORT 2006–2007 A Joint Research Center of the Law School, the Wharton School, and the Department

of Economics in the School of Arts and Sciences

at the University of Pennsylvania d INSTITUTE for LMAW and ECONOMICS

1 Institute for Law and Economics COVER PHOTOS ounded in 1980, the Institute for Law and Economics at the University of Pennsylvania has an ambitious agenda 2 Board of Advisors 1 Silverman Hall interior, with entrance to ILE offices at top of stairs. that is timelier than ever. The study of law and economics remains the most rapidly growing movement in legal 4 Message from the Chair 2 Deal Day, Spring 2007. (see page 18). sFcholarship and jurisprudence. Under the sponsorship of the Law 5 Message from the Dean 3 Chancery Court Panel on “Compliance.” From left: Simon M. Lorne, School, the Wharton School, and the Department of Economics Millennium Management, LLC; Janet L. Kelly, ConocoPhillips Company; in Penn’s School of Arts and Sciences, the Institute has played a 6 Message from the Co-Directors Michael L. Wachter, University of Pennsylvania Law School; Hon. Leo E. leading role in this expanding field. Strine, Jr., Delaware Chancery Court (see page 16). Cross-disciplinary research, the cornerstone of the ILE, 7 Roundtable Programs 8 Corporate Governance, Spring 2007 4 Distinguished Jurist lecturer Hon. Richard A. Posner, U.S. Seventh Circuit seeks to influence the national policy debate by analyzing the 10 Corporate Finance, Fall 2006 Court of Appeals and University of Chicago Law School (see page 24). impact of law on the global economy, spotlighting the significant 12 Corporate Law, Spring 2006 role that economics plays in fashioning legal policy. Our innovative 13 Labor Law, Fall 2005 5 Corporate Finance Roundtable, Fall 2006. Front row: William A. Ackman, roundtables and conferences, launched in 1985, complement 14 Corporate Law, Spring 2005 Pershing Square Capital Management, L.P. Middle row: Jill Fisch, Fordham these goals by provoking in-depth and, frequently, ground-breaking University School of Law; Roy J. Katzovicz, Pershing Square Capital 15 Chancery Court Panels examinations of critical issues. These and other programs high - 18 Deal Day, Spring 2007 Management, L.P. Back row: Benjamin Strauss, Pepper Hamilton LLP 19 Deal Day, Spring 2006 and Spring 2005 (see page 10) . lighted in this Annual Report have helped the Institute to stay on the leading edge of this cross-discipline. 20 Lectures 6 University of Pennsylvania Law School, Silverman Hall. The Institute for Law and Economics has unique advantages. 21 Law and Entrepreneurship We draw on the research and teaching strengths of the Law 24 Distinguished Jurist School, the Wharton School, and the Department of Economics.

27 Academic Events Our geographic location is optimal, allowing us to bring together 28 NYU / Penn Joint Conference, Spring 2007 participants from Washington and New York for full-day meet - 29 Penn / NYU Joint Conference, Spring 2006 ings and still get everyone home in time for dinner. We have 30 ILE / Finance Seminars been able to call on the expertise of Penn Law School alumni 31 ILE Seminar Series who occupy key positions in law, business, and government. And, critically, we have an extraordinarily distinguished cadre 32 Publications and Papers of board members and sponsors who are willing to give of their 34 Associate Faculty time and expertise to make our programming a success. In each area, from our public lectures through our closed- 40 Institute Investors door roundtables to our more academically oriented faculty workshops, we are driven by the same mission: to use the tools of economics to understand the law. In a world in which complex legal rules govern economic relationships, the tools of economics provide a way of asking whether the law creates appropriate University of Pennsylvania Law School, Tanenbaum Hall; incentives to encourage actors to maximize social welfare. The Wharton School, Steinberg Hall-Dietrich Hall. Funding for the ILE comes from a diverse group of corpora - tions, law firms, foundations, and individuals who endorse our work each year. Over the past decade, the Institute has more than tripled its donor base to provide ongoing support for the programs discussed in this Annual Report. A list of Institute Investors for 2006 –2007 appears on page 40.

1 board of advisors

BOARD OF ADVISORS 1 M Gil Sparks (left) and Joe Frumkin 2 Barry Abelson 3 Bruce Silverstein Barry M. Abelson Robert L. Friedman Simon M. Lorne John F. Schmutz 4 Pepper Hamilton LLP Chair, 2001 –2007 Vice Chairman and Chair, 1990 –1994 Jerry Rosenfeld Philadelphia, PA Senior Managing Director and Chief Legal Officer Retired Senior Vice President and 5 123 Chief Legal Officer Millennium Management, LLC General Counsel Pam Craven James H. Agger The Blackstone Group L.P. New York, NY E. I. du Pont de Nemours & 6 Chair, 1994 –2001 New York, NY Company, Inc. Don Wolfe Retired Senior Vice President, Michael E. Lubowitz Wilmington, DE 7 General Counsel and Secretary Joseph B. Frumkin Weil, Gotshal & Manges LLP Bob Lonergan Air Products and Chemicals, Inc. Sullivan & Cromwell LLP New York, NY Howard L. Shecter 8 Allentown, PA New York, NY Morgan, Lewis & Bockius LLP J. Anthony Messina Joel Friedlander Philadelphia, PA Alan Alpert Perry Golkin Buchanan Ingersoll & Rooney PC 9 Managing Partner, Member Philadelphia, PA Robert C. Sheehan Casey Cogut M&A Transaction Services Kohlberg Kravis Roberts & Co. Executive Partner 10 Alan Miller Deloitte Tax LLP New York, NY Skadden, Arps, Slate, Meagher & Paul Levy Co-Chairman 456 New York, NY Flom LLP 11 John G. Harkins, Jr. Innisfree M&A Incorporated New York, NY Martha Rees William D. Anderson, Jr. Chair, 1980 –1990 New York, NY 12 Managing Director Harkins Cunningham LLP Victoria E. Silbey G. Daniel O’Donnell Bob Sheehan Goldman, Sachs & Co. Philadelphia, PA Senior Vice President- Dechert LLP 13 New York, NY Legal and General Counsel Leon C. Holt, Jr. Philadelphia, PA Jim Odell SunGard Data Systems Inc. Marshall B. Babson Retired Vice Chairman and 14 James E. Odell Wayne, PA Hughes Hubbard & Reed LLP Chief Administrative Officer Dan O’Donnell ( left) and Jim Agger General Counsel, The Americas New York, NY Air Products and Chemicals, Inc. David M. Silk 15 UBS Investment Bank Allentown, PA Wachtell, Lipton, Rosen & Katz David Silk Michael J. Biondi New York, NY New York, NY 16 Chair, 2007 – William B. Johnson 7 89 John E. Osborn Victoria Silbey Co-Chairman, Investment Banking Chairman Emeritus Bruce L. Silverstein Executive Vice President, 17 Lazard Frères & Co. LLC Whitman Corporation Young Conaway Stargatt & General Counsel and Secretary Howard Shecter New York, NY Chicago, IL Taylor, LLP Cephalon, Inc. 18 Wilmington, DE Fred Blume Stephen J. Jones Frazer, PA Alan Miller Chairman Emeritus Vice President, General Counsel A. Gilchrist Sparks III 19 James A. Ounsworth Blank Rome LLP and Secretary Morris, Nichols, Arsht & Cynthia Kane Managing Director Philadelphia, PA Air Products and Chemicals, Inc. Tunnell LLP 20 The Musser Consulting Group Allentown, PA Wilmington, DE Marshall Babson Charles I. Cogut Wayne, PA Simpson Thacher & Bartlett LLP Cynthia B. Kane Hon. Leo E. Strine, Jr. Morton A. Pierce New York, NY Special Assistant to the Vice Chancellor 10 11 12 Dewey Ballantine LLP Secretary of State Delaware Court of Chancery Isaac D. Corré New York, NY Senior Managing Director Delaware Department of State Wilmington, DE Wilmington, DE Martha L. Rees Eton Park Capital Management Nancy Straus Sundheim New York, NY Vice President and Roy J. Katzovicz Senior Vice President, General Assistant General Counsel Pamela Craven General Counsel Counsel and Secretary E. I. du Pont de Nemours & Chief Administrative Officer Pershing Square Capital Unisys Corporation Company, Inc. Avaya Communications Management, L.P. Blue Bell, PA Wilmington, DE Basking Ridge, NJ New York, NY Jere R. Thomson Myron J. Resnick Richard D’Avino Paul S. Levy Jones Day Retired Senior Vice President and 14 15 16 V.P. Taxes-GE Capital Founder New York, NY 13 Chief Investment Officer and NBC Universal JLL Partners Allstate Insurance Company Hon. E. Norman Veasey General Electric Company New York, NY Northbrook, IL [Chief Justice, Supreme Court of Stamford, CT Delaware, 1992–2004] Robert A. Lonergan Robert H. Rock Kenneth C. Frazier Weil, Gotshal & Manges LLP Executive Vice President, General Chairman and Publisher Executive Vice President and New York, NY, and Wilmington, DE Counsel and Corporate Secretary Directors & Boards General Counsel Rohm and Haas Company Philadelphia, PA Marc Weingarten Merck & Co., Inc. Philadelphia, PA Schulte Roth & Zabel LLP Whitehouse Station, NJ Gerald Rosenfeld New York, NY Joel E. Friedlander Chief Executive Officer Donald J. Wolfe Bouchard, Margules & Friedlander Rothschild North America 17 18 19 20 New York, NY Potter Anderson & Corroon LLP Wilmington, DE Wilmington, DE

2 3 MESSAGE FRMOM THE CHAIR MESSAGE FRMOM THE DEAN

his is my last letter as Chairman of the Board of Advisors as or over twenty years, the Institute for Law and Economics has I step down after serving as Chairman since 2001. An organ - successfully demonstrated the benefits of a cross-disciplinary ization such as the Institute for Law and Economics benefits perspective. Its programs provide a model for how to build if the leadership of its Board of Advisors regularly turns over. bridges between disciplines by creating ties between schools, Fbetween faculty members, between students, and between experts in ITam delighted that Mike Biondi has agreed to succeed me as Chairman. I have known Mike for a long time and I am confident that the ILE will the field from around the world. ILE combines Penn’s greatest strengths thrive under his leadership. in the Law School, the Wharton School, and the Department of Economics It has been extremely gratifying to witness the ILE’s accomplish - to focus on complex questions that concern all of these fields. The Institute ments over the past six years. Its programs have become more relevant proves that when you bring the right people—judges, deal-makers, and important than ever, focusing on the issues that the academic, legal regulators, business leaders, lawyers, bankers, policymakers, academics, and business communities care about. Participation in these programs and more—to convene outside of their own niches, remarkably original by leaders in their fields is at an all-time high. Over the past six years, insights are generated. the ILE has considerably broadened its financial base of support and remarkable position the ILE enjoys today could not have remotely As our world grows more complex every day, the topics the benefit of his expertise, in addition to his numerous contacts in the even more importantly it has garnered the crucial participation and pro - been achieved without the efforts of Ed and Michael. Their tireless Institute addresses are both exciting and relevant. It is no longer enough legal and financial communities. We are also extremely grateful to grammatic advice of its distinguished donors. Today the Institute enjoys dedication to all aspects of the Institute’s work and their ceaseless abil - to approach complicated questions such as appraisal law, corporate him for his leadership support as an Institute Benefactor. an outstanding international reputation for the excellence of its round - ity to come up with timely programs and attract the ideal participants compliance, and the effect of legal enforcement on financial markets I extend the deepest appreciation to all ILE supporters and partic - table conferences, where leaders in business, financial management, to make every program an unqualified success are why the ILE is from solely a legal, economic, or business perspective. Indeed, no sig - ipants for their commitment and investment during the past year. legal practice and academic scholarship candidly discuss the intersection world-renowned as the forum for interesting dialogue on topical issues nificant business issue can be addressed without paying attention to the With the proper support and sponsorship, the Institute for Law and of theory and practice on a host of significant issues facing the business for corporations and their financial and legal advisors. It has been a real underlying economic trends and legal regulations. All of ILE’s partici - Economics has limitless potential for growth and expansion in the community. pleasure to work with Ed and Michael over the past six years. pants contribute to and benefit from the profound understanding such future. We welcome others to join in backing and participating in On behalf of the Board, I want to express our gratitude to every - analysis affords. this extremely worthwhile endeavor. one who has helped the Institute during this past year, whether through In addition to its unique focus, another of the Institute’s strengths financial contributions or by participation in ILE programs. One of the is the variety of programs it offers. The roundtables—ILE’s signature foremost goals of the Institute is to broaden and diversify our founda - events—bring together distinguished members of the bar, judiciary, Robert L. Friedman tion, both in terms of the entities that support us and the individuals government, business world, and academia for open discussion and who take part in our programs. Once again this year, we have served Senior Managing Director and Chief Legal Officer intellectual exploration. ILE’s public lectures by leading jurists, Michael A. Fitts that goal well. The Blackstone Group L.P. executives, and entrepreneurs attract participants from all sectors of Dean, University of Pennsylvania Law School I am delighted to report some superb additions to our Board of the University and from the wider community. During the past year Bernard G. Segal Professor of Law Advisors during the past year. We are pleased to welcome the follow - September 2007 the outstanding talks, workshops, and conferences organized by the ing new members: Richard D’Avino (General Electric Company); Institute covered a wide range of topics and programs, from corporate September 2007 Stephen J. Jones (Air Products and Chemicals, Inc.); Roy J. Katzovicz finance and corporate governance to private equity and investing, hedge (Pershing Square Capital Management, L.P.); Alan Miller (Innisfree funds and labor law, and large-scale entrepreneurship and management. M&A Incorporated); James E. Odell (UBS Investment Bank); Martha L. The Institute’s highly successful seminar series, including sessions Rees (E.I. du Pont de Nemours & Company, Inc.); Victoria E. Silbey jointly sponsored with Wharton’s Finance Department, provides a (SunGard Data Systems Inc.); and Marc Weingarten (Schulte Roth & forum for leading academics from around the country to present their Zabel LLP). These accomplished individuals will greatly enhance the work and receive feedback from the Penn community. work of the Institute and broaden the composition of our Board. Since my cross-disciplinary vision for the Law School and the All of the members of our Board give graciously to the Institute, purposes of the Institute for Law and Economics are so similar, it is not just financially but also of their time and expertise, and I am very personally gratifying to me that the Institute is generously supported grateful for all of their contributions. Very special thanks must be given by contributors who understand the importance of what we do and the to ILE Benefactors Paul Levy, Skadden, Arps, Slate, Meagher & Flom unique position the Institute holds. Many of these contributors also LLP (through Bob Sheehan) and Wachtell, Lipton, Rosen & Katz serve as members of the Institute’s Board of Advisors, helping to plan (through David Silk). Their extraordinary level of financial support the direction and focus of the programs and lending their expertise as enables the Institute to continue to lead the field, and I want to express panelists and commentators for Institute events. The Institute’s extraor - dinary chair, Bob Friedman, has my particular thanks at the end of his our sincere appreciation to each of them. ILE Board Chairs. Top row: Edward B. Rock, University of Pennsylvania Law The one thing that stands out from my six years as Chairman of the highly successful term for his many exceptional contributions and his School; Michael L. Wachter, University of Pennsylvania Law School; proactive role in engaging new participants and supporters. Like all who Board of Advisors is the truly outstanding job that Ed Rock and Michael James H. Agger, Chair, 1994 –2001. Middle row: Leon C. Holt, Jr.; serve as advisors for ILE, Bob contributes his very valuable time and the Wachter have done as co-directors of the Institute. Notwithstanding the John F. Schmutz, Chair, 1990–1994. Bottom row: John G. Harkins, Jr., Chair, terrific financial and programmatic support the Institute has received 1980–1990; Michael A. Fitts, University of Pennsylvania Law School; from all of its Board members, donors and program participants, the Robert L. Friedman, Chair, 2001–2007.

