institute for law & economics annual report 2011–12

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 message from the co-chairs

For almost three decades, Penn’s Institute for Law and Economics has contributed Message from the Co-Chairs: 1 to scholarship, policy, and practice on relevant issues of law and economics that affect Board of Advisors: 2 our country’s businesses and financial institutions.

Message from the Dean: 6

Message from the Co-Directors: 7 he Institute’s programs have become increasingly relevant and important in this Roundtable Programs: 9 challenging economic climate, focusing on the issues that the academic, legal, and business communities care about. Today the Institute enjoys an outstanding Corporate Roundtable, Spring 2012: 10 T international reputation for the excellence of its programs, where leaders in business, financial management, legal practice, and academic scholarship candidly discuss Corporate Roundtable, Fall 2011: 12 the intersection of theory and practice on a host of significant issues. Your participation in Corporate Roundtable, Spring 2011: 14 these programs is a vital component of their success. On behalf of the Institute’s Board of Advisors, we want to express our gratitude to Corporate Roundtable, Fall 2010: 14 everyone who has helped the Institute during this past year, whether through financial contributions or by participation in ILE programs. One of the foremost goals of the Institute Corporate Roundtable, Spring 2010: 16 is to broaden and diversify our foundation, and once again we have realized that goal. Corporate Roundtable, Fall 2009: 16 We are delighted to report some superb additions to our Board of Advisors during the past year. We are pleased to welcome the following new members: Kevin Genirs (Barclays Panel Programs: 19 Capital); Jennifer Shotwell (Innisfree M&A Incorporated); Richard D. Smith (Allen & Overy LLP); Andrea E. Utecht (FMC Corporation); and Antonio Weiss (Lazard). These Chancery Court Programs: 20 accomplished individuals will greatly enhance the work of the Institute and broaden the Insights from Practice: 22 composition of our Board. We would also like to welcome The Depository Trust and Clearing Corporation and White & Case LLP as ILE sponsors, through long-standing board members Lectures: 25 James E. Odell and Morton A. Pierce. All of the members of our Board give graciously to the Institute, not just financially but also of their time and Law and Entrepreneurship: 26 expertise, and we are grateful for their contributions. Very special thanks must be given to ILE Benefactors Bob Distinguished Jurist: 28 Friedman, Paul G. Haaga, Jr., and Skadden, Arps, Slate, Meagher & Flom LLP (through Eric Friedman). Their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express International Program Lectures: 30 our sincere appreciation to each of them. Bill Bratton, Jill Fisch, and Michael Wachter continued to be truly outstanding as co-directors of the Institute. Past Lectures: 32 The co-directors’ dedication to all aspects of the Institute’s work and their ability to come up with timely programs Academic Events: 35 and attract the ideal participants to make every program an unqualified success are why ILE is world-renowned as the forum for interesting dialogue on topical issues for corporations and their financial and legal advisors. Penn /NYU Conference, Spring 2012: 36

NYU/Penn Conference, Spring 2011: 36 Charles “Casey” Cogut Simpson Thacher & Bartlett LLP ILE/Wharton Finance Seminars: 38 Joseph B. Frumkin Curricular Partnerships: 40 Sullivan & Cromwell LLP

Publications and Papers: 42 September 2012

Associate Faculty: 44

Institute Investors: 53

message from the co-chairs 1 board of advisors board of advisors

James H. Agger Richard B. Aldridge William D. Anderson, Jr. Marshall B. Babson Louis J. Bevilacqua Joseph B. Frumkin Kevin Genirs Scott C. Goebel Perry Golkin Stuart M. Grant Chair, 1994-2001 Morgan, Lewis & Bockius LLP Managing Director, Global Seyfarth Shaw LLP Cadwalader, Wickersham Co-Chair, 2008- Managing Director Senior Vice President and Chief Executive Officer Grant & Eisenhofer P.A. Retired Senior Vice President, Philadelphia, PA Head of Raid and Activism New York, NY & Taft LLP Sullivan & Cromwell LLP Barclays Capital General Counsel PPC Enterprises LLC Wilmington, DE General Counsel and Secretary Defense New York, NY New York, NY New York, NY Fidelity Management & New York, NY Air Products and Chemicals, Inc. Goldman, Sachs & Co. Research Company Allentown, PA New York, NY Boston, MA

Fred Blume Daniel H. Burch George A. Casey Charles I. Cogut Isaac D. Corré Mark I. Greene Paul G. Haaga, Jr. John G. Harkins, Jr. Leon C. Holt, Jr. William B. Johnson Chairman Emeritus Chairman & CEO Shearman & Sterling LLP Co-Chair, 2008- Senior Managing Director Cravath, Swaine & Moore LLP Retired, Former Chairman of Chair, 1980-1990 Retired Vice Chairman and Chairman Emeritus Blank Rome LLP MacKenzie Partners, Inc. New York, NY Simpson Thacher & Eton Park Capital New York, NY the Board Harkins Cunningham LLP Chief Administrative Officer Whitman Corporation Philadelphia, PA New York, NY Bartlett LLP Management Capital Research and Philadelphia, PA Air Products and Chemicals, Inc. Chicago, IL New York, NY New York, NY Management Company Allentown, PA Los Angeles, CA

Stephen Fraidin Joel E. Friedlander Dennis J. Friedman Eric J. Friedman Robert L. Friedman Brendan R. Kalb Cynthia B. Kane Roy J. Katzovicz Bruce N. Kuhlik Mark Lebovitch Kirkland & Ellis LLP Bouchard Margules & Gibson, Dunn & Crutcher LLP Executive Partner Chair, 2001-2007 General Counsel Special Assistant to the Chief Legal Officer and Executive Vice President Bernstein Litowitz Berger & New York, NY Friedlander New York, NY Skadden, Arps, Slate, Senior Advisor AQR Capital Management, LLC Secretary of State Investment Team Member and General Counsel Grossmann LLP Wilmington, DE Meagher & Flom LLP The Blackstone Group L.P. Greenwich, CT Delaware Department of State Pershing Square Capital Merck & Co., Inc. New York, NY New York, NY New York, NY Wilmington, DE Management, L.P. Whitehouse Station, NJ New York, NY

2 institute for law and economics board of advisors 3 board of advisors board of advisors

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Kenneth A. Lefkowitz Simon M. Lorne G. Daniel O’Donnell James E. Odell James A. Ounsworth Heidi Stam Hon. Leo E. Strine, Jr. John J. Suydam Andrea E. Utecht Hon. E. Norman Veasey Hughes Hubbard & Reed LLP Vice Chairman and Chief Dechert LLP Managing Director Managing Partner Managing Director and Chancellor Chief Legal and Compliance Executive Vice President, Chief Justice, Supreme Court New York, NY Legal Officer Philadelphia, PA The Depository Trust and The S Consulting Group General Counsel Delaware Court of Chancery Officer General Counsel and of Delaware, 1992-2004 Millennium Management LLC Clearing Corporation Philadelphia, PA Vanguard Wilmington, DE Apollo Global Management, LLC Secretary Weil, Gotshal & Manges LLP New York, NY New York, NY Wayne, PA New York, NY FMC Corporation New York, NY, and Philadelphia, PA Wilmington, DE

Morton A. Pierce Allan N. Rauch Martha L. Rees Myron J. Resnick Peter G. Samuels Marc Weingarten Antonio Weiss Gregory P. Williams Donald J. Wolfe, Jr. Christopher Young White & Case LLP Vice President - Legal and Vice President and Assistant Retired Senior Vice President Proskauer Rose LLP Schulte Roth & Zabel LLP Global Head of Investment Richards, Layton & Finger, P.A. Potter Anderson & Corroon LLP Managing Director and New York, NY General Counsel General Counsel and Chief Investment Officer New York, NY New York, NY Banking Wilmington, DE Wilmington, DE Head of the Contested Bed Bath & Beyond Inc. E. I. du Pont de Nemours and Allstate Insurance Company Lazard Situations Practice Union, NJ Company Northbrook, IL Credit Suisse Wilmington, DE New York, NY

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Jennifer Shotwell David M. Silk Bruce L. Silverstein Richard D. Smith A. Gilchrist Sparks III Founding Managing Director Wachtell, Lipton, Rosen Young Conaway Stargatt & Allen & Overy LLP Morris, Nichols, Arsht & Innisfree M&A Incorporated & Katz Taylor, LLP New York, NY Tunnell LLP New York, NY New York, NY Wilmington, DE Wilmington, DE

4 institute for law and economics board of advisors 5 message from the dean message from the co-directors

For over twenty years, the Institute for Law and Economics has successfully The Institute for Law and Economics continues to be the legal academy’s demonstrated the benefits of a cross-disciplinary perspective. most dynamic corporate law program.

ts programs provide a model for how to build bridges between disciplines by creating ties between schools, he Institute for Law and Economics endeavors to sponsor the legal academy’s deepest and most between faculty members, between students, and between experts in the field from around the world. ILE compelling corporate law programs. We believe this year’s events met this demanding aspiration. ILE combines Penn’s greatest strengths in the Law School, the Wharton School, and the Department of Economics continues to be a prominent venue for encounters among leading corporate practitioners, lawmakers, to focus on complex questions that concern all of these fields. The Institute proves that when you bring the T and academics and for conversations across academic disciplines. We commit ourselves to achieving I an even higher level of seriousness of endeavor and participant engagement in the future. right people—judges, deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more—to convene outside of their own niches, remarkably original insights are generated. Our Fall Corporate Roundtable looked at current issues in securities regulation and As our world grows more complex every day, the topics the Institute addresses are both exciting and relevant. examined the SEC from an institutional perspective—a hot topic in light of events like the It is no longer enough to approach complicated questions such as securities regulation, shareholder empowerment, Business Roundtable decision and the Citigroup litigation. Our Spring Roundtable consid- or investment management solely from a legal, economic, or business perspective. Indeed, no significant business ered the evolving issue of shareholder empowerment in Delaware corporate law. issue can be addressed without paying attention to the underlying economic trends and legal regulations. All of ILE’s Our public lecture series highlighted ILE’s close relationship with the Delaware courts. participants contribute to and benefit from the profound understanding such analysis affords. In recognition of the transition on the Delaware Chancery Court, we hosted both William In addition to its unique focus, another of the Institute’s strengths is the variety of programs it offers. The Chandler, the outgoing Chancellor, and Leo Strine, the new Chancellor, as Distinguished roundtables—ILE’s signature events—bring together distinguished members of the bar, Jurist lecturers. judiciary, government, business world, and academia for open discussion and intellectual Our Law and Entrepreneurship lecture came from Paul Haaga, who spoke about the exploration. ILE’s public lectures by leading jurists, executives, and entrepreneurs attract principles of money management and the distinctive investment style employed by Capital participants from all sectors of the University and from the wider community. During the Research and Management Company, the investment advisor for the American Funds. past year the outstanding talks, panels, and conferences organized by the Institute covered a Corporate governance retained a place at the top of our agenda as well. Our Fall Insights wide range of topics and programs, from corporate finance and corporate governance to from Practice program explored the Air Products/Airgas takeover battle. Hideki Kanda from private equity, hedge funds, and mutual funds, as well as large-scale entrepreneurship and the University of Tokyo delivered a lecture on comparative corporate governance as part of management. our International Programs Series. Our Chancery Court program featured several leading Since my cross-disciplinary vision for the Law School and the purposes of the Institute investment bankers and focused on conflicts of interest in mergers and acquisitions and other for Law and Economics are so similar, it is personally gratifying to me that the Institute is current financial topics. generously supported by contributors who understand the importance of what we do and We successfully continued our cross-disciplinary academic initiatives. The Law and the unique position the Institute holds. Many of these contributors also serve as members of the Institute’s Board Finance series, held in cooperation with Wharton’s Finance Department as a regular part of of Advisors, helping to plan the direction and focus of the programs and lending their expertise as panelists and its Finance workshop, featured papers on financial regulation from Eric Talley, Rosalinde commentators for Institute events. and Arthur Gilbert Professor of Law at University of California-Berkeley Law School, and ILE’s extraordinary co-chairs, Casey Cogut and Joe Frumkin, have my particular thanks for their many Paul Pfleiderer, C.O.G. Miller Distinguished Professor of Finance at Stanford University exceptional contributions. Like all who serve as advisors for ILE, Casey and Joe contribute their very valuable time Graduate School of Business. In February, we co-hosted the eighth annual Penn/NYU Law and expertise, in addition to their numerous contacts in the legal and business communities. ILE has benefited and Finance Conference, a joint venture of the Institute for Law and Economics, the substantially from their leadership. Wharton Financial Institutions Center, and the Pollack Center for Law and Business at New I must also thank the three eminent professors who lead the Institute for Law and Economics—Michael Wachter, York University. Jill Fisch, and Bill Bratton. It is because of their commitment and enthusiasm that ILE ranks among the premier As in the past, our Institute’s greatest strength lies in the quality of our supporters and institutions of its kind. their active participation in our programs. Our board members and sponsors make our I extend the deepest appreciation to all ILE supporters and participants for their commitment and investment programs possible, not only as financial supporters but as key participants and co-organizers. We are especially during the past year. With the proper support and sponsorship, the Institute for Law and Economics has limitless grateful for the dedicated and enthusiastic work of our board chairs, Casey Cogut of Simpson Thacher & Bartlett potential for growth and expansion in the future. We welcome others to join in backing and participating in this LLP and Joseph Frumkin of Sullivan & Cromwell LLP.We are delighted to welcome four new board members: Kevin extremely worthwhile endeavor. Genirs (Barclays Capital); Jennifer Shotwell (Innisfree M&A Incorporated); Richard D. Smith (Allen & Overy LLP); Andrea E. Utecht (FMC Corporation); and Antonio Weiss (Lazard). We are also delighted to welcome The Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, Depository Trust and Clearing Corporation and White & Case LLP as sponsors, thanks to our dedicated board University of Pennsylvania Law School members Jim Odell and Mort Pierce. September 2012 William W. Bratton, Co-Director, Institute for Law and Economics Nicholas F. Gallicchio Professor of Law Jill E. Fisch, Co-Director, Institute for Law and Economics Perry Golkin Professor of Law Michael L. Wachter, Co-Director, Institute for Law and Economics William B. Johnson Professor of Law and Economics September 2012

6 institute for law and economics message from the co-directors 7 Roundtable Programs

At the heart of the Institute’s work is the round- table series, which brings members of the Institute’s associate faculty and other academics together with corporate executives, practicing attorneys, judges, public policymakers, and students. Each roundtable takes up current issues that emerge from the research and teaching of the Institute and provides a forum for lively discussion.

