ANNUAL REPORT 2008–2009

We find “islands of conscious power in this ocean of unconscious co-operation like lumps of butter coagulat- ing in a pail of buttermilk.” But in view of the fact that it is usually argued that co-ordination will be done by the price mechanism, why is such organization neces- sary? Why are there these “islands of conscious power”? Outside the firm, price movements direct production, which is coordinated through a series of exchange trans- actions on the market. Within a firm, these markets transactions are eliminated and in place of the com- plicated market structure with exchange transactions is substituted the entrepreneur co-ordinator, who directs production. It is clearinstitute that these for are alternative methods of co-ordinatinglaw production. & economics Yet, having regard to the fact that if production is regulated by price movements, production could be carried on without any organization at all, well might we ask, why is there any organization?

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 to scholarship, policy, and practice on relevant issues of law and economics that affect our country’s businesses and fi nancial institutions.

tHe InstItUte’s programs have become increasingly relevant and important in this challenging economic climate, focusing on the issues that the academic, legal, and business communities care about. today the Institute enjoys an Message from the Co-Chairs 1 deal day 20 outstanding international reputation for the excellence of its programs, where leaders in business, fi nancial management, Board of Advisors 2 Chancery Court programs 20 legal practice, and academic scholarship candidly discuss the intersec- Message from the Dean 4 Lectures 22 tion of theory and practice on a host of signifi cant issues. Message from the Co-Directors 5 Law and entrepreneurship 24 on behalf of the Institute’s Board of advisors, we want to express Roundtable Programs 6 distinguished Jurist 28 our gratitude to everyone who has helped the Institute during this past off the record, spring 2009 8 past Lectures 30 year, whether through fi nancial contributions or by participation in ILe Corporate Finance, spring 2009 10 Academic Events 32 programs. one of the foremost goals of the Institute is to broaden and Corporate Finance, Fall 2008 12 nYU/penn Conference, spring 2009 34 diversify our foundation, and once again we have realized that goal. Corporate Finance, spring 2008 14 penn/nYU Conference, spring 2008 34 We are delighted to report some superb additions to our Board of Corporate Finance, Fall 2007 14 ILe/Wharton Finance seminars 36 advisors during the past year. We are pleased to welcome the following Panel Programs 16 Publications and Papers 38 new members: daniel H. Burch (macKenzie partners, Inc.); stuart m. delaware Chancery program 18 Associate Faculty 40 grant (grant & eisenhofer p.a.); and Heidi stam (vanguard). these Corporate governance Conference 18 Institute Investors 49 accomplished individuals will greatly enhance the work of the Institute and broaden the composition of our Board. all of the members of our Board give graciously to the Institute, not just fi nancially but also of their time and expertise, and we are very grateful for their contributions. very special thanks must be given to ILe Benefactors Bob Friedman, paul Levy, and skadden, arps, slate, meagher & Flom LLp (through eric Friedman). their extraordinary level of fi nancial support FoUnded In 1980, the Institute for Law and economics at the participants from Washington and new York for full-day meetings University of pennsylvania has an ambitious agenda that is and still get everyone home in time for dinner. We have been able enables the Institute to continue to lead the fi eld, and we want to express our sincere appreciation to each of them. timelier than ever. the study of law and economics remains the to call on the expertise of penn Law school alumni who occupy this year we welcomed Jill Fisch as a co-director of ILe, joining ed rock and michael Wachter. these three distinguished most rapidly growing movement in legal scholarship and key positions in law, business, and government. and, critically, we professors have continued to do a truly outstanding job coordinating the work of the Institute. their tireless dedication jurisprudence. Under the sponsorship of the Law school, the have an extraordinarily distinguished cadre of board members Wharton school, and the department of economics in penn’s and sponsors who are willing to give of their time and expertise to all aspects of the Institute’s work and their ability to come up with timely programs and attract the ideal participants to school of arts and sciences, the Institute has played a leading to make our programming a success. make every program an unqualifi ed success are why ILe is world-renowned as the forum for interesting dialogue on topical role in this expanding fi eld. In each area, from our public lectures and panels through our issues for corporations and their fi nancial and legal advisors. Cross-disciplinary research, the cornerstone of ILe, seeks closed-door roundtables to our more academically-oriented to infl uence the national policy debate by analyzing the impact faculty workshops, we are driven by the same mission: to use of law on the global economy, spotlighting the signifi cant role the tools of economics to understand the law. In a world in that economics plays in fashioning legal policy. our innovative which complex legal rules govern economic relationships, the roundtables and conferences, launched in 1985, complement tools of economics provide a way of asking whether the law these goals by provoking in-depth and frequently groundbreaking creates appropriate incentives to encourage actors to maximize examinations of critical issues. these and other programs social welfare. highlighted in this annual report have helped the Institute to Funding for ILe comes from a diverse group of corporations, stay on the leading edge of this cross-discipline. law fi rms, foundations, and individuals who endorse our work Charles “Casey” Cogut the Institute for Law and economics has unique advantages. each year. over the past decade, the Institute has more than We draw on the research and teaching strengths of the Law tripled its donor base to provide ongoing support for the Simpson Thacher & Bartlett LLP school, the Wharton school, and the department of economics. programs discussed in this annual report. a list of Institute our geographic location is optimal, allowing us to bring together Investors for 2008–2009 appears on page 49.

Cover Captions (from left to right) off the record. Hon. e. norman veasey, Weil, gotshal & manges LLp; Lee a. meyerson, simpson thacher & Bartlett LLp; perry golkin, Kohlberg Kravis roberts & Co.; gerald rosenfeld, rothschild north america. Joseph B. Frumkin Sullivan & Cromwell LLP Corporate roundtable, Fall 2008. paul g. Haaga, Jr., Capital research and management Company.

University of pennsylvania Law school. september 2009 off the record. marcy engel, eton park Capital management.

Cover Text ronald Coase, The Nature of the Firm (1937)

institute for law and economics 1 message from the co-chairs Board of advisorsAdvisors

JamesBarry M. H. AbelsonAgger EricRobert J. Friedman L. Friedman WilliamRoy J. B.Katzovicz Johnson Alannew Miller York, nY DavidWayne, M. Silkpa Chair,pepper 1994–2001 Hamilton LLp ExecutiveChair, 2001–2007 Partner ChairmanGeneral EmeritusCounsel Co-Chairman Wachtell, Lipton, 1 2 3 Retiredphiladelphia, Senior pa Vice skadden,Senior Managing arps, slate, Director and Whitmanpershing Corporation square Capital InnisfreeJames A.m&a Ounsworth Incorporated rosenDavid & M. Katz Silk President, General meagherChief Legal & OffiFlom cer LLp Chicago,management, IL L.p. newManaging York, nY Director newWachtell, York, nY Lipton, CounselJames H. and Agger Secretary newthe York,Blackstone nY group L.p. new York, nY the musser Consulting group rosen & Katz airChair, products 1994–2001 and new York, nY Cynthia B. Kane G.Wayne, Daniel paO’Donnell Brucenew L. York, Silverstein nY Chemicals,Retired Senior Inc. Vice Robert L. Friedman SpecialBruce Assistant N. Kuhlik to the dechert LLp Young Conaway stargatt allentown,President, General pa Counsel Chair,Joseph 2001–2007 B. Frumkin SecretaryExecutive of ViceState President and philadelphia,Morton A. Pierce pa & Brucetaylor, L. LLp Silverstein and Secretary SeniorCo-Chair, Managing 2008– Director delawareGeneral Counseldepartment dewey & LeBoeuf LLp Wilmington,Young Conaway de stargatt air products and sullivan & Cromwell LLp merck & Co., Inc. new York, nY & taylor, LLp Richard B. Aldridge and Chief Legal Offi cer of state James E. Odell Chemicals, Inc. new York, nY Whitehouse station, nJ Wilmington, de morgan Lewis & the Blackstone group L.p. Wilmington, de General Counsel, A. Gilchrist Sparks III allentown, pa Martha L. Rees Bockius LLp new York, nY The Americas morris, nichols, arsht Joseph D. Gatto Mark Lebovitch Vice President and Assistant A. Gilchrist Sparks III philadelphia, pa Roy J. Katzovicz UBs Investment Bank & tunnell LLp Richard B. Aldridge Vice Chairman Bernstein Litowitz Berger & General Counsel morris, nichols, arsht 4 5 morgan Lewis & Bockius LLp JosephLehman B. Brothers Frumkin Inc. Chiefgrossmann Legal Offi LLp cer newe. I. York,du pont nY de nemours Wilmington,& tunnell LLp de William D. Anderson, Jr. Co-Chair, 2008– pershing square Capital philadelphia, pa new York, nY new York, nY & Company, Inc. Wilmington, de 1 Lee Holt and Jim Agger 6 Bob Friedman Managing Director sullivan & Cromwell LLp management, L.p. JamesWilmington, A. Ounsworth de Heidi Stam 2 Richard Aldridge 7 Joe Gatto goldman,William D. sachs Anderson, & Co. Jr. newJoseph York, Glatt nY newPaul York, S. Levy nY Managing Partner ManagingHon. Leo Director E. Strine, Jr. 3 Marshall Babson 8 Perry Golkin newManaging York, Director nY Principal Counsel Founder theMyron sL Consulting J. Resnick group andVice General Chancellor Counsel goldman, sachs & Co. Josephapollo D.Capital Gatto RogerJLL partnersKimmel philadelphia,Retired Senior pa Vice President vanguarddelaware Court of 4 Casey Cogut, Dan O’Donnell, 9 Cynthia Kane Marshallnew York, B. nY Babson Vicemanagement, Chairman L.p. Vicenew Chairman York, nY and Chief Investment Offi cer Wayne,Chancery pa Jack Schmutz 10 Roy Katzovicz Hughes Hubbard Barclaysnew York, nY rothschild Inc. Mortonallstate A. Insurance Pierce Company Wilmington, de 5 Isaac Corré 11 Paul Levy &Marshall reed LLp B. Babson new York, nY newRobert York, A. nY Lonergan deweynorthbrook, & LeBoeuf IL LLp Hon. Leo E. Strine, Jr. newHughes York, Hubbard nY & reed LLp Perry Golkin Executive Vice President, new York, nY ViceNancy Chancellor Straus Sundheim new York, nY JosephMember D. Glatt BruceGeneral N. Kuhlik Counsel and Robert H. Rock delawareSenior Vice Court President, of Chancery Fred Blume GeneralKohlberg Counsel Kravis roberts & Co.ExecutiveCorporate Vice Secretary President MarthaChairman L. Rees and Publisher Wilmington,General Counsel de and 6 7 8 ChairmanFred Blume Emeritus apollonew York, Capital nY androhm General and CounselHaas Company Vicedirectors President & Boards and Secretary Chairman Emeritus philadelphia, pa philadelphia, pa Unisys Corporation Blank rome LLp management, L.p. merck & Co., Inc. Assistant General Counsel Hon. E. Norman Veasey Blank rome LLp John G. Harkins, Jr. Blue Bell, pa philadelphia, pa new York, nY Whitehouse station, nJ e. I. du pont de nemours Chief Justice, Supreme Court philadelphia, pa Chair, 1980–1990 Simon M. Lorne Gerald Rosenfeld & Company, Inc. Harkins Cunningham LLp Vice Chairman and Chief Deputy Chairman of JereDelaware, R. Thomson 1992–2004 Daniel H. Burch Perry Golkin Mark Lebovitch Wilmington, de Charles I. Cogut philadelphia, pa Legal Offi cer rothschild north america Weil,Jones gotshal day & manges LLp Chairman & CEO Co-Chair, 2008– Member Bernsteinmillennium Litowitz management, Berger new York, nY newnew York, York, nY, nY and macKenzie partners, Inc. simpson thacher & KohlbergLeon C. Holt, Kravis Jr. & grossmannLLC LLp Myron J. Resnick Wilmington, de newBartlett York, LLp nY robertsRetired Vice& Co. Chairman and newnew York, York, nY nY RetiredPeter Senior G. Samuels Vice Hon. E. Norman Veasey new York, nY newChief York, Administrative nY Offi cer Presidentproskauer and rose Chief LLp MarcChief Weingarten Justice, Supreme Charles I. Cogut air products and Chemicals, Inc.PaulMichael S. Levy E. Lubowitz Investmentnew York, Offi nY cer schulteCourt of roth Delaware, & Zabel LLp Co-Chair,Isaac D. Corré 2008– Stuartallentown, M. Grant pa FounderWeil, gotshal & manges LLpallstate Insurance new1992–2004 York, nY 9 10 11 12 13 simpsonSenior Managing thacher Director grant & eisenhofer p.a. JLLnew partners York, nY CompanyJohn F. Schmutz Weil, gotshal & &eton Bartlett park Capital LLp Wilmington,William B. Johnson de new York, nY northbrook,Chair, 1990–1994 IL Gregorymanges P. LLp Williams newmanagement York, nY Chairman Emeritus J. Anthony Messina Retired Senior Vice President richards,new York, Layton nY, and & 12 Sy Lorne new York, nY JohnWhitman G. Harkins, Corporation Jr. SimonBuchanan M. Lorne Ingersoll & Peterand GeneralG. Samuels Counsel Finger,Wilmington, p.a. de 13 Alan Miller Isaac D. Corré Chair,Chicago, 1980–1990 IL Vicerooney Chairman pC and Chief proskauere. I. du pont rose de LLpnemours Wilmington, de 14 Jim Odell SeniorPamela Managing Craven Director Harkins Cunningham LLp Legalphiladelphia, Offi cer pa new& Company, York, nY Inc. Marc Weingarten 15 Martha Rees etonChief parkAdministrative Capital Offi cer philadelphia,Stephen J. Jones pa millennium Wilmington, de Donaldschulte J. rothWolfe & Zabel 16 David Silk managementavaya Communications Vice President, General managementAlan Miller LLC John F. Schmutz potternew andersonYork, nY & 17 Bruce Silverstein newBasking York, ridge, nY nJ LeonCounsel C. Holt, and Secretary Jr. newCo-Chairman York, nY Chair,Howard 1990–1994 L. Shecter Corroon LLp 18 Gil Sparks air products and Chemicals, Inc. Innisfree m&a Incorporated orrick, Herrington & Gregory P. Williams Retired Vice Chairman and Retired Senior Vice Wilmington, de 19 Heidi Stam Richard D’Avino allentown, pa new York, nY sutcliffe LLp richards, Layton & Kenneth R. Fitzpatrick Chief Administrative Offi cer J. Anthony Messina President and 20 Marc Weingarten V.P. Taxes-GE Capital and new York, nY Finger, p.a. Vice President, air products and Buchanan Ingersoll & General Counsel NBC Universal Cynthia B. Kane G. Daniel O’Donnell Wilmington, de 14 15 16 17 21 Don Wolfe Chief Legal Offi cer and Chemicals, Inc. rooney pC e. I. du pont de nemours general electric Company Special Assistant to the dechert LLp Robert C. Sheehan Corporate Secretary allentown, pa philadelphia, pa & Company, Inc. stamford, Ct Secretary of State philadelphia, pa Executive Partner Donald J. Wolfe the dow Chemical delaware department of state Wilmington,skadden, arps, de slate, potter anderson & Company Joel E. Friedlander AndrewWilmington, Jacobs de James E. Odell meagher & Flom LLp Corroon LLp philadelphia,Bouchard, margules pa & General Counsel & Chief General Counsel, The Victorianew York, E. Silbey nY Wilmington, de Friedlander Compliance Offi cer Americas Senior Vice President— Wilmington, de Bam Capital, LLC UBs Investment Bank LegalVictoria and General E. Silbey Counsel new York, nY sungardSenior Vice data President–Legal systems Inc. Wayne,and General pa Counsel sungard data systems Inc.