4 5 MESSAGE FROMMTHE CO-DIRECTORS ROUNDTABHLE PROGRAMS

he Institute for Law and Economics presented an ambitious t the heart of the Institute’s work is the program schedule this past year, as is evident in this report. The Fall Corporate Finance Roundtable addressed the issue Roundtable series, which brings together of assessing value in appraisal law, particularly in Delaware members of the Institute’s Associate Faculty (Tpages 10–11). The problems associated with corporate voting—and how to fix them—were the focus of our Spring Corporate Governance and other academics with corporate execu - Roundtable (pages 8–9). We held two Chancery Court programs in the tAives, practicing attorneys, judges, public policymakers, spring, one addressing the corporate board’s compliance function, and and students. Each roundtable provides a forum for lively one dealing with labor’s views on corporate governance (pages 15–16). In addition, we presented three fascinating Law and Entrepreneurship discussion of current issues that emerge from the research lectures (pages 21–22). In the fall, Henry R. Silverman, Chairman and and teaching of the Institute. CEO of the Realogy Corporation, spoke about the problems of manage - Finally, our academic programs build on our relationship with the ment in the 21st century, and Pamela Daley, the Senior Vice President Wharton Finance Department to bring leading scholars from both disciplines Over the years, the Institute has sponsored roundta - for Corporate Business Development at General Electric, lectured on to Penn. These programs, along with the joint conferences with NYU, con - bles on a broad range of topics—including labor law and tribute to creating a network of scholars from around the world who are large-scale entrepreneurship at GE. In the spring, board member Isaac D. bankruptcy, as well as corporate law, governance, and Corré, Senior Managing Director for Eton Park Capital Management, considering the question of how law and economics influence each other. explained to the audience how he uses his legal background to bet on The Institute’s greatest strength lies in the quality of our supporters finance—engaging the interest and participation not only and their active, enthusiastic participation in our programs. Our board legal risk. For our Distinguished Jurist lecture, the Honorable Richard A. of scholars but also of leaders in the business and public Posner from the U.S. Seventh Circuit Court of Appeals and the University members and sponsors make our programs possible, both as key participants of Chicago Law School spoke to an overflowing audience on “The and with their financial support. We would particularly like to acknowledge sectors. The high caliber of the participants guarantees that Embattled Corporation” (page 24). Finally, in May, we held a Deal our wonderful outgoing board chair, Bob Friedman of The Blackstone each affair is intense and informative. ILE’s longstanding Day program in New York City, where Brian Gavin, Senior Managing Group, for his dedicated and enthusiastic work over the past six years. Bob Director at The Blackstone Group L.P., explained how Blackstone has played a critical role building ILE’s support base, and we are extraordi - off-the-record policy for the roundtables is often the impetus evaluates the hedge funds it invests in (page 18). narily grateful for all of his efforts. In addition, we are pleased to welcome for an energetic and wide-ranging exchange of ideas among the new chair, Mike Biondi of Lazard Frères & Co. With his assistance, we Our more “academic” programs also flourished. The Law and Finance some of the nation’s most accomplished scholars, attorneys, series, held jointly with The Wharton School’s Finance Department, con - will build on the successes already accomplished, and expand them. tinued with presentations by Luigi Zingales (Robert C. McCormack Professor We are also delighted to have added eight new members to the board, and business people. of Entrepreneurship and Finance, University of Chicago, Graduate School of and we welcome them: Richard D’Avino (General Electric Company); Business) and John C. Coffee, Jr. (Adolf A. Berle Professor of Law, Columbia Stephen J. Jones (Air Products and Chemicals, Inc.); Roy J. Katzovicz University School of Law), (page 30). In February, ILE co-sponsored the (Pershing Square Capital Management, L.P.); Alan Miller (Innisfree M&A third annual Penn/NYU Law and Finance Conference, a joint venture of Incorporated); James E. Odell (UBS Investment Bank); Martha L. Rees Penn Law, Wharton Finance, New York University School of Law, and (E. I. du Pont de Nemours & Company, Inc.); Victoria E. Silbey (SunGard the Finance Department of the Leonard N. Stern School of Business (page Data Systems Inc.); and Marc Weingarten (Schulte Roth & Zabel LLP). 28). And throughout the year scholars from around the country came to We would also like to express congratulations to our Program Director, present papers in the Law and Economics seminar series, co-organized this Bonnie Clause, who retired this past May after seven years of committed serv - year by Penn Law professors Matthew Adler and Chris Sanchirico (page 31). ice to the Institute. Bonnie’s hard work and many talents were indispensable This range of programs provides for an extraordinary cross-fertiliza tion in building the Institute to its current level of success. We offer her our thanks of ideas. For the Corporate Roundtables, we gather together academics, judges, and best wishes for her future. At the same time, we welcome Vicki Hewitt business leaders, lawyers, investment bankers, private equity fund managers, who will pick up where Bonnie left off as we move forward. hedge fund managers and policymakers for intensive discussion of critical We also extend our heartfelt thanks to all of our supporters current issues. In our programs with the Delaware Chancery Court, we are for bringing your perspective, your ideas, your experience, and your able to focus on key issues arising in Delaware corporate law with the active expertise to all that we do. Your participation is necessary to realize participation of students, followed by dinners where the conversation continues the Institute’s purpose and objectives, and it makes our job as Institute informally. The Deal Day series gives an audience of professionals, academics directors immensely satisfying and worthwhile. and students an opportunity to hear presentations at the market’s cutting edge. In our two public lecture series, we recognize leaders who have played important roles in fashioning law, economic policy and business strategy. Our Law and Entrepreneurship speakers are for the most part law graduates who have developed their careers in unique ways, providing exemplary models Edward B. Rock Michael L. Wachter for our students of the value of a legal education. The Distinguished Jurist Co-Director, Co-Director, series brings to Penn judges and regulators who work at the cutting Institute for Law and Economics Institute for Law and Economics edge of business regulation. These lectures have a wide appeal through - Saul A. Fox Distinguished Professor William B. Johnson Professor out the university, drawing students and faculty from all sectors, as of Business Law of Law and Economics well as members of the ILE advisory board and the larger community. september 2007

6 7 roundtable programs roundtable programs

The Hanging Chads of years, activist institutional investors 1 Corporate Governance Corporate Voting have used the proxy process to advo - David C. McBride, Young Conaway 20 april 2007 Marcel Kahan cate changes in corporate policies, Stargatt & Taylor, LLP, and James E. New York University School of Law such as repeal of takeover defenses Odell, UBS Investment Bank. Edward B. Rock and changes in board composition or University of Pennsylvania Law School managerial compensation. In January 2 2003, the U.S. Security and Exchange William D. Anderson, Jr., Goldman Welcome Afternoon Session Never has voting been more impor - Commission (SEC) required mutual Sachs. Michael A. Fitts Panel Discussion on tant in corporate law. With greater funds to disclose how they voted on Bernard G. Segal Professor of Law What Is Wrong with Corporate activism among shareholders, there proxy proposals presented at share - 3 Dean, University of Pennsylvania Voting and How to Fix It are numerous close contests over holder meetings. This rule followed Front row: Alan Miller, Innisfree Law School mergers, director elections, executive a series of significant federal govern - M&A Incorporated. Middle row: 1 2 Moderators compensation and shareholder pro - ment interventions into firms’ corpo - Jennifer Gae Hill, Sydney Law Morning Session Edward B. Rock posals. But is the basic technology of rate governance in the Sarbanes-Oxley School, University of Sydney. The Hanging Chads of Corporate Voting Saul A. Fox Distinguished Professor corporate voting adequate to the task? Act (SOX), Congress’ response to the Back row: Richard Mertl, JD’08 Marcel Kahan of Business Law In this article, the authors first scandals of 2001-02 that began with University of Pennsylvania Law George T. Lowy Professor of Law Michael L. Wachter describe the incredibly complicated the implosion of Enron. School. New York University School of Law William B. Johnson Professor of Law system of U.S. corporate voting, a This paper examines the impact Edward B. Rock and Economics complexity that is driven by the under - of the mutual fund voting disclosure 4 Saul A. Fox Distinguished Professor University of Pennsylvania Law School lying custodial ownership structure. rule on corporate governance by exam - Front row: Cary I. Klafter, Intel of Business Law They then identify three ways in which ining its effect on proxy voting out - Corporation; James F. Duffy, NYSE University of Pennsylvania Law School Panelists things predictably go wrong: pathologies comes. To this end, the authors Regulation, Inc. Back row: Edmund Hon. Carolyn Berger of complexity; pathologies of ownership; construct a sample of firms that expe - W. Kitch, University of Virginia Commentators Justice and pathologies of misalignment (of rienced similar proposals, sponsored School of Law; Lynn A. Stout, Henry T. C. Hu Supreme Court of Delaware interests), and review the current legal either by management or sharehold - University of California-Los Angeles Allan Shivers Chair in the Law James F. Duffy 3 4 treatment of these pathologies. The ers, both before and after the 2003 School of Law; Marcel Kahan, New of Banking and Finance Executive Vice President and authors then consider a variety of direc - rule change. They then examine the York University School of Law; Peter The University of Texas Law School General Counsel tions for reform, ranging from incremental difference in voting outcomes before Friz, Institutional Shareholder Hon. Leo E. Strine, Jr. NYSE Regulation, Inc. modifications to fundamental redesign. relative to after this rule change, partic - Services. Vice Chancellor Cary I. Klafter The paper shows that, absent a ularly in relation to mutual fund own er - Delaware Court of Chancery Vice President, Legal and fundamental reconstruction of the ship, controlling for firm characteristics, 5 Government Affairs ownership structure, the existing system including profitability, non-mutual Front row: Charles I. Cogut, Institutional Investors and Proxy Intel Corporation will continue to be noisy, imprecise and fund institutional ownership and Simpson Thacher & Bartlett LLP; Voting: The Impact of the 2003 Mutual Alan Miller disturbingly opaque. Given the prob - governance features. Hon. Carolyn Berger, Supreme Fund Voting Disclosure Regulation Co-Chairman lems with the existing system, and the The authors find that voting support Court of Delaware; John C. Wilcox, Roberta Romano Innisfree M&A Incorporated difficulties in improving it, one should for management has been declining for TIAA-CREF; David K. Musto, Oscar M. Ruebhausen Professor of Law David K. Musto be skeptical of calls to expand the close to a decade and that mutual The Wharton School, University of 6 Yale Law School Associate Professor of Finance opportunities for shareholder voting funds appear to support management Pennsylvania. Middle row: Roy J. The Wharton School in corporate governance. More share - less frequently than other investors. Katzovicz, Pershing Square Capital Commentators University of Pennsylvania holder power in corporate elections will However, there is no evidence that the Management, L.P.; Yair J. Listokin, Peter Friz A. Gilchrist Sparks III generate more close outcomes and will rule decreased mutual funds’ voting Yale Law School. Back row: Jonathan Vice President of Global Voting and Morris, Nichols, Arsht & Tunnell LLP impose even more stress on an already in support of management. Indeed, Charles Lipson, James E. Beasley Transaction Services John C. Wilcox overstressed system. some of the data suggest that mutual School of Law, Temple University. Institutional Shareholder Services Senior Vice President and Head funds’ support for management Lynn A. Stout of Corporate Governance Institutional Investors and Proxy increased after the rule’s adoption, 6 5 Paul Hastings Professor of Corporate TIAA-CREF Voting: The Impact of the 2003 Mutual particularly for executive equity incentive A. Gilchrist Sparks III, Morris, and Securities Law Fund Voting Disclosure Regulation compensation plan proposals. This Nichols, Arsht & Tunnell LLP. University of California-Los Angeles Martijn Cremers finding is contrary to the expectation School of Law Yale School of Management of disclosure rule advocates, who con - Roberta Romano tended that funds voted with manage - Yale Law School ment due to conflicts of interest and would reduce that support once their The proxy voting process is thought to votes were transparent. be a key mechanism by which share - holders monitor corporate managers. It is the means by which managers are replaced through proxy contests over director elections, and by which their major plans are reviewed as state law and stock exchange rules require shareholder approval of significant transactions. Moreover, in recent

8 9 roundtable programs roundtable programs

The Short and Puzzling Life of Fortuitously, in some cases, where Corporate Finance the ‘Implicit Minority Discount’ allegations of incumbent board wrong - 8 december 2006 in Appraisal Law doing are combined with the appraisal Lawrence Hamermesh case, the IMD may result in the correct Ruby R. Vale Professor of Corporate answer when it offsets an incumbent and Business Law controller’s wrongful acts. But, that Widener University School of Law result can be achieved more directly, Welcome Afternoon Session Michael L. Wachter by accepting petitioner’s evidence that Michael A. Fitts Panel Discussion on William B. Johnson Professor of Law the respondent’s anticipated cash flow Bernard G. Segal Professor of Law Delaware Appraisal Law: Challenges and Economics projections or other operational per - Dean, University of Pennsylvania and Proposals for Change University of Pennsylvania Law School formance measures are too low. In Law School short, the authors’ core submission is Moderators The financial/empirical assertion of that the Delaware courts, in their valu - 1 Morning Session Edward B. Rock 2 the implicit minority discount, or IMD, ation of shares (particularly in squeeze The Short and Puzzling Life of Saul A. Fox Distinguished Professor is quite simple: it posits that, no mat - out mergers), should abandon the the ‘Implicit Minority Discount’ of Business Law ter how liquid and informed the finan - IMD and rely instead on a more direct in Appraisal Law Michael L. Wachter cial markets may be, all publicly traded approach to addressing concerns Lawrence Hamermesh William B. Johnson Professor of Law shares persistently and continuously about past or future abuse by control - Ruby R. Vale Professor of Corporate and Economics trade in the market at a substantial ling stockholders. The arsenal of cor - and Business Law University of Pennsylvania Law School discount relative to their proportionate porate finance techniques available to Widener University School of Law share of the value of the corporation. measure going concern value, correctly Michael L. Wachter Panelists This discount, it is said, arises because applied, would award shareholders the William B. Johnson Professor of Law William A. Ackman the stock prices on national security correct amount. and Economics Managing Member markets represent “minority” posi - University of Pennsylvania Law School Pershing Square Capital Management, L.P. tions, and minority positions trade at a Robert W. Holthausen discount to the value of the company’s The Value of Control: Implications for Commentators Nomura Securities Company equity. The consequence of the IMD Control Premia, Minority Discounts, Thomas J. Allingham II Professor of Accounting and Finance in appraisal proceedings is limited in and Voting Share Differentials 3 4 Skadden, Arps, Slate, Meager & Chair, Department of Accounting scope, but substantial in scale: in Aswath Damodaran Flom LLP The Wharton School applying a valuation technique (known Professor of Finance and Andrew Metrick University of Pennsylvania as “comparable companies analysis,” David Margolis Teaching Fellow Associate Professor of Finance Hon. Stephen P. Lamb or “CCA”) that estimates subject com - Stern School of Business The Wharton School Vice Chancellor pany value by reference to market trad - New York University University of Pennsylvania Delaware Court of Chancery ing multiples observed in shares of David C. McBride comparable publicly traded firms, It is not uncommon in private com - The Value of Control: Implications for Young Conaway Stargatt & Taylor, LLP the result must be adjusted upward pany and acquisition valuations to see Control Premia, Minority Discounts, A. Gilchrist Sparks III by adding a premium to offset the large premiums attached to estimated and Voting Share Differentials Morris, Nichols, Arsht & Tunnell LLP “implicit minority discount” asserted value to reflect the “value of control.” Aswath Damodaran Randall S. Thomas to exist in the comparable companies’ But what, if any, is the value of control Professor of Finance and John S. Beasley II Professor of Law share prices. In the last several years, in a firm, and if it exists, how do we go David Margolis Teaching Fellow and Business the size of this upward adjustment about estimating it? This paper exam - Stern School of Business Vanderbilt University Law School (and the supposed discount that it ines the ingredients of the control pre - New York University “corrects”) has been routinely fixed, mium. In particular, the author argues even without supporting expert testi - that the value of controlling a firm has 6 Commentators 5 mony, at 30 percent. to lie in being able to run it differently John C. Coates Not a single piece of financial or (and better). Consequently, the value John F. Cogan, Jr. Professor of Law empirical scholarship affirms the core of control will be greater for poorly and Economics 1 3 5 premise of the IMD that public com - managed firms than well run ones. Harvard Law School Front row: Hon. Donald F. Parsons, Jr., Foreground: Eileen Nugent, Skadden, Front row: Merritt B. Fox, Columbia pany shares systematically trade at a The value of control has wide ranging Joel E. Friedlander Delaware Court of Chancery; David C. Arps, Slate, Meagher & Flom LLP. Law School; Bruce L. Silverstein, substantial discount to the net present implications beyond acquisitions. The Bouchard Margules & Friedlander McBride, Young Conaway Stargatt & Background: Robert L. Friedman, Young Conaway Stargatt & Taylor, value of the corporation. To the con - paper shows that the expected likeli - Taylor, LLP; Hon. Stephen P. Lamb, The Blackstone Group L.P. LLP; Roberta Romano, Yale University trary, the one treatise on which the hood of control changing is built into Delaware Court of Chancery. Middle row: Law School. Back row: Adam C. Delaware courts have relied in invok - the price of every publicly traded com - Merritt B. Fox, Columbia Law School; 4 Pritchard, University of Michigan Law ing the IMD has, in its most recent pany and that this provides a way of Bruce L. Silverstein, Young Conaway Front row: William A. Ackman, School; David G. Clarke, The Griffing edition, explicitly warned against rou - measuring the payoff to strong corpo - Stargatt & Taylor, LLP. Back row: James Pershing Square Capital Management, Group, Inc.; Martin S. Lessner, Young tinely applying an upward adjustment rate governance. It also argues that G. McMillan, Bouchard Margules & L.P. Middle row: Jill Fisch, Fordham Conaway Stargatt & Taylor, LLP. in order to offset some supposed IMD. getting a better handle on the value of Friedlander. University School of Law; Roy J. control can allow one to better explain Katzovicz, Pershing Square Capital 6 the dif ferences between voting and 2 Management, L.P. Back row: Benjamin Roy J. Katzovicz, Pershing Square non-voting share prices and the minority Michael E. Lubowitz, Weil, Gotshal & Strauss, Pepper Hamilton LLP. Capital Management, L.P. discount in private company valuations. Manges LLP.