Over the years, the Institute has sponsored roundtables on a broad range of topics—including labor law and bankruptcy, as well as corporate law, governance, and finance—engaging the interest and participation not only of scholars but also of leaders in the business and public sectors. The high caliber of the participants guarantees that each affair is intense and informative. ILE’s longstanding off-the-record policy for the roundtables is often the impetus for an energetic and wide-ranging exchange of ideas among some of the nation’s most accomplished scholars, attorneys, and business people.

roundtable programs 9 2 Corporate Roundtable 2 1 Perry Golkin, Kohlberg Kravis Roberts & Co.

2 Paul K. Rowe, Wachtell, Lipton, Rosen & Katz.

3 Hon. Travis Laster, Delaware Court of Chancery; Adapting to the New Shareholder Centric Reality: April 20, 2012 Joseph B. Frumkin, Sullivan & Cromwell LLP; Creditor Protection Christopher Young, Credit Suisse. Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School Welcome 4 Front row: Hon. Jack B. Jacobs, Supreme Court of Delaware; William T. Allen, New York Corporate law seeks to control three sorts of agency costs: Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, managers v. dispersed shareholders; controlling v. non- University of Pennsylvania Law School University School of Law; Perry Golkin, Kohlberg controlling shareholders; and shareholders v. creditors. Kravis Roberts & Co. Middle row: Joel E. 1 Because the magnitude of these agency costs is Friedlander, Bouchard Margules & Friedlander; interrelated, changes in the severity of one sort of agency Morning Session David C. McBride, Young Conaway Stargatt & cost will likely affect the severity of other varieties. In Adapting to the New Shareholder Centric Reality: shareholder-centric corporate law systems like the UK, Creditor Protection Taylor, LLP. Back row: Christopher Foulds, creditor protection is a prominent feature. By contrast, in Skadden, Arps, Slate, Meagher & Flom LLP; Rich manager-centric corporate law systems, as in the US over Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, Hynes, University of Virginia School of Law; much of the last 80 years, corporate law’s creditor protection University of Pennsylvania Law School features seem to atrophy. What happens when a system Moshe A. Cohen, Columbia Business School. shifts from a manager-centric system to a shareholder- 5 centric system? How can it adapt to the new reality and commentators Front row: Stephen Fraidin, Kirkland & Ellis respond to the increased need for creditor protection? Isaac D. Corré, Senior Managing Director, Eton Park Capital Management LLP; Frederick H. Alexander, Morris, Nichols, Arsht & Tunnell LLP. Middle row: Richard D. In this article, I argue that since the early 1980s, the Reinier Kraakman, Ezra Ripley Thayer Professor of Law, Harvard Law School Smith, Allen & Overy LLP; K.J. Martijn Cremers, U.S. system has shifted from a manager-centric system to a shareholder-centric system. If this is right, then the Yale School of Management. shareholder-creditor agency cost problem potentially Thirty Years of Shareholder Rights and Firm Valuation returns as a central concern of corporate law. Further, to Martijn Cremers, Associate Professor of Finance, Yale School of Management 6 Front row: William D. Anderson, Jr., Goldman, the extent that we have evolved into a shareholder-centric Allen Ferrell, Harvey Greenfield Professor of Securities Law, Harvard Law School Sachs & Co.; Roy J. Katzovicz, Pershing Square system through changes in practice rather than law, the Capital Management, L.P. Middle row: Marc H. law is unlikely to have kept pace. This article addresses the 2 4 3 question of how the U.S. corporate law system can adapt commentators Kushner, Lazard Frères & Co. LLC; Bo Becker, to this new shareholder-centric reality and the shareholder- Harvard Business School; Edward B. Rock, Bo Becker, Assistant Professor of Business Administration, Harvard Business School creditor agency costs that accompany it. University of Pennsylvania Law School. Back row: Paul K. Rowe, Wachtell, Lipton, Rosen & Katz David A. Skeel, Jr., University of Pennsylvania Thirty Years of Shareholder Rights and Firm Valuation Law School. Martijn Cremers, Associate Professor of Finance, Afternoon Session Yale School of Management Panel on Delaware Law and Shareholder Empowerment: Allen Ferrell, Harvey Greenfield Professor of Securities Law, How It Has Evolved and Where It Is Going Harvard Law School

This paper introduces a new hand-collected shareholder moderators rights dataset tracking restrictions on shareholder rights at approximately 1,000 firms over 1978-1989. In conjunction William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of with the 1990-2006 IRRC data, we track firms’ shareholder Pennsylvania Law School rights over thirty years. Most governance changes occurred Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School during the 1980s. We find a robustly negative association between restrictions on shareholder rights (using the G-Index as a proxy) and Tobin’s Q. The negative association panelists only appears after the judicial approval of the poison pill Frederick H. Alexander, Morris, Nichols, Arsht & Tunnell LLP and antitakeover defenses more generally in the landmark 4 Delaware Supreme Court decision of Moran v. Household William T. Allen, Nusbaum Professor of Law and Business, New York University in 1985. This decision was an unanticipated, exogenous School of Law shock that increased the importance of shareholder rights, suggesting that shareholder rights have become more William C. Coffey,Senior Vice President and Deputy General Counsel, strongly associated with firm valuation in the post-Moran era. Fidelity Investments Stephen Fraidin, Kirkland & Ellis LLP Perry Golkin, Advisory Partner, Kohlberg Kravis Roberts & Co. Hon. Jack B. Jacobs, Justice, Supreme Court of Delaware

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10 institute for law and economics roundtable programs 11 2 Corporate Roundtable 2 1 Troy A. Paredes, U.S. Securities and Exchange Commission.

2 Front row: Heidi Stam, Vanguard; Stephen L. Brown, TIAA-CREF. Middle row: Edward B. Rock, The Political Economy of Fraud on the Market University of Pennsylvania Law School. William W. Bratton, Nicholas F. Gallicchio Professor of Law, December 9, 2011 University of Pennsylvania Law School 3 Front row: Simon M. Lorne, Millennium Michael L. Wachter, William B. Johnson Professor of Law Welcome and Economics, University of Pennsylvania Law School Management LLC; Roy J. Katzovicz, Pershing Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, Square Capital Management, L.P. Middle row: The fraud on the market class action no longer enjoys University of Pennsylvania Law School Martha L. Rees, E. I. du Pont de Nemours and substantive academic support. If, as the consensus view 1 2 now has it, fraud on the market makes no policy sense, Company; Joshua F. Bonnie, Simpson Thacher then its abolition would seem to be the next logical step. Morning Session & Bartlett LLP. Yet most observers continue to accept it on the same The Political Economy of Fraud on the Market ground cited by the Supreme Court in 1964 when it first 4 Front row: Troy A. Paredes, U.S. Securities and implied a private right of action under the 1934 Act in J.I. William W. Bratton, Nicholas F. Gallicchio Professor of Law, Exchange Commission; Harvey J. Goldschmid, Case v. Borak—a private enforcement supplement is needed University of Pennsylvania Law School Columbia Law School; Jill E. Fisch, University of in view of inadequate SEC resources. Restating, even a Michael L. Wachter, William B. Johnson Professor of Law and Economics, private enforcement supplement that makes no sense is Pennsylvania Law School. Middle row: Robert better than no private enforcement supplement at all. University of Pennsylvania Law School C. Clark, Harvard Law School; Henry T.C. Hu, The University of Texas Law School. Back row: This article questions this backstop policy conclusion, commentators highlighting the sticking points retarding movement Edmund W. Kitch, University of Virginia School toward fraud on the market’s abolition and mapping a James D. Cox, Brainerd Currie Professor of Law, Duke University School of Law of Law. plausible route to a superior enforcement outcome. We Linda Chatman Thomsen, Davis Polk & Wardwell LLP recommend that private plaintiffs be required to meet an 5 Front row: Harvey J. Goldschmid, Columbia actual reliance standard. We look to the Securities and Law School; Perry Golkin, Kohlberg Kravis Exchange Commission, rather than Congress or the courts, “Publicness” in Contemporary Securities Regulation Roberts & Co. Middle row: Robert C. Clark, to initiate the change—it is the lawmaking institution most responsible for the unsatisfactory status quo and Donald C. Langevoort, Thomas Aquinas Reynolds Professor of Law, Harvard Law School; Henry T.C. Hu, The best equipped to propose a corrective. Because an actual Georgetown University Law Center University of Texas Law School. reliance requirement would substantially diminish the flow Robert B. Thompson, Peter P. Weidenbruch Jr. Professor of Business Law, of private litigation, we also look to a compensating step up 3 6 Christine Hurt, University of Illinois College Georgetown University Law Center in public enforcement capability. More specifically, theSEC of Law; Christopher J. Brummer, Georgetown enforcement division needs enough funding to redirect its University Law Center; Amanda M. Rose, efforts away from the enterprise toward culpable commentators individuals. Vanderbilt University Law School; Frederick Joshua F. Bonnie, Simpson Thacher & Bartlett LLP Tung, Boston University School of Law. Adam C. Pritchard, Professor of Law, The University of Michigan Law School “Publicness” in Contemporary Securities Regulation 7 William W. Bratton, University of Pennsylvania Donald C. Langevoort, Thomas Aquinas Reynolds Professor Law School. of Law, Georgetown University Law Center Afternoon Session Robert B. Thompson, Peter P. Weidenbruch Jr. Professor of Business Law, Georgetown University Law Center Panel on the SEC from an Institutional Perspective

This article surveys some of the history of the public- private divide in securities regulation, and looks at how moderators technology has blurred the distinctions that have long William W. Bratton, Nicholas F. Gallicchio Professor of Law, been used by regulators. It looks at the questions University of Pennsylvania Law School surrounding public company status under the ’34 Act. We suggest abandoning the 500 shareholder record Michael L. Wachter, William B. Johnson Professor of Law and Economics, ownership in favor of a standard focusing on trading University of Pennsylvania Law School volume. We consider but ultimately reject the idea that accredited or otherwise sophisticated, wealthy investors 4 5 not be counted in assessing public status for issuers. panelists And we offer some thoughts about balancing costs and benefits with respect to drawing the line between public David M. Becker, Cleary Gottlieb Steen & Hamilton LLP and private issuers. Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School Harvey J. Goldschmid, Dwight Professor of Law, Columbia Law School Much of the SEC’s policymaking along the public-private divide is reactive, a delayed response—largely invisible Roy J. Katzovicz, Chief Legal Officer and Investment Team Member, except to legal elites—to regulatory arbitrage efforts by Pershing Square Capital Management, L.P. sophisticated lawyers and clients, who use both technical Simon M. Lorne, Vice Chairman and Chief Legal Officer, legal knowledge and political influence to protect the spaces they claim. We see this as a growing problem: how Millennium Management LLC is the SEC, at a time of both financial and political stress, Troy A. Paredes, Commissioner, U.S. Securities and Exchange Commission to address increasingly rapid technological innovation. We have no suggestions beyond addressing those stresses, but do think that the nature of informal (and not necessarily enforcement-driven) SEC lawmaking be given more scholarly attention that it has gotten.

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12 institute for law and economics roundtable programs 13 2 Corporate Roundtable 2 1 Harvey R. Miller, Weil, Gotshal & Manges LLP; Richard Levin, Cravath, Swaine & Moore LLP.

2 Front row: Hon. Christopher S. Sontchi, April 8, 2011 U.S. Bankruptcy Court, District of Delaware; Robert L. Friedman, The Blackstone Group L.P. Welcome commentators Middle row: Edward B. Rock, University of Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, Barry E. Adler, Charles Seligson Professor of Law, New York Pennsylvania Law School; Mark J. Roe, Harvard University of Pennsylvania Law School University School of Law Law School. Back row: John C. Coffee, Jr., Columbia Law School. Randall D. Guynn, Davis Polk & Wardwell LLP 1 2 Morning Session 3 Front row: Hon. Leo E. Strine, Jr., Delaware Transaction Consistency and the New Finance Afternoon Session Court of Chancery; Roy J. Katzovicz, Pershing in Bankruptcy Panel on Issues in Bankruptcy and Resolution Square Capital Management, L.P. Middle row: Thomas H. Jackson, Distinguished University Professor in Political Julian Franks, London Business School; Ronald Science and Business Administration and President Emeritus, moderators J. Gilson, Columbia Law School. University of Rochester William W. Bratton, Professor of Law, University of Pennsylvania 4 Front row: Roy J. Katzovicz, Pershing Square David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law, Law School Capital Management, L.P.; Faiza J. Saeed, University of Pennsylvania Law School Michael L. Wachter, William B. Johnson Professor of Law and Cravath, Swaine & Moore LLP; Bruce L. Economics, University of Pennsylvania Law School Silverstein, Young Conaway Stargatt & Taylor, commentators LLP. Middle row: Ronald J. Gilson, Columbia Law Richard K. Kim, Wachtell, Lipton, Rosen & Katz panelists School; James E. Odell, UBS Investment Bank; Mark J. Roe, David Berg Professor of Law, Harvard Law School Donald S. Bernstein, Davis Polk & Wardwell LLP Daniel M. Hawke, Philadelphia Regional Office, Martin J. Bienenstock, Dewey & LeBoeuf LLP SEC; Roberta Romano, Yale Law School. Back Systemic Risk After Dodd-Frank: Contingent Richard J. Herring, Jacob Safra Professor of International Banking row: Christine Hurt, University of Illinois Capital and the Need for Regulatory Strategies and Professor of Finance, The Wharton School 3 College of Law; James C. Spindler, The Beyond Oversight William F. Kroener, III, Sullivan & Cromwell LLP University of Texas at Austin School of Law; John C. Coffee, Jr.,Adolf A. Berle Professor of Law, Richard Levin, Cravath, Swaine & Moore LLP David G. Clarke, The Griffing Group, Inc.; Robert C. Clark, Harvard Law School. Columbia Law School Harvey R. Miller, Weil, Gotshal & Manges LLP James Millstein, Former Chief Restructuring Officer, 5 Donald S. Bernstein, Davis Polk & Wardwell LLP. U.S. Department of the Treasury 6 Front row: Louis J. Bevilacqua, Cadwalader, Wickersham & Taft LLP; Hon. Jack B. Jacobs, December 10, 2010 Supreme Court of Delaware; Marc Weingarten, Schulte Roth & Zabel LLP. Middle row: Welcome commentators Christopher Young, Credit Suisse; David K. Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, Isaac Corré, Senior Managing Director, Eton Park Capital Management Musto, The Wharton School; Joseph A. University of Pennsylvania Law School Joseph A. McCahery, Professor of Financial Market Regulation and McCahery, Tilburg University. Back row: Professor of International Economic Law, Tilberg University - Christopher Foulds, Skadden, Arps, Slate, Morning Session Tilburg Law and Economics Center Meagher & Flom, LLP; Kent S. Hughes, High Water Marks in Competitive Capital Markets Egan-Jones Group, Ltd.; April Klein, NYU Stern School of Business. Susan Kerr Christoffersen, Associate Professor of Finance, Afternoon Session 4 Rotman School of Management, University of Toronto Panel on Hedge Funds Under Fire? David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School moderators William W. Bratton, Professor of Law, University of Pennsylvania commentators Law School Steven J. Fredman, Schulte Roth & Zabel LLP Michael L. Wachter, William B. Johnson Professor of Law and Ronald J. Gilson, Marc and Eva Stern Professor of Law and Economics, University of Pennsylvania Law School Business, Columbia Law School panelists Unfulfilled Expectations? Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP The Returns to International Hedge Fund Activism Roy Katzovicz, Chief Legal Officer, Pershing Square Capital Management, L.P. Marco Becht, Professor, University of Brussels Faiza J. Saeed, Cravath, Swaine & Moore LLP Julian Franks, Professor of Finance, London Business School Bruce Silverstein, Young Conaway Stargatt & Taylor, LLP Jeremy Grant , Ph.D. Candidate, University of Cambridge Hon. Leo E. Strine, Jr., Vice Chancellor, Delaware Court of Chancery John Suydam, Chief Legal Officer, Apollo Global Management, LLC 5 6 Gregory V. Varallo, Richards, Layton & Finger, P. A.