18 19 20 21

institute for law and economics 2 board of advisors institute for law and economics 3 board of advisors Message from the Dean Message from the Co-Directors for over twenty years, the institute for law and economics this year’s programs explored some of the most critical issues has successfully demonstrated the benefits of a cross- of the day. disciplinary perspective. Our Fall Corporate Finance Roundtable looked behind the hype on the question of whether CEOs are in fact overpaid. We also examined the role of corporate governance ratings and the factors that determine how institutional Its programs provide a model for how to build bridges between disciplines by creating ties between schools, shareholders decide to vote their shares. In the spring, as government bailouts left the Treasury with equity stakes in between faculty members, between students, and between experts in the field from around the world. ILE combines private corporations, we took a preliminary look at the “new corporatism” and the role of the government as shareholder. Penn’s greatest strengths in the Law School, the Wharton School, and the Department of Economics to focus on In our spring Delaware Chancery program, we examined different forms of shareholder activism and the extent to which complex questions that concern all of these fields. The Institute proves that when you bring the right people—judges, labor unions and hedge funds have common interests. Over the course of the year, we presented three fascinating deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more—to convene outside Law and Entrepreneurship lectures. In the fall, Bill Ackman, Managing Member of Pershing Square Capital Management, of their own niches, remarkably original insights are generated. spoke to an overflowing audience about investing in a recession. In the spring, Hon. Michael Nutter, the Mayor of as our world grows more complex every day, the topics the Institute addresses are both exciting and relevant. It is Philadelphia, spoke on the intersection of education and community, and Safra Catz, President of Oracle Corporation, no longer enough to approach complicated questions such as the current financial crisis, the role of shareholder activism, gave the audience behind-the-scenes insight into the PeopleSoft deal. For our Distinguished Jurist lecture, Hon. and the enforcement of securities law from solely a legal, economic, or business perspective. Randy J. Holland of the Delaware Supreme Indeed, no significant business issue can be addressed without paying attention to the underlying Court spoke on “Delaware Directors’ economic trends and legal regulations. All of ILE’s participants contribute to and benefit from the Fiduciary Duties.” At the Deal Day program, profound understanding such analysis affords. we examined in depth the acquisition of In addition to its unique focus, another of the Institute’s strengths is the variety of programs CNET by CBS. it offers. The roundtables—ILE’s signature events—bring together distinguished members of the our joint programs with Wharton’s bar, judiciary, government, business world, and academia for open discussion and intellectual Finance Department flourished. The Law exploration. ILE’s public lectures by leading jurists, executives, and entrepreneurs attract participants and Finance series, a regular part of the from all sectors of the University and from the wider community. During the past year the Finance workshop schedule, continued with outstanding talks, panels, and conferences organized by the Institute covered a wide range of presentations by Mark J. Roe (David Berg topics and programs, from corporate finance and corporate governance to private equity and Professor of Law, Harvard Law School) and hedge funds, as well as large-scale entrepreneurship and management. Antoinette Schoar (Michael M. Koerner Associate Professor of Entrepreneurial Finance, Sloan School of Management, since my cross-disciplinary vision for the Law School and the purposes of the Institute for Law and Economics are so Massachusetts Institute of Technology). The fifth annual NYU/Penn Law and Finance Conference was held at NYU. similar, it is personally gratifying to me that the Institute is generously supported by contributors who understand the the Institute’s greatest strength lies in the quality of our supporters and their active, enthusiastic participation in importance of what we do and the unique position the Institute holds. Many of these contributors also serve as members our programs. Our board members and sponsors make our programs possible, both as key participants and with their of the Institute’s Board of Advisors, helping to plan the direction and focus of the programs and lending their expertise as financial support. We would particularly like to acknowledge our board chairs, Casey Cogut of Simpson Thacher & panelists and commentators for Institute events. Bartlett LLP and Joe Frumkin of Sullivan & Cromwell LLP, for their dedicated and enthusiastic work over the past year. ILE’s extraordinary co-chairs, Casey Cogut and Joe Frumkin, have my particular thanks for their many exceptional We are delighted to have added three new members to the board, and we welcome them: Daniel H. Burch (MacKenzie contributions. Like all who serve as advisors for ILE, Casey and Joe contribute their very valuable time and expertise, in Partners, Inc.); Stuart M. Grant (Grant & Eisenhofer P.A.); and Heidi Stam (The Vanguard Group). addition to their numerous contacts in the legal and business communities. ILE has benefited substantially from We also extend our heartfelt thanks to all of our supporters for bringing your perspective, your ideas, your experience, their leadership. and your expertise to all that we do. Your participation is necessary to realize the Institute’s purpose and objectives, and I must also thank the three eminent professors who lead the Institute for Law and Economics—Michael Wachter, it makes our job as Institute directors immensely satisfying and worthwhile. Ed Rock, and Jill Fisch. It is because of their commitment and enthusiasm that ILE ranks among the premier institutions of its kind. I extend the deepest appreciation to all ILE supporters and participants for their commitment and investment during the Jill E. Fisch, Co-Director, Institute for Law and Economics past year. With the proper support and sponsorship, the Institute for Law and Economics has limitless potential for growth Perry Golkin Professor of Law and expansion in the future. We welcome others to join in backing and participating in this extremely worthwhile endeavor. Edward B. Rock, Co-Director, Institute for Law and Economics Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, Saul A. Fox Distinguished Professor of Business Law University of Pennsylvania Law School Michael L. Wachter, Co-Director, Institute for Law and Economics William B. Johnson Professor of Law and Economics September 2009

September 2009

institute for law and economics 4 message from the dean institute for law and economics 5 message from the co-directors Roundtable Programs at the heart of the institute’s work is the roundtable series, which brings together members of the institute’s associate faculty and other academics with corporate executives, practicing attorneys, judges, public policy- makers, and students. each roundtable provides a forum for lively discussion of current issues that emerge from the research and teaching of the institute.

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 round- tables 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.

institute for law and economics 7 roundtable programs 1 Hon. E. Norman Veasey, Weil, Gotshal & Manges LLP; Lee A. Off the Record: A Board Discussion of Meyerson, Simpson Thacher & Bartlett LLP; Perry Golkin, Kohlberg Kravis Roberts & Co.; Gerald Rosenfeld, Rothschild the Financial Crisis North America; Isaac D. Corré, Eton Park Capital Management.

26 May 2009 2 G. Daniel O’Donnell, Dechert LLP; Isaac D. Corré, Eton Park Capital Management; Michael L. Wachter, University of Pennsylvania Law School. Off the Record: A Board Discussion Eton Park Capital Management, New York City of the Financial Crisis 3 Perry Golkin, Kohlberg Kravis Roberts & Co.; Gerald Rosenfeld, the off the record program was created as a forum Moderators Rothschild North America; Charles I. Cogut, Simpson Thacher & for the ILe Board of advisors and a select group of Isaac d. Corré, Senior Managing Director, Eton Park Capital Management Bartlett LLP; Jill E. Fisch, University of Pennsylvania Law School; invitees to candidly discuss the current fi nancial crisis Jill e. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School Isaac D. Corré, Eton Park Capital Management; Michael L. in an informal setting. the presentation by richard Wachter, University of Pennsylvania Law School; Joseph D. Herring provided the context explaining how the crisis michael L. Wachter, William B. Johnson Professor of Law and Economics, Gatto, Barclays; Joseph B. Frumkin, Sullivan & Cromwell LLP; G. came about. edward rock’s presentation detailed University of Pennsylvania Law School several different plans for recovery and suggestions Daniel O’Donnell, Dechert LLP; Marcy Engel, Eton Park Capital Management; Robert H. Mundheim, Shearman & Sterling LLP. for reform moving forward. the program was hosted Introductory Presentations by at the offi ces of eton park Capital management in new York City. richard J. Herring, Jacob Safra Professor of International Banking; Professor of Finance, The Wharton School edward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

1 2

4 James E. Odell, UBS Investment Bank; Simon M. Lorne, Millennium Management LLC; Michael J. Macaluso, Morgan, Lewis & Bockius LLP; Richard D’Avino, General Electric Company.

5 G. Daniel O’Donnell, Dechert LLP; Marcy Engel, Eton Park Capital Management; Robert H. Mundheim, Shearman & 3 Sterling LLP.

4 5

institute for law and economics 8 roundtable programs institute for law and economics 9 roundtable programs 1 Joseph B. Frumkin, Sullivan & Cromwell LLP.

2 Front row: William W. Bratton, Georgetown University Law Center; Martha L. Rees, DuPont. Middle row: Stephen L. Brown, Corporate Finance TIAA-CREF; Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Andrew R. Brownstein, Wachtell, Lipton, Rosen & Katz. Back 8 May 2009 row: Christopher Foulds, Clerk, Delaware Court of Chancery; Scott Litvinoff, Clerk, Delaware Court of Chancery; Neela Mookerjee, Clerk, Delaware Court of Chancery. Shareholder Primacy in a Corporatist Welcome Political Economy Michael a. Fitts, Dean and Bernard G. Segal Professor of Law, 3 Robert L. Friedman, The William W. Bratton, Professor of Law, Georgetown Blackstone Group L.P.; Alan University Law Center University of Pennsylvania Law School michael L. Wachter, William B. Johnson Professor L. Beller, Cleary Gottlieb of Law and Economics, University of Pennsylvania Morning Session Steen & Hamilton LLP; Hon. Law School Leo E. Strine, Jr., Delaware Shareholder Primacy in a Corporatist Political Economy Court of Chancery; Michael many look toward enactment of items on shareholder William W. bratton, Professor of Law, Georgetown University Law Center L. Wachter, University of primacy’s law reform agenda to help recovery from the Michael l. Wachter, William B. Johnson Professor of Law and Economics, Pennsylvania Law School. fi nancial crisis. the authors negate that view, arguing University of Pennsylvania Law School that the fi nancial crisis exposes major weakness in the claims of those who favor greater shareholder power. 4 Robert F. Hoyt, Department our claim is that shareholder empowerment delivers Commentators of the Treasury. management a simple and emphatic marching order: Joseph B. Frumkin, Sullivan & Cromwell LLP manage to maximize the market price of the stock. 1 2 and that is exactly what the managers of a critical set mark J. roe, David Berg Professor of Law, Harvard Law School of fi nancial fi rms did in recent years. they managed to a market that focused on increasing observable earnings Big Deal: The Government’s Response to the Financial Crisis and, as it turned out, failed to factor in concomitant increases in risk that went largely unobserved. the Steven M. Davidoff, Associate Professor of Law, University of Connecticut School of Law fact that management bears primary responsibility for David Zaring, Assistant Professor of Legal Studies, The Wharton School the disastrous results does not by itself effect a policy connection between increased shareholder power and Commentators regulatory reform. a policy connection instead turns on a counterfactual question: Whether increased Isaac d. Corré, Senior Managing Director, Eton Park Capital Management shareholder power would have imported more effective andrew metrick, Professor of Finance, Yale School of Management risk management in advance of the crisis. no plausible grounds exist for making such a case. Afternoon Session Big Deal: The Government’s Response to the Panel on the Government as Shareholder Financial Crisis steven m. davidoff, Associate Professor of Law, Moderators University of Connecticut School of Law david Zaring, Assistant Professor of Legal Studies, Jill e. Fisch, Perry Golkin Professor of Law The Wharton School edward B. rock, Saul A. Fox Distinguished Professor of Business Law michael L. Wachter, William B. Johnson Professor of Law and Economics How should we understand the federal government’s response to the fi nancial crisis? the government’s University of Pennsylvania Law School team, largely staffed by investment bankers, pushed the limits of its statutory authority to authorize an ad Panelists hoc series of deals designed to mitigate that crisis. It 3 4 then decided to seek comprehensive legislation that, as alan Beller, Cleary Gottlieb Steen & Hamilton LLP it turned out, paved the way for more deals. the result robert F. Hoyt, Department of the Treasury has not been particularly coherent, but it has married robert H. mundheim, Shearman & Sterling LLP transactional practice to administrative law. In fact, roberta romano, Oscar M. Ruebhausen Professor of Law, Yale Law School we think that regulation by deal provides an organ- izing principle, albeit a loose one, to the government’s Hon. Leo e. strine, Jr., Vice Chancellor, Delaware Court of Chancery response to the fi nancial crisis. dealmakers use contract Heath tarbert, Committee on Capital Markets Regulation to avoid some legal constraints, and often prefer to focus on arms-length negotiation, rather than regulatory authorization, as the source of legitimacy for their actions, though the law does provide a structure to their deals. they also do not always take the long view or place value on consistency, instead preferring to complete the latest deal at hand and move to the next transaction. In this paper, we offer a fi rst look at the 5 6 history of the fi nancial crisis from the fall of Bear stearns up to, and including, the initial implementation of the economic emergency stability act of 2008. We 5 Front row: Heidi Stam, Vanguard; Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; analyze each deal the government concluded, and how Gerald Rosenfeld, Rothschild North America. Middle row: Eric D. Roiter, Harvard Law School. it justifi ed those deals within the constraints of the law, Back row: Robert T. Miller, Villanova University School of Law; Matthew Rhodes-Kropf, Harvard using its authority to sometimes stretch but never truly break that law. We consider what the government’s Business School; Christine T. DiGuglielmo, Weil, Gotshal & Manges LLP. response so far means for transactional and administrative law scholarship, as well as some of the 6 Hon. Jack B. Jacobs, Supreme Court of Delaware. broader implications of crisis governance by deal. 7 Front row: Hon. William B. Chandler III, Delaware Court of Chancery; Joseph B. Frumkin, Sullivan & Cromwell LLP. Middle row: Mark J. Roe, Harvard Law School; Ronald J. Gilson, Stanford Law School. Back row: Joshua Ronen, NYU Stern School of Business; Jenny Pak, RiskMetrics Group; Richard Squire, Fordham University School of Law; Robert T. Miller, Villanova University School of Law. 7