10 11 roundtable programs roundtable programs

Corporate Law Labor Law 28 april 2006 11 november 2005

Welcome Afternoon Session Welcome Afternoon Session Michael A. Fitts Panel Discussion on Michael A. Fitts Panel Discussion on Bernard G. Segal Professor of Law Regulating Hedge Funds Bernard G. Segal Professor of Law Bargaining Before Recognition Dean, University of Pennsylvania to Protect Investors Dean, University of Pennsylvania in a Global Market: Law School Law School How Much Will It Cost? 1 Moderators Morning Session Edward B. Rock 1 Morning Session Moderators Hedge Funds in Corporate Saul A. Fox Distinguished Professor Decline of Labor Unions Marshall B. Babson Governance and Corporate Control of Business Law in the United States Hughes Hubbard & Reed LLP Marcel Kahan Michael L. Wachter Michael L. Wachter Edward B. Rock George T. Lowy Professor of Law William B. Johnson Professor of Law William B. Johnson Professor Saul A. Fox Distinguished Professor New York University School of Law and Economics of Law and Economics of Business Law Edward B. Rock University of Pennsylvania Law School University of Pennsylvania Law School University of Pennsylvania Saul A. Fox Distinguished Professor Law School Commentators of Business Law Panelists 2 3 University of Pennsylvania Law School Thomas H. Bell Charles I. Cohen Panelists 2 3 Simpson Thacher & Bartlett LLP Partner, Labor and Employment James A. Gross Commentators Isaac D. Corré Morgan, Lewis & Bockius LLP Professor of Labor Policy & William D. Anderson, Jr. Senior Managing Director Cynthia Estlund Labor Arbitration Managing Director Eton Park Capital Management Isidor and Seville Sulzbacher School of Industrial and Goldman, Sachs & Co. Harvey Goldschmid Professor of Law Labor Relations Eric L. Talley Dwight Professor of Law Columbia Law School Cornell University The Law School Columbia University School of Law Jonathan P. Hiatt University of Southern California Simon M. Lorne A Reduction in the Disadvantages General Counsel Millennium Management, LLC of British Unionism? AFL-CIO 4 5 Vote Trading and Robert Plaze John T. Addison Peter Hurtgen Information Aggregation Associate Director Hugh C. Lane Professor Morgan, Lewis & Bockius LLP 4 Christopher Geczy Division of Investment Management 1 3 of Economic Theory (former chairman, National Labor Assistant Professor of Finance Securities and Exchange Commission Front row, left to right: Gerald Front: Thomas Bell, Simpson Thacher & Moore School of Business, Relations Board) The Wharton School Rosenfeld, Rothschild North America; Bartlett; Robert Plaze, Securities and University of South Carolina and Hon. Wilma Liebman University of Pennsylvania Jedd Wider, Morgan Lewis; John Exchange Commission. Back: Donald Universidade de Coimbra, Portugal Member David K. Musto Schmutz, ILE Board of Advisors; Langevoort, Georgetown University Law National Labor Relations Board Associate Professor of Finance Jennifer Adams, Jones Day. Back: Center; Robert Rasmussen, Vanderbilt Commentators The Wharton School Adam Reed, University of North University Law School; Sean Griffith, Paul Davies University of Pennsylvania Carolina; Susan Christoffersen, McGill University of Connecticut School of Law. Cassel Professor of Commercial Law University; Christopher Geczy, The London School of Economics 4 Commentators Wharton School; David Musto, The John Wilhelm Donald J. Wolfe, Jr., Potter Anderson Henry T. C. Hu Wharton School. President, Hotel Division 5 & Corroon; David Silk, Wachtell, Alan Shivers Chair in UNITE HERE the Law of Banking and Finance 2 Lipton, Rosen & Katz; Robin Sampson, Drinker Biddle & Reath. The University of Texas Law School David McBride, Young Conaway 1 4 Hon. Leo E. Strine, Jr. Stargatt & Taylor; Eileen Nugent, 5 From left: Pamela Craven, Avaya Inc; Left to right: Patrick Szymanski, Vice Chancellor Skadden, Arps, Slate, Meagher & Simon Lorne, Millennium Management; Hon. Wilma B. Liebman, National International Brotherhood of Teamsters; Delaware Court of Chancery Flom. Back: Eric Talley, The Law Harvey Goldschmid, Columbia Law Labor Relations Board; Jonathan Hon. Robert Battista, National Labor School, University of Southern School. Background: Robert Thompson, Hiatt, AFL-CIO. Relations Board; Betsey Engel, California; William D. Anderson, Jr., Vanderbilt University Law School; International Union, UAW. Goldman Sachs; Bruce Silverstein, 2 Merritt Fox, Columbia Law School. Young Conaway Stargatt & Taylor. Left, John Wilhelm, UNITE HERE; right, 5 Arthur Rosenfeld, National Labor Marshall Babson, Hughes Hubbard & Relations Board. Reed. Background: Edward B. Rock, University of Pennsylvania 3 Law School. Keith Hylton, Boston University School of Law.

12 13 roundtable programs roundtable programs

Corporate Law Chancery Court Panels Panelists and Dinner Commentators Damon Silvers 15 april 2005 Richard C. Ferlauto Associate General Counsel Director of Pension and Benefit Policy American Federation of Labor and American Federation of State, County Congress of Industrial Organizations and Municipal Employees (AFSCME) (AFL-CIO) Michael Musuraca Assistant Director, Department Welcome Afternoon Session ILE’s series of Chancery Court Panels Chancery Court Panels of Research and Negotiations Michael A. Fitts Panel Discussion on was initiated in fall 2003 as a component District Council 37, American Bernard G. Segal Professor of Law Hedge Funds, Private Equity, and of a Penn Law course on corporate law Moderators Federation of State, County and Dean, University of Pennsylvania Control Contests 1 2 and finance co-taught by Leo E. Strine, Vice Chancellor Leo E. Strine, Jr. Municipal Employees (AFSCME) Law School Jr., Vice Chancellor of the Delaware Chancery Court of Delaware Moderators Chancery Court, and Michael L. Wachter, Michael L. Wachter Morning Session Edward B. Rock William B. Johnson Professor of Law University of Pennsylvania Law School The Fair Value of Cornfields in Saul A. Fox Distinguished Professor and Economics. The topic of this Delaware Appraisal Law of Business Law year’s seminar was the evolving role 5 April 2007 Lawrence A. Hamermesh Michael L. Wachter of independent directors in corporate Ruby R. Vale Professor of Corporate William B. Johnson Professor governance. Labor’s Views on Corporate and Business Law of Law and Economics Two special sessions of the class Governance and the Role of the Widener University Law School University of Pennsylvania Law School were opened to the entire University Corporate Board: How Has Labor’s Michael L. Wachter 3 4 community, as well as to ILE board Perspective Changed over the William B. Johnson Professor Panelists members and invited guests, under Decades? What Are the Current of Law and Economics William D. Anderson, Jr. the auspices of ILE. These open sessions Objectives? University of Pennsylvania Law School Managing Director featured panels of lawyers, corporate 1 2 Goldman, Sachs & Co. general counsels, and representatives Before World War II, unions were not Commentators Isaac D. Corré from the labor community who shared a significant force in investment markets. Michael Klausner Senior Managing Director their wealth of experience in issues of Between 1945 and 1980, there was an Nancy and Charles Munger Professor Eton Park Capital Management corporate governance and compliance. enormous growth in union pension of Business; Professor of Law Saul A. Fox Since the topics combine areas of finance funds. Today, more than $5 trillion is Associate Dean for Research Chief Executive Officer and law, faculty of The Wharton School invested on behalf of unionized workers, and Academics Fox Paine & Company, LLC often participate actively in the Chancery more than $400 billion of which is in Stanford Law School Robert L. Friedman Court Programs. union-sponsored pension funds. Since 5 Bruce L. Silverstein Senior Managing Director and The Chancery Court panels are the mid-1990s, the labor movement Young Conaway Stargatt & Taylor, LLP Chief Legal Officer followed by Corporate Governance has sought to define a governance The Blackstone Group L.P. Dinners with further commentary and agenda for workers as long-term investors 1 4 The Public and Private Faces of Simon M. Lorne discussion. ILE’s Corporate Governance that is distinct from the agendas of 3 Derivative Lawsuits Vice Chairman and Chief Legal Officer Left: Saul A. Fox, Fox Paine & William D. Anderson Jr., Goldman Dinners—whether as stand-alone both self-interested managers and Randall S. Thomas Millennium Management, LLC Company; Andrew Metrick, The Sachs. Background, Michael events or as adjuncts to lectures, short-term investors like day traders, Professor of Law Andrew Metrick Wharton School. Background, Klausner, Stanford Law School. presentations, Chancery Court panels, leveraged buyout players and hedge Merritt B. Fox, Columbia Law Vanderbilt University Law School Associate Professor of Finance 5 and other formal programs—provide funds. This perspective is now being School. The Wharton School Left: Robert L. Friedman, The an opportunity for further off- the-record challenged by the rise of hedge funds Commentators Alan Miller commentary and conversation among and private equity. 2 Blackstone Group; Simon M. Jill E. Fisch Co-Chairman presenters and members of the board This program focused on the evo - Left: Albert S. Dandridge III, Lorne, Millennium Management. Alpin J. Cameron Professor of Law Innisfree M&A Incorporated of advisors, their invited colleagues, and lution of labor’s perspectives about Schnader Harrison Segal & Lewis; Director, Center for Corporate, the Institute’s associate faculty. Each corporate directors and officers and David M. Silk, Wachtell, Lipton, Securities and Finance Law dinner features focused commentary what corporate governance initiatives Rosen & Katz. Fordham University School of Law on a current issue in corporate gover - are in labor’s best interests as owners 4 David M. Silk 3 nance, followed by a general discus - and stakeholders. In particular, the Wachtell, Lipton, Rosen & Katz From left: Saul A. Fox, Fox Paine & sion moderated by ILE co-directors program discussed labor’s views of Company; Andrew Metrick, The Edward Rock and Michael Wachter. corporate takeovers, executive pay, and 1 3 Wharton School; Isaac D. Corré, director elections—and highlighted Damon Silvers, AFL-CIO. Michael L. Wachter, University of Eton Park Capital Management; labor’s agenda for the upcoming proxy Pennsylvania Law School; Hon. Leo William D. Anderson Jr., Goldman season. 2 E. Strine, Jr., Delaware Chancery Court; Sachs. Hon. Leo E. Strine, Jr., Delaware Damon Silvers, AFL-CIO; Michael Chancery Court and Damon Silvers, Musuraca, AFSCME; Richard C. AFL-CIO. Ferlauto, AFSCME.

4 Michael Musuraca, AFSCME and Richard C. Ferlauto, AFSCME.

14 15 roundtable programs roundtable programs

Chancery Court Panels Chancery Court Panels Chancery Court Programs Technicolor 4 Toys “R” Us Front row: Donald J. Wolfe, Jr., 1 Potter Anderson & Corroon; A. Left to Right: Thomas J. Allingham II, Gilchrist Sparks III, Morris, Nichols, Skadden, Arps, Slate, Meagher & Arsht & Tunnell. Second row: John 13 March 2007 Panelists and Dinner Commentators Flom; Robin Rankin, Credit Suisse Schmutz, ILE Board of Advisors; 4 April 2006 18 February 2006 Mark J. Gentile First Boston; John Finley, Steven Reed, Harkins Cunningham; Simpson Thacher & Bartlett. Structuring the Board’s Compliance Richards, Layton & Finger Panel Discussion of the “The Technicolor Saga” Eileen Nugent, Skadden, Arps, Function: Should the Corporation Janet L. Kelly Toys “R” Us Litigation Discussion with Members of the 2 Slate, Meagher & Flom. Continue to ‘Dump It into Audit’ or Deputy General Counsel Delaware Chancery Court Left to Right: John Finley, Simpson Are Fresher Approaches Needed? ConocoPhillips Company Toys “R” Us is a fascinating case, 5 Thacher & Bartlett; Hon. Leo E. Simon M. Lorne recently decided by Vice Chancellor Leo The Technicolor saga began in 1983 fol - William T. Allen, New York Strine, Jr., Delaware Chancery How should corporations best organize Vice Chairman and 1 Strine, involving the merger of the com - lowing a cash-out merger of the minority University School of Law (former Court; Michael Wachter, University their board committees and officer Chief Legal Counsel pany with an acquisition vehicle of KKR. shareholders of Technicolor Incorporated Delaware Chancellor); William B. of Pennsylvania Law School. structure to address the myriad, Millennium Management, LLC The plaintiffs asserted that the board of by a company controlled by Ron Chandler III, Chancellor, Delaware increasingly complex and diverse legal Robert H. Mundheim directors failed to act reasonably in pur - Perelman. There were five remands by 3 Court of Chancery. and financial mandates that corporations Shearman & Sterling LLP suit of the highest attainable value. The the Delaware Supreme Court to the Front: Joel Friedlander, Bouchard 6 must contend with? The traditional Victoria E. Silbey Toys “R” Us case is thus a fiduciary Court of Chancery and two appraisal Margules & Friedlander; Bruce Leo E. Strine, Jr., Delaware Court of boardroom approach to addressing legal Senior Vice President-Legal and duty suit rather than an appraisal case. trials, the first in 1989 before Chancellor Silverstein, Young Conaway Chancery; Michael Wachter, University and financial compliance—to “dump General Counsel However, the case provides an excellent Allen. The litigation finally ended with a Stargatt & Taylor. Background, of Pennsylvania Law School. it into audit,” which is what Enron did— SunGard Data Systems, Inc. study, filled with intricate corporate val - Chancery Court opinion from Chancellor left: David Silk, Wachtell, Lipton, remains the prevalent model. This pro - uation principles and showing the inter - Chandler in 2004. The appraisal remedy, Rosen & Katz. gram focused on whether that is the play of fiduciary duty suits and valuation. available in a cash-out merger, has most prudent way to use the board’s The panel and audience on April 4 become more frequently utilized and 2 3 talents and to organize the corporation’s brought together the major participants thus more frequently debated over the compliance function, and whether there representing the defendant and the last several years as a result of the are other models that might be more plaintiff in Toys “R” Us. “going- private” boom. effective and efficient. One alternative is to carve out areas, such as tax or spe - Panelists and Dinner Commentators Panelists and Dinner Commentators cial public policy issues, and give them Thomas J. Allingham II Hon. William T. Allen to board committees that have special - Skadden, Arps, Slate, Former Chancellor ized knowledge of the areas. The weak - Meagher & Flom Delaware Chancery Court ness of this plan is that compliance William D. Anderson, Jr. Hon. William B. Chandler III 1 issues are often related. The advantage Goldman, Sachs & Co. Chancellor of leaving compliance issues with the John G. Finley Delaware Chancery Court audit committee is that a single com - Simpson Thacher & Bartlett LLP Hon. Leo E. Strine, Jr. 4 5 mittee benefits from having knowledge Robin M. Rankin Vice Chancellor of the full array of compliance issues Credit Suisse First Boston Delaware Chancery Court the corporation is facing. 1 3 Simon M. Lorne, Millennium Robert H. Mundheim, University Management, LLC; Janet L. Kelly, of Pennsylvania and Shearman & 23 ConocoPhillips Company; Michael L. Sterling. Wachter, University of Pennsylvania 4 Law School; Hon. Leo E. Strine, Jr., Pamela F. Craven, Avaya Inc. Delaware Chancery Court. 5 2 Eileen Nugent, Skadden, Arps, Victoria Silbey, SunGard Data Slate, Meagher & Flom. Systems Inc.

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16 17 roundtable programs roundtable programs

Deal Day Deal Day in New York Deal Day Deal Day in Israel Deal Day in New York Spring 2007 1 4 spring 2006 and spring 2005 1 1 Timothy L. Barefield, Pershing Timothy L. Barefield, Pershing Saul A. Fox, Fox Paine & Company. Michael J. Biondi, Lazard Frères & Square Capital Management, L.P.; Square Capital Management, Co. LLC; left, Joseph D. Gatto, George J. Mazin, Dechert LLP; L.P.; George J. Mazin, Dechert 2 Goldman, Sachs & Co. Gerald Rosenfeld, Rothschild LLP; Gerald Rosenfeld, Hon. Aharon Barak, President, Deal Day taps the expertise of our board DEAL DAY in New York North America; Michael L. Wachter, Rothschild North America. DEAL DAY in ISRAEL DEAL DAY in NEW YORK Israel Supreme Court; and Hon. 2 and sponsors to examine in depth cur - 4 May 2007 University of Pennsylvania Law 25 May 2006 23 May 2005 Myron T. Steele, Chief Justice, Front, from left: Morton A. Pierce, rent opportunities and challenges. The Penn Club of New York School; Edward B. Rock, University 5 Tel Aviv, Israel The Penn Club of New York Delaware Supreme Court. Dewey Ballantine; Michael C. Bond, By looking at the details of complex of Pennsylvania Law School. George J. Mazin, Dechert LLP; Avaya Inc.; Pamela F. Craven, Avaya Co-Sponsored by 3 transactions, we examine cutting edge Moderators Gerald Rosenfeld, Rothschild Moderator Inc. Background: John S. Stroebel, Institute for Law and Economics From left: Theodore H. Mirvis, Wachtell, issues at the intersection of law, Edward B. Rock North America; Michael L. Rohm and Haas Company; Simon M. 2 Kiryat Ono College of Law Edward B. Rock Lipton, Rosen & Katz; Donald J. Wolfe, finance, governance and operations. Saul A. Fox Distinguished Professor Wachter, University of Pennsylvania Lorne, Millennium Management. Eric L. Talley, School of Law - Office of the Saul A. Fox Distinguished Professor Jr., Potter Anderson & Corroon; David of Business Law Law School; Edward B. Rock, The goal of these programs is to allow Boalt Hall, University of Delaware Secretary of State of Business Law C. McBride, Young Conaway Stargatt & 3 Michael L. Wachter University of Pennsylvania Law the participants to understand the California, Berkeley. University of Pennsylvania Law School Taylor ; Zohar Goshen, Columbia Law Paul S. Levy, JLL Partners; “guts of the deal” as a way of under - William B. Johnson Professor School; Brian Gavin, The Moderators Morning Session School and Academic College, Kiryat Ono; right, Alan Alpert, Deloitte Tax. standing the issues at the cutting of Law and Economics 3 Blackstone Group L.P. Zohar Goshen Lazard’s Representation of the Hon. Myron T. Steele, Delaware Supreme edge of deal making. University of Pennsylvania Law School Brian Gavin, The Blackstone Columbia Law School and 4 Special Committee in the Battle for Court; Cynthia B. Kane, Delaware In May 2007, Brian Gavin, head Group L.P. Academic College, Kiryat Ono John E. Osborn, Cephalon, Inc. Hollywood Entertainment (Movie Department of State; Hon. Stephen P. of Blackstone’s hedge fund monitoring Monitoring Hedge Funds: Edward B. Rock Gallery/Blockbuster/Leonard Green Lamb, Delaware Chancery Court. group, presented Blackstone’s approach Investor Due Diligence University of Pennsylvania Law School Partners/Icahn) to evaluating hedge funds in its $20 Morning Session billion fund of hedge funds. Presentation by What Are American Private Presentation by In previous years, we’ve held Deal Brian Gavin Equity Firms Looking for in Michael J. Biondi Days in New York, London and Tel Senior Managing Director Israeli Companies? Co-Chairman of Investment Banking Aviv that have examined international The Blackstone Group L.P. The 2002 Acquisition of Paradigm Lazard Frères & Co. LLC and domestic private equity transactions, Geophysical by Fox Paine Commentators the role of the investment banker for a Commentators Presentation by Joseph B. Frumkin special committee in a management Timothy L. Barefield Saul A. Fox Sullivan & Cromwell LLP buyout, as well as the role of a spe - Chief Operating Officer Fox Paine & Company, LLC (California) Joseph D. Gatto cialty corporate court. Pershing Square Capital Mitchell S. Presser Managing Director 1 2 Management, L.P. Wachtell, Lipton, Rosen & Katz Goldman, Sachs & Co. George J. Mazin (New York) Robert E. Spatt Dechert LLP Eldad Weiss Simpson Thacher & Bartlett Gerald Rosenfeld Paradigm Geophysical (Israel) Chief Executive Officer 1 Afternoon Session Rothschild North America Afternoon Session The Creation of Advance PCS From Delaware to Israel (through the Merger of Advance The Role of a Specialized Paradigm and PCS) and its Business Court Subsequent Merger into Caremark, Delaware-Style Moot Court to Create the Largest PBM Hon. Stephen P. Lamb in America Vice Chancellor 3 Delaware Chancery Court Presentation by David C. McBride Paul S. Levy 23 Young Conaway Stargatt & Taylor Senior Managing Director (Delaware) JLL Partners Donald J. Wolfe, Jr. Potter Anderson & Corroon LLP Commentators (Delaware) Alan Alpert Panelists Managing Partner, Hon. Aharon Barak M&A Transaction Services Deloitte Tax LLP President 4 5 4 Supreme Court of Israel Michael S. Knoll Hon. Myron T. Steele Professor of Law and Real Estate Chief Justice University of Pennsylvania Law School Supreme Court of Delaware John E. Osborn Hon. Moshe Teri Senior Vice President Chair and General Counsel Israel Securities Authority Cephalon, Inc Theodore N. Mirvis 5 6 7 Wachtell, Lipton, Rosen & Katz (New York)