14 institute for law and economics roundtable programs 15 2 Corporate Roundtable 2 1 Front row: John E. Baumgardner, Jr., Sullivan & Cromwell LLP; Scott Goebel, Fidelity Management & Research Company; David M. Silk, Wachtell, Lipton, Rosen & Katz. Back row: April 9, 2010 Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Tamar Frankel, Boston University School of Law; Alan R. Palmiter, Wake Forest commentators Welcome School of Law; Eric D. Roiter, Boston University Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, Donald G. Bennyhoff,Senior Investment Analyst, Vanguard School of Law. University of Pennsylvania Law School Eric Zitzewitz, Associate Professor of Economics, Dartmouth College 2 Susan B. Kerley, Strategic Management Morning Session Afternoon Session Advisors, LLC. Panel on the Governance of Mutual Funds 3 Rethinking the Regulation of Securities 1 Front row: Jeffrey W. Bullock, Delaware Intermediaries Department of State; Marcy Engel, Eton Park Jill E. Fisch, Perry Golkin Professor of Law, moderators Capital Management. Middle row: John C. University of Pennsylvania Law School Jill E. Fisch, Perry Golkin Professor of Law, Wilcox, Sodali Ltd.; Jennifer Shotwell, Innisfree University of Pennsylvania Law School M&A Incorporated. commentators Michael L. Wachter, William B. Johnson Professor of Law 4 Hon. Travis Laster, Delaware Court of Tamar Frankel, Michaels Faculty Research Scholar and and Economics, University of Pennsylvania Law School Chancery; Charles I. Cogut, Simpson Thacher Professor of Law, Boston University School of Law & Bartlett LLP. Eric D. Roiter, Former General Counsel, Fidelity Management panelists 5 Front row: Edwin J. Elton, Stern School of & Research John E. Baumgardner, Jr., Sullivan & Cromwell LLP Business, New York University. Middle row: Edwin J. Elton, Nomura Professor of Finance, Gérard Hertig, Swiss Institute of Technology; NYU Stern School of Business Mutual Fund Performance Advertising: Eric Zitzewitz, Dartmouth College; Matthew R. Scott Goebel, Senior Vice President and General Counsel, Inherently and Materially Misleading? Clark, Morris, Nichols, Arsht & Tunnell LLP; Jill Fidelity Management & Research Company 2 3 Alan R. Palmiter, Professor of Law, Wake Forest University E. Fisch, University of Pennsylvania Law School; School of Law Susan B. Kerley, Strategic Management Advisors, LLC Donald G. Bennyhoff, Vanguard; Randall S. Ahmed Taha, Professor of Law, Wake Forest University School of Law Ryan Leggio, Mutual Fund Analyst, Morningstar, Inc. Thomas, Vanderbilt University Law School; Jeffrey S. Puretz,Dechert LLP Sarah E. Cogan, Simpson Thacher & Bartlett LLP; Glenn Booraem, Vanguard; William W. December 11, 2009 Bratton, Georgetown University Law Center. Back row: Mary K. Stokes, Blank Rome LLP; William A. Birdthistle, Chicago-Kent College of commentators Welcome Law, Illinois Institute of Technology; Talyana T. Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, William D. Anderson, Jr., Managing Director, Goldman, Sachs & Co. Bromberg, Grant & Eisenhofer P.A. University of Pennsylvania Law School Roberta Romano, Oscar M. Ruebhausen Professor of Law, Yale Law School 6 Front row: Scott Goebel, Fidelity Management Morning Session Afternoon Session & Research Company; Robert McCormick, Embattled CEOs Panel on the Reform Agenda Glass Lewis & Co, LLC; Glenn Booraem, Vanguard. Middle row: Merritt B. Fox, Columbia Law Marcel Kahan, George T. Lowy Professor of Law, School. New York University School of Law moderators 4 Edward B. Rock, Saul A. Fox Distinguished Professor Jill E. Fisch, Perry Golkin Professor of Law, of Business Law, University of Pennsylvania Law School University of Pennsylvania Law School Edward B. Rock, Saul A. Fox Distinguished Professor of commentators Business Law, University of Pennsylvania Law School Roy J. Katzovicz, Chief Legal Officer, Pershing Square Capital Management panelists Reinier H. Kraakman, Ezra Ripley Thayer Professor of Law, Hon. Jeffrey W. Bullock,Secretary of State, Delaware Department of State Harvard Law School Lucian A. Bebchuk, William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance, The Case Against Shareholder Empowerment Harvard Law School William W. Bratton, Peter P. Weidenbruch, Jr. Professor of Glenn Booraem, Principal and Assistant Fund Controller, Vanguard Business Law, Georgetown University Law Center Marcy Engel, Chief Operating Officer and General Counsel, Michael L. Wachter, William B. Johnson Professor of Law Eton Park Capital Management and Economics, University of Pennsylvania Law School Scott Goebel, Senior Vice President and General Counsel, Fidelity Management & Research Company

Robert McCormick, Chief Policy Officer, Glass, Lewis & Co., LLC 5 6

16 institute for law and economics roundtable programs 17 Panel Programs

In addition to the roundtable series, the Institute hosts several panel programs each year that explore important topics in the areas of law and finance. The panelists on these programs provide students and other attendees with real-world examples of the complex situations they face in their professional careers.

These programs are usually followed by Corporate Governance Dinners with further commentary and discussion. The Corporate Governance Dinners provide an opportunity for off-the-record conversation among presenters and members of the board of advisors, their invited colleagues, and the Institute’s associate faculty.

panel programs 19 2 chancery court programs 2 1 Antonio Weiss, Lazard.

2 Hon. Leo E. Strine, Jr., Delaware Court of Chancery. april 10, 2012 3 Hon. Leo E. Strine, Jr., Delaware Court of Chancery; Christopher Young, Credit Suisse; Alan Miller, Innisfree M&A Incorporated; Jill E. Function and Impartiality: Deciding Between moderators Fisch, University of Pennsylvania Law School; Using a Conflicted Full Service Bank and a Hon. Leo E. Strine, Jr., Chancellor, Chancery Court of Delaware Glenn Booraem, Vanguard; Daniel H. Burch, Conflict-Free Bank Michael L. Wachter, William B. Johnson Professor of Law and MacKenzie Partners, Inc., Michael L. Wachter, Economics, University of Pennsylvania Law School University of Pennsylvania Law School. This program looked at the role of investment banks in providing 1 2 4 Joel E. Friedlander, Bouchard Margules advisory services in mergers and acquisitions. Investment banks panelists & Friedlander. provide financial advice on M&A transactions, as well as the Joel E. Friedlander, Bouchard Margules & Friedlander ability to arrange for the financing necessary to complete the Robert A. Kindler, Vice Chairman and Global Head of M&A, 5 Eileen Nugent, Skadden, Arps, Slate, Meagher deal. However, investment banks are vulnerable to conflicts of Morgan Stanley & Flom LLP. Eileen Nugent, Skadden, Arps, Slate, Meagher & Flom LLP interest, since their equity research and trading departments 6 Richard Hall, Cravath, Swaine & Moore LLP. may be dealing in the shares of the companies they are advising. Antonio Weiss, Global Head of Investment Banking, Lazard Although the SEC requires investment banks to impose a 7 Joel E. Friedlander, Bouchard Margules & Chinese wall between their corporate finance and their equity Friedlander; Antonio Weiss, Lazard; Eileen research and trading divisions, the investment banking sector Nugent, Skadden, Arps, Slate, Meagher & Flom has been criticized for the opacity of its operations. These LLP; Michael L. Wachter, University of Pennsylvania Law School; Robert A. Kindler, potential conflicts of interest have led to the growth of independent Morgan Stanley. investment banking firms that offer specialized M&A advice but not financing. The panelists considered the benefits and 3 trade-offs of conducting M&A transactions with full service investment banks and conflict-free banks.

March 29, 2011

Illegitimate Kingmaker or Effective Voice of moderators Genuine Stockholder Sentiment?: The Role of Hon. Leo E. Strine, Jr., Vice Chancellor, Chancery Court of Delaware Institutional Shareholder Services in Contested Michael L. Wachter, William B. Johnson Professor of Law and Corporate Elections Economics, University of Pennsylvania Law School

This program examined the role and influence of Institutional panelists Shareholder Services in making recommendations and voting Glenn Booraem, Principal and Fund Controller, The Vanguard Group shareholder proxies for institutional investors. Proxy services Daniel H. Burch, Chairman & CEO, MacKenzie Partners, Inc. such as ISS play a key role in the voting process because Jill Fisch, Perry Golkin Professor of Law, University of Pennsylvania 4 5 institutional shareholders turn to them for advice when voting Law School billions of shares at annual meetings. The panel explored the Alan Miller, Co-Chairman, Innisfree M&A Incorporated inner workings of ISS and how it views its own influence on Christopher Young, Managing Director and Head of the Takeover the voting process. The panel discussed ISS’s role and influence Defense Practice, Credit Suisse from the perspectives of a large mutual fund company and several proxy solicitation firms. The panelists also considered the overarching questions of what should a proxy advisor’s role be, how much influence they should exercise, and what kind of regulation is needed for them.

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20 institute for law and economics Panel Programs 21 2 insights from practice 2 1 Donald J. Wolfe, Jr., Potter Anderson & Corroon LLP; Hon. Jack B. Jacobs, Supreme Court of Delaware.

2 Gary A. Bornstein, Cravath, Swaine & October 4, 2011 Moore LLP; Isaac D. Corré, Eton Park Capital Management; Minh Van Ngo, Cravath, Swaine Our fall Insights from Practice program looked at the recently- panelists & Moore LLP; Theodore N. Mirvis, Wachtell, settled case of Air Products & Chemicals, Inc. v. Airgas, Inc. This Gary A. Bornstein, Cravath, Swaine & Moore LLP Lipton, Rosen & Katz.

case addressed the fundamental corporate law question of who Isaac D. Corré, Senior Managing Director, Eton Park 3 Roger Kimmel, Rothschild Inc.; Charles I. gets to decide when and if a corporation is for sale. The case was Capital Management Cogut, Simpson Thacher & Bartlett LLP; Hon. the response to a shareholder rights plan used by the Airgas board Hon. Jack Jacobs, Justice, Supreme Court of Delaware Myron T. Steele, Supreme Court of Delaware; of directors to ward off an unsolicited Air Products offer that was Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP David M. Silk, Wachtell, Lipton, Rosen & Katz; believed by the Airgas board to undervalue the company. The Theodore N. Mirvis, Wachtell, Lipton, Rosen & Katz Douglas M. Steenland, formerly of Northwest Court’s opinion in Air Products & Chemicals, Inc. v. Airgas, Inc. Minh Van Ngo, Cravath, Swaine & Moore LLP Airlines. ruled in favor of Airgas and its board of directors, concluding Donald J. Wolfe, Jr., Potter Anderson & Corroon LLP that the power to defeat an inadequate hostile tender offer ultimately lies with the board of directors. The panelists for the program included lawyers for both the plaintiffs and the defendants, as well as a Delaware judge and an investment professional, who analyzed the effects of the case on corporate law and on the financial markets.

October 21, 2010

This Insights from Practice panel program focused on what it panel co-chairs means to be a director of a public company in 2010. The panelists Charles I. Cogut, Simpson Thacher & Bartlett LLP 11 shared their perspectives on the fiduciary duties of directors and Hon. Myron T. Steele, Chief Justice, Supreme Court of Delaware how these might differ depending on the type of director and how they were appointed. The composition and leadership of panelists boards of directors was also discussed. The panel then reviewed Robert L. Friedman, Senior Managing Director, The Blackstone provisions in the Dodd-Frank legislation that affected boards of Group L.P., Director of Axis Capital Holdings Limited, TRW directors and talked about their impact so far on the activities Automotive Holdings Corp., FGIC Corporation and The India of boards. The panelists also discussed several hypothetical cases Fund, Inc. drawn from the business news headlines on how directors should Roger Kimmel, Vice Chairman, Rothschild Inc., Non-Executive react in crisis situations affecting the corporation. Chairman of the Board of Endo Pharmaceuticals Inc., Director of PG&E Corporation and Schiff Nutrition International David M. Silk, Wachtell, Lipton, Rosen & Katz Douglas Steenland, Former CEO, Northwest Airlines, Director of Delta Air Lines, American International Group, Digital River Corp., Chrysler Group, Hilton Worldwide, and Performance Food Group

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22 institute for law and economics Panel Programs 23 Lectures

The Law and Entrepreneurship Lecture and the Distinguished Jurist Lecture are the Institute’s principal public programs. In sponsoring these events, the Institute aims to spotlight and honor lawyers who have led noteworthy careers and made significant contributions as corporate executives and entrepreneurs, or as jurists at the state and federal levels. We also sponsor lectures in cooperation with Penn Law’s International Program.