institute for law and economics 10 roundtable programs institute for law and economics 11 roundtable programs Corporate Finance 12 DeCeMber 2008

Are U.S. CEOs Overpaid? Welcome steven n. Kaplan, Neubauer Family Professor of Michael a. Fitts, Dean and Bernard G. Segal Professor of Law, Entrepreneurship and Finance, The University of Chicago Graduate School of Business University of Pennsylvania Law School 2 Critics of U.s. corporate governance claim that public Morning Session company (a) Ceos are overpaid, (b) Ceos are not paid for performance, and (c) boards do a poor job Are U.S. CEOs Overpaid? of compensating and monitoring Ceos. In this paper, Steven n. Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, I argue that the critics are wrong. While corporate The University of Chicago Graduate School of Business governance and Ceo pay are not perfect, a great deal of evidence suggests that Ceo pay is largely determined by market forces. Ceos have been affected Commentators by the same forces that have increased income John e. Core, Ira A. Lipman Professor and Professor of Accounting, The Wharton School inequality. they have not done better than several simi- damon silvers, Associate General Counsel, AFL-CIO lar groups. (In fact, average Ceo pay declined in real terms from 2000 to 2006.) Ceos are strongly paid for performance. and boards do monitor Ceos. Ceo Rating the Ratings: How Good Are Commercial Governance Ratings 1 tenures are lower than they have been since tenures robert M. Daines, Pritzker Professor of Law and Business, Stanford Law School began to be measured in the 1970s; Ceo turnover is more closely tied to stock performance than it has Ian D. Gow, Stanford University Graduate School of Business David F. larcker, James Irvin Miller Professor in Finance, Stanford University been since turnover began to be studied in the 1970s. 1 Robert E. Spatt, Simpson Thacher & Bartlett LLP; David M. Silk, Increased transparency for Ceo pay (required Graduate School of Business Wachtell, Lipton, Rosen & Katz. by the seC), increased shareholder activism, and the increased prevalence of majority voting in director elections should further reduce any remaining unwise Commentators 2 Front row: Robert McCormick, Glass Lewis & Co, LLC; Eric D. compensation practices. more regulation, such as the martha Carter, Managing Director, Corporate Governance, RiskMetrics Group Roiter, Harvard Law School. Middle row: Robert M. Daines, proposed “say on pay” bill to mandate a shareholder andrew metrick, Professor of Finance, Yale School of Management Stanford Law School; Damon Silvers, AFL-CIO; Adam C. vote on executive compensation, is likely to impose Pritchard, The University of Michigan Law School. Back row: costs with little additional benefi t. Afternoon Session Wayne R. Guay, The Wharton School. 3 Rating the Ratings: How Good Are Commercial Panel on How Do Institutional Investors Decide to Vote Their Shares? Governance Ratings How Should They Decide? 3 Front row: Joseph B. Frumkin, robert m. daines, Pritzker Professor of Law and Sullivan & Cromwell LLP; Business, Stanford Law School Michael McCauley, Florida Ian d. gow, Stanford University Graduate Moderators State Board of Administration School of Business edward B. rock, Saul A. Fox Distinguished Professor of Business Law david F. Larcker, James Irvin Miller Professor in Finance, (SBA); Robert McCormick, Stanford University Graduate School of Business michael L. Wachter, William B. Johnson Professor of Law and Economics Glass Lewis & Co, LLC. Middle University of Pennsylvania Law School row: David F. Larcker, Stanford proxy advisory and corporate governance rating fi rms University Graduate School of play an increasingly important role in U.s. public markets. they rank the quality of fi rm corporate Panelists Business; Robert M. Daines, governance, advise shareholders how to vote and stephen L. Brown, Director of Corporate Governance, TIAA-CREF Stanford Law School. Back sometimes press for governance changes. We examine Jill e. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School row: Wayne R. Guay, The whether these commercially available corporate paul g. Haaga, Jr., Executive Vice President, Capital Research and Management Company Wharton School; Aleine governance rankings provide useful information for Porterfi eld, Clerk, Supreme shareholders. our results suggest that they do not. michael mcCauley, Senior Corporate Governance Offi cer, Florida State Board of Administration Court of Delaware. Commercial governance ratings do not predict robert mcCormick, Chief Policy Offi cer, Glass Lewis & Co, LLC 4 5 governance-related outcomes with the precision eric d. roiter, Lecturer, Harvard Law School and Boston University School of Law necessary to support the bold claims made for them. [former General Counsel, Fidelity Management & Research Company] moreover, we fi nd little or no relation between the 4 Heidi Stam, Vanguard. governance ratings provided by riskmetrics with either Hon. myron t. steele, Chief Justice, Supreme Court of Delaware their voting recommendations or the actual votes by shareholders on proxy proposals. 5 Paul G. Haaga, Jr., Capital Research and Management Company.

6 Front Row: Stephen L. Brown, TIAA-CREF; Hon. Myron T. Steele, Supreme Court of Delaware. Middle row: Alan Miller, Innisfree M&A Incorporated; Anna Gelpern, Rutgers School of Law— Newark; Jennifer Shotwell, Innisfree M&A Incorporated. Back row: Yair J. Listokin, Yale Law School; Tom Baker, University of Pennsylvania Law School; Faith Stevelman, New York Law School.

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institute for law and economics 12 roundtable programs institute for law and economics 13 roundtable programs Corporate Finance 1 Front row: Simon Walker, British Venture Capital Association; Todd Fisher, Kohlberg Kravis Roberts & Co. Back row: Joseph B. 6 June 2008 Frumkin, Sullivan & Cromwell LLP; Jill Fisch, Fordham University School of Law.

Saïd Business School, University of Oxford 2 Front row: Carolyn Conner, Allen & Overy LLP; David Jackson, Commentators BP plc. Back row: Joshua Getzler, Faculty of Law, University of Opening Address Horst eidenmüller, Professor, University of Munich Oxford; Wanjiru Njoya, Faculty of Law, University of Oxford. Colin Mayer and Timothy endicott, Deans of Saïd Business School Carolyn Conner, Allen & Overy LLP and Faculty of Law, University of Oxford 3 Marco Becht, European Corporate Governance Institute and Université Libre de Bruxelles. Afternoon Session Morning Session Panel Discussion on Doing Deals When the Sky Is Falling 4 David S. Blitzer, The Blackstone Group International Limited; Hedge Fund Activism in Europe Chris Hale, Travers Smith; Tim Jenkinson, Saïd Business School, 1 Marco becht, Director, European Corporate Governance Institute; Moderators University of Oxford. Professor of Finance and Economics, Université Libre de Bruxelles John H. armour, Lovells Professorship in Law and Finance, 5 Front row: James E. Odell, Julian Franks, Professor of Finance, London Business School Oriel College, University of Oxford UBS Investment Bank; J. Jeremy Grant, Executive Director of the Centre for Corporate edward B. rock, Saul A. Fox Distinguished Professor of Business Law, Gregory Milmoe, Skadden, Governance, London Business School University of Pennsylvania Law School Arps, Slate, Meagher & Flom LLP. Back row: William W. Commentators Panelists Lafferty, Morris, Nichols, John H. armour, Lovells Professorship in Law and Finance, david s. Blitzer, Senior Managing Director, Private Equity Group, Arsht & Tunnell LLP; Richard Oriel College, University of Oxford The Blackstone Group International Limited Booth, Villanova University roy Katzovicz, Chief Legal Offi cer, Pershing Square Capital Charles Crawshay, Assistant Secretary, The Takeover Panel 2 School of Law. Management, L.P. todd Fisher, Kohlberg Kravis Roberts & Co. Chris Hale, Travers Smith 6 Front row: Roberta Romano, Yale Law School; G. Daniel Hedge Fund Activism in the Enforcement of Bond Covenants tim Jenkinson, Professor of Finance, Saïd Business School, O’Donnell, Dechert LLP. Back Marcel Kahan, George T. Lowy Professor of Law, New York University University of Oxford row: Yair J. Listokin, Yale Law School of Law stephanie Keen, Lovells LLP School; James D. Cox, Duke edward b. rock, Saul A. Fox Distinguished Professor of Business Law, simon Walker, CEO, British Venture Capital Association University School of Law; University of Pennsylvania Law School Edward M. Iacobucci, Faculty of Law, University of Toronto. Corporate Finance 3 4 14 DeCeMber 2007

Welcome Commentators Michael a. Fitts, Dean and Bernard G. Segal Professor of Law, Barry e. adler, Charles Seligson Professor of Law, New York University University of Pennsylvania Law School School of Law paul s. Levy, Founder, JLL Partners Morning Session Hedge Fund Activism in the Enforcement of Bondholder Rights Afternoon Session Marcel Kahan, George T. Lowy Professor of Law, New York University Panel Discussion on How Is the Changing Credit Environment School of Law Affecting Private Equity, Hedge Funds, and Strategic Buyers? edward b. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School Moderators edward B. rock, Saul A. Fox Distinguished Professor of Business Law 5 6 Commentators michael L. Wachter, William B. Johnson Professor of Law and Economics Isaac d. Corré, Senior Managing Director, Eton Park Capital Management University of Pennsylvania Law School 7 Front row: Charles I. Cogut, michael r. roberts, Assistant Professor of Finance, Simpson Thacher & Bartlett LLP; The Wharton School, University of Pennsylvania Panelists Paul S. Levy, JLL Partners. Middle Brendan Connolly, Managing Director/Leveraged Capital Markets, row: Douglas G. Baird, University Anti-Bankruptcy: Hedge Fund Activity in Group Head, UBS Investment Bank of Chicago Law School; Robert Corporate Reorganizations robert L. Friedman, The Blackstone Group L.P. K. Rasmussen, USC Gould School of Law. Douglas G. baird, Harry A. Bigelow Distinguished Service Professor Joseph d. gatto, Vice Chairman and Co-Head of Corporate Finance, of Law, University of Chicago Law School Lehman Brothers Inc. robert K. rasmussen, Dean and Carl Mason Franklin Chair in Law, perry golkin, Member, Kohlberg Kravis Roberts & Co. USC Gould School of Law andrew metrick, Professor of Finance, Yale School of Management duncan o’Brien, General Manager, Global Business Development, General Electric Company marc Weingarten, Schulte Roth & Zabel LLP 7

institute for law and economics 14 roundtable programs institute for law and economics 15 roundtable programs 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 commentary and conversation among presenters and members of the board of advisors, their invited colleagues, and the Institute’s associate faculty. the Chancery Court Programs developed out of a Penn Law course on corporate law and finance co-taught by Leo E. Strine, Jr., Vice Chancellor of the Delaware Chancery Court, and Michael L. Wachter, William B. Johnson Professor of Law and Economics. Two special sessions of the class are opened to the entire University community, as well as to ILE board members and invited guests, under the auspices of ILE. deal Day taps the expertise of our board and sponsors to examine in depth current opportunities and challenges. By looking at the details of complex transactions, we examine cutting edge issues at the intersection of law, finance, governance and operations. The goal of these programs is to allow the participants to understand the “guts of the deal” as a way of understanding the issues at the cutting edge of deal making.

institute for law and economics 17 panel programs Delaware Chancery Court Program 11 February 2009

11 February 2009 11 February 2009 Shareholder Activism Shareholder Activism Moderators Hon. Stephen P. Lamb, Vice Chancellor, Chancery Court This program explored examples of shareholder activism in corporate governance. Activist of Delaware shareholders attempt to put pressure on corporate managers to meet a wide variety of Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania goals. The program particularly focused on shareholder activism as practiced by hedge funds and labor unions, examining the similarities and differences between them. Daniel Speakers Pedrotty from the AFL-CIO talked about the investment strategies that his organization Daniel Pedrotty, Director, Office of Investment, AFL-CIO uses and the goals it hopes to achieve. Marc Weingarten discussed several cases in which Marc Weingarten, Schulte Roth & Zabel LLP he has represented activist hedge funds in his practice with Schulte Roth & Zabel LLP.