18 19 lectures LECITURES Law and Entrepreneurship Lectures

he Institute for Law and Economics presents 28 February 2007 involving mergers and acquisitions, securities issuance, corporate gover - two series of public lectures: Law and Law, Legal Risks, and nance and bankruptcy. Entrepreneurship and Distinguished Jurist. the Financial Markets He graduated with a BA, summa cum laude, from Yeshiva University in In sponsoring these events, the Institute aims Isaac D. Corré 1985 and a JD, cum laude, from to spotlight and honor lawyers who have led noteworthy Senior Managing Director Harvard Law School in 1989. Isaac T Eton Park Capital Management serves on the Board of Trustees of the careers and made significant contributions as corporate Yeshiva University business school. 29 November 2006 executives and entrepreneurs, or as members of the judiciary Isaac D. Corré is responsible for the event oriented activities of Eton Park. at the state or federal levels. Audiences are drawn from Large-Scale Entrepreneurship: In his talk for ILE, Corré spoke on how “The United States features what Business Development at GE all sectors of the University and the legal and business he used his legal training in the world many rightly consider the world’s of investing by evaluating legal risks communities. most efficient capital markets and Pamela Daley when a company’s situation may be stable legal regime. These are mutu - Senior Vice President These eminent speakers hold particular appeal and significantly affected by an uncertain ally reinforcing, but the financial for Corporate Business Development legal outcome. markets have a lot to learn about the General Electric Company inspiration for students of Penn’s Law School and the Prior to joining Eton Park, Corré legal system and the law has a lot to Wharton School, with whom they talk informally at was a partner at Scoggin Capital learn about the financial markets. Pamela Daley is responsible for GE’s Management, a New York-based Perhaps forums such as this will facil - mergers, acquisitions, and divestiture receptions following each lecture. itate the critical transfer of knowl - multi-strategy hedge fund. At Scoggin, activities worldwide. In her November edge between these two systems. The Law and Entrepreneurship lecture is supported Corré managed the merger arbitrage lecture, Daley described GE’s evolution in part by the Ronald N. Rutenberg Fund. and special situations portfolio that into one of the largest companies in included investments in complex the world, and GE’s recent initiatives of Genworth Financial, Inc. (NYSE: restructurings, stub trades and securi - to invest in new fields and sectors. GNW) (2004–2006). She also serves ties affected by legal and regulatory Before assuming her present on the Board of Overseers of the changes. Corré also managed the position, she was Vice President and University of Pennsylvania Law School. firm’s investment in a sovereign trade Senior Counsel for Transactions at GE. Daley received her B.A. degree claims business. He was deeply Before arriving at GE in 1989, Daley with highest honors from Princeton involved in managing the distressed was a tax partner of the national law University in 1974 in Romance debt and value equities portfolios. firm of Morgan, Lewis & Bockius Languages and Literatures. In 1979, Before joining Scoggin, Corré where she specialized in tax-oriented she graduated first in her class from practiced law for more than nine years. financings and M&A. From 1982 to the University of Pennsylvania Law His legal practice focused principally 1989, she was an adjunct professor School, where she served as Editor-in- on complex commercial litigation, at the University of Pennsylvania Law Chief of the Law Review. She is a School, where she taught federal member of Phi Beta Kappa and Order income taxation of partners and of the Coif. partnerships. Daley serves on the Board of Directors of General Electric Capital Corporation, GE Capital Services, Inc., the GE Foundation, and the World Wildlife Fund, and is a past director

20 21 lectures lectures

Law and Entrepreneurship Lectures 16 February 2006 Past Law and Entrepreneurship Lectures 23rd Law and Entrepreneurship Lecture

The Banker as Entrepreneur Michael J. Biondi 26 October 2006 believes that the anti-business climate 26 October 2005 19 April 2002 Co-Chairman, Investment Banking fostered by the government and the Founding and Building a New Venture: Smart People Making and Losing Lazard Frères & Co. LLC Managing in the 21st Century media is hurting American companies’ The Story of the National Women’s Money: Some Recent Examples productivity. Law Center Perry Golkin 1 2 Henry R. Silverman In 1998, Silverman received the Marcia Greenberger Kohlberg Kravis Roberts & Co. Chairman & CEO American Heritage Award from the Founder and Co-President Realogy Corporation Anti-Defamation League for lifetime National Women’s Law Center 25 October 2001 achievement in fighting discrimination. The Economics of Sports Team Henry R. Silverman is chairman & He has been honored twice for his 7 April 2005 Franchises for Cities CEO of Realogy Corporation, the efforts to promote diversity in the A Swing of the Pendulum: Hon. Edward G. Rendell world’s largest residential brokerage workplace—first in 2001, by the Jackie 20 Years in M&A Governor, Commonwealth franchisor and the largest U.S. residen - Robinson Foundation and again in Joseph D. Gatto of Pennsylvania Managing Director [former Mayor, City of Philadelphia; tial real estate brokerage firm. From 2003, by the U.S. Hispanic Chamber Goldman, Sachs & Co. former General Chair, Democratic 1997 through August 2006, Silverman of Commerce. National Committee] served as chairman and CEO of Silverman graduated from 24 March 2004 Cendant Corporation, ranked 107th in Williams College in 1961, and the Michael Biondi has extensive experience Biondi has a particular expertise in The WNBA and Women’s Team Sports: 21 February 2001 3 4 the 2006 Fortune magazine list of the University of Pennsylvania Law School in advising companies and independent advising independent directors in con - A New Sports Marketing Proposition Private Equity: Difficult Investing 500 largest U.S. companies. Cendant in 1964, and served as an officer in the board committees on domestic and flict situations. When a parent company for the New Millennium in a Difficult Time was the largest global provider of con - U.S. Navy Reserve from 1965 to 1972. cross-border transactions in a broad seeks to acquire a partially owned sub - Val Ackerman Paul S. Levy sumer and business services within array of industries— media/communica - sidiary, current practice requires that the President Senior Managing Director the travel and residential real estate “The most important thing that we tions, transportation, utilities, general subsidiary board appoint a special com - Women’s National Basketball Joseph Littlejohn & Levy sectors before its decision to separate can all do is to understand that in industrial and retail. He joined Lazard mittee of independent directors to look Association into four new companies effective July 31, the final analysis, every good part - from Dresdner Kleinwort Wasserstein, after the interests of minority sharehold - 2 March 2000 2006. Realogy Corporation is comprised nership—whether it is in business, in where he held a number of senior posi - ers. For these committees to fulfill their 30 October 2003 Perspectives on the of the business units from Cendant’s friendship, or in marriage—is based tions, including Chairman and Co-Chief responsibilities, they need independent The Role of Entrepreneurship in Health Care Revolution former Real Estate Services Division. on trust and integrity.” Charles A. Heimbold, Jr. Executive of the Americas and Co-Head and expert investment banking advice. Urban Education: Prior to the formation of Cendant in Chairman and CEO of Global Investment Banking. Prior to Whom do they call? Mike Biondi. Past, Present and Future 1997, Silverman was chairman, presi - James E. Nevels Bristol-Myers Squibb Company that, he was a founding partner of the Michael Biondi began his M&A 5 dent and chief executive officer of HFS Chairman and CEO 6 boutique investment bank Wasserstein career as a lawyer at Skadden, Arps, Incorporated, which he founded in 1990. The Swarthmore Group, Inc. 18 November 1999 Perella & Co., serving as its Chairman Slate, Meagher & Flom. He holds both Silverman gave a Law and Chairman, Philadelphia School Ethics in Sports: Deciding the Game and Chief Executive Officer from 1996 an M.B.A. from The Wharton School Entrepreneurship lecture in 1998 on Reform Commission Anita DeFrantz until its sale early in 2001. His talk and a J.D. from Penn Law. crisis management, focusing on his Vice President for ILE focused on his experiences discovery of accounting fraud at 6 November 2002 International Olympic Committee in starting and building Wasserstein President, Amateur Athletic Cendant after his company merged “Once you’ve done something entre - Public Trust—and Distrust— Perella & Co. and ultimately selling Foundation with it, and how he led the corporation preneurial, once you’ve met a pay - in American Business: it for $1.37 billion. What Needs to be Done in rebuilding. His lecture in the fall of roll, once you’ve been responsible More recently, Biondi has played a Peter G. Peterson 23 October 1997 2006 addressed to problems of man - for hundreds of people who’ve been key role at Lazard as part of the team Chairman, The Blackstone Group How to Maintain Entrepreneurial aging a corporation in the post-Enron, willing to follow you into battle— that assumed control and took the com - Chairman, Federal Reserve Bank Values While Your Company post-Sarbanes-Oxley Act, post-tech whether rightly or wrongly—it is pany public. Known as the world’s pre - of New York Climbs into the Fortune 500 7 bubble era. At the same time that very hard to go to work at a big 8 eminent advisory investment bank, Co-Chair, Conference Board Brian L. Roberts globalization is making the business bureaucratic organization.... And Lazard has offices in 16 countries Commission on Public Trust and President world increasingly competitive, he around the globe. The firm provides it’s that spark, it’s that essence, it’s Comcast Corporation Private Enterprise 1 5 that feel of a small firm that keeps advisory services—including mergers Peter G. Peterson Paul S. Levy and acquisitions, asset management, me doing this...the thrill of both 26 September 2002 27 March 1997 counseling people over the long run The Unique Impact of the Law on and restructuring—to corporations, part - What They Did Not Teach Me 2 6 and staying cutting edge with the Leveraged Buyout Business nerships, institutions, governments, and in Law School James E. Nevels Perry Golkin individuals. what’s going on in your business. Robert M. Potamkin Saul A. Fox I wouldn’t be doing this today if I Fox Paine &Company, LLC Co-Chairman and Co-CEO 3 7 didn’t have a place where I could Planet Automotive Group, Inc. Edward G. Rendell Val Ackerman be doing both of those things.” 4 8 Marcia Greenberger Joseph D. Gatto

22 23 lectures lectures

Distinguished Jurist Lectures

11 October 2006 16 March 2006 intellectual property issues in high- 28 October 2004 restore professionalism to the practice tech companies (such as the land - of law and adopt best practices in the The Embattled Corporation Technology Mergers in a mark case that pitted Apple Computer A Twelve-Year Retrospective on running of America’s courts. Hon. Richard A. Posner Shrinking World against Microsoft). His lecture Delaware Corporate Jurisprudence Currently, E. Norman Veasey is U.S. Seventh Circuit Court of Appeals Hon. Vaughn R. Walker focused on the implications for and Governance Issues a senior partner at Weil, Gotshal & and University of Chicago Law School Chief Judge antitrust merger analysis of the Hon. E. Norman Veasey Manges, serving as a strategic advisor U.S. District Court for the Northern increasing importance of intellectual Chief Justice to the firm’s roster of prominent District of California property (i.e., technology) in com - Delaware Supreme Court global clients on a wide range of mercial activity, and the impact of 1992–2004 issues related to mergers and acquisi - Hon. Vaughn R. Walker became a fed - globalization. tions, restructuring and litigation. eral judge in 1990 after having been Chief Justice Veasey presented “a Additionally, he advises on corporate nominated by Presidents Reagan and thematic look through the rear-view governance issues involving the George H. W. Bush and confirmed mirror” of some of the Delaware responsibilities of corporate directors by the Senate. He studied law at the Supreme Court decisions handed in complex financial transactions and 3 March 2005 University of Chicago and Stanford down during a term that began in crisis management. He is a member and practiced law in San Francisco, April of 1992 and ended in the spring of the ILE Board of Advisors. “In an industry whose products Corporate Federalism: handling antitrust and other business of 2004. He discussed changes dur - derive their value from their intel - Event Horizons in Corporate Richard Posner, as an academic and encourage economic analysis of law, cases, from 1972 until his appointment lectual or conceptual content, not ing his time on the bench in liability Governance “The best way to demonstrate that as a judge, is one of the pioneers of and was a research associate of the to the bench. from their physical characteristics, exposure of directors; standards of Hon. Myron T. Steele federal intervention into the inter - Law and Economics. In numerous National Bureau of Economic Research. As a federal judge, Walker has the traditional tools we’ve used in conduct and standards of review; Chief Justice nal affairs of corporations is unnec - books, articles and judicial opinions, In his talk for ILE, Posner discussed been described as “a pioneer who merger analysis are much less use - trends in fiduciary duty law and the Delaware Supreme Court essary and undesirable is for boards he has examined legal issues through the ways in which his thoughts on law understands business law.” In his ful. They don’t fit the kinds of evolving expecations of directors, of directors—guided by business the lens of economic analysis. and economics have changed since Distinguished Jurist talk he shared dynamics that a technology indus - including good faith; deal protection; The Honorable Myron T. Steele lawyers—to continue what the He came to Law and Economics Economic Analysis of the Law was first insights gained in presiding over the try displays in quite the same way duty of disclosure; derivative suits; the is a former Vice Chancellor of the Delaware judges have consistently indirectly after graduating from Yale published, and his current thoughts on Oracle antitrust trial and other high- that the traditional physical kind role of best practices; and federalism Delaware Court of Chancery, Resident encouraged, which is the quest for College in 1959, summa cum laude, executive compensation, organizational profile litigation involving mergers and of product fits those standards.... vs. federalization. In summing up his Judge of Superior Court, Deputy best practices of due care, loyalty, junior Phi Beta Kappa, and an English dynamics, and irrationality in the market. We’ve seen that judges in our observations across all of these areas, Attorney General, Senate (Delaware) good faith, independence, construc - major. Three years later, after graduat - Posner became a Judge of the U.S. courts have approached these he offered the over-arching conclusion Attorney and Chairman of the tive skepticism and demanding ing from Harvard Law School first in Court of Appeals for the Seventh Circuit merger cases with a healthy skepti - that “the corporate governance regime Consumer Affairs Board. He has “The larger the federal presence, total understanding before acting.” his class, magna cum laude, and presi - in December 1981 and served as Chief depends on an active board, and it cism. This, I think, has been a presided over major corporate litiga - the less scope to the states’ radi - dent of the Law Review, he went to Judge from 1993 to 2000. He has writ - works only when people of integrity wholesome development that even - tion, LLC and limited partner gover - cally different approaches and work in Washington—as law clerk to ten almost 2200 published judicial opin - operating in the right corporate culture tually may spur and forward the nance disputes, and he writes their influence in shaping corpo - Justice William J. Brennan,Jr., as an ions. He continues to teach part time at make it work. The system depends on search for a more workable metric frequently on issues of corporate doc - rate governance. Like black holes, assistant to Commissioner Philip the University of Chicago Law School, trust in people—especially the directors, of competition in a fast-changing, ument interpretation and corporate the federal government’s gravita - Elman of the Federal Trade Commission, where he is Senior Lecturer, and to write regulators and courts.” shrinking world.” governance. He has published over tional pull inevitably swallows as an assistant to the Solicitor General academic articles and books. He has During Mr. Veasey’s tenure as 300 opinions disposing of disputes everything in its path.” of the U.S., Thurgood Marshall, and as written 38 books and more than 300 Chief Justice, the U.S. Chamber of among members of limited liability general counsel of President Johnson’s articles and book reviews. His academic Commerce ranked Delaware’s courts companies, and limited partnerships, Task Force on Communications Policy. work since his becoming a judge has creeping further and further into the first in the nation for three consecu - and between shareholders and man - Posner entered law teaching in included studies in the economics of domain of individual states’ regulation, tive years for their fair, reasonable and agement of both publicly traded and 1968 at Stanford as an associate profes - criminal law, labor law, and intellectual he said. efficient litigation environment. Chief closed corporations. sor, and became professor of law at property; in jurisprudence, law and liter - He sees the Sarbanes-Oxley Act, Justice Veasey has also been credited In his talk, Chief Justice Steele the University of Chicago Law School in ature, and the interpretation of constitu - passed in 2002 in response to corpo - with leading nationwide programs to described how the federal govern - 1969, where he remained (later as Lee tional and statutory texts; and in the rate financial and accounting scandals, ment’s desire to protect shareholders and Brena Freeman Professor of Law) economics of sexuality and of old age. as a troubling harbinger of growing in corporations has led to a “one-size- until his appointment to the Seventh federal control. Since 2002, corpora - fits-all regulatory model” that is often Circuit in 1981. During this period tions have spent $8 billion attempting less sensitive to a corporation’s partic - Posner wrote a number of books “The stock option is not a very tai - to comply with the new restrictions, ular situation than the corresponding (including Antitrust Law: An Economic lored way of motivating chief execu - the Chief Justice said, and he expressed state laws would be. As early as Perspective, Economic Analysis of Law, tive officers to do their best, because concern that there would be further the Securities Act of 1933 and the and The Economics of Justice) and many a lot of things affect the price of stock costs, not only in direct compliance Exchange Act of 1934, the federal articles exploring the application of eco - other than the efforts of the CEO. To expenditures, but in losses from regulation of corporations has been nomics to a variety of legal subjects, tie a CEO’s income to the value of his restricted business practices. including antitrust, public utility and company’s stock is a little like if the common carrier regulation, torts, con - salary of the President of the United tracts, and procedure. He founded States was tied to the GNP.” the Journal of Legal Studies, primarily to