Audiences are drawn from all sectors of the University and the legal and business communities. These eminent speakers hold particular appeal and inspiration for students of Penn’s Law School and the Wharton School, with whom they talk informally at receptions following each lecture. The Law and Entrepreneurship lecture is supported in part by the Ronald N. Rutenberg Fund.

lectures 25 2 law and entrepreneurship Lectures 2

november 15, 2011

Too Dull for Davos: My Life in Long-Only, in economics from Princeton University, an M.B.A. from the Objective-Based, Active Money Management Wharton School, and a J.D. from the University of Pennsylvania and Why I Think It Still Makes Sense Law School. Paul G. Haaga, Jr., Chairman of the Board, Capital Research He is a member of the Executive Committee (Chairman and Management Company from 2002–2004, Vice Chairman from 2004-2006) of the Board of Governors of the Investment Company Institute (the Paul G. Haaga, Jr. is Chairman of the Board of Capital Research national association of the U.S. mutual fund industry) and and Management Company. He is Vice Chairman of the fixed- serves as President of the Board of Trustees of the Los Angeles income funds in the American Funds Group and Chairman of County Museum of Natural History. He is a trustee of the Capital International Fund. He is also an officer and/or director Huntington Library, Museum and Gardens in San Marino, of a number of other CRMC-managed mutual funds. California, and Chairman of the Board of Overseers of the Prior to joining Capital in 1985, Paul was a partner in the University of Pennsylvania Law School. Paul is a member of law firm of Dechert Price & Rhoads (now known as Dechert) the National Public Radio (NPR) Board of Directors. He has also in Washington, D.C. From 1974 to 1977, he was a senior attorney served as president and Major Gifts chair for Princeton’s Class for the Division of Investment Management of the U.S. Securities of 1970 and is a trustee of the Princeton Rugby Endowment. and Exchange Commission. Paul earned a bachelor’s degree

March 2, 2011

Competitive Places and Inner City Opportunities: He was the founding Chair of the Board of Mastery Reflections on 25 Years of Community Investment Charter Schools, a network of inner city schools recognized Jeremy Nowak, President and Chief Executive Officer, as the most effective management organization in the nation The Reinvestment Fund for turning around low performing schools. And he was the founding Board Chair of Alex’s Lemonade Stand, a charity Jeremy Nowak is the President of The Reinvestment Fund, that supports pediatric cancer research and in six years has a community development financial institution that manages raised more than $35 million from lemonade stands held by $700 million. The Reinvestment Fund (TRF) provides thousands of families and children. financing in support of affordable housing, small businesses, Mr. Nowak is the author of numerous reports and articles commercial real estate and community facilities. TRF has including recent work on creativity and neighborhood develop- allocated more than $1 billion, leveraging $3.5 billion in ment. He holds an undergraduate degree in philosophy development capital. (Pennsylvania State University, Phi Beta Kappa, 1973) and a TRF is a thought leader in the creative use of geo-spatial Ph.D. in cultural anthropology (New School for Social Research, data to facilitate investments into distressed communities. 1986). He was a Fellow at the Aspen Institute’s program for Its proprietary mapping tool, PolicyMap, is the most compre- leaders in education and is a member of Harvard University’s hensive web-enabled data base for location-based intelligence. roundtable on social enterprise and poverty. TRF led the movement to finance supermarkets in low- Mr. Nowak has received numerous awards including the income communities, first as manager of the Pennsylvania Philadelphia Award (1995), the city’s highest civic honor; as Fresh Food Financing Initiative and today as one of the well as honorary doctorates from Villanova University (2000) architects of the White House’s Healthy Food Financing and La Salle University (2008). Initiative. Mr. Nowak is the Vice Chair of the Federal Reserve Bank of Philadelphia and a member of the Fed’s Council of Chairs. He is also a board member of the Pennsylvania Housing Finance Agency, the agency responsible for billions of dollars of annual bond and tax credit financing.

26 institute for law and economics lectures 27 2 distinguished jurist Lectures 2

February 15, 2012

Regular Order as Equity Immediately before becoming a member of the Court of Hon. Leo E. Strine, Jr., Chancellor, Delaware Court of Chancery Chancery, Chancellor Strine was Counsel to Governor Thomas R. Carper of the State of Delaware. Before becoming Counsel Chancellor Leo E. Strine, Jr. became Chancellor of the Delaware to Governor Carper in January 1993, Chancellor Strine was a Court of Chancery in 2011 after serving as a Vice Chancellor corporate litigator at the firm of Skadden, Arps, Slate, Meagher since 1998. Since he joined the Court, Chancellor Strine has & Flom. Prior to that, Chancellor Strine was law clerk to Judge written numerous influential and provocative opinions. Walter K. Stapleton of the U.S. Court of Appeals for the Third Circuit and Chief Judge John F. Gerry of the U.S. District Court for the District of New Jersey. Chancellor Strine graduated magna cum laude from the University of Pennsylvania Law School in 1988, and was selected as a member of the Order of the Coif. In 1985, he received his Bachelor’s Degree summa cum laude from the University of Delaware and was selected as a member of Phi Beta Kappa.

October 25, 2011

The Delaware Court of Chancery from 1989 - 2011: Prior to his appointment to the Court of Chancery, Chancellor An Insider’s View Chandler served as resident judge of the Delaware Superior Hon. William B. Chandler III, Former Chancellor, Delaware Court Court from 1985 to 1989. He previously was an associate with of Chancery Morris, Nichols, Arsht & Tunnell and served as legal counsel to Pete duPont, the former governor of Delaware. Chancellor William B. Chandler III is a partner at Wilson Sonsini Earlier in his career, Chancellor Chandler taught commercial Goodrich & Rosati, where he advises both public and private law, legislative process, and remedies at the University of clients in connection with corporate governance matters, special Alabama School of Law. He also has taught law courses at the committee assignments, internal investigations, and merger and Delaware Law School of Widener University, Washington acquisition transactions. He currently serves on the firm's Policy University School of Law, Seattle University School of Law, Committee. Ohio State University, University of Georgia, Vanderbilt Chancellor Chandler joined the firm from the Delaware University, and the University of Nevada, Las Vegas. Chancellor Court of Chancery, the nation's leading court for corporate law Chandler is a member of the American Law Institute and a cases, particularly those relating to change of control and other trustee of the Yale Center for Corporate Governance, the corporate law issues. He was appointed Chancellor in 1997, after University of Delaware, and the Weinberg Center for Corporate serving as Vice Chancellor since 1989. Widely regarded as one of Governance. the country's most influential judges on issues of corporate law and governance, he issued more than a thousand opinions and presided over some of the most contentious and high-profile corporate law disputes in the country, including those involving The Walt Disney Company, Yahoo, Microsoft, Hewlett-Packard, eBay, Citigroup, Dow Chemical, and, most recently, the Air Products/Airgas dispute. Many of his rulings have become required reading for M&A and business law practitioners, and he has written and lectured widely on numerous critical corporate law issues.

28 institute for law and economics lectures 29 2 International Program Lectures 2

March 12, 2012

Puzzles on Comparative Corporate Governance: Hideki Kanda was born in 1953 and received an LL.B. from the Rethinking the Linkage Between Laws and University of Tokyo in 1977. His main areas of specialization Ownership include commercial law, corporate law, banking regulation and Hideki Kanda, Faculty of Law, The University of Tokyo securities regulation. Mr. Kanda has published articles in both Japanese and English in major legal journals on various aspects of corporate law and related matters. He has been a visiting professor of law at the University of Chicago Law School and a visiting professor at Harvard Law School.

April 13, 2011

Financial Sector Regulation in India: He has also held positions in Karnataka state government and Evolution and the Road Ahead worked as an advisor to the Executive Director of World Bank in KP Krishnan, Secretary, Economic Advisory Council of the Washington DC. Dr. Krishnan belongs to the Indian Administrative Prime Minister of India Service, Karnataka Cadre, 1983 batch. He received his Ph.D. (Eco) from Indian Institute of Management in Bangalore and M.A. Dr. KP Krishnan serves as Secretary of the Economic Advisory (Eco) from University of Mysore. Council of the Prime Minister of India, a position he took up in July 2010. For the preceding five years, Dr. Krishnan served as Joint Secretary of the Capital Markets Division of the Indian Department of Economic Affairs, where he was responsible for securing approval of Parliament for a new legal framework for securitization, placing for parliamentary approval a new legal and regulatory framework for pension sector reforms, preparing a blueprint for Indian financial sector reforms including funda- mental reforms in the regulatory architecture, preparing legislation on reform of securities markets including putting in place arrangements for financial stability, leading the successful effort for introduction of new products like Exchange Traded Currency Futures, Interest Rate Futures, Credit Default Swaps and Corporate Repos, and carrying out preparatory work for the setting up of an independent Public Debt Management Office.

30 institute for law and economics lectures 31 2 past Lectures 2 Past Law and Entrepreneurship Lectures

1 William A. Ackman

2 Safra Catz Past Law and Entrepreneurship 31 March 2008 7 April 2005 25 October 2001 Lectures Making Every Mistake Once A Swing of the Pendulum: 20 Years in M&A The Economics of Sports Team 3 H. Rodgin Cohen Safra Catz, President, Oracle Corporation Joseph D. Gatto, Managing Director, Franchises for Cities 1 2 3 4 November 2, 2010 Goldman, Sachs & Co. Hon. Edward G. Rendell, Governor, 4 Isaac D. Corré The Financial Crisis: 19 September 2007 Commonwealth of Pennsylvania Aftermath and Implications Tales from Blackstone’s IPO 24 March 2004 5 Pamela Daley H. Rodgin Cohen, Sullivan & Cromwell LLP Robert L. Friedman, Senior Managing The WNBA and Women’s Team Sports: 21 February 2001 Director and Chief Legal Officer, The A New Sports Marketing Proposition for Private Equity: 6 Robert L. Friedman March 3, 2010 Blackstone Group L.P. the New Millennium Difficult Investing in a Difficult Time Managing Through Change, Val Ackerman, President, Women’s National Paul S. Levy, Senior Managing Director, 7 Joseph D. Gatto Managing Through Crisis 28 February 2007 Basketball Association Joseph Littlejohn & Levy in Financial Services Law, Legal Risks, and the Financial Markets 8 Marcia Greenberger Joseph D. Gatto, Chairman of Investment Isaac D. Corré, Senior Managing Director, 30 October 2003 2 March 2000 Banking, Barclays Capital Americas Eton Park Capital Management The Role of Entrepreneurship in Urban Perspectives on the Health Care 9 James E. Nevels Education: Past, Present and Future Revolution 30 September 2009 29 November 2006 James E. Nevels, Chairman and CEO, Charles A. Heimbold, Jr., Chairman and The ‘Ten Points’ for Maintaining a Large-Scale Entrepreneurship: Business The Swarthmore Group, Inc.; Chairman, CEO, Bristol-Myers Squibb Company 5 6 7 8 Past Distinguished Jurist Lectures Risk-Taking Entrepreneurial Spirit in Development at GE Philadelphia School Reform Commission a Large Corporation Pamela Daley, Senior Vice President for 18 November 1999 10 Hon. Carolyn Berger J.P. Suarez, Senior Vice President and Corporate Business Development, General 6 November 2002 Ethics in Sports: Deciding the Game General Counsel, Wal-Mart Stores Electric Company Public Trust—and Distrust—in American Anita DeFrantz, Vice President, 11 Brian G. Cartwright International Division Business: What Needs to Be Done International Olympic Committee; 26 October 2006 Peter G. Peterson, Chairman, The President, Amateur Athletic Foundation 12 Hon. Harry T. Edwards 31 March 2009 Managing in the 21st Century Blackstone Group; Chairman, Federal The PeopleSoft Deal Henry R. Silverman, Chairman & CEO, Reserve Bank of New York; Co-Chair, 23 October 1997 13 Kenneth R. Feinberg Safra Catz, President, Oracle Corporation Realogy Corporation Conference Board Commission on Public How to Maintain Entrepreneurial Trust and Private Enterprise Values While Your Company Climbs 14 Hon. Jack B. Jacobs 3 March 2009 16 February 2006 into the Fortune 500 Defining the 21st Century Campus: The Banker as Entrepreneur 26 September 2002 Brian L. Roberts, President, Comcast 15 Hon. Lewis A. Kaplan Michael J. Biondi, Co-Chairman, Investment What They Did Not Teach Me in Law Corporation The Intersection of Education and 9 10 11 12 Community Banking, Lazard Frères & Co. LLC School 16 Hon. Myron T. Steele Hon. Michael Nutter, Mayor, City of Robert M. Potamkin, Co-Chairman and 27 March 1997 Philadelphia 26 October 2005 Co-CEO, Planet Automotive Group, Inc. The Unique Impact of the Law 17 Hon. E. Norman Veasey Founding and Building a New Venture: on the Leveraged Buyout Business 17 September 2008 The Story of the National Women’s Law 19 April 2002 Saul A. Fox, Fox Paine & Company, LLC Retailers in a Recession: A Fireside Center Smart People Making and Losing Money: Chat on Investing with Bill Ackman Marcia Greenberger, Founder and Some Recent Examples William A. Ackman, Managing Co-President, National Women’s Law Center Perry Golkin, Kohlberg Kravis Roberts & Co. Member, Pershing Square Capital Management, L.P.