U.S./Israel Comparative Corporate Governance conference 8 January 2009

1 Hebrew University, Israel Bondholders and the Financial Crisis Delaware Chancery Court Program Greetings Moderator 1 Daniel Pedrotty, AFL-CIO. Prof. Yoav Dotan, Dean, Hebrew University Faculty of Law Assaf Hamdani, Hebrew University Faculty of Law 2 Marc Weingarten, Schulte Roth & Zabel LLP M&A Deal Protections: A Comparative Moot Court Panelists Shirel Gutman-Amira, Deputy Director and Counsel, 3 Daniel Pedrotty, AFL-CIO; Marc Weingarten, Schulte Roth & Zabel LLP; Hon. Stephen P. Lamb, Delaware Court of Chancery; Moderators Corporation Finance Department, ISA Edward B. Rock, University of Pennsylvania Law School. Assaf Hamdani, Hebrew University Faculty of Law Ronen Baharav, Herzog, Fox & Neeman Edward B. Rock, University of Pennsylvania Law School Adam O. Emmerich, Wachtell, Lipton, Rosen & Katz 4 Daniel Pedrotty, AFL-CIO; Gil Oren, Yigal Arnon & Co. Marc Weingarten, Schulte Panelists Roth & Zabel LLP; Hon. Chief Justice Myron T. Steele, Delaware Supreme Court Stephen P. Lamb, Delaware Judge Michal Agmon-Gonen, Tel Aviv District Court Court of Chancery; Edward B. Theodore N. Mirvis, Wachtell, Lipton, Rosen & Katz Rock, University of Pennsylva- Israel Leshem, Meitar Liquorniq Geva & Leshem Brendwein nia Law School.

Shareholder Activism and Controlling Shareholders

Moderator Edward B. Rock, University of Pennsylvania Law School 2 3

Panelists William A. Ackman, Managing Member, Pershing Square Capital Management, L.P. Yael Andoran, CEO, Amitim Pension Fund Guy Firer, S. Horowitz & Co. Didi Lachman-Messer, Former Deputy Attorney General, Israel

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institute for law and economics 18 panel programs institute for law and economics 19 panel programs Deal Day Fall 2008

29 October 2008 29 October 2008 The Recent Acquisition of CNET by CBS The Recent Acquisition of CNET by CBS Moderators Jill E. Fisch, University of Pennsylvania Law School For this Deal Day program, Morton Pierce and his legal team spoke about their role Edward B. Rock, University of Pennsylvania Law School representing CNET in its merger with CBS. Prior to the merger, CNET was undergoing a 2 Michael L. Wachter, University of Pennsylvania proxy battle with hedge fund Jana Partners. Mr. Pierce and his associates took the Law School audience through the background of the deal and the specifics of the merger process. Deal Day Presenters Itay Goldstein from the Wharton School and Gerald Rosenfeld from Rothschild North 1 Gerald Rosenfeld, Rothschild North America; Chang-Do Gong, Morton A. Pierce, Chairman, Mergers and Acquisitions America provided commentary on the presentation. Dewey & LeBoeuf LLP; Morton A. Pierce, Dewey & LeBoeuf LLP; Group, Dewey & LeBoeuf LLP Michelle B. Rutta, Dewey & LeBoeuf LLP; Itay Goldstein, The Chang-Do Gong, Dewey & LeBoeuf LLP Wharton School. Michelle B. Rutta, Dewey & LeBoeuf LLP

Commentators 2 Itay Goldstein, The Wharton School. Itay Goldstein, Associate Professor of Finance, 1 The Wharton School, University of Pennsylvania 3 Gerald Rosenfeld, Rothschild North America. Gerald Rosenfeld, Deputy Chairman, Rothschild North America

Chancery Court Programs

25 March 2008 25 March 2008 Moderators The Independent Director’s Most Important Role?: Selecting, Compensating, Overseeing, Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware and Planning for the Succession of the CEO Michael L. Wachter, University of Pennsylvania Law School This panel discussion featured several well-respected and experienced independent 3 Panelists directors. The panelists shared their perspectives on how boards carry out these important Robert C. Clark, Harvard Law School, Director: functions, how boards should ideally organize themselves to effectively address these TIAA-CREF and Time Warner responsibilities, and what, if any, public policy changes would better aid independent Charles M. Elson, Weinberg Center for Corporate directors in this vital area. Governance, University of Delaware, Director: Autozone, Inc. and HealthSouth Corp. V. Janet Hill, Alexander & Associates, Inc., Director: 4 March 2008 Sprint Nextel and Wendy’s Say On Pay: A Positive Contribution To Corporate Effectiveness and Accountability Susan M. Stalnecker, E. I. du Pont de Nemours and Company, Director: PPL Corporation 0r An Unprincipled and Costly Incursion Into Director Authority?

4 March 2008 In this program, two distinguished academics debated the question of whether and to what Moderators Vice Chancellor Leo E. Strine, Jr., Chancery Court extent stockholders should vote on executive compensation. Professor Goldschmid argued of Delaware that shareholders should be given advisory votes on executive compensation, while Professor 4 Michael L. Wachter, University of Pennsylvania Bainbridge took the opposite position. The participants articulated their views on whether Law School increased stockholder voting rights over executive compensation is compatible with the Speakers traditional American approach to corporation law and what effects the creation of such a Stephen M. Bainbridge, William D. Warren Professor of right would have on the authority of boards of directors, and on their behavior. Chancery Court Programs Law, University of California- Los Angeles School of Law Harvey J. Goldschmid, Dwight Professor of Law, 4 Michael Musuraca, Columbia Law School, Securities and Exchange AFSCME and Richard C. Commission, 2002–2005 Ferlauto, AFSCME.

5 Victoria Silbey, SunGard Data Systems, Inc. 5

6 Simon M. Lorne, Millennium Management, LLC; Janet L. Kelly, ConocoPhillips Company; Michael L. Wachter, University of Pennsylvania Law School; and Hon. Leo E. Strine, Jr., Delaware Chancery Court. 6

institute for law and economics 20 panel programs institute for law and economics 21 panel programs lectures the institute for law and economics presents two series of public lectures: law and entrepreneurship and distin- guished jurist. in sponsoring these events, the institute aims to spotlight and honor lawyers who have led note- worthy careers and made significant contributions as corporate executives and entrepreneurs, or as jurists at the state or federal levels.

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.

institute for law and economics 23 lectures Law and Entrepreneurship Lecture “some of the worst mistakes in business could have been 31 March 2009 3 March 2009 avoided if someone had just The PeopleSoft Deal Defining the 21st Century Campus: The Intersection of challenged convention.” Safra Catz, President, Oracle Corporation Education and Community Hon. Michael Nutter, Mayor, City of Philadelphia —safra catz Safra Catz is President of Oracle Corporation. In her lecture for ILE, Catz provided an inside look at Oracle’s acquisition of PeopleSoft In his first public appearance at Penn since his election, and the lessons she learned from that deal. Mayor Nutter delivered a noteworthy speech on the importance Catz has been a member of Oracle’s Board of Directors since of education in the scope of his plans for the city. October 2001. She serves on Oracle’s Executive Management the Hon. Michael A. Nutter was sworn-in as the 98th Mayor Committee and is responsible for global operations. Previously, she of Philadelphia on January 7th, 2008. Mayor Nutter is a native served as Executive Vice President and Senior Vice President. Prior Philadelphian with an accomplished career in public service, to joining Oracle, Catz was at Donaldson, Lufkin & Jenrette, a global business and financial administration. He served as a Philadelphia investment bank that has since merged with Credit Suisse First City Councilman for nearly 15 years representing the city’s Fourth Boston, where she was a Managing Director from February 1997 District. Before pursuing his career in public service, Mayor Nutter to March 1999, and a Senior Vice President from January 1994 until worked as an investment manager at one of the nation’s leading February 1997. minority-owned investment banking and brokerage firms. Catz is a graduate of the Wharton School and the University mayor Nutter is a graduate of the Wharton School of Business. of Pennsylvania Law School.

institute for law and economics 24 lectures institute for law and economics 25 lectures Law and Entrepreneurship Lecture

17 September 2008 19 September 2007 Retailers in a Recession: A Fireside Chat on Investing Tales from Blackstone’s IPO with Bill Ackman Robert L. Friedman, Senior Managing Director and Chief Legal Officer, William A. Ackman, Managing Member, Pershing Square Capital The Blackstone Group L.P. Management, L.P. Robert L. Friedman is a senior managing director at Blackstone and Bill Ackman is the managing member and portfolio manager he also serves as the chief legal officer. His talk for ILE focused on of Pershing Square Capital Management, L.P., a concentrated his experiences as part of the team that took Blackstone public on research-intensive fundamental value investor in long and June 22. At that time, Blackstone’s IPO was the third-largest public occasionally short investments in the public markets with assets offering in history, and the first by a large private equity house. under management of approximately $6 billion. His talk for ILE Friedman has been with Blackstone since 1999. He has focused on investment decisions he had made in the past and worked primarily in Blackstone’s Private Equity group and has also their outcomes. Pershing Square has played an active role in participated in the work of the Corporate and Mergers and creating value at companies including Wendy’s International, Acquisitions Advisory group. Since early 2003, he has also been McDonald’s, Ceridian Corporation, and Sears Canada. the Chief Legal Officer. Before joining Blackstone, Mr. Friedman prior to forming Pershing Square, Mr. Ackman co-founded had been a partner with Simpson Thacher & Bartlett for 25 years, Gotham Partners, L.P., a public and private equity investment where he was a senior member of that law firm’s mergers and partnership. Prior to Gotham Partners, Mr. Ackman began acquisitions practice. At Simpson Thacher, Mr. Friedman advised his career in real estate investment banking at Ackman Brothers The Blackstone Group since the firm was founded in 1985. “fifty percent of being a successful investor is being a good analyst. & Singer, Inc. Mr. Ackman received a Bachelor of Arts degree Friedman graduated from Columbia College and received a the other fifty percent is emotional and psychological. the wharton from Harvard College magna cum laude and an MBA from the JD from the University of Pennsylvania Law School. He is a Harvard Business School. member of the Board of Advisors for the Institute for Law and school can teach you to be a great analyst, but the other half of Economics of the University of Pennsylvania, and he served the picture you can only learn by experience. what do you do when as its chair from 2001 to 2007. He also serves as a member of the Board of Visitors of Columbia College, a Trustee of the the price of a stock you believe in drops 50% in forty-eight hours?” Nantucket Land Council, and a Trustee of Chess-in-the-Schools —william ackman and New Alternatives for Children, two charitable organizations with programs for disadvantaged youth in New York City.

institute for law and economics 26 lectures institute for law and economics 27 lectures Distinguished Jurist Lectures

11 November 2008 24 October 2007 Delaware Directors’ Fiduciary Duties: The Focus on Loyalty The Future of Securities Regulation Hon. Randy Holland, Justice, Supreme Court of Delaware Brian G. Cartwright, General Counsel, Securities and Exchange Commission The Honorable Randy J. Holland presently serves on the Delaware Supreme Court. He is the youngest person to serve on the Delaware Brian G. Cartwright currently serves as the general counsel for the Supreme Court, having been recommended to the Governor by a Securities and Exchange Commission. bipartisan merit selection committee. Prior to his appointment and Cartwright began his legal career in 1980 after earning a J.D. confirmation in 1986, Justice Holland was in private practice as from Harvard Law School, where he was President of the Harvard a partner at Morris, Nichols, Arsht & Tunnell. In January 1999, he Law Review and winner of the Sears Prize. He served as a law clerk was reappointed and confirmed unanimously for a second twelve- to Judge Malcolm R. Wilkey of the U.S. Court of Appeals for the year term. District of Columbia Circuit and to Associate Justice Sandra Day Justice Holland graduated from Swarthmore College. He also O’Connor of the U.S. Supreme Court. graduated from the University of Pennsylvania Law School, cum Cartwright then joined the law firm of Latham & Watkins in laude, where he received an award for legal ethics. Justice Holland 1982, and became a partner in 1988. Among the management received a Master of Laws in the Judicial Process from the positions he held at Latham & Watkins, Mr. Cartwright served University of Virginia Law School. as Global Chair of the firm’s practice representing public compa- nies. While a member of the firm’s Executive Committee, he was one of five partners responsible for the management of the firm as a whole. prior to joining the legal profession, Mr. Cartwright was an astrophysicist. Following his graduation from Yale University in 1967, he earned a Ph.D. in physics from the University of Chicago in 1971. From 1973 to 1977, he was a Research Physicist in the Department of Physics and Space and Sciences Laboratory of the University of California, Berkeley. While working as an astrophysicist, Mr. Cartwright published many articles in scholarly journals, such as the Astrophysical Journal.