24 25 lectures lectures ACADEMIC EVENTS Past Distinguished Jurist Lectures K

4 March 2004 12 February 1998 ajor one- and two-day symposia are organ - During the 2006–2007 academic year Michael Knoll Corporate Decision-Making The Value of Predictability in Delaware Courts in Corporate Law ized under the sole sponsorship of the (Penn Law and the Wharton School), Chris William The Honorable Carolyn Berger The Honorable E. Norman Veasey Institute for Law and Economics, and Sanchirico (Penn Law and the Wharton School), and Justice Chief Justice Delaware Supreme Court Delaware Supreme Court in cooperation with other organizations 1 2 Reed Shuldiner (Penn Law), with funding from the wMithin the Law School and Wharton. In February 2005 we University of Pennsylania Provost’s Office, ran a 27 February 2003 11 February 11 1997 The Effects of Collegiality on Judicial What Economics of Law Must launched an annual conference on Law and Finance, jointly Seminar on Tax Policy and Public Finance. As part Decision Making Address Next: Some Thoughts sponsored by ILE, the Wharton Finance Department, of that seminar, six prominent tax academics and one The Honorable Harry T. Edwards on Theory Circuit Judge The Honorable Guido Calabresi and the Center for Law and Business at NYU Law School, high-ranking government official were brought to the U.S. Court of Appeals for the U.S. Court of Appeals for the and the Stern School Finance Department. The conference University to make presentations. D.C. Circuit Second Circuit location alternates between Penn and NYU. 29 November 2001 7 February 1996 In October 2002 ILE debuted the first installment in Fee Shifting as a Control The MTV Constitution the new ILE/Wharton Finance series, providing an oppor - Against the Rogue Litigant The Honorable Alex Kozinski The Honorable Jack B. Jacobs U.S. Court of Appeals for the tunity for faculty and advanced students from the Law Justice, Supreme Court of Delaware Ninth Circuit School, the Wharton School, and the Department of [former Vice Chancellor, Delaware Court of Chancery] 22 March 1995 Economics to come together around an area of common 1 2 Accountability: Popular Will, Interest interest and strengthening the Institute’s core academic 6 March 2001 Groups, or the Invisible Hand 3 4 Administering Capital Punishment: The Honorable Stephen F. Williams relationships. A dinner follows each presentation, with Is Texas Different? U.S. Court of Appeals for the commentary presented by members of ILE’s Associate The Honorable District of Columbia Patrick E. Higginbotham Faculty from Law, Wharton Finance, and the Department U.S. Court of Appeals for the 13 April 1994 of Economics and a general discussion. This series contin - Fifth Circuit On the Constitution The Honorable Antonin Scalia ued with two seminars during 2006–2007. ILE and 24 February 2000 Associate Justice, U.S. Supreme Court Finance alternate in selecting speakers, and the venue 3 The Court of Chancery as Teacher of Corporate Law 14 October 1992 for the presentations alternates between the Law School The Honorable William B. Chandler III Nonprice Competition and Wharton. The organizers of the series are Michael Chancellor The Honorable Douglas H. Ginsberg Delaware Court of Chancery U.S. Court of Appeals for the Wachter (Law) and Andrew Metrick (Wharton). District of Columbia 5 6 ILE Seminars provide an opportunity for scholars from 11 February 1999 Why Do People Bring Employment 3 December 1991 the University of Pennsylvania and elsewhere to present 4 5 Discrimination Cases When Corporate Takeovers and Our 1 4 provocative ideas on timely issues and a wide range of sub - They Usually Lose? Schizophrenic Conception The Honorable Harry T. Edwards The Honorable Diane Wood The Honorable Diane Wood of the Corporation jects. All participants are invited to engage in give-and- 1 4 U.S. Court of Appeals for the The Honorable William T. Allen 2 5 take with the presenter, an interchange that is a hallmark Raghuram G. Rajan, International Marcel Kahan, New York University Seventh Circuit Chancellor The Honorable Jack B. Jacobs The Honorable Antonin Scalia Monetary Fund. School of Law; Gerald Rosenfeld, Delaware Court of Chancery of these workshops. Papers, which are usually works in Rothschild North America. 3 6 progress, can be downloaded from the ILE Web site at 2 1990 The Honorable William B. Chandler III The Honorable Carolyn Berger www.law.upenn. edu/ile/seminarseries.html, and copies Roberta Romano, Yale Law School. 5 The Constitution and the From left: Augustine Landier, Stern Spirit of Freedom are provided to faculty and advanced students upon 3 School of Business; Vinay Nair, The Honorable Anthony M. Kennedy request. The 2006 –2007 ILE Seminar Series was organized Left, Bruce Silverstein, Young The Wharton School; Michael Associate Justice Conaway Stargatt & Taylor; right, Roberts, The Wharton School. U.S. Supreme Court by Professors Matthew Adler and Chris William Sanchirico. Andrew Metrick, The Wharton School.

26 27 academic events academic events

NYU/Penn Chair: Malcolm Baker Commentator: Session III Session VII Session VIII William T. Allen Harvard Business School William N. Goetzmann Penn/NYU Bottom-Up Corporate Governance Hedge Funds in Corporate Judge-Specific Effects in Chapter 11 Conference on Stern School of Business National Bureau of Yale School of Management Conference on Augustin Landier Governance and Corporate Control and Firm Outcomes New York University Economic Research Stern School of Business Marcel Kahan Tom Chang Chair: Law and Finance New York University School of Law Joshua Coval Law and Finance New York University New York University School of Law Massachusetts Institute of Edward B. Rock 23–24 February 2007 Harvard Business School 24–25 February 2006 David Sraer Edward B. Rock Technology Session III University of Pennsylvania Law School National Bureau of CREST & GREMAQ University of Pennsylvania Law School Antoinette Schoar Institutional Investors and Economic Research Session VIII David Thesmar Sloan School of Management Proxy Voting: The Impact of Jeremy C. Stein Commentator: Who Blows the Whistle on HEC Paris (Groupe HEC) & CEPR Massachusetts Institute of New York University the 2003 Mutual Fund Voting Harvard University, University of Pennsylvania Laura T. Starks Corporate Fraud? Technology School of Law Disclosure Regulation Economics Department Law School Commentator: McCombs School of Business Alexander Dyck Martijn Cremers National Bureau of Ehud Kamar University of Texas at Austin Commentator: Rotman School of Management Jointly sponsored by Jointly sponsored by Yale School of Management Economic Research University of Southern California, Barry F. Adler University of Toronto Moderator: Roberta Romano Institute for Law and Economics Law School New York University School of Law Institute for Law and Economics Adair Morse William T. Allen Yale Law School Commentator: University of Pennsylvania University of Pennsylvania Robert M. Daines The University of Michigan Moderator: New York University School of Law Moderator: Commentator: Luigi Zingales Financial Institutions Center Jill Fisch Financial Institutions Center Stanford Law School William W. Bratton Joy Ishii The University of Chicago Graduate The Wharton School Fordham University School of Law Georgetown University Law Center The Wharton School Stanford Graduate School of Business Chair: School of Business Center for Law & Business Session IV Center for Law & Business Edward B. Rock National Bureau of Chair: New York University Legal Origins and Stock Markets New York University University of Pennsylvania Economic Research William T. Allen in the Twentieth Century New York University Law School Centre for Economic Policy Research Organized by Stern School of Business Mark J. Roe School of Law Organized by Yakov Amihud Yakov Amihud New York University Session VII Commentator: Harvard Law School Stern School of Business Co-Sponsored by Stern School of Business New York University School of Law Did Reform of Prudent Trust Jeffrey N. Gordon New York University Commentator: New York University Investment Laws Change Columbia Law School Session IV Marcel Kahan Luigi Zingales Stephen Choi Trust Portfolio Allocation? Predatory Lending in a Rational World Chair: New York University School of Law The University of Chicago New York University School of Law Max M. Schanzenback Philip Bond Kose John Andrew Metrick Gradate School of Business Richard Kihlstrom Northwestern University School of Law The Wharton School Robert H. Sitkoff Stern School of Business The Wharton School The Wharton School University of Pennsylvania New York University University of Pennsylvania Moderator: New York University School of Law 1 2 University of Pennsylvania David K. Musto Michael L. Wachter H. Franklin Allen Edward B. Rock The Wharton School University of Pennsylvania Law School The Wharton School University of Pennsylvania Law School University of Pennsylvania University of Pennsylvania Bilge Yılmaz Session I Session I Session V The Wharton School Ex Ante Choices of Law and Forum: The Short and Puzzling Life of The Law and Economics University of Pennsylvania An Empirical Analysis of the “Implicit Minority Discount” Corporate Merger Agreements of Self-Dealing in Delaware Appraisal Law Commentator: Theodore Eisenberg Simeon Djankov Lawrence A. Hamermesh Michael Barr Cornell University Law School The World Bank Widener University School of Law The University of Michigan Law School Geoffrey P. Miller Rafael LaPorta Michael L. Wachter New York University School of Law Dartmouth College University of Pennsylvania Law School Chair: 1 2 Florencio Lopez-de-Silanes 3 Andrew Metrick Commentator: University of Amsterdam 4 Commentator: The Wharton School Matthew Rhodes-Kropf Andrei Shleifer David L. Yermack University of Pennsylvania Columbia University Harvard University Stern School of Business Graduate School of Business New York University Session V Commentator: Pay Distribution in the Moderator: John C. Coates Chair: Top Executive Team Merritt B. Fox Harvard Law School Stephen J. Choi Lucian Arye Bebchuk Columbia Law School New York University School of Law Harvard Law School Moderator: 3 4 Session II Michael L. Wachter Session II Martijn Cremers Yale School of Management Is Financial Contracting Costly? University of Pennsylvania Law School Governance Problems in An Empirical Analysis of Debt Urs Peyer 1 3 Close Corporations Covenants and Corporate Investment Session VI INSEAD Hon. Stephen P. Lamb, Delaware 5 Venky Nagar Gerald Rosenfeld, Rothschild North Sudheer Chava How Law Affects Lending Court of Chancery; Yakov Amihud, Ross School of Business Commentator: America and William T. Allen, Stern C. T. Bauer School of Business Rainer Haselmann The University of Michigan School of Business, New York Stern School of Business, New York University of Houston Leipzig Graduate School Steve Kaplan 4 Kathy R. Petroni University and New York University University; Hon. Donald F. Parsons, Michael R. Roberts of Management Penn/NYU Conference The University of Chicago Graduate Werner Ebke, New York University The Eli Broad College of Business School of Business School of Law. Jr., Delaware Court of Chancery; The Wharton School Katharina Pistor on Law and Finance and The Eli Broad Graduate School Law School. William T. Allen, Stern School of University of Pennsylvania Columbia Law School 1 of Management Chair: 2 Business, New York University and Vikrant Vig Edward Rock, University of 5 Michigan State University Andrew Metrick Commentator: Graduate School of Business New York University School of Law. Pennsylvania Law School. Front ro w: Phillip Bond and Hulya Eraslan, Daniel Wolfenzon Daniel Wolfenzon, Stern School of Michael Klausner The Wharton School Columbia University The Wharton School. Back r ow: Reiner Stern School of Business University of Pennsylvania Business, New York University and Stanford Law School 2 Haselmann, Vikrant Vig, and Hayong New York University National Bureau of Economic 4 Commentator: Michael Klausner, Stanford National Bureau of Session VI Research; Jill Fisch, Fordham Foreground: David K. Musto, The Moderator: Viral V. Acharya Law School. Yun, Graduate School of Business, Corporate Financing Decisions Andrew Metrick London Business School Columbia University; Katharina Pistor, Economic Research University School of Law; Yakov Wharton School, University of 3 When Investors Take the Path of The Wharton School Columbia Law School; H. Franklin Allen, Amihud, Stern School of Business, Pennsylvania. Background: Michael Jeffrey Gordon, Columbia Law School. Commentator: Least Resistance University of Pennsylvania Moderator: New York University. Barr, The University of Michigan The Wharton School; Jun Qian, Carroll Jill Fisch Bernard Black Law School. School of Management, Boston College. Fordham University School of Law University of Texas School of Law

28 29 academic events academic events

ILE/Finance Seminars scene. More surprising is the key role them a percentage of the money ILE/Finance Seminars ILE Seminar Series played by actors who lack a gover - recovered by the government. spring 2007 & fall 2006 nance mandate, such as employees Generalizing from these results, (19 percent), the media (15 percent), the authors arrived at what might be and industry regulators (15 percent). called a paradox of whistle blowing: Having identified the whistle those with the best access to informa - blowers, the authors then investigated tion have weak incentives to blow the Co-Sponsored by 30 November 2006 6 April 2006 11 November 2004 12 April 2007 14 September 2006 the cost-benefits trade off they face. whistle and are most active, while Institute for Law and Economics Who Blows the Whistle The States as Laboratory: Venture Capital Investment Cycles: Mandated Medical Leave Taxation and Social Security Overall, analysts, journalists, auditing those with less access to information and Department of Finance on Corporate Fraud? Legal Innovation and State The Role of Experience and in the Workplace (Draft Chapter 11 from The Theory firms, and employees who bring fraud have better incentives and are least The Wharton School (co-authored with Alexander Dyck and Competition for Corporate Charters Specialization Christine Jolls of Taxation and Public Economics, to light do not seem to be rewarded active. This paradox has important Adair Morse) Roberta Romano Paul A. Gompers Professor of Law forthcoming 2007, Princeton in monetary or in career terms. In fact, policy implications: rather than Graduate School 22 March 2007 Luigi Zingales Allen Duffy/Class of 1960 Yale Law School University Press) conditional on a fraud being commit - increase the layers of monitors (as Professor of Law of Business Administration Law and the Market: Robert C. McCormack Professor Louis Kaplow ted, auditing firms are more likely to done in SOX), it would be more cost Yale University Law School Harvard University The Impact of Enforcement of Entrepreneurship and Finance 15 March 2007 Finn M. W. Caspersen and lose the job when they reveal it than effective to increase the reward for Commentators: Commentators: John C. Coffee, Jr. The University of Chicago Graduate Completing Contracts in the Shadow Household International Professor when they do not. The only exception people to come forward. Richard E. Kihlstron Rafi Amit Adolf A. Berle Professor of Law School of Business of Costly Verification of Law and Economics is employees who reveal a fraud against Wharton Finance Wharton Finance Columbia University School of Law Commentators: Albert Choi Harvard Law School the government to avail themselves of Andrew Metrick Sean Griffith Commentators: Aditi Bagchi Penn Law (visiting) Professor of Law the qui tam statute, which guarantees Wharton Finance Philip Bond Penn Law Chris W. Sanchirico Richard Kihlstrom Associate Director, John M. Olin Tax Policy Seminars Wharton Finance John E. Core Penn Law Wharton Finance Program in Law and Economics Spring 2007 Jill Fisch Wharton Finance Bruce L. Silverstein Polk Wagner University of Virginia School of Law Fordham University School of Law; Andrew Metrick Young Conaway Stargatt & Taylor Penn Law Speakers: Penn Law (visiting) Wharton Finance 1 March 2007 Reuven Avi-Yonah 21 April 2004 Wayne R. Guay Edward B. Rock 20 October 2005 Unconscious Prejudice and University of Michigan Law School The State of U.S. Corporate Governance: Wharton Finance Creating Constituencies for Reform Penn Law What’s Right and What’s Wrong Accountability Systems: A Proposal to Adopt Formulary Tobias B. Wolff Raghuram G. Rajan Steven Kaplan What Must Organizations Do Apportionment for Corporate Economic Counsellor and Penn Law The large and numerous corporate Graduate School of Business to Check Implicit Bias? Income Taxation: Director, Research frauds that emerged in the United University of Chicago Gregory Mitchell The Hamilton Project International Monetary Fund This paper explores the possible rela - States at the onset of the new millen - Commentators: Professor of Law Commentators: tionship between the intensity of nium have provoked an immediate Franklin Allen E. James Kelly, Jr.-Class of 1965 Joseph Bankman William W. Burke-White enforcement efforts by securities regu - Wharton Finance legislative response in the Sarbanes 12 Penn Law Research Professor Stanford Law School lators in selected nations, and (i) the Andrew Metrick Oxley Act (SOX). This law was predi - Robert P. Inman University of Virginia School of Law Why It Is So Difficult to Get cost of equity capital by nation and (ii) Wharton Finance cated upon the idea that the institu - Wharton Finance Easy Tax Filing Katharina Pistor the extraordinary listing premium that tions designed to uncover fraud had Jason Scott Johnston 15 February 2007 Penn Law (visiting) non-U.S. firms exhibit upon cross-list - failed, and their incentives as well as Penn Law The Enduring Problem of Anup Malani ing on a U.S. exchange. Enforcement their monitoring should be increased. Bilge Yilmaz 9 October 2003 WTO Export Subsidies Rules University of Chicago Law School intensity may dissuade issuers from The political imperative to act quickly Wharton Finance Understanding Material Adverse (with Andrew Green and Vivien Milat) The Case for For-Profit Charities entering a particular market prevented any empirical analysis to Change Clauses: Michael Trebilcock (with Eric Posner) and thus may be responsible for the substantiate the law’s premises. 31 March 2005 Moral Hazard in Acquisitions University Professor asserted decline in the “competitive - The authors gathered data on a What Matters in Corporate Governance? (co-authored with Alan Schwartz) Faculty of Law Richard T. Morrison ness” of the U.S. capital markets. comprehensive sample of alleged cor - Lucian Arye Bebchuk Ronald J. Gilson University of Toronto Deputy Assistant Attorney General Harvard Law School This paper suggests that one legal porate frauds in companies with more Columbia Law School United States Department of Commentators: variable—the level of enforcement— than 750 million dollars in assets that and Stanford Law School 9 November 2006 Justice, Tax Division Hulya Eraslan does distinguish jurisdictions in a man - took place between 1996 and 2004. Commentators: Offsetting Risks Recent Developments in Wharton Finance Franklin Allen ner that can explain national differences Through an extensive reading of each Ariel Porat Tax Shelter Cases Andrew Metrick Wharton Finance in the cost of capital (especially between fraud’s history, they identified who was Alain Poher Professor of Law Wharton Finance Kristin Madison common law and civil law countries) involved in the revelation of the fraud, Edward B. Rock Penn Law Tel Aviv University Faculty of Law Dan Shaviro and that may help explain financial and what were the circumstances that Penn Law Andy Postlewaite Visiting Professor of Law NYU Law School development. Because enforcement lead to its detection. In particular, they David A. Skeel Penn Economics University of Chicago Permanent Income and intensity appears to play a dual role, studied the source of the information Penn Law the Annual Income Tax both enhancing share value for foreign and the incentives detectors face in 31 October 2002 12 October 2006 issuers that cross-list into a high bringing the fraud to light. Law and Finance: The Practice of Justice Mandatory versus Voluntary Joel Slemrod enforcement legal regime and deterring The authors found that no specific Andrei Shleifer Disclosure of Product Risks University of Michigan many foreign issuers from entering actor dominates the revelation of fraud. Harvard University (with Steven Shavel) The Economics of Tax Remittance high enforcement jurisdictions, reason - The SEC accounts for only 6 percent. Commentators: A. Mitchell Polinsky Richard E. Kihlstrom able persons might disagree about Even using the most comprehensive Josephine Scott Crocker Professor Linda Sugin Wharton Finance whether the best policy response is and generous interpretation, the reve - of Law and Economics Fordham Law School Michael S. Knoll to increase or relax it. lation can be attributed to shortsellers Penn Law Stanford Law School Why Endowment Taxation is Unjust in only 9 percent of the cases. Financial Jason Scott Johnston analysts and auditors do a little better Penn Law (respectively 15 and 14 percent of the 1 2 Andrew Metrick cases), but they hardly dominate the Luigi Zingales John C. Coffee, Jr. Wharton Finance