Past Distinguished Jurist Lectures 16 March 2006 29 November 2001 11 February 1997 13 14 15 16 Technology Mergers in a Shrinking World Fee Shifting as a Control Against What Economics of Law Must Address March 23, 2011 Hon. Vaughn R. Walker, Chief Judge, U.S. the Rogue Litigant Next: Some Thoughts on Theory Treasury’s Performance as Pay Tsar: District Court for the Northern District of Hon. Jack B. Jacobs, Justice, Supreme Court Hon. Guido Calabresi, U.S. Court of Precedent or Aberration? California of Delaware Appeals for the Second Circuit Kenneth R. Feinberg, Feinberg Rozen, LLP 3 March 2005 6 March 2001 7 February 1996 October 29, 2009 Corporate Federalism: Administering Capital Punishment: The MTV Constitution Private Securities Litigation— Event Horizons in Corporate Governance Is Texas Different? Hon. Alex Kozinski, U.S. Court of Time for a Fresh Start? Hon. Myron T. Steele, Chief Justice, Hon. Patrick E. Higginbotham, U.S. Court Appeals for the Ninth Circuit Hon. Lewis A. Kaplan, United States Delaware Supreme Court of Appeals for the Fifth Circuit District Judge, Southern District of 22 March 1995 New York 28 October 2004 24 February 2000 Accountability: Popular Will, Interest A Twelve-Year Retrospective on Delaware The Court of Chancery as Teacher of Groups, or the Invisible Hand 11 November 2008 Corporate Jurisprudence and Governance Corporate Law Hon. Stephen F. Williams, U.S. Court of 17 Delaware Directors’ Fiduciary Issues Hon. William B. Chandler III , Chancellor, Appeals for the District of Columbia Duties: The Focus on Loyalty Hon. E. Norman Veasey, Chief Justice, Delaware Court of Chancery Hon. Randy Holland, Justice, Supreme Delaware Supreme Court 13 April 1994 Court of Delaware 11 February 1999 On the Constitution 4 March 2004 Why Do People Bring Employment Hon. Antonin Scalia, Associate Justice, 24 October 2007 Corporate Decision-Making in Delaware Courts Discrimination Cases When They Usually U.S. Supreme Court The Future of Securities Regulation Hon. Carolyn Berger, Justice, Delaware Lose? Brian G. Cartwright, General Counsel, Supreme Court Hon. Diane Wood, U.S. Court of Appeals 14 October 1992 Securities and Exchange Commission for the Seventh Circuit Nonprice Competition 27 February 2003 Hon. Douglas H. Ginsberg, U.S. Court 11 October 2006 The Effects of Collegiality on Judicial 12 February 1998 of Appeals for the District of Columbia The Embattled Corporation Decision Making The Value of Predictability in Corporate Law Hon. Richard A. Posner, U.S. Seventh Hon. Harry T. Edwards, Circuit Judge, Hon. E. Norman Veasey, Chief Justice, Circuit Court of Appeals and U.S. Court of Appeals for the D.C. Circuit Delaware Supreme Court University of Chicago Law School

32 institute for law and economics lectures 33 Academic Events

Major one-and two-day symposia are organized under the sole sponsorship of the Institute for Law and Economics, and in cooperation with other organizations.

In February 2005 we launched an annual conference on Law and Finance, jointly sponsored by ILE, the Wharton School’s Financial Institutions Center, and NYU’s Pollack Center for Law and Business. The conference location alternates between Penn and NYU.

In October 2002 ILE started the ILE/Wharton Finance series, providing an opportunity for faculty and advanced students from the Law School, the Wharton School, and the Department of Economics to come together around an area of common interest and strengthening the Institute’s core academic relationships. A dinner follows each presentation, with commentary presented by members of ILE’s Associate Faculty from Law, Wharton Finance, and the Department of Economics and a general discussion.

academic events 35 Penn/2 NYU Conference on Law and finance2 1 Simon M. Lorne, Millennium Management LLC.

2 Yakov Amihud, NYU Stern School of Business.

3 Hon. Donald F. Parsons, Jr., Delaware Court 24-25 February 2012 Session II Anat Carmy Wiechman, New York Moderator Valid Inference in Single-Firm, University School of Law Hon. Donald F. Parsons, Jr., Delaware of Chancery. University of Pennsylvania Law Single-Event Studies Court of Chancery 4 School Jonah B. Gelbach, Yale Law School Commentator Itay Goldstein, The Wharton School. Eric Helland, The Robert Day School of D. Scott Lee, Mays Business School, Session VII Jointly sponsored by Economics and Finance, Claremont Texas A&M University The Real Effects of Stock Market Prices 5 Theodore Eisenberg, Cornell University Institute for Law and Economics McKenna College Gustavo Grullon, Rice University Law School. University of Pennsylvania Jonathan Klick, University of Pennsylvania Moderator Sebastien Michenaud, Rice University Financial Institutions Center Itay Goldstein, The Wharton School, James Weston, Rice University 6 Law School 1 2 Todd Gormley, The Wharton School. The Wharton School University of Pennsylvania Center for Law & Business Commentator Commentator 7 Lemma W. Senbet, Robert H. Smith School New York University Stephen J. Brown, Stern School of Session V Holger Spamann, Harvard Law School of Business, University of Maryland; Yakov Business, New York University On Enhancing Shareholder Control: Organized by A (Dodd-) Frank Assessment of Proxy Moderator Amihud, NYU Stern School of Business; William T. Allen, NYU Stern School Hon. Donald F. Parsons, Jr., Delaware Moderator Access Stephen J. Brown, NYU Stern School of of Business and NYU School of Hon. Jack B. Jacobs, Supreme Court of Jonathan Cohn, McCombs School of Business, Court of Chancery Law, New York University The University of Texas at Austin Business. Delaware Session VIII Yakov Amihud, Stern School of Stuart Gillan, Rawls College of Business Mortgage Modification and Strategic Business, New York University Session III Administration, Texas Tech University Behavior: Evidence from a Legal Jill E. Fisch, University of Pennsylvania Tailspotting: What Can Investors Learn by Jay Hartzell, McCombs School of Business, Settlement with Countrywide Law School Tracking the Flights of Corporate Jets? The University of Texas at Austin Itay Goldstein, The Wharton School, David Yermack, Stern School of Business, Christopher Mayer, Columbia University of Pennsylvania New York University Commentator Business School Ryan Bubb, New York University Edward Morrison, Columbia Law School Session I Commentator School of Law Tomasz Piskorski, Columbia Business Bankers and Regulators Katherine V. Litvak, Northwestern School Philip Bond, Carlson School of University School of Law Moderator Arpit Gupta, Columbia Business School Management, University Itay Goldstein, The Wharton School, of Minnesota Moderator University of Pennsylvania Commentator Vincent Glode, The Wharton School Itay Goldstein, The Wharton School, Manju Puri, The Fuqua School of University of Pennsylvania Session VI Business, Duke University Commentator Managing Disputes Through Contract: 3 4 Eric L. Talley, University of California, Session IV Evidence from M&A Moderator Berkeley School of Law Scandal Enforcement at the SEC: John C. Coates, Harvard Law School Richard E. Kihlstrom, The Wharton Salience and the Arc of the Option School, University of Pennsylvania Moderator Backdating Investigations Commentator Hon. Jack B. Jacobs, Supreme Court Stephen J. Choi, New York University S. Viswanathan, The Fuqua School of of Delaware School of Law Business, Duke University A.C. Pritchard, The University of Michigan Law School

25-26 February 2011 Commentator Session IV Commentator Chester S. Spatt, Carnegie Mellon CEO Compensation and Corporate Henry T. Hu, University of Texas New York University Risk-Taking: Evidence from a Natural School of Law School of Law Moderator Experiment Jill Fisch, University of Pennsylvania Todd A. Gormley, The Wharton School, Moderator Jointly sponsored by Law School University of Pennsylvania William T. Allen, NYU Stern School of Institute for Law and Economics Business and NYU School of Law, University of Pennsylvania Session II Commentator New York University Financial Institutions Center Information Disclosure and Michal Barzuza, University of Virginia Session VII The Wharton School Corporate Governance School of Law Center for Law & Business Michael Weisbach, The Ohio State Securitization and Moral Hazard: 5 New York University University Moderator Evidence from a Lender Cutoff Rule Michael Roberts, The Wharton School, Ryan Bubb, New York University Organized by Commentator University of Pennsylvania School of Law William T. Allen, NYU Stern School of Merritt Fox, Columbia Law School Business and NYU School of Law, Session V Commentator New York University Moderator Corporate Governance and Vikrant Vig, London Business School Yakov Amihud, Stern School of Michael Wachter, University of Corporate Political Activity: Business, New York University Pennsylvania Law School What Effect Will Citizens United Moderator William W. Bratton, University of Have on Shareholder Wealth? Kose John, NYU Stern School of Business Session III John C. Coates, Harvard Law School Pennsylvania Law School Session VIII Michael Roberts, The Wharton Does Delaware Entrench Management? Competition for Managers, School, University of Pennsylvania Adam C. Pritchard, University of Michigan Commentator Law School Andrew Metrick, Yale School of Management Corporate Governance and Session I Incentive Compensation Viral V. Acharya, NYU Stern School The Political Economy of Fraud on Commentator Moderator Yaniv Grinstein, Cornell University Barry Adler, New York University School of Law of Business the Market William W. Bratton, University of Moderator Session VI Commentator Pennsylvania Law School Richard E. Kihlstrom, The Wharton School, Fiduciary Duties and Equity — Alan Schwartz, Yale Law School Michael Wachter, University of University of Pennsylvania Debtholder Conflicts Pennsylvania Law School Bo Becker, Harvard Business School Moderator Jennifer Arlen, New York University 6 7 School of Law

36 institute for law and economics academic events 37 2 ILE/wharton finance seminars 2 1 Eric L. Talley, University of California, Berkeley School of Law.

2 Paul Pfleiderer, Stanford University Graduate School of Business. March 29, 2012 3 H. Franklin Allen, The Wharton School. Fallacies, Irrelevant Facts, and Myths in the high leverage may not even be privately optimal for banks. Setting Discussion of Capital Regulation: Why Bank Equity equity requirements significantly higher than the levels currently is Not Expensive proposed would entail large social benefits and minimal, if any, (co-authored with Anat R. Admati, Peter M. social costs. Approaches based on equity dominate alternatives, DeMarzo, and Martin F. Hellwig) including contingent capital. To achieve better capitalization Paul Pfleiderer,C.O.G. Miller Distinguished Professor of Finance, quickly and efficiently and prevent disruption to lending, regulators Stanford University Graduate School of Business must actively control equity payouts and issuance. If remaining challenges are addressed, capital regulation can be a powerful tool The authors examine the pervasive view that “equity is expensive,” for enhancing the role of banks in the economy. which leads to claims that high capital requirements are costly and would affect credit markets adversely. We find that argu- co-sponsored by the institute for law and 1 ments made to support this view are either fallacious, irrelevant, economics and the department of finance, or very weak. the wharton school We conclude that bank equity is not socially expensive, and that high leverage is not necessary for banks to perform all their commentators socially valuable functions, including lending, deposit-taking William Bratton, Penn Law and issuing money-like securities. To the contrary, better Jill Fisch, Penn Law capitalized banks suffer fewer distortions in lending decisions Joao Gomes, Wharton Finance and would perform better. The fact that banks choose high Todd Gormley, Wharton Finance leverage does not imply that this is socially optimal, and, except for government subsidies and viewed from an ex ante perspective,

October 27, 2011

A Model of Optimal Corporate Bailouts co-sponsored by the institute for law and (co-authored with Antonio E. Bernardo economics and the department of finance, and Ivo Welch) the wharton school Eric L. Talley, Rosalinde and Arthur Gilbert Professor of Law, University of California-Berkeley School of Law commentators William Bratton, Penn Law The authors analyze incentive-efficient government bailouts Alex Edmans, Wharton Finance within a canonical model of intra-firm moral hazard. Bailouts David Musto, Wharton Finance exacerbate the moral hazard of firms and managers in two ways. David Skeel, Penn Law First, they make them less averse to failing. Second, the taxes to fund bailouts dampen their incentives. Nevertheless, if third- party externalities from keeping the firm alive are strong, bailouts can improve welfare. Our model suggests that governments should use bailouts sparingly, where social externalities are large and subsidies small; eliminate incumbent owners and managers to improve a priori incentives; and finance bailouts through redistributive taxes on productive firms instead of forcing recipients to repay in the future.

2 3 4

38 institute for law and economics academic events 39 2 Curricular Partnerships 2 1 David M. Silk, Wachtell, Lipton, Rosen & Katz.

2 Dennis J. Friedman, Gibson, Dunn & Crutcher LLP.

3 George A. Casey, Shearman & Sterling LLP.

The Institute for Law and Economics also engages in curricular Spring 2012 4 Louis J. Bevilacqua, Cadwalader, Wickersham partnerships that serve the educational mission of Penn Law & Taft LLP. School. The Institute provided support for three advanced LAW 704-001 seminars in the 2011-2012 academic year. ILE also invited members of our board of advisors and other distinguished Advising the Board of Directors professionals to the Law School for special classes and seminars Hon. Myron T. Steele and Mark A. Morton 1 2 to share their professional expertise with Penn Law students in an informal setting. LAW 915-001 Corporate Governance Seminar Jill E. Fisch and William W. Bratton

LAW 957-001 Widening the Lens on Corporate Law Michael L. Wachter and Hon. Leo E. Strine, Jr.