“retail investors continue to invest very large dollar amounts indirectly in stock and other public securities—but only indirectly. this means that, increasingly, retail investors are not the ones deciding whether to buy, sell, or hold individual stocks—or, and this is very important, how to vote them.”—brian cartwright

institute for law and economics 28 lectures institute for law and economics 29 lectures Past Law and Entrepreneurship Lectures

28 February 2007 26 October 2005 30 October 2003 19 April 2002 18 November 1999 Law, Legal Risks, and the Founding and Building a The Role of Entrepreneurship Smart People Making Ethics in Sports: 1 Financial Markets New Venture: The Story in Urban Education: and Losing Money: Deciding the Game Isaac D. Corré, Senior of the National Women’s Past, Present and Future Some Recent Examples Anita DeFrantz, Vice President, Managing Director, Eton Park Law Center James E. Nevels, Chairman and Perry Golkin, Kohlberg Kravis International Olympic Capital Management Marcia Greenberger, Founder CEO, The Swarthmore Group, Roberts & Co. Committee; President, Amateur and Co-President, National Inc.; Chairman, Philadelphia Athletic Foundation 29 November 2006 Women’s Law Center School Reform Commission 25 October 2001 Large-Scale Entrepreneur- The Economics of Sports 23 October 1997 ship: Business Development 7 April 2005 6 November 2002 Team Franchises for Cities How to Maintain at GE A Swing of the Pendulum: Public Trust—and Distrust— Hon. Edward G. Rendell, Entrepreneurial Values Pamela Daley, Senior Vice Presi- 20 Years in M&A in American Business: Governor, Commonwealth of While Your Company Climbs dent for Corporate Business Joseph D. Gatto, Managing What Needs to Be Done Pennsylvania into the Fortune 500 Development, General Electric Director, Goldman, Sachs & Co. Peter G. Peterson, Chairman, Brian L. Roberts, President, Company The Blackstone Group; Chairman, 21 February 2001 Comcast Corporation 24 March 2004 Federal Reserve Bank of New Private Equity: Difficult 3 4 26 October 2006 The WNBA and Women’s York; Co-Chair, Conference Board Investing in a Difficult Time 27 March 1997 2 Managing in the 21st Team Sports: A New Sports Commission on Public Trust and Paul S. Levy, Senior Managing The Unique Impact of Century Marketing Proposition for Private Enterprise Director, Joseph Littlejohn & Levy the Law on the Leveraged Henry R. Silverman, Chairman the New Millennium Buyout Business & CEO, Realogy Corporation Val Ackerman, President, 26 September 2002 2 March 2000 Saul A. Fox, Fox Paine & Women’s National Basketball What They Did Not Teach Perspectives on the Health Company, LLC 16 February 2006 Association Me in Law School Care Revolution The Banker as Entrepreneur Robert M. Potamkin, Charles A. Heimbold, Jr., Michael J. Biondi, Co-Chairman, Co-Chairman and Co-CEO, Chairman and CEO, Investment Banking, Lazard Planet Automotive Group, Inc. Bristol-Myers Squibb Company Frères & Co. LLC

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Past Law and Entrepreneurship Lectures Past Distinguished Jurist Lectures 1 Isaac D. Corré 2 Pamela Daley 3 Marcia Greenberger 4 Val Ackerman 5 James E. Nevels 11 October 2006 4 March 2004 24 February 2000 11 February 1997 14 October 1992 6 Joseph D. Gatto The Embattled Corporation Corporate Decision-Making The Court of Chancery as What Economics of Law Nonprice Competition Hon. Richard A. Posner, U.S. in Delaware Courts Teacher of Corporate Law Must Address Next: The Honorable Douglas H. 7 Edward G. Rendell Seventh Circuit Court of Appeals The Honorable Carolyn Berger, The Honorable William B. Some Thoughts on Theory Ginsberg, U.S. Court of Appeals 8 9 and University of Chicago Law Justice, Delaware Supreme Court Chandler III, Chancellor, The Honorable Guido for the District of Columbia School Delaware Court of Chancery Calabresi, U.S. Court of Appeals 27 February 2003 for the Second Circuit 3 December 1991 16 March 2006 The Effects of Collegiality 11 February 1999 Corporate Takeovers Technology Mergers in a on Judicial Decision Making Why Do People Bring 7 February 1996 and Our Schizophrenic Shrinking World The Honorable Harry T. Employment Discrimination The MTV Constitution Conception of the Hon. Vaughn R. Walker, Chief Edwards, Circuit Judge, Cases When They Usually The Honorable Alex Kozinski, Corporation Judge, U.S. District Court for the U.S. Court of Appeals for the Lose? U.S. Court of Appeals for the The Honorable William T. Northern District of California D.C. Circuit The Honorable Diane Wood, Ninth Circuit Allen, Chancellor, Delaware U.S. Court of Appeals for the Court of Chancery 3 March 2005 29 November 2001 Seventh Circuit 22 March 1995 Corporate Federalism: Fee Shifting as a Control Accountability: Popular 1990 Event Horizons in Against the Rogue Litigant 12 February 1998 Will, Interest Groups, The Constitution and the Corporate Governance The Honorable Jack B. Jacobs, The Value of Predictability or the Invisible Hand Spirit of Freedom 10 11 12 Hon. Myron T. Steele, Chief Justice, Supreme Court of in Corporate Law The Honorable Stephen F. The Honorable Anthony M. Justice, Delaware Supreme Court Delaware The Honorable E. Norman Williams, U.S. Court of Appeals Kennedy, Associate Justice, Veasey, Chief Justice, Delaware for the District of Columbia U.S. Supreme Past Distinguished Jurist Lectures 28 October 2004 6 March 2001 Supreme Court A Twelve-Year Retrospective Administering Capital 13 April 1994 8 Hon. Myron T. Steele on Delaware Corporate Punishment: On the Constitution 9 The Honorable Diane Wood Jurisprudence and Is Texas Different? The Honorable Antonin Scalia, 10 The Honorable Carolyn Berger Governance Issues The Honorable Patrick E. Associate Justice, U.S. Supreme Hon. E. Norman Veasey, Chief Higginbotham, U.S. Court of Court 11 The Honorable William B. Chandler III Justice, Delaware Supreme Court Appeals for the Fifth Circuit 12 The Honorable E. Norman Veasey 13 The Honorable Jack B. Jacobs 14 The Honorable Harry T. Edwards

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institute for law and economics 30 lectures institute for law and economics 31 lectures 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 debuted the first installment in the new 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.

institute for law and economics 33 academic events NYU/Penn Conference on Law and Finance 27–28 February 2009

New York University School of Law Jointly sponsored by Commentator Commentator Commentator Lawrence Hamermesh, Widener Institute for Law Curtis Milhaupt, Columbia Alan Schwartz, Yale Law School Henry Hu, The University of University School of Law and Economics University Law School Texas Law School Michael L. Wachter, University University of Pennsylvania Moderator of Pennsylvania Law School Financial Institutions Center Moderator Marcel Kahan, New York Moderator The Wharton School William Allen, NYU Stern School University School of Law Gerald Rosenfeld, NYU Stern Commentator NYU/Penn 09 Center for Law & Business of Business and NYU School of School of Business Daniel Wolfenzon, Columbia 1 Jennifer H. Arlen, New York Session IV Business School New York University Law, New York University The Decisions of Corporate Session VI University School of Law. Organized by Session II Special Litigation Committees: The Returns to Hedge Moderator William T. Allen, NYU Stern Motions for Lead Plaintiff in An Empirical Investigation Fund Activism Richard Kihlstrom, The Wharton 2 Raghuram G. Rajan, School of Business and NYU Securities Class Actions Minor Myers, Brooklyn Law School Alon Brav, Duke University School, University of Pennsylvania International Monetary Fund. School of Law, New York Stephen Choi, New York Graduate School Commentator Wei Jiang, Columbia Business Session VIII University University School of Law Sanjai Bhagat, Leeds School of Does Board Classification 3 Marcel Kahan, New York Yakov Amihud, Stern School of School Commentator Business, University of Frank Partnoy, University of Matter for Industry Rivals? University School of Law. 1 Business, New York University Colorado at Boulder Evidence of Spillover Effects in Michael Roberts, Alexander Dyck, Joseph J. San Diego School of Law Rotman School of Management, Randall Thomas, Vanderbilt the Market for Corporate Control 4 Alicia Davis Evans, The 5 H. Franklin Allen, The The Wharton School, Moderator Kose John, NYU Stern School University of Toronto University Law School University of Michigan Law Wharton School. University of Pennsylvania Gerald Rosenfeld, NYU Stern of Business Edward B. Rock, University of Moderator School of Business Commentator Dalida Kadyrzhanova, Robert H. School. Pennsylvania Law School Edward B. Rock, University of Session V Stuart Gillan, Rawls College of Smith School of Business, 2 Session I Pennsylvania Law School The Market Value of the Vote: Business Administration, University of Maryland Comparing Legal and Texas Tech University Session III A Contingent Claims and One Commentator Alternative Institutions in Internal Governance of Firms Share-One Vote is Unenforce- Moderator Alicia Davis Evans, University of Finance and Commerce Viral V. Acharya, London Business able and Sub-optimal Richard Kihlstrom, The Wharton Michigan Law School H. Franklin Allen, The Wharton School Avner Kalay, David Eccles School School, University of Pennsylvania School, University of Pennsylvania Stewart C. Myers, Sloan School of Business, University of Utah Moderator Jun Qian, Carroll School of of Management, MIT Shagun Pant, David Eccles School Session VII Michael L. Wachter, University of Management, Boston College Raghuram Rajan, Graduate School of Business, University of Utah Rationalizing Appraisal Pennsylvania Law School of Business, University of Chicago Standards in Compulsory Buyouts

Penn/NYU Conference on Law and Finance 29 February and 1 March 2008

University of Pennsylvania Law School 3 4 5 Jointly sponsored by Moderator Commentator Session VI Commentator Institute for Law Hon. Leo E. Strine, Jr., Delaware Antoinette Schoar, Sloan Wall Street and Main Street: Julian Franks, London Business and Economics Court of Chancery School of Management, MIT What Contributes to the Rise School University of Pennsylvania in the Highest Incomes? Financial Institutions Center Session II Moderator Steven N. Kaplan, The University Moderator The Wharton School Creditor Rights and Corporate Hon. Stephen P. Lamb, of Chicago Graduate School of Richard E. Kihlstrom, The Center for Law & Business Risk-Taking Delaware Court of Chancery Business Wharton School, University of New York University Viral Acharya, London Business Joshua Rauh, The University of Pennsylvania School Session IV Blockholders, Market Efficiency, Chicago Graduate School of Organized by Yakov Amihud, Stern School of Business Session VIII Yakov Amihud, Stern School of Business, New York University and Managerial Myopia Differences in Governance Business, New York University Lubomir Litov, Olin School of Alex Edmans, The Wharton Commentator Practices between U.S. and Marcel Kahan, New York Business, Washington School, University of Pennsylvania David I. Walker, Boston Foreign Firms: Measurements, Causes, and Consequences University School of Law University in St. Louis Commentator University School of Law H. Franklin Allen, Alan Schwartz, Yale Law School Reena Aggerwal, McDonough The Wharton School, Commentator Moderator School of Business, University of Pennsylvania Katharina Pistor, Columbia Law Moderator Richard E. Kihlstrom, The Georgetown University Michael L. Wachter, University School Hon. Stephen P. Lamb, Delaware Wharton School, University of Isil Erel, Fisher College of Business, 6 7 Pennsylvania of Pennsylvania Law School Moderator Court of Chancery The Ohio State University René Stulz, Fisher College of Session I Hon. Leo E. Strine, Jr., Delaware Session V Session VII PENN/NYU 08 Court of Chancery Value Destruction in the New Business, The Ohio State University Rating the Ratings: Hedge Fund Activism in the Rohan Williamson, McDonough 6 Gerald Rosenfeld, Rothschild North America, and Robert H. How Good Are Commercial Era of Chapter 11 Session III Enforcement of Bondholder Rights School of Business, Georgetown Mundheim, University of Pennsylvania and Shearman & Sterling. Governance Ratings? Barry E. Adler, New York Attorneys as Arbitrators Marcel Kahan, New York University Robert M. Daines, Stanford Law University School of Law University School of Law Stephen Choi, New York Vedran Capkun, HEC School of 7 Katharina Pistor, Columbia Law School, and Michal Barzuza, School University School of Law Edward B. Rock, University of Commentator Ian Gow, Stanford Graduate Pennsylvania Law School Management University of Virginia School of Law. Jill Fisch, Fordham University Lawrence A. Weiss, McDonough Edward M. Iacobucci, Faculty of School of Business School of Law Law, University of Toronto David F. Larcker, Stanford Commentator School of Business, Georgetown Adam Pritchard, The University Wei Jiang, Columbia Business School University 8 Andrew Metrick, Yale School of Management. Graduate School of Business of Michigan Law School Moderator Commentator Moderator Richard E. Kihlstrom, The 9 Alex Edmans, The Wharton School, University of Pennsylvania. David Yermack, Stern School of Hon. Stephen P. Lamb, Delaware Wharton School, University of Business, New York University Court of Chancery Pennsylvania 8 9

institute for law and economics 34 academic events institute for law and economics 35 academic events ILE/Wharton Finance Seminars Past ILE/Wharton Finance Seminars