30 31 publications & papers

File Sharing, Copyright, and the Optimal Jason Scott Johnston Gesellschaftsrecht (comprehensive trea - coming 2007. PUBLICATIONS AND PAPERS Production of Music, Michigan Robert G. Fuller Jr., Professor of Law tise of German corporate law), with A Normative Theory of Bankruptcy: Reputation and Rhetoric in Elections Michael L. Wachter Telecommunications and Technology and Director, Program on Law, the Hans-Dieter Assmann, 6th edition, 2006. Bankruptcy As (Is) Civil Procedure, (with E. Aragones and T. Palfrey), William B. Johnson Professor of Law Law Review, 2006. Environment and the Economy Washington & Lee Law Review, 2004. Journal of the European Economic and Economics; Co-Director, Institute The Shifting Paradigm of European Association, forthcoming. for Law and Economics Lawrence A. Hamermesh Desperately Seeking Numbers: Global Company Law, The Columbia Journal David K. Musto Ruby R. Vale Professor of Corporate Warming, Species Loss, and the Use and of European Law, 2005. Associate Professor of Finance Courts of Law and Unforeseen The Short and Puzzling Life of the and Business Law Abuse of Quantification in Climate Change Contingencies (with L. Anderlini and “Implicit Minority Discount” in Delaware Listed below is a sampling of recently The Accidental Promise: Remaking Widener University School of Law Policy Analysis, University of Pennsylvania Peter D. Linneman Vote Trading and Information L. Felli), Journal of Law, Economics and Appraisal Law (with Lawrence A. published papers and work in progress the Law of Misrepresented Intent, Law Review, forthcoming 2007. Albert Sussman Professor of Real Aggregation (with Susan Christoffersen, Organization, forthcoming. Hamermesh), University of Pennsylvania by members of the Associate Faculty of University of Illinois Law Review, The Short and Puzzling Life of the Estate, Finance, and Public Policy Chris Geczy, and Adam Reed), Journal Law Review, forthcoming. the Institute for Law and Economics. forthcoming. “Implicit Minority Discount” in Fashioning Entitlements: A Comparative The Wharton School of Finance, forthcoming. Social Assets (with G. Mailath), ILE maintains a series of research Delaware Appraisal Law (with Michael Law and Economic Analysis of the International Economic Review, 2006. Labor Unions: A Corporatist Institution papers and provides copies—electronic Howard F. Chang Wachter), University of Pennsylvania Judicial Role in Environmental A New Product to ENHANCE Failure Is an Option: Impediments to in a Competitive World, University of or paper—to interested parties upon Earle Hepburn Professor of Law Law Review, forthcoming. Centralization in the U.S. and Europe Shareholder Value: Bifurcating Land Short-Selling and Option Prices (with Rich Edward B. Rock Pennsylvania Law Review, 2007. request to [email protected]. (with Michael G. Faure), in Responsibility and Improvements to Generate Evans, Chris Geczy, and Adam Reed), Saul A. Fox Distinguished Professor The Effect of Joint and Several Liability The Fair Value of Cornfields in Delaware and Governance, Edward Elgar Superior Returns (co-authored with Review of Financial Studies, forthcoming. of Business Law; Co-Director, Institute Susan M. Wachter The Institute is a member of the Legal under Superfund on Brownfields (with Appraisal Law (with Michael Wachter), Publishing, forthcoming 2007. Mukund Krishnaswami), Wharton Real for Law and Economics; Associate Richard B. Worley Professor of Scholarship Network (LSN), a subset Hilary Sigman), International Review Journal of Corporation Law, 2006. Estate Review, 2006. A Portfolio View of Consumer Credit Dean, University of Pennsylvania Law Financial Management; Professor of the Social Science Research Network. of Law and Economics, forthcoming. The Return of Bargain: An Economic (with Nicholas Souleles), Journal of School of Real Estate and Finance Current ILE research papers are posted The Policy Foundations of Delaware Theory of Standard Form Contracts and Revisiting Return Profiles of Real Estate Monetary Economics, 2006. The Wharton School in the University of Pennsylvania Law Cultural Communities in a Corporate Law, Columbia Law Review, the Negotiation of Business Relationships, Investment Vehicles (co-authored with Hedge Funds in Corporate Co-Director, Institute for Urban Research and Economics Research Paper Series Global Labor Market: Immigration 2006. Michigan Law Review, 2006. Deborah Chan Moy), Wharton Real Gideon Parchomovsky Governance and Corporate Control on the LSN Web site. Abstracts as well Restrictions as Residential Estate Review, 2005. Professor of Law (with Marcel Kahan), University of What is a Tree Worth? Green-City Segregation, University of Chicago as complete papers can be downloaded Richard J. Herring Leo Katz Pennsylvania Law Review, 2007. Strategies and Housing Prices (with Legal Forum , forthcoming 2007. (http://www.ssrn.com/link/penn-law- Jacob Safra Professor of International Frank Carano Professor of Law Kristin Madison Tradable Patent Rights (with Ian Grace Wong), Real Estate Economics, econ.html). Banking, Professor of Finance Assistant Professor of Law Ayres), Stanford Law Review, forth- Symbiotic Federalism and the Structure forthcoming. Cary Coglianese The Wharton School A Theory of Loopholes, Working coming 2007. of Corporate Law (with Marcel Kahan), Edward B. Shils Professor of Law and Faculty appointments are in the Co-Director, Wharton Financial Paper, 2007. Hospital Mergers in an Era of Quality Vanderbilt Law Review, 2005. The Inevitability of Market-Wide Professor of Political Science University of Pennsylvania Law School Institutions Center Improvement, Houston Journal of Health Safe Use Harbors (with Kevin Underpriced Risk (with Andrey unless otherwise noted. In Defense of Tax Shelters, Virginia Law and Policy, forthcoming 2007. Goldman), Virginia Law Review, Chris W. Sanchirico Pavlov), Real Estate Economics, 2006. Legitimacy and Corporate Governance, The Case of the Missing Market: Tax Review, 2007. forthcoming 2007. Professor of Law Delaware Journal of Corporate Law, 2007. Matthew D. Adler The Bond Market & Why it Matters Regulating Health Care Quality in an Professor of Business and Public Policy Neighborhood Patterns of Subprime Leon Meltzer Professor of Law for Financial Development (with Richard E. Kihlstrom Information Age, U.C. Davis Law Of Equal Wrongs and Half Rights The Wharton School Lending: Evidence from Disparate Leveraging the Private Sector: Nathporn Chatusripitak), in Recent Ervin Miller-Arthur M. Freedman Review, forthcoming 2007. (with Peter Siegelman and Steve Thel), Cities (with Paul Calem and Jonathan E. Risk Equity: A New Proposal, Harvard Management-Based Strategies for Improving Environmental Performance Financial Crises: Analysis, Challenges Professor of Finance and Economics NYU Law Review, forthcoming 2007. Progressivity and Potential Income: Hershaff), Housing Policy Debate, 2005. Environmental Law Review, forth- and Implications, Edward Elgar Chairman, Finance Department George J. Mailath Measuring the Effect of Changing coming 2008. (with Jennifer Nash), Johns Hopkins University Press/Resources for the Publishing, 2006. The Wharton School Walter H. Annenberg Professor Mark V. Pauly Work Patterns on Income Tax R. Polk Wagner Future Press, 2006. in the Social Sciences Bendheim Professor, Department of Progressivity, Working Paper, 2007. Professor of Law New Foundations of Cost-Benefit Implementing Basel II: Is the Game Risk Aversion and the Elasticity of Professor of Economics Health Care Systems, and Professor of Analysis (co-authored with Eric John E. Core Worth the Candle?, Financial Markets, Substitution in General Dynamic School of Arts and Sciences Health Care Systems, Insurance and Inequality and Uncertainty: Theory The Federal Circuit and Patentability: Posner), Harvard University Press, Institutions & Instruments, 2005. Portfolio Theory: Consistent Planning Risk Management, and Public Policy and Legal Applications, University of An Empirical Assessment of the Law 2006. Associate Professor of Accounting The Wharton School by Forward-Looking, Expected Utility Disappearing Private Reputations in and Management, The Wharton School; Pennsylvania Law Review, 2006. of Obviousness (with L. Petherbridge), Robert W. Holthausen Maximizing Investors, Working Paper, Long-Run Relationships (with Martin W. Professor of Economics, School of Arts Texas Law Review, 2007. Policy Analysis for Natural Hazards: The Nomura Securities Company 2007. Cripps and Larry Samuelson), Journal and Sciences; Co-Director, Vagelos Life Detection Avoidance, NYU Law Some Cautionary Lessons from Can Differences in U.S. and U.K. CEO Pay Be Explained by Differences Professor, Professor of Accounting of Economic Theory, 2007. Sciences and Management Program Review, 2006. “A Teaching, Suggestion, or Motivation Environmental Policy Analysis, and Finance and Management, and Takeover Defenses and Managerial to Combine”: Bringing Structure and Duke Law Journal, 2006. in Equity Incentives? (with W. Guay and M. Conyon), Working Paper. Chairman, Accounting Department Incentives Under Alternative Legal Social Assets (with Andrew Postlewaite), Measures of Costs and Benefits for Reed Shuldiner Clarity to the Obviousness Analysis, The Wharton School Regimes (with Michael L. Wachter), 2006. International Economic Review, 2006. Drugs in Cost Effectiveness Analysis, in Alvin Snowiss Professor of Law University of Pennsylvania Law Review, Franklin Allen Agency Problems of Excess Endowments Pharmaceutical Innovation: Incentives, 2006. Nippon Life Professor of Finance and in Not-for-Profit Firms (with W. Guay Testing the Relative Power of Accounting Michael S. Knoll Repeated Games and Reputations: Long Competition, and Cost-Benefit Analysis Comment on “Does the United States Professor of Economics and R. Verdi), Journal of Accounting Standards versus Incentives and Other Theodore K. Warner Professor of Law Run Relationships (with Larry Samuelson), in International Perspective, Cambridge Tax Capital Income,” in Taxing Capital Comments on “Stealth Marketing and The Wharton School and Economics, 2006. Institutional Features to Influence the Professor of Real Estate Oxford University Press, 2006. University Press, 2007. Income, Brookings Institution and Editorial Integrity,” Texas Law Review, Outcome of Financial Reporting in an The Wharton School Urban Institute, forthcoming 2007. 2006. Understanding Financial Crises, (with Is U.S. CEO Compensation Inefficient International Setting, 36 Journal of Andrew Metrick The Demand for Health Insurance in D. Gale), Oxford University Press, 2007. Pay Without Performance? A review of Accounting & Economics, December 2003. Implicit Taxes and Economic Associate Professor of Finance the Group Setting: Can You Always Get Taxation of Risky Investments, 2005. Amy Wax Pay Without Performance: The Unfulfilled Substance: A Reply, Tax Notes, 2007. The Wharton School What You Want? (with B. J. Herring), Robert Mundheim Professor of Law Beauty Contests, Bubbles and Iterated Promise of Executive Compensation by Robert P. Inman The Journal of Risk and Insurance, 2007. David A. Skeel, Jr. Expectations in Asset Prices (with Lucian Bebchuk and Jesse Fried (with Richard King Mellon Professor; Implicit Taxes and Pretax Profit in Venture Capital and the Finance of S. Samuel Arsht Professor of Group Justice, Social Wrongs and S. Morris and H. Shin), Review of W. Guay and R. Thomas), Michigan Professor of Finance, Economics, Compaq and IES Industries, Tax Innovation, John Wiley & Sons, 2007. Is High and Growing Spending on Corporate Law Individual Responsibility, Hoover Financial Studies, 2006. Law Review, 2005. Business and Public Policy, Real Estate Notes, 2007. Cancer Treatment and Prevention Institution Monograph Series, The Wharton School The Economics of Private Equity Harmful to the U.S. Economy?, Who Makes the Rules for Hostile forthcoming 2007. Large Investors, Price Manipulation, Gerald R. Faulhaber Friedrich K. Kübler Funds (with Ayako Yasuda), Working Journal of Clinical Oncology, 2007. Takeovers, and Why? The Peculiar and Limits to Arbitrage: An Anatomy Professor of Business and Why Federalism?, CESifo Economic Professor and Director of the Paper, 2007. Divergence of US and UK Takeover Too Few Good Men, Policy Review, of Market Corners (with L. Litov and Public Policy and Management Studies, forthcoming 2007. Banking Law Institute Emeritus, Andrew W. Postlewaite Regulation (with John Armour), 2005/2006. J. Mei), Review of Finance, 2006. The Wharton School University of Frankfurt, Germany Charles W. Mooney, Jr. Harry P. Kamen Professor of Georgetown Law Journal, Professor of Law Financing Cities, in A Companion to Urban Professor of Law Charles A. Heimbold, Jr. Professor of Law Economics forthcoming 2007. Unique, Like Everyone Else, Policy Aditi Bagchi Economics, Blackwell Publishing, 2006. School of Arts and Sciences Review, 2006. Assistant Professor of Law Network Neutrality: The Debate Recht und Sozialwissenschaften— The “Consumer Compromise” in Professor of Finance The Promise and Perils of Credit Evolves, International Journal of Federalism and the Democratic Herausforderungen und Chancen der Revised UCC Article 9: The Shame The Wharton School Derivatives (with Frank Partnoy), Varieties of Employee Ownership: Communication, forthcoming 2007. Transition: Lessons from South Africa, Verhaltensökonomie (Law and Social “of It All”, Ohio State Law Journal, University of Cincinnati Law Review, Some Unintended Consequences American Economic Review, Papers and Sciences—the Challenge and the 2007. forthcoming 2007. of Corporate Law and Labor Law, Solving the Interoperability Problem: Proceedings, 2005. Promise of Behavioral Economics) Security Interests in Personal Property University of Pennsylvania Journal of Are We on the Same Channel?, Federal (with Dorothea Kubler), Kritische (with S. Harris), Foundation Press, 2006. Odious Debt or Odious Regimes? Business and Employment Law, forth - Communications Law Review, forth - Vierteljahresschrift für Gesetzgebung (with Patrick Bolton), Journal of Law coming. coming 2007. und Rechtswissenschaft, 2007. and Contemporary Problems, forth -