2

3

4

40 institute for law and economics academic events 41 A Comprehensive Theory of Deal Andrew W. Postlewaite, Harry P. Kamen The Striking Success of the National Structure: Understanding How Professor of Economics, School of Arts and Labor Relations Act, in the Research publications and papers Transactional Structure Creates Sciences; Professor of Finance, The Handbook on the Economics of Labor and 2 2 Value (with Daniel M. G. Raff), Texas Wharton School Employment Law, 2012. Law Review, 2011. Should Courts Always Enforce What Susan M. Wachter, Richard B. Worley George J. Mailath, Walter H. Contracting Parties Write? (with L. Professor of Financial Management, Annenberg Professor in the Social Anderlini and L. Felli), Review of Law and Professor of Real Estate and Finance, Sciences, Professor of Economics, Economics, 2011. The Wharton School; Co-Director, School of Arts and Sciences Institute for Urban Research Listed below is a sampling of recently published papers and work Jill Fisch, Perry Golkin Professor of Law; Fair Value Accounting and Financial Co-Director, Institute for Law and Stability: Does How We Keep Score Political Reputations and Campaign in progress by members of the Associate Faculty of the Institute Economics Affect How the Game is Played?, Common Learning with Intertemporal Promises (with E. Aragones and T. Explaining the Housing Bubble (with for Law and Economics. ILE maintains a series of research papers in Handbook of Key Global Financial Dependence (with Martin W. Cripps, Palfrey), Journal of the European Adam Levitin), Georgetown Law Review, Jeffrey C. Ely, and Larry Samuelson), Economic Association, 2007. forthcoming. and provides copies—electronic or paper—to interested parties The Destructive Ambiguity of Federal Markets, Institutions, and Infrastruc- Proxy Access, Emory Law Journal, ture, forthcoming, 2012 International Journal of Game upon request to [email protected]. forthcoming 2012. Theory, forthcoming. Courts of Law and Unforeseen Immigration and the Neighborhood The Institute is a member of the Legal Scholarship Network How to Use Contingent Capital Contingencies (with L. Anderlini and L. (with Albert Saiz), American Economic Folk Theorems with Bounded Recall Felli), Journal of Law, Economics and Journal: Economic Policy, 2011. (LSN), a subset of the Social Science Research Network. Current How Powerful is ISS? Less—and in Buffers (with Charles Calomiris), in Different Ways—than Most People Think The Future of Central Banking, Central under (Almost) Perfect Monitoring Organization, 2007. ILE research papers are posted in the University of Pennsylvania (with Stephen Choi and Marcel Kahan), Banking Publications, 2011. (with Wojciech Olszewski), Games Subprime Lending and Real Estate Prices Law and Economics Research Paper Series on the LSN Web site. Corporate Governance Advisor, 2011. and Economic Behavior, 2011. Michael R. Roberts, Associate Professor (with Andrey Pavlov), Real Estate of Finance, The Wharton School Economics, 2011. Abstracts as well as complete papers can be downloaded Robert P. Inman, Richard King Mellon Rethinking the Regulation of Securities Professor of Finance; Professor of Common Learning (with Martin W. (www.ssrn.com/link/penn-lawecon. html). Intermediaries, University of Pennsylvania Finance and Economics, Business and Cripps, Jeffrey C. Ely, and Larry Renegotiation of Financial Contracts: Amy Wax, Robert Mundheim Professor Faculty appointments are in the University of Pennsylvania Law Review, 2010. Public Policy, Real Estate, The Wharton Samuelson), Econometrica, 2008. Evidence from Private Credit Agreements of Law (with Amir Sufi), Journal of Financial Law School unless otherwise noted. School Itay Goldstein, Associate Professor of Charles W. Mooney, Jr., Charles A. Economics, 2009. Diverging Family Structure and Rational Finance, The Wharton School Federal Institutions and the Democratic Heimbold, Jr. Professor of Law Behavior: The Decline in Marriage as a Transition: Learning from South How does Financing Impact Investment? Disorder of Choice, in The Economics of Great Expectations for True Sales The Role of Debt Covenants (with the Family, Elgar Publishers, 2011. Franklin Allen, Nippon Life Professor The Political Economy of Fraud on the The Real Effects of Financial Markets: The Africa, Journal of Law, Economics, and of Receivables, Securitization, and Sudheer Chava), Journal of Finance, 2008. of Finance and Professor of Economics, Market (with Michael L. Wachter), Impact of Prices on Takeovers (with Alex Organizations, 2011. Bankruptcy Policy (with Steven Disparate Impact Realism, William and The Wharton School University of Pennsylvania Law Review, Edmans and Wei Jiang), Journal of Harris), forthcoming 2012. Back to the Beginning: Persistence and Mary Law Review, 2011. 2011. Finance, forthcoming. How Should Suburbs Help Their the Cross-Section of Corporate Capital Asset Commonality, Debt Maturity Central Cities? Growth and Welfare United States Sovereign Debt: Structure (with Michael Lemmon and Stereotype Threat: A Case of Overclaim and Systemic Risk (with A. Babus Heedless Globalism: The SEC’s Roadmap Learning and Complementarities in Enhancing Intra-Metropolitan Fiscal A Thought Experiment on Default Jaime Zender, Journal of Finance, 2008. Syndrome?, in The Science on Women and and E. Carletti), Journal of Financial to Accounting Convergence, University of Speculative Attacks (with Emre Distributions, Annals of the American and Restructuring, forthcoming Science, AEI Press, 2009. Economics, 2012. Cincinnati Law Review, 2011. Ozdenoren and Kathy Yuan), Review of Academy of Political and Social Economic Studies, 2011. Sciences, 2009. 2012. Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law Bilge Yilmaz, Associate Professor of Financing Firms in India (with R. The Case Against Shareholder Security Interests in Personal Finance, The Wharton School Chakrabarti, S. De, J. Qian, and M. Empowerment (with Michael L. Wachter), Payoff Complementarities and Financial Making Cities Work: Prospects and Property (with S. Harris), 5th ed., Shareholder Eugenics in the Public Qian), Journal of Financial University of Pennsylvania Law Review, Fragility: Evidence from Mutual Fund Policies for Urban America, Princeton Foundation Press, 2011. Corporation, Cornell Law Review, 2012. Adverse Selection and Convertible Bonds Intermediation, 2012 2010. Outflows (with Qi Chen and Wei Jiang), University Press, 2009. Journal of Financial Economics, 2010. (with Archishman Chakraborty), Review David K. Musto, Ronald O. Perelman The Insignificance of ProxyA ccess (with of Economic Studies, 2011. Credit Market Competition and Howard F. Chang, Earle Hepburn Jonathan Klick, Professor of Law and Professor in Finance, The Wharton Marcel Kahan), Virginia Law Review, 2011. Capital Regulation (with E. Carletti Professor of Law Lawrence A. Hamermesh, Ruby R. Vale Erasmus Chair of Empirical Legal School Predatory Mortgage Lending (with Philip and R. Marquez), Review of Financial Professor of Corporate and Business Law, Studies at Erasmus University Rotterdam When the Government is the Controlling Bond and David Musto), Journal of Studies, 2011. The Effect of Allowing Pollution Offsets Widener University School of Law (Senior What do Consumers’ Fund Flows Shareholder (with Marcel Kahan), Texas Financial Economics, 2009. with Imperfect Enforcement (with Hilary Special Counsel, Securities and Exchange Abortion Liberalization and Sexual Maximize? Evidence from their Law Review, 2011. Tom Baker, William Maul Measey Sigman), American Economic Review, Commission Division of Corporation Behavior: International Evidence Brokers’ Incentives (with Susan Information and Efficiency inT ender Professor of Law and Health Sciences 2011. Finance, 2010–2011) (with Sven Neelsen and Thomas Stratmann), American Law and Christoffersen and Rich Evans), David A. Skeel, Jr., S. Samuel Arsht Offers (with Robert Marquez), Journal of Finance, forthcoming. Professor of Corporate Law Econometrica, 2008. Predicting Securities Fraud The Immigration Paradox: Alien Workers Who Let You Into the House?, Wisconsin Economics Review, forthcoming. Settlements and Amounts: A and Distributive Justice, in Citizenship, Law Review, forthcoming 2012. Notes on Bonds: Liquidity at all The New Financial Deal: Understanding Hierarchical Bayesian Model of Borders, and Human Needs, 2011. Recessions and the Social Safety Net: Costs in the Great Recession (with the Dodd-Frank Act and its (Unintended) Federal Securities Class Action Loyalty’s Core Demand: The Defining Role The Alternative Minimum Tax as a Greg Nini and Krista Schwarz), Consequences, Wiley, 2011. Lawsuits (with Blakely McShane, The Environment and Climate Change: of Good Faith in Corporate Law (with Leo Counter-Cyclical Fiscal Stabilizer Wharton School Working Paper. Oliver Watson, and Sean Griffith), Is International Migration Part of the Strine, Jr., R. Franklin Balotti, and Jeffrey (with Brian Galle), Stanford Law Transaction Consistency and the New Journal of Empirical Legal Studies, Problem or Part of the Solution?, Gorris), Georgetown Law Journal, 2010. Review, 2010. The Economics of Mutual Funds, Finance in Bankruptcy (with Thomas forthcoming. Fordham Environmental Law Review, The Annual Review of Financial Jackson), Columbia Law Review, 2012. 2010. Rationalizing Appraisal Standards in Passive Discrimination: When Does Economics, 2011. Health Insurance, Risk, and Compulsory Buyouts (with Michael It Make Sense to Pay Too Little? (with Assessing the Chrysler Bankruptcy (with Responsibility after the Affordable Cary Coglianese, Edward B. Shils Professor Wachter), Boston College Law Review, Jonah Gelbach and Lesley Wexler), Gideon Parchomovsky, Professor Mark Roe), Michigan Law Review, 2010. Care Act, University of Pennsylvania of Law and Professor of Political Science 2009. University of Chicago Law Review, of Law Law Review, 2011. 2009. Michael L. Wachter, William B. Johnson Regulatory Breakdown: The Crisis of Richard J. Herring, Jacob Safra Professor Beyond Fair Use (with Phil Weiser), Professor of Law and Economics; The Shifting Terrain of Risk and Confidence in U.S. Regulation, University of International Banking, Professor of Michael S. Knoll, Theodore K. Warner Cornell Law Review, 2011. Co-Director, Institute for Law and Uncertainty on the Liability of Pennsylvania Press, 2012. Finance, The Wharton School; Co-Director, Professor of Law, Professor of Real Economics Insurance Field, DePaul Law Review, Wharton Financial Institutions Center Estate, The Wharton School; The Hidden Function of Takings 2011. Business and Environmental Law (with Co-Director, Center for Tax Law & Compensation (with Abraham Bell), A Theory of Preferred Stock (with William Ryan Anderson), in The Oxford Handbook How to Reform the Credit-Rating Process Policy Virginia Law Review, 2010. B. Bratton), working paper. William W. Bratton, Nicholas F. of Business and the Environment, 2011. to Support a Revival of Private-Label Gallicchio Professor of Law; Securitization (with Edward Kane), What is Tax Discrimination? (with The Distortionary Effect of Evidence The Political Economy of Fraud on the Co-Director, Institute for Law and Beyond Compliance: Explaining Business Quarterly Journal of Finance, forthcoming Ruth Mason), Yale Law Journal, 2012. on Primary Behavior (with Alex Market (with William B. Bratton), Economics Participation in Voluntary Environmental 2012. Stein), Harvard Law Review, 2010. University of Pennsylvania Law Review, Programs (with Jonathan Borck), in Reconsidering International Tax 2011. Explaining Compliance: Business Neutrality, Tax Law Review, 2011. Responses to Regulation, Edward Elgar Publishing, 2011.

42 institute for law and economics academic events 43 1 Franklin Allen 17 Reed Shuldiner