Co-Sponsored by 2 April 2009 27 March 2008 6 April 2006 21 April 2004 Institute for Law and Economics and Department of CEO Careers and Style Where Do Firms Incorporate: Deregulation and the The States as Laboratory: Legal Innovation and State The State of U.S. Corporate Governance: Finance, The Wharton School Cost of Entry (co-authored with Marco Becht and Competition for Corporate Charters What’s Right and What’s Wrong Antoinette Schoar, Michael M. Koerner Associate Professor of Entrepreneurial Finance, Hannes F. Wagner) Roberta Romano, Allen Duffy/Class of 1960 Professor Steven Kaplan, Graduate School of Business, 2 April 2009 Sloan School of Management, MIT Colin Mayer, Peter Moores Dean of the Saïd Business of Law, Yale University Law School University of Chicago CEO Careers and Style School and Peter Moores Professor of Management Antoinette Schoar, Michael M. Koerner Associate Studies, University of Oxford Commentators Commentators Professor of Entrepreneurial Finance, Sloan School of Prof. Schoar examines how early career experiences affect the career path and promotion Richard E. Kihlstrom, Wharton Finance Franklin Allen, Wharton Finance Management, MIT of managers as well as the managerial style that they develop when becoming CEO. She 8 November 2007 Andrew Metrick, Wharton Finance Andrew Metrick, Wharton Finance differentiates between exogenous shocks to managers’ careers such as the business cycle Identifying the Effect of Board Structure on Chris W. Sanchirico, Penn Law Katharina Pistor, Penn Law (visiting) Commentators Firm Value: Event Study, DiD, Firm Fixed Effects, Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP at starting date and endogenous choices of individuals such as the industry, type and size and IV Evidence from Korea (co-authored with 9 October 2003 Philip Bond, Wharton Finance 20 October 2005 Understanding Material Adverse Change Clauses: Jill Fisch, Penn Law of firm that someone starts in. She shows that the economic conditions at the beginning Woochan Kim) Bernard S. Black, Hayden W. Head Regents Chair for Creating Constituencies for Reform Moral Hazard in Acquisitions (co-authored with Lucian Taylor, Wharton Finance of a manager’s career have lasting effects on the career path and the ultimate outcome as Raghuram G. Rajan, Economic Counsellor and Director, Alan Schwartz) Michael Wachter, Penn Law Faculty Excellence, The University of Texas at Austin a CEO. CEOs who start in recessions tend to take longer time to become CEO, are more School of Law Research International Monetary Fund Ronald J. Gilson, Columbia Law School and likely to rise through the ranks within a given firm rather than moving across firms and Stanford Law School 25 September 2008 Commentators Commentators Public and Private Enforcement of Securities Law: industries and ultimately end up as CEOs in smaller firms. Moreover, managers who start Assaf Hamdani, Penn Law (visiting) William W. Burke-White, Penn Law Commentators Resource-Based Evidence (co-authored with Howell in recessions have more conservative management styles once they become CEOs. These Jonathan Klick, Penn Law (visiting) Robert P. Inman, Wharton Finance Franklin Allen, Wharton Finance E. Jackson) managers have less leverage in the firm where they are CEOs, rely more on internal Andrew Metrick, Wharton Finance Jason Scott Johnston, Penn Law Kristin Madison, Penn Law Mark J. Roe, David Berg Professor of Law, David K. Musto, Wharton Finance Bilge Yilmaz, Wharton Finance Andy Postlewaite, Penn Economics Harvard Law School investments rather than acquisitions, have lower SG&A and higher ROA. 22 March 2007 31 March 2005 31 October 2002 What Matters in Corporate Governance? Law and Finance: The Practice of Justice Commentators 25 September 2008 Law and the Market: The Impact of Enforcement David Abrams, Penn Law John C. Coffee, Jr., Adolf A. Berle Professor of Law, Lucian Arye Bebchuk, Harvard Law School Andrei Shleifer, Harvard University Gustav Sigurdsson, Wharton Finance Public and Private Enforcement of Securities Law: Resource-Based Evidence Columbia University School of Law Commentators Commentators Joel Friedlander, Bouchard Margules & Friedlander (co-authored with Howell E. Jackson) Hulya Eraslan, Wharton Finance Richard E. Kihlstrom, Wharton Finance Lucian Taylor, Wharton Finance Commentators Mark J. Roe, David Berg Professor of Law, Harvard Law School Andrew Metrick, Wharton Finance Michael S. Knoll, Penn Law Mark Lebovitch, Bernstein Litowitz Berger & Philip Bond, Wharton Finance Edward B. Rock, Penn Law Jason Scott Johnston, Penn Law Grossmann LLP Jill Fisch, Penn Law (visiting) Recent work in finance concludes that financial market development is facilitated by Wayne R. Guay, Wharton Finance David A. Skeel, Penn Law Andrew Metrick, Wharton Finance private enforcement of investor protection—primarily via disclosure and private lawsuits— Tobias B. Wolff, Penn Law 11 November 2004 but not by public enforcement of regulatory rules, or even criminal penalties. In contrast 30 November 2006 Venture Capital Investment Cycles: to prior work, which used formal enforcement powers to measure public enforcement Who Blows the Whistle on Corporate Fraud? The Role of Experience and Specialization (co-authored with Alexander Dyck and Adair Morse) Paul A. Gompers, Graduate School of Business strength, we use new measures based on securities regulators’ real resources—their Luigi Zingales, Robert C. McCormack Professor of Administration, Harvard University staffing levels and budgets. These resource-based measures of public enforcement are Entrepreneurship and Finance, The University of Commentators significantly associated with standard measures of stock market development (stock Chicago Graduate School of Business Rafi Amit, Wharton Finance market capitalization, trading volume, the number of domestic firms, and the number of Commentators Sean Griffith,Penn Law (visiting) IPOs), with more intense public enforcement regularly and significantly correlating Aditi Bagchi, Penn Law Richard Kihlstrom, Wharton Finance Polk Wagner, Penn Law with more robust financial outcomes. In horse races between our measures of public John E. Core, Wharton Finance Andrew Metrick, Wharton Finance enforcement and the most common measures of private enforcement, public enforcement Edward B. Rock, Penn Law is overall at least as important as private enforcement in explaining important financial market outcomes around the world. Hence, in our view, the World Bank’s rejection of public enforcement could well be a serious policy error.

institute for law and economics 36 academic events institute for law and economics 37 academic events Publications and Papers

Listed below is a sampling of recently published papers John E. Core, Ira A. Lipman How Should Suburbs Help Their Recht und Sozialwissen- Purification in the Infinitely- Law and the Boundaries of The Tax Advantage to Paying Susan M. Wachter, Richard B. and work in progress by members of the Associate Professor of Accounting, The Central Cities? Growth and schaften—Herausforderungen Repeated Prisoners’ Dilemma Technology Intensive Firms Private Equity Fund Managers Worley Professor of Financial Wharton School Welfare Enhancing Intra-Metro- und Chancen der Verhalten- (with V. Bhaskar and Stephen (with Oren Bar Gill), University with Profit Shares: What is it? Management, Professor of Real Faculty of the Institute for Law and Economics. ILE politan Fiscal Distributions, sökonomie (Law and Social Morris), Review of Economic of Pennsylvania Law Review, Why is it Bad? University of Estate and Finance, The Wharton maintains a series of research papers and provides Are Firms Under-Leveraged? Annals of the American Academy Sciences—the Challenge and Dynamics, July 2008. forthcoming 2009. Chicago Law Review, 2008. School; Co-Director, Institute for copies—electronic or paper—to interested parties upon Evidence from Improved of Political and Social Sciences, the Promise of Behavioral Urban Research Estimates of Marginal Tax Rates forthcoming 2009. Economics) (with Dorothea Does Competitive Pricing Cause Reconceptualizing Trespass Reed Shuldiner, Alvin Snowiss request to [email protected]. (with J. Blouin and W. Guay), Kubler), Kritische Vierteljahress- Market Breakdown Under (with Alex Stein), Northwestern Professor of Law System Risk and Market the Institute is a member of the Legal Scholarship Working Paper. Making Cities Work: Prospects and chrift für Gesetzgebung und Extreme Adverse Selection? University Law Review, Institutions (with Andrey Network (LSN), a subset of the Social Science Research Policies for Urban America, Rechtswissenschaft, 2007. (with Georg Nöldeke), Journal of forthcoming 2009. Comment on “Does the United Pavlov), Yale Journal on Network. Current ILE research papers are posted in the Can Differences in U.S. and U.K. Princeton University Press, 2009. Economic Theory, May 2008. States Tax Capital Income,” in Regulation, forthcoming 2009. CEO Pay Be Explained by Gesellschaftsrecht (comprehen- Andrew W. Postlewaite, Harry P. Taxing Capital Income, Brookings University of Pennsylvania Law and Economics Research Differences in Equity Incentives? The Flypaper Effect, The New sive treatise of German corporate Charles W. Mooney, Jr., Charles Kamen Professor of Economics, Institution and Urban Institute, Systemic Risk through Paper Series on the LSN Web site. Abstracts as well as (with W. Guay and M. Conyon), Palgrave Dictionary of Economics, law) (with Hans-Dieter A. Heimbold, Jr. Professor of Law School of Arts and Sciences; Professor 2007. Securitization: The Result of complete papers can be downloaded (www.ssrn.com/ Working Paper. 2009. Assmann), 2006. of Finance, The Wharton School Deregulation and Regulatory Core Issues Under the UNIDROIT Taxation of Risky Investments, Failure (with Patricia McCoy and link/penn-lawecon. html). Agency Problems of Excess Jason Scott Johnston, Robert G. Peter D. Linneman, Albert [Draft] Convention on Intermedi- Political Reputations and 2005. Andrey Pavlov), Connecticut Law Faculty appointments are in the University of Endowments in Not-for-Profit Fuller Jr. Professor of Law and Sussman Professor of Real Estate, ated Securities: Views From the Campaign Promises (with E. Review, forthcoming 2009. Pennsylvania Law School unless otherwise noted. Firms (with W. Guay and R. Director, Program on Law, the Finance, and Public Policy, The United States and Japan, Hart Aragones and T. Palfrey), David A. Skeel, Jr., S. Samuel Verdi), Journal of Accounting and Environment and the Economy Wharton School Publishing, forthcoming 2009. Journal of the European Economic Arsht Professor of Corporate Law State and Local Anti-Predatory Economics, 2006. Association, 2007. Lending Laws: The Effect of Problems of Equity and Is This The Worst Ever Yet?, Law and Systems for Governance in the Ruins, Legal Enforcement Mechanisms Matthew D. Adler, Leon Meltzer Howard F. Chang, Earle Hepburn Jill Fisch, Perry Golkin Professor of Efficiency in theD esign of Wharton Real Estate Review, Intermediated Securities and the Courts of Law and Unforeseen Harvard Law Review, 2008 (with Raphael W. Bostic, Professor of Law Professor of Law Law; Co-Director, Institute for Law International Greenhouse Gas Spring 2009. Relationship of Private Property Contingencies (with L. Anderlini (essay review of Curtis Kathleen C. Engel, Patricia A. and Economics Cap and Trade Schemes, Harvard Law to Securities Clearance and and L. Felli), Journal of Law, Milhaupt & Katharina Pistor, McCoy, and Anthony N. Bounded Rationality and Legal Immigration Restriction as Environmental Law Review, 2009. Realizing the Value of Corporate Settlement: United States, Japan, Economics and Organization, 2007. Law and Capitalism). Pennington-Cross), Journal of Scholarship, in Theoretical Redistributive Taxation: Working Director Elections and the Role Real Estate Management (with and the UNIDROIT Draft Economics and Business, 2008. Foundations of Law and Economics, Women and the Costs of of Proxy Advisors (with Stephen Climate Change Confusion and Hartmann, S., Pfnür, A., Convention, Institute for Monetary Social Assets (with G. Mailath), Who Makes the Rules for 2009. Protectionism in the Labor Choi and Marcel Kahan), the Supreme Court: The Siperstein, B.), Wharton Real and Economic Studies, 2008. International Economic Review, Hostile Takeovers, and Why? Amy Wax, Robert Mundheim Market, Journal of Law, Economics forthcoming 2009. Misguided Regulation of Estate Review, Spring 2009. 2006. The Peculiar Divergence of US Professor of Law Happiness Research and Cost- and Policy, forthcoming. Greenhouse Gas Emissions Introductory Note to Convention and UK Takeover Regulation Benefit Analysis (with Eric Attorneys as Arbitrators (with under the Clean Air Act, Notre Is this the Worst Ever? (with on the Law Applicable to Certain Edward B. Rock., Saul A. Fox (with John Armour), Georgetown Race, Wrongs, and Remedies: Posner), Journal of Legal Studies, Guest Workers and Justice in a Stephen Choi and A.C. Dame Law Review, 2008. John Williams), Wharton Real Rights in respect of Securities Distinguished Professor of Business Law Journal, 2007. Group Justice in the 21st Century, 2008. Second-Best World, University of Pritchard), forthcoming 2009. Estate Review, Fall 2008. Held with an Intermediary, Law; Co-Director, Institute for Law Hoover Institution Press/ Dayton Law Review, 2008. Tradable Pollution Permits and International Legal Materials, 2007. and Economics The Promise and Perils of Credit Rowman and Littlefield, May Risk Equity: A New Proposal, Cause for Concern: Causation the Regulatory Game, in Moving Kristin Madison, Professor of Law Derivatives (with Frank Partnoy), 2009. Harvard Environmental Law The Disadvantages of and Federal Securities Fraud, to Markets in Environmental David K. Musto, Ronald O. The Hanging Chads of Corporate University of Cincinnati Law Review, 2008. Immigration Restriction as a Iowa Law Review, 2009. Regulation: Lessons from Twenty Quality Regulation in the Perelman Associate Professor of Voting (with Marcel Kahan), Review, 2007. Stereotype threat: a Case of Policy to Improve Income Years of Experience, Oxford Information Age: Challenges for Finance, The Wharton School Georgetown Law Journal, 2008. Overclaim Syndrome?, in Franklin Allen, Nippon Life Distribution, SMU Law Review, Lawrence A. Hamermesh, Ruby University Press, 2007. Medical Professionalism (with Michael L. Wachter, William B. Stereotype Threat and Professor of Finance and Professor 2008. R. Vale Professor of Corporate and Mark Hall), in Medical Predatory Mortgage Lending Corporate Taxation and Johnson Professor of Law and Unconscious Bias: The State of the of Economics, The Wharton School Business Law, Widener University Michael S. Knoll, Theodore K. Professionalism in the New (with Philip Bond and Bilge International Charter Economics; Co-Director, Institute Research, American Enterprise Cary Coglianese, Associate Dean School of Law Warner Professor of Law, Professor Information Age, forthcoming Yilmaz), Journal of Financial Competition (with Mitchell for Law and Economics Institute, 2009. Mark-to-Market Accounting for Academic Affairs, Edward B. of Real Estate, The Wharton 2009. Economics, forthcoming. Kane), Michigan Law Review, and Liquidity Pricing (with E. Shils Professor of Law and Loyalty’s Core Demand: The School; Co-Director, Center for Tax 2008. Rationalizing Appraisal The Family Law Doctrine of Carletti), Journal of Accounting Professor of Political Science Defining Role of Good Faith in Law & Policy The Law and Policy of Health Vote Trading and Information Standards in Compulsory Equivalence, Michigan Law and Economics, forthcoming. Corporate Law (with Leo Strine, Care Quality Reporting, Campbell Aggregation (with Susan Hedge Funds in Corporate Buyouts (with Lawrence A. Review, 2009. Environmental Leadership Jr., R. Franklin Balotti & Jeffrey The Taxation of Private Equity Law Review, forthcoming 2009. Christoffersen, Chris Geczy, and Governance and Corporate Hamermesh), Boston College Understanding Financial Crises Programs: Toward an Empirical Gorris), forthcoming. Carried Interests: Estimating the Adam Reed), Journal of Finance, Control (with Marcel Kahan), Law Review, forthcoming 2009. (with D. Gale), Oxford University Assessment of their Perfor- Revenue Effects of Taxing Profit Hospital Mergers in an Era of 2007. University of Pennsylvania Law Press, 2007. mance, Ecology Law Quarterly Rationalizing Appraisal Interests as Ordinary Income, Quality Improvement, Houston Review, 2007. Shareholder Primacy’s (with Jonathan Borck & Jennifer Standards in Compulsory William & Mary Law Review, 2008. Journal of Health Law and Policy, A Portfolio View of Consumer Corporatist Origins: Adolf Berle Beauty Contests, Bubbles and Nash), 2009. Buyouts (with Michael 2007. Credit (with Nicholas Souleles), Chris W. Sanchirico, Professor of and The Modern Corporation Iterated Expectations in Asset Wachter), Boston College Law The Ancient Roots of Modern Journal of Monetary Economics, Law, Professor of Business and (with William W. Bratton), Prices (with S. Morris and H. Shin), Evaluating the Social Effects of Review, forthcoming 2009. Financial Innovation: The Early George J. Mailath, Walter H. 2006. Public Policy, The Wharton School Journal of Corporate Law, Review of Financial Studies, 2006. Environmental Leadership History of Regulatory Arbitrage, Annenberg Professor in the Social forthcoming 2008. Programs, Environmental Law The Short and Puzzling Life of Oregon Law Review, 2008. Sciences, Professor of Economics, Gideon Parchomovsky, Professor A Critical Look at the Economic Aditi Bagchi, Assistant Professor Reporter (with Jonathan Borck & the “Implicit Minority Discount” School of Arts and Sciences of Law Argument for Taxing Only Labor The Short and Puzzling Life of of Law Jennifer Nash), 2008. in Delaware Appraisal Law (with The UBIT: Leveling an Uneven Income, University of the “Implicit Minority Discount” Michael Wachter), University of Playing Field or Tilting a Level Common Learning (with Martin Bribes v. Bombs: A Study in Pennsylvania Institute for Law in Delaware Appraisal Law (with Contract Versus Promise, The Managerial Turn in Pennsylvania Law Review, 2007. One, Fordham Law Review, 2007. W. Cripps, Jeffrey C. Ely, and Coasean Warfare (with Peter and Economics Research Paper Lawrence A. Hamermesh), Working Paper. Environmental Protection, New Larry Samuelson), Econometrica, Siegelman), International Review Series, 2009. University of Pennsylvania Law York University Environmental Law Robert P. Inman, Richard King Friedrich K. Kübler, Professor and July 2008. of Law and Economics, Review, 2007. The Myth of Equality in the Journal, 2008. Mellon Professor of Finance; Profes- Director of the Banking Law Institute forthcoming 2009. Progressivity and Potential Employment Relation, Working sor of Finance and Economics, Emeritus, University of Frankfurt, Income: Measuring the Effect of Paper. Business and Public Policy, Real Germany; Professor of Law Changing Work Patterns on Estate, The Wharton School Income Tax Progressivity, Distributive Injustice and Private Medien, Menschenrechte und Columbia Law Review, 2008. Law, Hastings Law Journal, 2008. Demokratie (Media, Human Rights, and Democracy), forthcoming.