32 33 associate faculty

ASSOCIATE FACULTY Matthew D. Adler Elizabeth Bailey Cary Coglianese Patricia M. Danzon M Leon Meltzer Professor of Law John C. Hower Professor of Edward B. Shils Professor of Law and Chair, Health Care Systems Department, Professor Adler is a graduate of Yale Business and Public Policy Professor of Political Science Celia Z. Moh Professor of Health College, St. Antony’s College of Oxford The Wharton School Cary Coglianese is the Edward B. Shils Care Systems, Insurance and Risk University, and the Yale Law School. Professor Bailey received her Ph.D. in Professor of Law and Professor of Management Prior to teaching at Penn, he worked economics from Princeton University Political Science at the University of The Wharton School as a law clerk for Judge Harry Edwards, in 1972. From 1983 until 1990, Pennsylvania Law School. He is also Professor Danzon received her Ph.D. Left to right, from top: U.S. Court of Appeals for the D.C. Professor Bailey served as dean of the director of the Penn Program on in economics from the University of Matthew Adler Circuit, and for Justice Sandra Day the Graduate School of Industrial Regulation and a senior research fel - Chicago in 1973 and joined the Penn Franklin Allen O’Connor, U.S. Supreme Court, and Administration at Carnegie Mellon low at Harvard University’s John F. faculty from Duke University in 1985. Aditi Bagchi practiced law at Paul, Weiss, Rifkind, University. She joined the Wharton fac - Kennedy School of Government. His She is a member of the Institute of Elizabeth Bailey Wharton & Garrison in New York City. ulty in 1991 where she served as Chair, work has appeared in journals such as Medicine and the National Academy Howard F. Chang At the Penn Law School, Professor Department of Business and Public the Duke Law Journal, Law & Society of Social Insurance, and she has Cary Coglianese Adler teaches administrative law, con - Policy from 1997 to 2005. She served Review, and Stanford Law Review. served as a consultant to many private John Core stitutional law, and regulation. His as head of the Economics Research Coglianese is the founder and co-chair and public institutions in the U.S. and Patrician M. Danzon current research focuses on policy Department and member of the of the Law & Society Association’s worldwide. Professor Danzon’s Robert W. Holthausen analysis and on risk regulation. Technical Staff at Bell Laboratories international collaborative research research interests are in health care, Jason S. Johnston between 1960 and 1977 and was com - network on regulatory governance, a pharmaceuticals, insurance, law and Richard E. Kihlstrom Franklin Allen missioner and vice-chairman of the vice chair of the E-Rulemaking Committee economics. She has published widely Michael S. Knoll Nippon Life Professor of Finance Civil Aeroneutics Board from 1977 until of the American Bar Association’s in scholarly journals on a broad range Friedrich K. Kübler and Professor of Economics 1983. She has served on the boards of section on Administrative Law and of subjects related to medical care, Kristin Madison The Wharton School many organizations, including the Regulatory Practice, and a Vice Chair pharmaceuticals, insurance, and the Andrew Metrick Franklin Allen is the Nippon Life Brookings Institution and Bancroft of the Innovation, Management economics of law. Professor of Finance and Professor of Neurohealth, and she currently serves Systems, and Trading Committee of Charles W. Mooney, Jr. Economics at the Wharton School of on the boards of Altria Group, Inc., the American Bar Association’s section Gerald R. Faulhaber Andrew W. Postlewaite the University of Pennsylvania. He has CSX, TIAA/CREF, and the National on Environment, Energy, and Resources. Professor of Business and Public Policy Chris Sanchirico been on the faculty since 1980. He is Bureau of Economic Research. Her He is also co-editor of the peer-reviewed and Management David A. Skeel, Jr. currently Co-Director of the Wharton research interests concern public poli - journal Regulation & Governance. The Wharton School Polk Wagner Financial Institutions Center and cies that affect business, particularly Coglianese received his J.D., M.P.P., Professor of Law Amy Laura Wax President of the Financial Intermediation those involving regulation, deregula - and Ph.D. in political science from the Professor Faulhaber has published Research Society. He was formerly Vice tion, and corporate governance. University of Michigan, and for twelve extensively on telecommunications Dean and Director of Wharton Doctoral years served on the faculty of the John F. and Internet economics and policy, Programs and Executive Editor of the Howard F. Chang Kennedy School of Government at focusing particularly on the interaction Review of Financial Studies, one of the Earle Hepburn Professor of Law Harvard University. He has also been of business and public policy. His leading academic finance journals. He is Professor Chang received a Ph.D. in a visiting professor of law at Stanford most recent work has focused on a past President of the American Finance economics from the Massachusetts University and Vanderbilt University network neutrality, public safety com - Association, the Western Finance Institute of Technology in 1992, a J.D. and an affiliated scholar at the Harvard munications, and file sharing and Association and the Society of Financial from Harvard Law School in 1987, a Law School. intellectual property. He spent a year Studies. He received his doctorate from Master in Public Affairs from Princeton on scholarly leave at Penn Law, after Oxford University. Dr. Allen’s main areas University in 1985, and an A.B. from John E. Core which he was granted a secondary of interest are corporate finance, asset Harvard College in 1982. Prior to join - Associate Professor of Accounting appointment at the Law School. He pricing, financial innovation and compar - ing the Penn faculty in 1999, he was a The Wharton School served as Chief Economist at the ative financial systems. He is a co-author Professor of Law at the University of John Core joined the Wharton School Federal Communications Commission with Richard Brealey and Stewart Myers Southern California Law School, where in 1996. He has a B.A. from Yale for the year ending June 30, 2001. At of the eighth edition of the textbook he began teaching in 1992. He was a University and a Ph.D. from The the FCC he worked on telecommunica - Principles of Corporate Finance. Visiting Professor of Law at Stanford Wharton School. He has worked as an tions and Internet issues, including the Law School in 1998, at Harvard Law investment banker for PaineWebber, AOL-Time Warner merger. He has Aditi Bagchi School and at the New York University as a compensation consultant for served on numerous scholarly boards Assistant Professor of Law School of Law in 2001, at the University Ernst & Young, and as an assistant and review committees and was Vice- Professor Bagchi received a J.D. from of Michigan Law School in 2002, and professor at MIT Sloan School of President of the Board of Directors of Yale Law School in 2003 and a M.Sc. at the University of Chicago Law Management. He is an editor of The the Telecommunications Policy in economic and social history from School in 2007, and a Visiting Associate Accounting Review and an associate Research Conference in Washington, Oxford University in 2000. She clerked Professor of Law at the Georgetown editor of the Journal of Accounting D.C. Professor Faulhaber was the for United States Court of Appeals University Law Center from 1996 to and Economics, and he serves on the founding director of Wharton’s Judge Julio Fuentes and practiced law 1997. He served as a law clerk for the editorial boards of the Journal of Fishman-Davidson Center for the with Cravath, Swaine & Moore LLP in Honorable Ruth Bader Ginsburg on Accounting Research and the Journal Study of the Service Sector, from 1984 New York. She joined the Penn Law the U.S. Court of Appeals for the D.C. of Management Accounting Research. to 1989. Prior to his academic career, faculty in 2006 and currently teaches Circuit from 1988 to1989. He served His primary research interest is execu - Professor Faulhaber was Director of contracts and labor law. Her areas of on the Board of Directors of the tive compensation and executive stock Strategic Planning and Financial research interest include normative American Law and Economics and option incentives, and he has also Management at AT&T, after holding theories of private law and compara - Association from 2004 to 2007. He published work in the areas of corpo - the position of Head, Economics tive political economy. has written on a wide variety of sub - rate governance, equity valuation, and Research at Bell Laboratories. As jects including environmental protec - corporate disclosure. a Visiting Scholar at INSEAD, tion, international trade, immigration, Fountainebleau, France, and at intellectual property, and the econom - ics of litigation and settlement.

34 Faculty appointments are in the University of Pennsylvania Law School unless otherwise noted. 35 associate faculty associate faculty

the Institut d’Analisi Economica in responsibility. Since 1995, Professor Outside the university, he is co- Robert P. Inman corporate environmentalism and the Finance Department from 1988 to Friedrich K. Kübler ing Chairman of the Real Estate Barcelona, Spain, Professor Faulhaber Hamermesh has been a member of chair of the US Shadow Financial Richard King Mellon Professor; centralization of environmental and 1994. Before coming to Penn, he Professor and Director of the Banking Department. He is one of the found - engaged in political economy research. the Council of the Corporation Law Regulatory Committee. He is a member Professor of Finance, Economics, natural resource regulation, and is taught at Northwestern University, Law Institute Emeritus, University of ing co-editors of The Wharton Real He held an appointment at Tsinghua Section of the Delaware State Bar of the Financial Economist’s Roundtable, Business and Public Policy, organizing a first-of-its kind interdisci - the University of Illinois, the State Frankfurt, Germany; Professor of Law Estate Review. Dr. Linneman received University School of Economics and Association, which is responsible for the Advisory Board of the European Real Estate plinary conference on the law, econom - University of New York at Stony Brook, After earning a Dr. iur. from the both his master’s degree and doctorate Management, Beijing, China, as a the annual review and modernization Banking Report in Rome and the The Wharton School ics and science of liability for global and the University of Massachusetts. University of Tübingen in 1961, in economics from the University of Visiting Professor, where he lectured of the Delaware General Corporation Institute for Financial Studies in Professor Inman received his Ph.D. in warming. Johnston has published He is a Fellow of the Econometric Professor Kübler held appointments Chicago, and he is a graduate of on technology management. His cur - Law, and served as Chair of the Council Frankfurt. He served as co-chair of the economics from Harvard University dozens of articles, both in various Society. His areas of research interest as teaching assistant in Tübingen and Ashland University. rent research is in the area of public from 2002 to 2004. In 2002 and 2003 Multinational Banking seminar from and joined the Penn faculty in 1972. major American law journals such as include information and uncertainty Paris; Professor of Law, University of policy and broadband infrastructure he also served as the Reporter for the 1992 –2004 and was a Fellow of the He is a senior fellow of Wharton’s the Yale Law Journal, Virginia Law in economics, financial market equilib - Giessen (1966 –70); Visiting Lecturer, Kristin Madison for the Internet, and the use of mar - American Bar Association’s Task Force World Economic Forum in Davos Leonard Davis Institute of Health Review and Columbia Law Review, as rium, and corporate finance Harvard Law School (1968 –69); Assistant Professor of Law kets and property rights for the alloca - on Corporate Responsibility. He served from 1992 –95. He was a member of Economics. He is also a research well as in peer-reviewed economics Professor of Law and Dean of the Professor Madison received a J.D. tion of the electromagnetic spectrum. from 2001 to 2007 as a member of the the recent Group of 30 task force on associate of the National Bureau of journals such as the Journal of Law, Michael S. Knoll Graduate School of Social Sciences, from Yale Law School in 2000 and Committee on Corporate Laws of the the reinsurance industry and as well as Economic Research. He has served as Economics and Organization, and the Theodore K. Warner Professor of Law University of Konstanz (1971 –76); a Ph.D. in economics from Stanford Michael A. Fitts American Bar Association Section of an earlier study group on international a consultant to the city of Philadelphia, Journal of Legal Studies. He has served Professor of Real Estate and Professor of Law, University of University in 2001. She joined the Dean of the Law School and Bernard G. Business Law, which supervises the supervision and regulation. Currently, the state of Pennsylvania, CitiGroup, as a Regent for the Policy Academy of The Wharton School Frankfurt (1976 –98). He first came to Penn Law faculty in 2001 and currently Segal Professor of Law drafting of the Model Business he is an independent director of the Chemical Bank, the U.S. Department the Multistate Working Group on Professor Knoll joined the Penn Law and Penn in 1975 and again in 1983 as a teaches contracts and health care law. Michael A. Fitts was named Dean of Corporation Act. In 2007 Professor DWS Scudder mutual fund complex of the Treasury, the Financial and Environmental Management Systems, on Wharton faculties from the University Visiting Professor of Law, and in 1985 Her main areas of research interest are the Law School in March 2000. Before Hamermesh was appointed as Chair and has served on the predecessor Fiscal Commission of the Republic the Board of Directors of the American of Southern California Law School in he joined the faculty as Professor of health economics and the regula tion joining the Penn Law faculty in 1985, of the Corporate Practice Committee Deutsche Asset Management and of South Africa, the National Bank of Law and Economics Association and on 2000. He teaches courses in corporate Law. He has served on the board of of the health care industry. Professor Dean Fitts served as clerk to the of the Section of Business Law. In Bankers Trust boards since 1990. Sri Lanka, the National Academy of the National Science Foundation’s Law finance and taxation in the Law the Deutscher Juristentag and is a Madison is currently studying the Honorable A. Leon Higginbotham, Jr., 1999 Professor Hamermesh was Herring received his undergraduate Sciences, and numerous U.S. federal and Social Science grant review panel. School, the Wharton School, and the member of the American Law Institute. diffusion of new forms of health care U.S. Court of Appeals for the Third elected as a member of the American degree from Oberlin College in 1968 government agencies. His research is He was an Olin Visiting Fellow at the Wharton Executive Program. He is He was one of the six commissioners regulation, particularly health care Circuit, and as attorney advisor in the Law Institute. Professor Hamermesh and his PhD from Princeton University currently focused on fiscal federalism, University of Southern California Law also an affiliate of the Zell/Lurie Real regulating concentration in the quality reporting requirements. Office of Legal Counsel in the U.S. is also a member of the Board of in 1973. He has been a member of the the urban fiscal crisis, and the political Center and Visiting Professor at the Estate Center at the Wharton School, German television industry and is a Department of Justice. At Penn he was Directors of ACLU Delaware, Inc., and Finance Department since 1972. He is and legal institutions of fiscal policy- University of Virginia School of Law. and the editor of Forensic Economic member of the European Shadow George J. Mailath appointed Associate Professor of Law represents that organization on the married, with two children, and lives in making. Professor Inman held the In Fall 2007, he will be in residence as Abstracts, an electronic journal pub - Financial Regulatory Committee as Walter H. Annenberg Professor in 1990, Professor of Law in 1992 and National Board of the ACLU. Bryn Mawr, Pennsylvania. Florence Chair in Economics at the Bosch Public Policy Fellow at the lished by the Social Science Research well as of the Frankfurt Academy of in the Social Sciences Robert G. Fuller, Jr. Professor of Law the European University Institute, American Academy of Berlin. Network. Professor Knoll’s undergrad - Arts and Sciences. Professor Kübler’s Professor of Economics in 1996. From 1996 to 1998 he served Richard J. Herring Robert W. Holthausen Florence, Italy, for the spring quarter of uate and J.D. degrees are from the teaching interests are the European School of Arts and Sciences as Associate Dean for Academic Jacob Safra Professor of International The Nomura Securities Company 2000. He will be a Visiting Scholar at Leo Katz University of Chicago. He also earned Union, corporations, international Professor Mailath received his Ph.D. in Affairs at the Law School and was Banking, Professor of Finance Professor, Professor of Accounting the Rockefeller Foundation’s Bellagio Frank Carano Professor of Law a Ph.D. in Economics at the University finance, and mass communication. economics from Princeton University active in establishing a variety of joint The Wharton School and Finance and Management, Study Center for the fall 2007 semester. Professor Katz graduated from the of Chicago. In 1990 he joined the USC His current (comparative) research in 1985. He is currently an associate programs with other schools within Co-Director, Wharton Financial and Chairman, Accounting Department University of Chicago College and Law faculty as an Assistant Professor, interests are in the areas of corporate editor of Econometrica, serves on the the University. In 1999 he served as Institutions Center The Wharton School Jason Scott Johnston Law School. He then clerked for the and in 1995 he was promoted to full governance and finance, the supervi - editorial board of Games and Economic Visiting Professor in Political Science Richard J. Herring is Jacob Safra Professor Holthausen earned his doc - Robert G. Fuller Jr. Professor of Law Honorable Anthony M. Kennedy, at Professor. He has been a Visiting sion of transnational financial markets, Behavior, and is on the executive at Swarthmore College. Dean Fitts’s Professor of International Banking and torate and his M.B.A. at the University and Director, Program on Law, that time on the U.S. Court of Appeals Professor of Law at Georgetown (1999), and broadcast regulation. board of Theoretical Economics. His current research focuses on the effect Professor of Finance at The Wharton of Rochester. Prior to his academic the Environment and the Economy for the Ninth Circuit, and he practiced Penn (1998 –99), and Virginia (2000). research interests include the organiza - of various structural changes (e.g., School, University of Pennsylvania career, he was a C.P.A. He worked After graduating summa cum laude corporate law for several years with Professor Knoll was also a John M. Peter D. Linneman tion of the firm, noncooperative game stronger political parties, presidents or where he is also founding director of at Price Waterhouse and was also a from Dartmouth College, Professor Mayer, Brown and Platt in Chicago. Olin Senior Research Scholar at Albert Sussman Professor of Real theory, evolutionary game theory, social centralized legal institutions) on gov - The Wharton Financial Institutions financial analyst with Mobil. He was Johnston obtained both his J.D. and He began teaching at the University of Columbia University School of Law Estate, Finance, and Public Policy norms, and the foundations of reputa - ernment budgeting and legislation. Center, one of Wharton’s largest on the accounting and finance faculty Ph.D. in economics from the University Michigan in 1987 and joined the Penn (1996 –97), a Visiting Scholar at New The Wharton School tions, law, and authority. He has authored numerous law review research centers. From 2000 to 2006, at the Graduate School of Business of of Michigan, where he was an Alcoa faculty in 1991. Professor Katz teaches York University Law School (1996 –97), Dr. Linneman, a member of the and political science articles in this he served as the Director of the Lauder the University of Chicago for ten years, Fellow in Law and Economics and was and writes about both criminal and and a John M. Olin Distinguished Wharton faculty since 1979, also Andrew Metrick area, several co-authored with political Institute of International Management joining the Penn faculty in 1989. elected to Order of the Coif. He served corporate law. He is the author of Bad Visiting Professor of Law at Toronto serves as a strategic advisor to the Associate Professor of Finance, scientists. Studies and, from 1995 to 2000, he During the 2001 –2002 academic year, as law clerk for United States Court of Acts and Guilty Minds: Conundrums of University. He clerked for the Honorable Lubert-Adler Realty Funds. He also The Wharton School served as Vice Dean and Director of he was a visiting professor at Harvard Appeals Judge Gilbert Merritt, was a the Criminal Law and Ill-Gotten Gains: Alex Kozinski on the U.S. Court of currently serves as a Director of Andrew Metrick is an associate profes - Lawrence A. Hamermesh Wharton’s Undergraduate Division. Business School. Since 1998 he has civil liability fellow at Yale Law School, Evasion, Blackmail, Fraud and Kindred Appeals, Ninth Circuit, from January to one New York Stock Exchange firm sor of finance at the Wharton School Ruby R. Vale Professor of During 2006, he was a Professorial served as the academic director of and in 1995 came to the University Puzzles of the Law, and editor (with August 1986, when he was appointed and several privately held firms. Dr. of the University of Pennsylvania and a Corporate and Business Law Fellow at the Reserve Bank of New Wharton’s Mergers and Acquisitions of Pennsylvania Law School from Michael Moore and Stephen Morse) legal advisor to the Vice Chairman of Linneman was the Chairman of the faculty research fellow at the National Widener University School of Law Zealand and Victoria University. program. Professor Holthausen’s Vanderbilt University Law School. of Foundations of the Criminal Law. the U.S. International Trade Commission. Board of Rockefeller Center Properties, Bureau of Economic Research. He Professor Hamermesh received a B.A. He is the author of more than 90 research interests include the effects Johnston is the founding Director He is currently working on another book, He has published extensively in the Inc. He was Senior Managing Director joined Wharton in 1999 after spending from Haverford College in 1973, and articles, monographs and books on of management compensation and of the Program on Law and the Why the Law Is So Perverse. fields of corporate finance, taxation, of Equity International Properties and five years on the faculty of the Harvard a J.D. from Yale Law School in 1976. various topics in financial regulation, governance structures on firm per - Environment at Penn Law School, and economics, and real estate finance. a Managing Director and Vice Chairman economics department. He is the Professor Hamermesh practiced law international banking and international formance, the effects of information in 2001 became the Robert G. Fuller Jr. Richard E. Kihlstrom of the Investment Committee of author of Venture Capital & the with Morris, Nichols, Arsht & Tunnell, finance. At various times his research on volume and prices, corporate Professor of Public Law. Professor Ervin Miller-Arthur M. Freedman Amerimar Realty. He is an Urban Land Finance of Innovation (Wiley, 2006), Wilmington, Delaware, as an associate has been funded by grants from the restructuring and valuation, the effects Johnston’s research includes both the - Professor of Finance and Economics Institute Research Fellow and a mem - and he teaches a course of the same from 1976 –84, and as a partner from National Science Foundation, the Ford of large block sales on common stock oretical and empirical projects explor - Chairman, Finance Department ber of numerous professional organi - name to MBAs and undergraduates. 1985 –94. Professor Hamermesh Foundation, the Brookings Institution, prices, and numerous other topics. He ing various aspects of natural resource The Wharton School zations. Since 1987, Dr. Linneman has He has been recognized with several joined the faculty at Widener in 1994, the Sloan Foundation and the Council is widely published in both finance and and environmental law and policy, as Richard Kihlstrom holds a doctorate been Albert Sussman Professor of Real teaching awards and been named by and teaches and writes in the areas of on Foreign Relations. accounting journals and is currently an well as more general studies of legal from the University of Minnesota. He Estate, Finance and Public Policy at BusinessWeek as one of the best teachers corporate finance, mergers and acqui - editor of the Journal of Accounting and rights and entitlements. He is cur - has been a member of the Wharton Wharton; he also served as the at Wharton. sitions, securities regulation, business Economics. rently in the midst of book-length proj - faculty since 1979, was named to the Director of the Wharton Real Estate organizations, and professional ects on the law and economics of Miller-Freedman professorship in 1986, Center for 13 years and was the found - and previously served as Chair of the