2 Tom Baker 18 David A. Skeel, Jr.

3 Howard F. Chang 19 Susan M. Wachter

4 Cary Coglianese 20 Amy L. Wax 1 2 3 4 5 Itay Goldstein 21 Bilge Yilmaz

6 Richard J. Herring

7 Robert W. Holthausen

8 Richard E. Kihlstrom

9 Jonathan Klick

10 Michael S. Knoll

11 Charles W. Mooney, Jr. 5 6 7 8 12 David K. Musto

13 Gideon Parchomovsky

14 Andrew Postlewaite

15 Michael R. Roberts

16 Edward B. Rock Associate faculty

9 10 11 12

13 14 15 16

17 18 19 20

21

associate faculty 45 governance, a chair of the e-government committee of the American fragility and crises and on the feedback effects between firms and associate faculty Bar Association’s section on Administrative Law and Regulatory financial markets. His research has been published in major 2 2 Practice, and a fellow of the American Bar Foundation. He is also academic journals, including the Review of Economic Studies, the a founder of the peer-reviewed journal Regulation & Governance, Journal of Finance, the Review of Financial Studies, the Journal of for which he now serves on the editorial board, as well as the Financial Economics, and the Journal of Economic Theory. His research founder and faculty advisor to RegBlog.org, the first university- has also been featured in the popular press in the Financial Times, based online source of daily regulatory news and analysis. Bloomberg, Forbes, National Public Radio, and others. He has taught Franklin Allen William W. Bratton Coglianese received his J.D., M.P.P., and Ph.D. in political science undergraduate, M.B.A., Ph.D., and executive education courses Nippon Life Professor of Finance and Professor of Economics, Nicholas F. Gallicchio Professor of Law; from the University of Michigan, and for twelve years served on in finance and economics. Prior to joining Wharton, Professor The Wharton School Co-Director, Institute for Law and Economics the faculty of the John F. Kennedy School of Government at Goldstein served on the faculty of Duke University’s Fuqua School Harvard University. He has also been a visiting professor of law of Business. He also worked in the research department of the bank Franklin Allen is the Nippon Life Professor of Finance and Professor Professor Bratton joined the Penn Law faculty in 2010. He graduated at Stanford University and Vanderbilt University and an affiliated of Israel, where he was in charge of the analysis of the current of Economics at the Wharton School of the University of Pennsylvania. in 1976 from Columbia Law School where he was articles editor of the scholar at the Harvard Law School. account of Israel. He has been on the faculty since 1980. He is currently Co-Director Law Review and a James Kent Scholar. He clerked for the Honorable of the Wharton Financial Institutions Center. He was formerly William H. Timbers on the U.S. Court of Appeals for the Second Circuit Jill Fisch Lawrence Hamermesh Vice Dean and Director of Wharton Doctoral Programs and and practiced for several years at Debevoise & Plimpton in New York. Perry Golkin Professor of Law; Co-Director, Ruby R. Vale Professor of Corporate and Business Law, Widener Executive Editor of the Review of Financial Studies. He is currently He served on the Cardozo, Rutgers, and George Washington law Institute for Law and Economics University School of Law (Senior Special Counsel, Securities and Managing Editor of the Review of Finance, the journal of the faculties before joining the faculty of the Georgetown University Law Exchange Commission Division of Corporation Finance, 2010–2011) European Finance Association. He is a past President of the American Center, where he was the Peter P. Weidenbruch, Jr., Professor of Professor Fisch received her J.D. from Yale Law School in 1985. Finance Association, the Western Finance Association, the Society Business Law. He also has been the Unilever Visiting Professor at the Before joining the Penn faculty in 2008, she held the T.J. Maloney Professor Hamermesh received a B.A. from Haverford College of Financial Studies, and the Financial Intermediation Research Faculty of Law of the University of Leiden and a visiting professor at Chair in Business Law at Fordham Law School and served as in 1973, and a J.D. from Yale Law School in 1976. Professor Society. He is a Fellow of the Econometric Society. He received his the Duke and Stanford law schools. He is a Research Associate of the founding director of the Fordham Corporate Law Center. She has Hamermesh practiced law with Morris, Nichols, Arsht & Tunnell, doctorate from Oxford University. Dr. Allen’s main areas of European Corporate Governance Institute and in 2010 was the Anton also been a visiting professor at Harvard Law School, Columbia Wilmington, Delaware, as an associate from 1976–84, and as a interest are comparative financial systems, banking, and financial Philips Professor at the faculty of law of the University of Tilburg. Law School and Georgetown University Law Center. Prior to partner from 1985–94. Professor Hamermesh joined the faculty at crises. He is a co-author with Richard Brealey and Stewart Myers He has published many articles and book chapters on topics in entering academia, Professor Fisch practiced law with the United Widener in 1994, and teaches and writes in the areas of corporate of the eighth through tenth editions of the textbook Principles corporate law, the theory of the firm, law and economics, and legal States Department of Justice and the New York office of Cleary, finance, mergers and acquisitions, securities regulation, business of Corporate Finance. history, and is the editor of the leading law school casebook on Gottlieb, Steen and Hamilton. Her research focuses on corporate organizations, and professional responsibility. Since 1995, Professor corporate finance. governance, business litigation, and securities regulation. Hamermesh has been a member of the Council of the Corporation Tom Baker Law Section of the Delaware State Bar Association, which is William Maul Measey Professor of Law and Health Sciences Howard F. Chang Michael A. Fitts responsible for the annual review and modernization of the Earle Hepburn Professor of Law Dean of the Law School and Bernard G. Segal Professor of Law Delaware General Corporation Law, and served as Chair of the Tom Baker is the William Maul Measey Professor of Law and Health Council from 2002 to 2004. In 2002 and 2003 he also served as the Sciences at Penn Law School. His work explores insurance, risk, Professor Chang received a Ph.D. in economics from the Massachusetts Michael A. Fitts was named Dean of the Law School in March 2000. Reporter for the American Bar Association’s Task Force on and responsibility in a wide variety of settings, using methods and Institute of Technology in 1992, a J.D. from Harvard Law School in Before joining the Penn Law faculty in 1985, Dean Fitts served as Corporate Responsibility. He was appointed in 2011 as Associate perspectives drawn from economics, sociology, psychology, and 1987, a Master in Public Affairs from Princeton University in 1985, and clerk to the Honorable A. Leon Higginbotham, Jr., U.S. Court of Reporter for the Committee on Corporate Laws of the American history. He is the author of The Medical Malpractice Myth (U. an A.B. from Harvard College in 1982. Prior to joining the Penn faculty Appeals for the Third Circuit, and as attorney advisor in the Office Bar Association Business Law Section, which supervises the Chicago P. 2005) and a contributing editor of Embracing Risk: in 1999, he was a Professor of Law at the University of Southern of Legal Counsel in the U.S. Department of Justice. At Penn he was drafting of the Model Business Corporation Act. He is a member The Changing Culture of Insurance and Responsibility (U. Chicago P. California Law School, where he began teaching in 1992. He was a appointed Associate Professor of Law in 1990, Professor of Law in of the American Law Institute. Professor Hamermesh is also a 2002). His latest book Ensuring Corporate Misconduct: How Liability Visiting Professor of Law at Stanford Law School in 1998, at Harvard 1992 and Robert G. Fuller, Jr. Professor of Law in 1996. From 1996 member of the Board of Directors of ACLU Delaware. Insurance Undermines Shareholder Litigation, co-authored with Sean Law School and at the New York University School of Law in 2001, at to 1998 he served as Associate Dean for Academic Affairs at the Law Griffith, analyzes the relationship between D&O insurance and the University of Michigan Law School in 2002, and at the University School and was active in establishing a variety of joint programs Richard J. Herring securities litigation based on in-depth interviews with underwriters, of Chicago Law School in 2007, and a Visiting Associate Professor of with other schools within the University. In 1999 he served as Jacob Safra Professor of International Banking, Professor of Finance, claims managers, plaintiffs and defense lawyers, actuaries, brokers Law at the Georgetown University Law Center from 1996 to 1997. He Visiting Professor in Political Science at Swarthmore College. Dean The Wharton School; Co-Director, Wharton Financial Institutions Center and others. He has a secondary appointment in the Insurance and served as a law clerk for the Honorable Ruth Bader Ginsburg on the Fitts’ research has focused on the effect of various structural changes Risk Management Department at Wharton, where he teaches risk U.S. Court of Appeals for the D.C. Circuit from 1988 to1989. He served (e.g., stronger political parties, presidents, or centralized legal Richard J. Herring is Jacob Safra Professor of International management. He is the Reporter for the American Law Institute's on the Board of Directors of the American Law and Economics institutions) on government budgeting and legislation. He has also Banking and Professor of Finance at The Wharton School, Principles of Liability Insurance Project. He was the Connecticut Association from 2004 to 2007. He has written on a wide variety of written more recently on the structure of non-profit institutions University of Pennsylvania, where he is also founding director Mutual Professor and Director of the Insurance Law Center at the subjects including environmental protection, international trade, and their leadership. of the Wharton Financial Institutions Center, one of Wharton’s University of Connecticut before joining the Penn Law faculty. immigration, intellectual property, and the economics of litigation largest research centers. From 2000 to 2006, he served as the He clerked for United States Court of Appeals Judge Juan Torruella and settlement. Itay Goldstein Director of the Lauder Institute of International Management and practiced with the firm of Covington and Burling. Associate Professor of Finance, The Wharton School Studies and from 1995 to 2000, he served as Vice Dean and Cary Coglianese Director of Wharton’s Undergraduate Division. During 2006, Edward B. Shils Professor of Law and Professor of Political Science Itay Goldstein is a tenured Associate Professor of Finance at the he was a Professorial Fellow at the Reserve Bank of New Zealand Wharton School of the University of Pennsylvania. He has been on and Victoria University. Cary Coglianese is the Edward B. Shils Professor of Law at the the faculty of the Wharton School since 2004. Professor Goldstein University of Pennsylvania Law School, as well as Professor of earned his B.A. (Economics and Accounting, 1994), M.A. Political Science and the director of the Penn Program on Regula- (Economics, 1998), and Ph.D. (Economics, 2001) from Tel Aviv tion. Coglianese is the founder of the Law & Society Association’s University. He is an expert in the areas of corporate finance, international collaborative research network on regulatory financial institutions, and financial markets, focusing on financial

46 institute for law and economics associate faculty 47 Michael S. Knoll He served as a member of the Uniform Commercial Code Permanent associate faculty Theodore K. Warner Professor of Law; Professor of Real Estate, Editorial Board Article 2 (Sales) Study Committee and also served 2 2 The Wharton School; Co-Director, Center for Tax Law & Policy as a reporter for that Board’s Article 9 (Secured Transactions) Study Committee and as a reporter for the Revised Article 9 drafting Professor Knoll joined the Penn Law and Wharton faculties from committee. He served as a member of the U.S. Security and the University of Southern California Law School in 2000. He Exchange Commission’s Advisory Committee on Market Transactions. teaches courses in corporate finance and taxation in the Law Mooney was awarded the Distinguished Service Award, presented He is the author of more than 100 articles, monographs and Robert P. Inman School, the Wharton School, and the Wharton Executive Program. by the American College of Commercial Finance Lawyers. He is books on various topics in financial regulation, international Richard King Mellon Professor of Finance, Professor of Finance and He is also an affiliate of the Zell/Lurie Real Estate Center at the a Fellow and Director of the American College of Bankruptcy. He banking, and international finance. At various times his research Economics, Business and Public Policy, Real Estate, The Wharton School Wharton School, and the editor of Forensic Economic Abstracts, also served as U.S. Delegate and Position Coordinator (appointed has been funded by grants from the National Science Foundation, an electronic journal published by the Social Science Research by U.S. Department of State) at the Diplomatic Conference for the the Ford Foundation, the Brookings Institution, the Sloan Professor Inman received his Ph.D. in economics from Harvard Network. Professor Knoll’s undergraduate and J.D. degrees are Cape Town Convention on International Interests in Mobile Foundation, and the Council on Foreign Relations. University and joined the Penn faculty in 1972. He is a research from the University of Chicago. He also earned a Ph.D. in Equipment and the Protocol on Matters Specific to Aircraft Outside the university, he is co-chair of the US Shadow associate of the National Bureau of Economic Research. He has Economics at the University of Chicago. In 1990 he joined the USC Equipment, in Cape Town, South Africa. He also served as a U.S. Financial Regulatory Committee and Executive Director of the served as a consultant to the city of Philadelphia, the state of Law faculty as an Assistant Professor, and in 1995 he was promoted Delegate for the UNIDROIT Geneva Securities Convention at the Financial Economist’s Roundtable, a member of the Advisory Pennsylvania, CitiGroup, Chemical Bank, the U.S. Department of to full Professor. He has been a Visiting Professor of Law at Diplomatic Conferences in Geneva. His current research centers Board of the European Banking Report in Rome, the Institute the Treasury, the Financial and Fiscal Commission of the Republic Georgetown (1999), Penn (1998–99), Virginia (2000), and on intermediated securities, sovereign debt restructuring, security for Financial Studies in Frankfurt, and the International Centre of South Africa, the National Bank of Sri Lanka, the National Columbia (2009). Professor Knoll was also a John M. Olin Senior interests in bankruptcy, and bankruptcy theory. for Financial Regulation in London. In addition, he is a member Academy of Sciences, and numerous U.S. federal government Research Scholar at Columbia University School of Law (1996–97), agencies. His research is currently focused on fiscal federalism, the of the FDIC Systemic Risk Advisory Committee. He served as a Visiting Scholar at New York University Law School (1996–97), Robert H. Mundheim urban fiscal crisis, and the political and legal institutions of fiscal co-chair of the Multinational Banking seminar from 1992–2004 a John M. Olin Distinguished Visiting Professor of Law at Toronto University Professor of Law and Finance Emeritus and former Dean, policymaking. Professor Inman held the Florence Chair in and was a Fellow of the World Economic Forum in Davos from University (1998), and a John Raneri Atax Fellow at the University University of Pennsylvania; Of Counsel, Shearman & Sterling; Professor Economics at the European University Institute, Florence, Italy, 1992–95. He was a member of the Group of 30 task force on the of New South Wales (2011). Prior to entering teaching, he clerked of Corporate Law and Finance, University of Arizona Law School; for the spring quarter of 2000. He was a Visiting Scholar at the reinsurance industry, as well as an earlier study group on for the Honorable Alex Kozinski on the U.S. Court of Appeals, formerly General Counsel, U.S. Treasury and Executive Vice President Rockefeller Foundation’s Bellagio Study Center, Fall 2007. international supervision and regulation. Currently, he is an Ninth Circuit, and served as legal advisor to the Vice Chairman and General Counsel of Salomon, Inc. independent director of the DWS Scudder mutual fund complex of the U.S. International Trade Commission. He has published and has served on the predecessor Deutsche Asset Management Richard E. Kihlstrom extensively in the fields of corporate finance, taxation, economics, Mr. Mundheim is Vice Chair of the Board of Trustees of the New and Bankers Trust boards since 1990. He is also an independent Ervin Miller-Arthur M. Freedman Professor of Finance and Economics, and real estate finance. School University, a member of the Council and Executive Committee director of the Daiwa closed end funds and of Barclays Bank, Chairman, Finance Department, The Wharton School of the American Law Institute, a Trustee of the Curtis Institute of Delaware. Richard Kihlstrom holds a doctorate from the University of George J. Mailath Music, and Chairman of the American Bar Association’s Standing Herring received his undergraduate degree from Oberlin Minnesota. He has been a member of the Wharton faculty since Walter H. Annenberg Professor in the Social Sciences, Professor Committee on Ethics and Professional Responsibility. College in 1968 and his PhD from Princeton University in 1973. 1979, was named to the Miller-Freedman professorship in 1986, and of Economics, School of Arts and Sciences He has been a member of the Finance Department since 1972. previously served as Chair of the Finance Department from 1988 to David K. Musto Professor Mailath received his Ph.D. in economics from Princeton He is married, with two children, and lives in Bryn Mawr, 1994. Before coming to Penn, he taught at Northwestern University, Ronald O. Perelman Professor in Finance, The Wharton School University in 1985. He is a Fellow of the American Academy of Arts Pennsylvania. the University of Illinois, the State University of New York at Stony and Sciences and of the Econometric Society. He served on the Brook, and the University of Massachusetts. He is a Fellow of the David K. Musto is the Ronald O. Perelman Professor in Finance at Council of the Game Theory Society 2005-2011, and was one of the the Wharton School, where he has been on the faculty since 1995. Robert W. Holthausen Econometric Society. His areas of research interest include informa- founders of the journal Theoretical Economics, and is or has served He has a B.A. from Yale University and a Ph.D. from the University The Nomura Securities Company Professor and Ernst and Young tion and uncertainty in economics, financial market equilibrium, as an associate editor or editorial board member of Econometrica, of Chicago, and between college and graduate school he worked for Professor, Professor of Accounting and Finance, and Chairman, and corporate finance. the Review of Economic Studies, the Journal of Economic Theory, Roll and Ross Asset Management in Los Angeles. He is an editor Accounting Department, The Wharton School Games and Economic Behavior, the International Economic Review, of the Journal of Financial Services Research and an Associate Editor Jonathan Klick and Economic Theory. He is co-editor of the Econometric Society of the Journal of Finance. Most of his work, both theoretical and Professor Holthausen earned his Ph.D. and his M.B.A. at the Professor of Law and Erasmus Chair of Empirical Legal Studies at Monograph Series and has been a member of the Economics empirical, is in the area of consumer financial services, mutual funds University of Rochester. He joined the Wharton School in 1989. Erasmus University Rotterdam Prior to joining the Penn faculty, he was a member of the Advisory Panel of the National Science Foundation. His research and consumer credit in particular. He has also published work on accounting and finance faculty at the Graduate School of Business Professor Klick earned his Ph.D. in economics in 2002 and his interests include the organization of the firm, noncooperative corporate and political voting, option pricing, short selling, and of the University of Chicago. Professor Holthausen teaches J.D. in 2003 from George Mason University. He was the Jeffrey A. game theory, evolutionary game theory, social norms, and the cross-border taxation. Corporate Valuation, a course he created for Wharton when he Stoops Professor of Law and Economics at Florida State University foundations of reputations, law, and authority. arrived and has been teaching ever since. He is currently working from 2005-2008. He has been a visiting professor at Columbia Gideon Parchomovsky on a valuation book entitled Corporate Valuation: Theory, Practice University, Northwestern University, the University of Southern Charles W. Mooney, Jr. Professor of Law and Evidence, scheduled for publication in January 2013. Since California, and the University of Hamburg, and he was an Erskine Charles A. Heimbold, Jr. Professor of Law 1998 he has served as the academic director of Wharton’s Mergers Fellow in the Department of Finance and Economics at the Professor Parchomovsky received his LL.B. from the Hebrew Professor Mooney received his J.D. from Harvard Law School and Acquisitions program. Professor Holthausen’s research University of Canterbury in Christchurch, New Zealand. Klick’s University of Jerusalem in 1993, his LL.M. from the University in 1972. He practiced law with the Oklahoma firm of Crowe and interests include the effects of management compensation and work lies in the area of empirical law and economics, and every of California at Berkeley in 1995, and his S.J.D. from Yale Law Dunlevy and as a partner of the New York firm of Shearman & governance structures on firm performance, the effects of year he thinks the Flyers will win the Stanley Cup. School in 1998. Prior to joining the Penn Law faculty in fall 2002, Sterling. Professor Mooney joined the Penn faculty in 1986, and information on volume and prices, corporate restructuring and Professor Parchomovsky served as an Associate Professor at during 1999 and 2000 he served as Interim Dean of the Law valuation, the effects of large block sales on common stock prices, Fordham Law School and a Visiting Lecturer at Yale Law School. School. From 1998 to 2000 and from 2008 to 2009 he served as and numerous other topics. He is widely published in both His research interests include intellectual property law and Associate Dean for Academic Affairs. He is an active member of finance and accounting journals and is currently an editor of the property theory. His recent work focuses on unlocking synergies the American Law Institute and the American Bar Association. Journal of Accounting and Economics. among sub-fields of intellectual property and devising innovative mechanisms for protecting property entitlements.