institute for law and economics 38 academic events institute for law and economics 39 academic events Associate Faculty

1 2 3 4

1 Matthew Adler 9 Charles W. Mooney, Jr. 2 Aditi Bagchi 10 Jason S. Johnston 3 Richard E. Kihlstrom 11 Michael S. Knoll 4 Howard F. Chang 12 Friedrich K. Kübler 5 Cary Coglianese 13 Kristin Madison 6 Robert W. Holthausen 14 Franklin Allen 7 Richard J. Herring 15 Gideon Parchomovsky 8 John Core 16 David K. Musto 5 6 7

8 9 10 11

12 13 14 15

16 17 18 19

17 Andrew Postlewaite 18 Susan M. Wachter 19 Chris W. Sanchirico 20 Reed Shuldiner 21 David A. Skeel, Jr. 22 Amy L. Wax

20 21 22

institute for law and economics 41 associate faculty Associate Faculty

Matthew D. Adler, Leon Meltzer Professor of Law organizations, including Princeton University, Brookings Institu- John E. Core, Ira A. Lipman Professor of Accounting, Jill Fisch, Perry Golkin Professor of Law; Co-Director, Institute for Law Professor Adler is a graduate of Yale College, St. Antony’s College tion, Standard Oil (Ohio), Honeywell and CSX. She currently The Wharton School and Economics of Oxford University, and the Yale Law School. Prior to teaching at serves on the boards of Altria Group, Inc., TIAA/CREF, and the John Core joined the Wharton School in 1996. He has a B.A. from Professor Fisch received her J.D. from Yale Law School in 1985. Penn, he worked as a law clerk for Judge Harry Edwards, U.S. National Bureau of Economic Research. Her research interests Yale University and a Ph.D. from The Wharton School. He has Before joining the Penn faculty in 2008, she held the T.J. Maloney Court of Appeals for the D.C. Circuit, and for Justice Sandra Day concern public policies that affect business, particularly those worked as an investment banker for PaineWebber, as a compensa- Chair in Business Law at Fordham Law School and served as O’Connor, U.S. Supreme Court, and practiced law at Paul, Weiss, involving regulation, deregulation, and corporate governance. tion consultant for Ernst & Young, and as an assistant professor founding director of the Fordham Corporate Law Center. She has Rifkind, Wharton & Garrison in New York City. At the Penn Law at MIT Sloan School of Management. He is an associate editor of also been a visiting professor at Harvard Law School, Columbia School, Professor Adler teaches administrative law, constitutional Howard F. Chang, Earle Hepburn Professor of Law the Journal of Accounting and Economics, and serves on the editorial Law School and Georgetown University Law Center. Prior to law, and regulation. His current research focuses on policy Professor Chang received a Ph.D. in economics from the Massa- board of the Journal of Accounting Research. He served as an editor entering academia, Professor Fisch practiced law with the United analysis and on risk regulation. chusetts Institute of Technology in 1992, a J.D. from Harvard of The Accounting Review from 2005 to 2008. His primary research States Department of Justice and the New York office of Cleary, Law School in 1987, a Master in Public Affairs from Princeton interest is executive compensation and executive stock and option Gottlieb, Steen and Hamilton. Her research focuses on corporate Franklin Allen, Nippon Life Professor of Finance and Professor of University in 1985, and an A.B. from Harvard College in 1982. Prior incentives, and he has also published work in the areas of corporate governance, business litigation, and securities regulation. Economics, The Wharton School to joining the Penn faculty in 1999, he was a Professor of Law at governance, equity valuation, and corporate disclosure. Franklin Allen is the Nippon Life Professor of Finance and Professor the University of Southern California Law School, where he began Lawrence Hamermesh, Ruby R. Vale Professor of Corporate and of Economics at the Wharton School of the University of Pennsyl- teaching in 1992. He was a Visiting Professor of Law at Stanford Patricia M. Danzon, Celia Z. Moh Professor of Health Care Systems, Business Law, Widener University School of Law vania. He has been on the faculty since 1980. He is currently Law School in 1998, at Harvard Law School and at the New York Insurance and Risk Management, The Wharton School Professor Hamermesh received a B.A. from Haverford College in Co-Director of the Wharton Financial Institutions Center. He was University School of Law in 2001, at the University of Michigan Professor Danzon received her Ph.D. in economics from the 1973, and a J.D. from Yale Law School in 1976. Professor Hamer- formerly Vice Dean and Director of Wharton Doctoral Programs Law School in 2002, and at the University of Chicago Law University of Chicago in 1973 and joined the Penn faculty from mesh practiced law with Morris, Nichols, Arsht & Tunnell, and Executive Editor of the Review of Financial Studies, one of the School in 2007, and a Visiting Associate Professor of Law at the Duke University in 1985. She is a member of the Institute of Wilmington, Delaware, as an associate from 1976–84, and as a leading academic finance journals. He is a past President of the Georgetown University Law Center from 1996 to 1997. He served Medicine and the National Academy of Social Insurance, and she partner from 1985–94. Professor Hamermesh joined the faculty at American Finance Association, the Western Finance Association, as a law clerk for the Honorable Ruth Bader Ginsburg on the U.S. has served as a consultant to many private and public institutions Widener in 1994, and teaches and writes in the areas of corporate the Society of Financial Studies, and the Financial Intermediation Court of Appeals for the D.C. Circuit from 1988 to1989. He served in the U.S. and worldwide. Professor Danzon’s research interests finance, mergers and acquisitions, securities regulation, business Research Society. He received his doctorate from Oxford University. on the Board of Directors of the American Law and Economics are in health care, pharmaceuticals, insurance, law, and economics. organizations, and professional responsibility. Since 1995, Dr. Allen’s main areas of interest are corporate finance, asset Association from 2004 to 2007. He has written on a wide variety She has published widely in scholarly journals on a broad range Professor Hamermesh has been a member of the Council of the pricing, comparative financial systems, and financial crises. He is of subjects including environmental protection, international trade, of subjects related to medical care, pharmaceuticals, insurance, Corporation Law Section of the Delaware State Bar Association, a co-author with Richard Brealey and Stewart Myers of the eighth immigration, intellectual property, and the economics of litigation and the economics of law. which is responsible for the annual review and modernization of and ninth editions of the textbook Principles of Corporate Finance. and settlement. the Delaware General Corporation Law, and served as Chair of the Michael A. Fitts, Dean of the Law School and Bernard G. Segal Council from 2002 to 2004. In 2002 and 2003 he also served as Aditi Bagchi, Assistant Professor of Law Cary Coglianese, Associate Dean for Academic Affairs, Edward B. Professor of Law the Reporter for the American Bar Association’s Task Force on Shils Professor of Law and Professor of Political Science Professor Bagchi received a J.D. from Yale Law School in 2003 Michael A. Fitts was named Dean of the Law School in March Corporate Responsibility. He served from 2001 to 2007 as a and a M.Sc. in economic and social history from Oxford University Cary Coglianese is the Associate Dean for Academic Affairs and 2000. Before joining the Penn Law faculty in 1985, Dean Fitts member of the Committee on Corporate Laws of the American in 2000. She clerked for United States Court of Appeals Judge the Edward B. Shils Professor of Law at the University of Pennsyl- served as clerk to the Honorable A. Leon Higginbotham, Jr., U.S. Bar Association Section of Business Law, which supervises the Julio Fuentes and practiced law with Cravath, Swaine & Moore vania Law School, as well as Professor of Political Science and Court of Appeals for the Third Circuit, and as attorney advisor in drafting of the Model Business Corporation Act. In 2007 Professor LLP in New York. She joined the Penn Law faculty in 2006 and the director of the Penn Program on Regulation. Coglianese the Office of Legal Counsel in the U.S. Department of Justice. Hamermesh was appointed as Chair of the Section of Business currently teaches contracts and labor law. Her areas of research is the founder of the Law & Society Association’s international At Penn he was appointed Associate Professor of Law in 1990, Law’s Committee on Corporate Documents and Process. In 1999 include normative theories of private law and comparative collaborative research network on regulatory governance, a Professor of Law in 1992 and Robert G. Fuller, Jr. Professor of Law Professor Hamermesh was elected as a member of the American political economy. council member of the American Bar Association’s section on in 1996. From 1996 to 1998 he served as Associate Dean for Law Institute. Professor Hamermesh is also a member of the Administrative Law and Regulatory Practice, and a fellow of Academic Affairs at the Law School and was active in establishing Board of Directors of ACLU Delaware, Inc. Elizabeth Bailey, John C. Hower Professor of Business and Public the American Bar Foundation. He is also a founder of the peer- a variety of joint programs with other schools within the University. Policy, The Wharton School reviewed journal Regulation & Governance, for which he now serves In 1999 he served as Visiting Professor in Political Science at Richard J. Herring, Jacob Safra Professor of International Banking, on the editorial board. Coglianese received his J.D., M.P.P., and Swarthmore College. Dean Fitts’ current research focuses on the Professor of Finance, The Wharton School; Co-Director, Wharton Professor Bailey received her Ph.D. in economics from Princeton Ph.D. in political science from the University of Michigan, and Financial Institutions Center University in 1972. From 1983 until 1990, Professor Bailey served effect of various structural changes (e.g., stronger political parties, for twelve years served on the faculty of the John F. Kennedy presidents or centralized legal institutions) on government Richard J. Herring is Jacob Safra Professor of International Banking as dean of the Graduate School of Industrial Administration at School of Government at Harvard University. He has also been a Carnegie Mellon University. She joined the Wharton faculty in budgeting and legislation. He has authored numerous law review and Professor of Finance at The Wharton School, University of visiting professor of law at Stanford University and Vanderbilt and political science articles in this area, several co-authored with Pennsylvania, where he is also founding director of The Wharton 1991 where she served as Chair, Department of Business and University and an affiliated scholar at the Harvard Law School. Public Policy from 1997 to 2005. She served as head of the political scientists. Financial Institutions Center, one of Wharton’s largest research Economics Research Department and member of the Technical centers. From 2000 to 2006, he served as the Director of the Staff at Bell Laboratories between 1960 and 1977 and was Lauder Institute of International Management Studies and from commissioner and vice-chairman of the Civil Aeroneutics Board 1995 to 2000, he served as Vice Dean and Director of Wharton’s from 1977 until 1983. She has served on the boards of many Undergraduate Division. During 2006, he was a Professorial Fellow at the Reserve Bank of New Zealand and Victoria University.