36 37 associate faculty associate faculty

Professor Metrick’s current research Robert H. Mundheim the Bar of the City of New York’s the fields of medical economics and Edward B. Rock Reed Shuldiner Michael L. Wachter Institute since 1989. She is author of interests are in corporate governance, University Professor of Law and Presidential Task Force on Lawyers’ health insurance. His classic study on Saul A. Fox Distinguished Professor Alvin L. Snowiss Professor of Law William B. Johnson Professor more than 100 scholarly publications venture capital, and technological inno - Finance Emeritus, University of Role in Corporate Governance. He has the economics of moral hazard was of Business Law; Co-Director, Institute Professor Shuldiner is a recognized of Law and Economics; Co-Director, and is the recipient of several awards vation. He has published papers in Pennsylvania; Of Counsel, Shearman written in the areas of corporate gover - the first to point out how health insur - for Law and Economics; Associate expert in the taxation of financial Institute for Law and Economics for teaching excellence at the Wharton many top academic journals in econom - & Sterling; formerly Senior Executive nance, securities regulation, corpora - ance coverage may affect patients’ use Dean, University of Pennsylvania instruments and transactions. His area Professor Wachter received his Ph.D. School. ics and finance, and his research has Vice President and General Counsel of tions, and professional responsibility. of medical services. Subsequent work, Law School of research is taxation and tax policy. in economics from Harvard University been supported by grants from the Salomon Smith Barney Holdings, Inc. both theoretical and empirical, has Professor Rock received his J.D. from His current research includes the taxa - and joined the Penn faculty in 1970. R. Polk Wagner National Science Foundation and the Professor Mundheim received his David K. Musto explored the impact of conventional the University of Pennsylvania in 1983. tion of risk under income, wealth and He has held full professorships in Professor of Law National Institutes of Health. He cur - LL.B. from Harvard Law School in Associate Professor of Finance insurance coverage on preventive care, He joined the Penn faculty in 1989 consumption taxes and the viability three of Penn’s schools: the School of Professor Wagner focuses his research rently serves as an associate editor of 1957. He joined the New York firm of David K. Musto is Associate Professor on outpatient care, and on prescrip - from the Philadelphia law firm of Fine, and effects of a federal wealth tax (with Arts and Sciences, where he has been and teaching in intellectual property The Journal of Finance. Shearman & Sterling, of which he is of Finance at the Wharton School, tion drug use in managed care. In Kaplan and Black, where he special - David Shakow). Professor Shuldiner professor of economics since 1976; the law and policy, with a special interest Professor Metrick received a B.A. in now Of Counsel, and then served as where he has been on the faculty addition, he has explored the influences ized in antitrust, corporate and securi - served as Associate Dean at Penn Law Wharton School, where he was profes - in patent law. He is the author of Economics and Mathematics from Yale special counsel to the U.S. Securities since 1995. He has a B.A. from Yale that determine whether insurance cov - ties litigation. He has written widely from 2000 –02. During Spring 2005, sor of management, 1980 –92; and the more than seventeen articles on topics in 1989 and a Ph.D. in Economics from and Exchange Commission before join - University and a Ph.D. from the erage is available and, through several in corporate law, on topics including: Professor Shuldiner was the William K. Law School, where he became profes - ranging from an empirical analysis of Harvard in 1994. ing the Penn faculty in 1965. Professor University of Chicago, and between cost effectiveness studies, the influence hedge funds; the role of institutional Jacobs, Jr. Visiting Professor of Law at sor of law and economics in 1984. He judicial decision-making in the patent Mundheim served as Dean of the Law college and graduate school he worked of use on health outcomes and cost. investors in corporate governance; Harvard Law School. He was a Visiting has been senior advisor to the Brookings law to the First Amendment status Charles W. Mooney, Jr. School from 1982 to 1989. He has for Roll and Ross Asset Management His interests in health policy deal with close corporations; the role of norms Assistant Professor at Yale Law School Panel on Economic Activity in addition of software programs. His work has Charles A. Heimbold, Jr. Professor of Law been a visiting professor at Harvard in Los Angeles. He is an editor of the ways to reduce the number of unin - in corporate law; the overlap between during 1994 –95. Before joining the Penn to consulting for the Federal Reserve’s appeared in the Stanford Law Review, Professor Mooney received his J.D. from Law School, UCLA Law School, the Journal of Financial Services Research. sured through tax credits for public corporate law and antitrust; the over - law faculty in 1990, he served in the Board of Governors and the Council of the Columbia Law Review, and the Harvard Law School in 1972. He prac - James E. Rogers College of Law at Most of his work, both theoretical and and private insurance, and appropriate lap between corporate law and labor Office of Tax Legislative Counsel of the Economic Advisors. He has also served University of Pennsylvania Law Review, ticed law with the Oklahoma firm of The University of Arizona, and the empirical, is in the area of consumer design for Medicare in a budget-con - law; comparative corporate law; and U.S. Department of the Treasury, was as a member of the National Council among several others. He is a frequent Crowe and Dunlevy and as a partner University of Konstanz in Germany. financial services, mutual funds and strained environment. Dr. Pauly is a the regulation of mutual funds. In counsel to the law firm of Cadwalader, on Employment Policy and as a national and international lecturer on of the New York firm of Shearman & Between 1977 and 1980, he served as consumer credit in particular. He has co-editor-in-chief of the International 1994, Professor Rock was a Visiting Wickersham and Taft, and was an commissioner on the Minimum Wage intellectual property topics, presenting Sterling. Professor Mooney joined the general counsel to the U.S. Department also published work on corporate and Journal of Health Care Finance and Professor of International Banking associate with the Washington, D.C., Study Commission. Professor Wachter his research at both academic institu - Penn faculty in 1986, and during 1999 of the Treasury. He also has served political voting, option pricing, short Economics and an associate editor of and Capital Markets at the Institut für law firm of Wilmer, Cutler and Pickering. served as Deputy Provost of the tions (such as Harvard, Stanford, and 2000 he served as Interim Dean of as chairman of the U.S. Tax Court selling and cross-border taxation. the Journal of Risk and Uncertainty. Arbeits-, Wirtschafts- und Zivil Recht, Professor Shuldiner received his J.D. University of Pennsylvania from July Columbia, University of Michigan, the Law School. From 1998 to 2000 he Nominating Commission, a director He has served on Institute of Medicine Johann Wolfgang Goethe - Universität, from Harvard University in 1983 and 1995 to January 1998, and as Interim University of Virginia, University of served as Associate Dean for Academic of the Securities Investor Protection Gideon Parchomovsky panels on public accountability for Frankfurt am Main, Germany. During his Ph.D. in economics from the Provost from January to December California at Berkeley) and prominent Affairs. He is an active member of Corporation and general counsel to Professor of Law health insurers under Medicare and the 1995 –96 academic year, he was a Massachusetts Institute of Technology 1998. He is the author of numerous industry groups (such as the Intellectual the American Law Institute and the the Chrysler Loan Guarantee Board. Professor Parchomovsky received his on improving the financing of vaccines. Fulbright Senior Scholar and Visiting in 1985. articles in law and economics as well Property Owner’s Organization, the American Bar Association. He served He was co-chairman of the New York LL.B. from the Hebrew University of Dr. Pauly is a former member of the Professor of Law at the Law Faculty as in corporation law and labor law American Intellectual Property Law as a member of a Uniform Commercial firm Fried, Frank, Harris, Shriver and Jerusalem in 1993, his LL.M. from the advisory committee to the Agency for of the Hebrew University of Jerusalem, David A. Skeel, Jr. and economics. Association, and the Association of Code Permanent Editorial Board Article Jacobson from 1989 to 1992. In 1992, University of California at Berkeley in Health Care Research and Quality, Israel. In 2001, he was appointed S. Samuel Arsht Professor of Corporate Patent Counsel). Prior to 2 (Sales) Study Committee and also he joined Salomon Inc. as its General 1995, and his S.J.D. from Yale Law and most recently a member of the the first Saul A. Fox Distinguished Corporate Law Susan M. Wachter joining the Penn faculty in 2000, Wagner served as a reporter for that Board’s Counsel and as a Managing Director School in 1998. Prior to joining the Medicare Technical Advisory Panel. Professor of Business Law. During Professor Skeel joined the Penn faculty Richard B. Worley Professor served as a clerk to Judge Raymond C. Article 9 (Secured Transactions) Study and member of the Executive Committee Penn Law faculty in fall 2002, Professor 2005 –06, he was again a Visiting in 1999. He graduated in 1987 from of Financial Management; Clevenger III of the United States Court Committee and as a reporter for the of Salomon Brothers. Professor Mundheim Parchomovsky served as an Associate Andrew W. Postlewaite Professor of Law, and Lady Davis Fellow, the University of Virginia School of Law, Professor of Real Estate and Finance of Appeals for the Federal Circuit. He Revised Article 9 drafting committee. He is the organizer and presiding officer Professor at Fordham Law School and Harry P. Kamen Professor of at Hebrew University. Professor Rock’s where he was editor of the Virginia Law The Wharton School holds a law degree from Stanford, an served as a member of the U.S. Security emeritus of the International Faculty a Visiting Lecturer at Yale Law School. Economics current research focuses on mergers Review and a member of the Order of Co-Director, Institute for engineering degree from the University and Exchange Commission’s Advisory for Corporate and Capital Market Law, His research interests include intellec - School of Arts and Sciences and acquisitions, hedge funds, and the Coif. He clerked for the Honorable Urban Research of Michigan, and was the 1994 –95 Committee on Market Transactions. a former Trustee and President of the tual property law and property theory. Professor of Finance corporate voting. Walter K. Stapleton on the U.S. Court From 1998 to 2001, as Assistant Roger M. Jones Fellow at the London School of Economics. Mooney was awarded the Distinguished American Academy in Berlin, a Trustee His recent work focuses on unlocking The Wharton School of Appeals for the Third Circuit, and Secretary for Policy Development Service Award, presented by the American of the New School University, a direc - synergies among sub-fields of intellec - Professor Postlewaite received his Chris W. Sanchirico practiced for several years at Duane, and Research, U.S. Department of Amy Wax College of Commercial Finance Lawyers. tor of the Appleseed Foundation, and tual property and devising innovative Ph.D. from Northwestern University in Professor of Law Morris & Heckscher in Philadelphia, Housing and Urban Development, Dr. Robert Mundheim Professor of Law He also served as U.S. Delegate and a member of the Council of the American mechanisms for protecting property 1974 and joined the Penn faculty from Professor of Business and Public Policy before joining the Temple University Wachter served as the senior urban A graduate of Yale College and Position Coordinator (appointed by U.S. Law Institute and Chairman of its entitlements. the University of Illinois in 1980. He is The Wharton School School of Law in 1990. Professor Skeel policy official and principal advisor to Harvard Medical School, Professor Department of State) at the Diplomatic Governance Committee. He also editor of American Economic Journal: Professor Sanchirico received his A.B. has also held visiting appointments the Secretary on overall HUD policies Wax trained as a neurologist at New Conference for the Cape Town Convention serves on the American Bar Association’s Mark V. Pauly Microeconomics, past editor of the from Princeton and both his law degree at the University of Wisconsin Law and programs. At Wharton, Dr. Wachter York Hospital before completing a on International Interests in Mobile Standing Committee on Ethics and Bendheim Professor, Department of International Economic Review and and his Ph.D. in economics from Yale. School (1993 –94), the University of was Chairperson of the Real Estate law degree at Columbia Law School in Equipment and the Protocol on Matters Professional Responsibility. He is Health Care Systems, and Professor past co-editor of Econometrica. He Before joining the Penn Law and Virginia School of Law (spring 1994), Department and Professor of Real 1987. She served as a clerk to the Specific to Aircraft Equipment, in Cape chairman of the Quadra Realty Trust of Health Care Systems, Insurance and serves on the Board of Directors Wharton faculties in 2003, he was Georgetown University Law Center Estate and Finance from July 1997 Honorable Abner J. Mikva of the U.S. Town, South Africa. He currently serves Board of Directors and a director of Risk Management, and Public Policy of the National Bureau of Economic a law professor at the University of (fall 2004), and the University of until her 1998 appointment to HUD. Court of Appeals for the D.C. Circuit as a U.S. Delegate for the UNIDROIT eCollege, Inc. and of Arnhold & S. and Management, The Wharton School; Research, the Executive Committee of Virginia and an economics professor Pennsylvania Law School (fall 1997). She founded and currently serves as and worked for six years at the Office draft convention on intermediated Bleichroeder Holdings, Inc. He is also Professor of Economics, School of Arts the Game Theory Society and on the at Columbia. Professor Sanchirico has Professor Skeel specializes in corpo - Director of Wharton’s Geographical of the Solicitor General at the U.S. securities. His current research centers the Chairman of the Legal Advisory and Sciences; Co-Director, Vagelos Life Executive Committee of the American written widely on tax policy, distribu - rate and commercial law and has Information Systems Lab. Dr. Wachter Department of Justice, where she argued around the intermediated securities, Board of NASDAQ. Mr. Mundheim Sciences and Management Program Economic Association. He has pub - tive justice, the information problems written widely on corporate law, served as a member of the Board of 15 cases before the U.S. Supreme Court. security interests in bankruptcy, and has served as a Consultant to the Dr. Pauly is a former commissioner lished widely in the areas of strategic of legal enforcement, the rules govern - bankruptcy and sovereign debt. He Directors of the Beneficial Corporation She taught from 1994 to 2001 at the bankruptcy theory. American Law Institute’s Principles on the Physician Payment Review behavior and industrial organization. ing trial evidence and pretrial discov - has also has written on law and reli - from 1985 to 1998 and of the MIG University of Virginia Law School. Her of Corporate Governance: Analysis Commission and an active member ery, and the evolution and stability of gion, and poetry and law. Residential REIT from 1994 to 1998. areas of teaching and research included |and Recommendations (1978 –1994), of the Institute of Medicine. He has social norms. Professor Sanchirico She was the editor of Real Estate civil procedure, remedies, labor and as a member of the American Bar made significant contributions to has published extensively in top law Economics from 1997 to 1999 and employment law, poverty law and wel - Association President’s Task Force on reviews as well as the premier peer- serves on the editorial boards for sev - fare policy, the law and economics of Corporate Responsibility (2002 –2003), reviewed journals in both law and eral real estate journals. Dr. Wachter work and family, and social science and as a member of the Association of economics and economic theory. has been a member of the Advanced Studies Institute of the Homer Hoyt and the law. Professor Wax joined the Penn Law Faculty in fall 2001.

38 39 ILE INVESTHORS 2006–2007

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James A. Ounsworth C d a y D : n g i s e D 40 Institute for Law and Economics University of Pennsylvania 3400 Chestnut Street Philadelphia, PA 19104-6204 215.898.7719 www.law.upenn.edu/ile/ Michael L. Wachter, Co-Director William B. Johnson Professor of Law and Economics 215.898.7852 mwachter @law.upenn.edu Edward B. Rock, Co-Director Saul A. Fox Distinguished Professor of Business Law 215.898.8631 erock @law.upenn.edu Vicki L. Hewitt, Program Director 215.898.7719 215.573.2025 fax vhewitt @law.upenn.edu september 2007