48 institute for law and economics associate faculty 49 Michael L. Wachter research include civil procedure, remedies, labor and employment associate faculty William B. Johnson Professor of Law and Economics; Co-Director, law, poverty law and welfare policy, the law and economics of work 2 2 Institute for Law and Economics and family, and social science and the law. Professor Wax joined the Penn Law Faculty in fall 2001. Professor Wachter received his Ph.D. in economics from Harvard University and joined the Penn faculty in 1970. He has held full Bilge Yilmaz professorships in three of Penn’s schools: the School of Arts and Associate Professor of Finance, The Wharton School Andrew W. Postlewaite Edward B. Rock Sciences, where he has been professor of economics since 1976; Harry P. Kamen Professor of Economics, School of Arts and Sciences; Saul A. Fox Distinguished Professor of Business Law the Wharton School, where he was professor of management, Bilge Yılmaz is an Associate Professor of Finance at the Wharton Professor of Finance, The Wharton School 1980–92; and the Law School, where he became professor of law School. Prior to his current appointment, he taught at the Graduate Professor Rock received his J.D. from the University of Pennsylvania and economics in 1984. He has been senior advisor to the Brookings School of Business, Stanford University, and held visiting positions Professor Postlewaite received his Ph.D. from Northwestern in 1983. He joined the Penn faculty in 1989 from the Philadelphia Panel on Economic Activity in addition to consulting for the at the University of Chicago and INSEAD. He received his BS University in 1974 and joined the Penn faculty from the University law firm of Fine, Kaplan and Black, where he specialized in Federal Reserve’s Board of Governors and the Council of Economic degrees in Electrical Engineering and Physics from Bogaziçi of Illinois in 1980. He is editor of American Economic Journal: antitrust, corporate, and securities litigation. He has written widely Advisors. He has also served as a member of the National Council University, and his PhD in Economics from Princeton University. Microeconomics, past editor of the International Economic Review and in corporate law, on topics including: proxy access, corporate on Employment Policy and as a commissioner on the Minimum His research focuses on corporate finance, political economy, and past co-editor of Econometrica. He serves on the Board of Directors voting, government ownership, hedge funds, and comparative Wage Study Commission. Professor Wachter served as Deputy game theory. His current projects include corporate governance, of the National Bureau of Economic Research, the Council of the corporate law. He has taught as a visiting professor at Columbia, Provost of the University of Pennsylvania from July 1995 to voting under asymmetric information, hedge funds, mergers and Game Theory Society, and on the Executive Committee of the NYU, Hebrew University, Israel, and the Johann Wolfgang January 1998, and as Interim Provost from January to December acquisitions, and private equity. American Economic Association. He has published widely in the Goethe-Universität, Frankfurt am Main, Germany. Professor Rock 1998. He is the author of numerous articles in law and economics, areas of strategic behavior and industrial organization. served as co-director of ILE from 1998-2010. as well as in corporation law and labor law and economics.

Michael R. Roberts Reed Shuldiner Susan M. Wachter Associate Professor of Finance, The Wharton School Alvin L. Snowiss Professor of Law Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute Michael R. Roberts is a tenured Associate Professor of Finance Professor Shuldiner is a recognized expert in the taxation of for Urban Research at the Wharton School of the University of Pennsylvania. Professor financial instruments and transactions. His area of research is Roberts earned his B.A. in Economics from the University of taxation and tax policy. His current research includes the taxation From 1998 to 2001, as Assistant Secretary for Policy Development California at San Diego, and his M.A. in Statistics and Ph.D. in of risk under income, wealth and consumption taxes, and the and Research, U.S. Department of Housing and Urban Develop- Economics from the University of California at Berkeley. In viability and effects of a federal wealth tax (with David Shakow). ment, Dr. Wachter served as the senior urban policy official and addition to his experience at the Wharton School, he has taught Professor Shuldiner served as Associate Dean at Penn Law from principal advisor to the Secretary on overall HUD policies and at Duke University’s Fuqua School of Business. His primary 2000–02. During spring 2005, Professor Shuldiner was the William programs. At Wharton, Dr. Wachter was Chairperson of the Real research is in the area of corporate finance and in particular: K. Jacobs, Jr. Visiting Professor of Law at Harvard Law School. Estate Department and Professor of Real Estate and Finance from capital structure, investment policy, financial contracting, and He was a Visiting Assistant Professor at Yale Law School during July 1997 until her 1998 appointment to HUD. She founded and payout policy. Recent work has examined issues including the 1994–95. Before joining the Penn law faculty in 1990, he served in currently serves as Director of Wharton’s Geographical Information design of debt securities and the role of control rights in influencing the Office of Tax Legislative Counsel of the U.S. Department of Systems Lab. Dr. Wachter served as a member of the Board of financial and investment policy. His research has received several the Treasury, was counsel to the law firm of Cadwalader, Wicker- Directors of the Beneficial Corporation from 1985 to 1998 and of awards including the Brattle Prize for Distinguished Paper sham and Taft, and was an associate with the Washington, D.C., law the MIG Residential REIT from 1994 to 1998. She was the editor of published in the Journal of Finance, and Best Paper awards at the firm of Wilmer, Cutler and Pickering. Professor Shuldiner received Real Estate Economics from 1997 to 1999 and serves on the editorial Financial Management Association and Southwestern Finance his J.D. from Harvard University in 1983 and his Ph.D. in economics boards for several real estate journals. Dr. Wachter has been a Association annual conferences. In addition to his research, from the Massachusetts Institute of Technology in 1985. member of the Advanced Studies Institute of the Homer Hoyt Professor Roberts has earned a number of teaching awards Institute since 1989. Wachter co-founded and is co-director including the Daimler-Chrysler Core Teaching Award at the David A. Skeel, Jr. of the Institute for Urban Research at Penn. She is author of more Fuqua School of Business and the David W. Hauk Award for S. Samuel Arsht Professor of Corporate Law than 100 scholarly publications and is the recipient of several Outstanding Teaching at the Wharton School. He has taught awards for teaching excellence at the Wharton School. undergraduate, M.B.A., Ph.D., and executive education courses Professor Skeel joined the Penn faculty in 1999. He graduated in in corporate finance, econometrics, and statistics. Prior to joining 1987 from the University of Virginia School of Law, where he was Amy Wax editor of the Virginia Law Review and a member of the Order of the academia, Professor Roberts was a Financial Engineer at Financial Robert Mundheim Professor of Law Engineering Associates Inc. and a Senior Analyst for Regional Coif. He clerked for the Honorable Walter K. Stapleton on the U.S. Economic Research Inc. Court of Appeals for the Third Circuit, and practiced for several A graduate of Yale College and Harvard Medical School, Professor years at Duane, Morris & Heckscher in Philadelphia, before joining Wax trained as a neurologist at New York Hospital before completing the Temple University School of Law in 1990. Professor Skeel has a law degree at Columbia Law School in 1987. She served as a clerk also held visiting appointments at the University of Wisconsin Law to the Honorable Abner J. Mikva of the U.S. Court of Appeals for School (1993–94), the University of Virginia School of Law (spring the D.C. Circuit and worked for six years at the Office of the Solicitor 1994), Georgetown University Law Center (fall 2004), and the General at the U.S. Department of Justice, where she argued 15 University of Pennsylvania Law School (fall 1997). Professor Skeel cases before the U.S. Supreme Court. She taught from 1994 to 2001 specializes in corporate and commercial law and has written widely at the University of Virginia Law School. Her areas of teaching and on corporate law, bankruptcy, and sovereign debt. He has also has written on law and religion, and poetry and law.

50 institute for law and economics associate faculty 51 ILE Investors 2011–2012

Funding for the Institute for Law and Economics comes from a diverse group of individuals, law firms, corporations, and foundations who endorse our work each year. We are pleased and privileged to recognize and thank the ILE investors whose generous contributions underwrite the activities described in this report. We deeply appreciate their support and their active participation in institute programs.

Benefactors Fidelity Management Members $25,000 or above & Research Company $5,000 to $9,999 Charles I. Cogut and Simpson FMC Corporation James H. Agger thacher & Bartlett LLP Stephen Fraidin Blank Rome LLP Robert L. Friedman Joel E. Friedlander Harkins Cunningham LLP Paul G. Haaga, Jr. Gibson, Dunn & Crutcher LLP Myron J. Resnick Skadden, Arps, Slate, Meagher Goldman, Sachs & Co. & Flom LLP Perry Golkin Donors Sullivan & Cromwell LLP Grant & Eisenhofer P.A. Up to $4,999 Leon C. Holt, Jr. Joseph J. Carapiet Sponsors Hughes Hubbard & Reed LLP Christopher Foulds $10,000 to $24,999 Innisfree M&A Incorporated Mary J. Grendell Allen & Overy LLP Roy J. Katzovicz Edmund Kitch Apollo Capital Management, L.P. Lazard James A. Ounsworth AQR Capital Management, LLC MacKenzie Partners, Inc. Myron J. Resnick Barclays Capital Merck & Co., Inc. John F. Schmutz Bernstein Litowitz Berger & Millennium Management Eric Wilensky grossmann LLP foundation Kenneth W. Willman Cadwalader, Wickersham & Taft LLP Morgan, Lewis & Bockius LLP Isaac D. Corré Morris, Nichols, Arsht & Tunnell LLP Cravath, Swaine & Moore LLP James E. Odell and The Depository Credit Suisse trust and Clearing Corporation Dechert LLP Potter Anderson & Corroon LLP Delaware Department of State Proskauer Rose LLP E. I. du Pont de Nemours Allan N. Rauch and Company Richards, Layton & Finger, P.A. Schulte Roth & Zabel LLP Seyfarth Shaw LLP Shearman & Sterling LLP Vanguard Wachtell, Lipton, Rosen & Katz White & Case LLP Young Conaway Stargatt & Taylor, LLP

52 institute for law and economics institute ilnecturesvestors 53 Institute for Law & Economics University of Pennsylvania 3501 Sansom Street, Philadelphia, PA 19104-6204 215.898.7719, www.law.upenn.edu/ile/

September 2012

Michael L. Wachter, Co-Director William W. Bratton, Co-Director William B. Johnson Professor Nicholas F. Gallicchio Professor of Law of Law and Economics 215.898.6911 215.898.7852 [email protected] [email protected] Vicki L. Hewitt, Program Director Jill E. Fisch, Co-Director 215.898.7719 Perry Golkin Professor of Law [email protected] 215.746.3454 [email protected]

Founded in 1980, the Institute for Law and Economics at the University of Pennsylvania has an ambitious agenda that is timelier than ever. The study of law and economics remains the most rapidly growing movement in legal scholarship and jurisprudence. Under the sponsorship of the Law School, the Wharton School, and the Department of Economics in Penn’s School of Arts and Sciences, the Institute has played a leading role in this expanding field. Cross-disciplinary research, the cornerstone of ILE, seeks to influence the national policy debate by analyzing the impact of law on the global economy, spotlighting the significant role that economics plays in fashioning legal policy. Our innovative roundtables and conferences, launched in 1985, complement these goals by provoking in-depth and frequently groundbreaking examinations of critical issues. These and other programs highlighted in this Annual Report have helped the Institute stay on the leading edge of this cross-discipline. The Institute for Law and Economics has unique advantages. We draw on the research and teaching strengths of the Law School, the Wharton School, and the Department of Economics. Our geographic location is optimal, allowing us to bring together partici- pants from Washington and New York for full-day meetings and still get everyone home in time for dinner. We have been able to call on the expertise of Penn Law School alumni who occupy key positions in law, business, and government. And, critically, we have an extraordinarily distinguished cadre of board members and sponsors who are willing to give of their time and expertise to make our programming a success. In each area, from our public lectures and panels through our closed-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 incentives to encourage actors to maximize social welfare. Funding for ILE comes from a diverse group of corporations, 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 its programs.