institute for law and economics 42 associate faculty institute for law and economics 43 associate faculty He is the author of more than 100 articles, monographs and Robert P. Inman, Richard King Mellon Professor of Finance, Professor Directors of the American Law and Economics Association and on Friedrich K. Kübler, Professor and Director of the Banking Law books on various topics in financial regulation, international banking, of Finance and Economics, Business and Public Policy, Real Estate, the National Science Foundation’s Law and Social Science grant Institute Emeritus, University of Frankfurt, Germany; Professor of Law and international finance.A t various times his research has been The Wharton School review panel. He has been an Olin Visiting Fellow at the University After earning a Dr. iur. from the University of Tübingen in 1961, funded by grants from the National Science Foundation, the Ford Professor Inman received his Ph.D. in economics from Harvard of Southern California Law Center and Visiting Professor at the Professor Kübler held appointments as teaching assistant in Foundation, the Brookings Institution, the Sloan Foundation, and University and joined the Penn faculty in 1972. He is a research University of Virginia School of Law. During the Fall of 2007, Tübingen and Paris; Professor of Law, University of Giessen the Council on Foreign Relations. associate of the National Bureau of Economic Research. He has Johnston was awarded the Bosch Public Policy Fellowship at the (1966–70); Visiting Lecturer, Harvard Law School (1968–69); outside the university, he is co-chair of the US Shadow served as a consultant to the city of Philadelphia, the state of American Academy in Berlin. Professor of Law and Dean of the Graduate School of Social Financial Regulatory Committee and Executive Director of the Pennsylvania, CitiGroup, Chemical Bank, the U.S. Department of Sciences, University of Konstanz (1971–76); and Professor of Law, Financial Economist’s Roundtable, the Advisory Board of the the Treasury, the Financial and Fiscal Commission of the Republic Richard E. Kihlstrom, Ervin Miller-Arthur M. Freedman Professor University of Frankfurt (1976–98). He first came to Penn in 1975 European Banking Report in Rome, and the Institute for Financial of South Africa, the National Bank of Sri Lanka, the National of Finance and Economics, Chairman, Finance Department, and again in 1983 as a Visiting Professor of Law, and in 1985 he Studies in Frankfurt. He served as co-chair of the Multinational Academy of Sciences, and numerous U.S. federal government The Wharton School joined the faculty as Professor of Law. He has served on the board Banking seminar from 1992–2004 and was a Fellow of the World agencies. His research is currently focused on fiscal federalism, Richard Kihlstrom holds a doctorate from the University of of the Deutscher Juristentag and is a member of the American Economic Forum in Davos from 1992–95. He was a member of the the urban fiscal crisis, and the political and legal institutions of Minnesota. He has been a member of the Wharton faculty since Law Institute. He was one of the six commissioners regulating Group of 30 task force on the reinsurance industry, as well as an fiscal policymaking. Professor Inman held the Florence Chair in 1979, was named to the Miller-Freedman professorship in 1986, concentration in the German television industry and is a member earlier study group on international supervision and regulation. Economics at the European University Institute, Florence, Italy, and previously served as Chair of the Finance Department from of the European Shadow Financial Regulatory Committee, as well Currently, he is an independent director of the DWS Scudder mutual for the spring quarter of 2000. He was a Visiting Scholar at the 1988 to 1994. Before coming to Penn, he taught at Northwestern as of the Frankfurt Academy of Arts and Sciences. Professor fund complex and has served on the predecessor Deutsche Rockefeller Foundation’s Bellagio Study Center, Fall 2007. University, the University of Illinois, the State University of New Kübler’s teaching interests are the European Union, corporations, Asset Management and Bankers Trust boards since 1990. He is York at Stony Brook, and the University of Massachusetts. He is a international finance, and mass communication. His current also an independent director of the Daiwa closed end funds. Jason Scott Johnston, Robert G. Fuller Jr. Professor of Law and Fellow of the Econometric Society. His areas of research interest (comparative) research interests are in the areas of corporate Herring received his undergraduate degree from Oberlin Director, Program on Law, Environment and Economy include information and uncertainty in economics, financial governance and finance, the supervision of transnational financial College in 1968 and his PhD from Princeton University in 1973. He market equilibrium, and corporate finance. markets, and broadcast regulation. has been a member of the Finance Department since 1972. He is After graduating summa cum laude from Dartmouth College, married, with two children, and lives in Bryn Mawr, Pennsylvania. Professor Johnston obtained both his J.D. and Ph.D. in economics from the University of Michigan, where he was an Alcoa Fellow Michael S. Knoll, Theodore K. Warner Professor of Law; Peter D. Linneman, Albert Sussman Professor of Real Estate, Finance, in Law and Economics and was elected to Order of the Coif. He Professor of Real Estate, The Wharton School; Co-Director, and Public Policy, The Wharton School Robert W. Holthausen, The Nomura Securities Company Professor, Center for Tax Law & Policy Professor of Accounting and Finance and Management, and Chairman, served as law clerk for United States Court of Appeals Judge Dr. Peter Linneman is the principal of Linneman Associates and the Accounting Department, The Wharton School Gilbert Merritt, was a postdoctoral civil liability fellow at Yale Law Professor Knoll joined the Penn Law and Wharton faculties from Albert Sussman Professor of Real Estate, Finance, and Public Policy School, and in 1995 came to the University of Pennsylvania Law the University of Southern California Law School in 2000. He at the Wharton School of Business. He is widely recognized as one Professor Holthausen earned his doctorate and his M.B.A. at the School from Vanderbilt University Law School. At Penn Law, teaches courses in corporate finance and taxation in the Law of the leading strategic thinkers in the real estate industry and was University of Rochester. Prior to his academic career, he was a Johnston is the Robert G. Fuller Jr. Professor of Public Law and the School, the Wharton School, and the Wharton Executive Program. named one of the 25 most influential people in real estate by C.P.A. He worked at Price Waterhouse and was also a financial founding Director of the Program on Law, Environment and He is also an affiliate of the Zell/Lurie Real Estate Center at the Realtor Magazine. He is a co-coordinator, co-sponsor and co-mod- analyst with Mobil. He was on the accounting and finance Economy. Professor Johnston’s research includes both theoretical Wharton School, and the editor of Forensic Economic Abstracts, an erator with Samuel Zell of the prestigious industry roundtable, faculty at the Graduate School of Business of the University of and empirical projects exploring various aspects of natural electronic journal published by the Social Science Research The Marshall Bennett Classic. Dr. Linneman holds a master’s Chicago for ten years, joining the Penn faculty in 1989. During resource and environmental law and policy, as well as more general Network. Professor Knoll’s undergraduate and J.D. degrees are degree and a doctorate in economics from the University of the 2001– 2002 academic year, he was a visiting professor studies of legal rights and entitlements. He is currently writing from the University of Chicago. He also earned a Ph.D. in Economics Chicago. A member of Wharton’s faculty since 1979, he served as at Harvard Business School. Since 1998 he has served as the books on the law and economics of corporate environmentalism at the University of Chicago. In 1990 he joined the USC Law the founding chairman of Wharton’s Real Estate Department and academic director of Wharton’s Mergers and Acquisitions and on the foundations of climate change law and policy. In the faculty as an Assistant Professor, and in 1995 he was promoted was the director of Wharton’s Zell/Lurie Real Estate Center for 13 program. Professor Holthausen’s research interests include the fall of 2006, he organized a first-of-its kind interdisciplinary to full Professor. He has been a Visiting Professor of Law at years. He is a founding co-editor of The Wharton Real Estate Review. effects of management compensation and governance structures conference on the law, economics, and science of liability for global Georgetown (1999), Penn (1998–99), and Virginia (2000). on firm performance, the effects of information on volume and warming, proceedings of which were published in July 2007 as a Professor Knoll was also a John M. Olin Senior Research Scholar Kristin Madison, Professor of Law prices, corporate restructuring and valuation, the effects of large special issue of the University of Pennsylvania Law Review (the at Columbia University School of Law (1996–97), a Visiting After receiving a J.D. from Yale Law School and a Ph.D. in econom- block sales on common stock prices, and numerous other topics. first and so far only time that a top ten American law journal has Scholar at New York University Law School (1996–97), and a He is widely published in both finance and accounting journals ics from Stanford University, Kristin Madison joined the Penn devoted an issue to climate change). Johnston has published John M. Olin Distinguished Visiting Professor of Law at Toronto Law faculty in 2001. She currently teaches contracts and health and is currently an editor of the Journal of Accounting and Economics. dozens of articles, both in various major American law journals University. He clerked for the Honorable Alex Kozinski on the U.S. His most recent work is entitled “Accounting Standards, Financial care law. Her main areas of research interest are health economics such as the Yale Law Journal, Virginia Law Review, and Columbia Law Court of Appeals, Ninth Circuit, from January to August 1986, and the regulation of the health care industry. Professor Madison Reporting Outcomes and Enforcement” and appears in the Journal Review, as well as in peer-reviewed economics journals such as when he was appointed legal advisor to the Vice Chairman of the of Accounting Research (May, 2009, pp. 447-458) as part of the is currently studying the diffusion of new forms of health care the Journal of Law, Economics and Organization and the Journal of U.S. International Trade Commission. He has published exten- regulation, particularly health care quality reporting requirements. Conference on the Regulation of Securities Markets: Perspectives Legal Studies. He is a member of the Board of Directors of the sively in the fields of corporate finance, taxation, economics, and from Accounting, Law and Financial Economics. Searle Civil Justice Institute at Northwestern University and an real estate finance. Overseer of the Program on Environmental Law and Economics at the University of Arizona. Johnston has served on the Board of

institute for law and economics 44 associate faculty institute for law and economics 45 associate faculty George J. Mailath, Walter H. Annenberg Professor in the Social Law School from 1982 to 1989. He has been a visiting professor at Gideon Parchomovsky, Professor of Law Chris W. Sanchirico. Professor of Law; Professor of Business and Sciences, Professor of Economics, School of Arts and Sciences Harvard Law School, UCLA Law School, the James E. Rogers Professor Parchomovsky received his LL.B. from the Hebrew Public Policy, The Wharton School Professor Mailath received his Ph.D. in economics from Princeton College of Law at The University of Arizona, and the University of University of Jerusalem in 1993, his LL.M. from the University Professor Sanchirico received his A.B. from Princeton and both University in 1985. He is a Fellow of the Econometric Society, a Konstanz in Germany. Between 1977 and 1980, he served as of California at Berkeley in 1995, and his S.J.D. from Yale Law his law degree and his Ph.D. in economics from Yale. Before member of the Council of the Game Theory Society, a co-founder general counsel to the U.S. Department of the Treasury. He also School in 1998. Prior to joining the Penn Law faculty in fall 2002, joining the Penn Law and Wharton faculties in 2003, he was a of the journal Theoretical Economics, and is or has served as an has served as chairman of the U.S. Tax Court Nominating Professor Parchomovsky served as an Associate Professor at law professor at the University of Virginia and an economics associate editor or editorial board member of Econometrica, the Commission, a director of the Securities Investor Protection Fordham Law School and a Visiting Lecturer at Yale Law School. professor at Columbia. Professor Sanchirico has written widely Review of Economic Studies, the Journal of Economic Theory, Games Corporation, and general counsel to the Chrysler Loan Guarantee His research interests include intellectual property law and on tax policy, distributive justice, the information problems of and Economic Behavior, the International Economic Review, and Board. He was co-chairman of the New York firm Fried, Frank, property theory. His recent work focuses on unlocking synergies legal enforcement, the rules governing trial evidence and pretrial Economic Theory. He is co-editor of the Econometric Society Harris, Shriver and Jacobson from 1989 to 1992. In 1992, he joined among sub-fields of intellectual property and devising innovative discovery, and the evolution and stability of social norms. Monograph Series and is a member of the Economics Advisory Salomon Inc. as its General Counsel and as a Managing Director mechanisms for protecting property entitlements. Professor Sanchirico has published extensively in top law reviews Panel of the National Science Foundation. His research interests and member of the Executive Committee of Salomon Brothers. as well as the premier peer-reviewed journals in both law and include the organization of the firm, noncooperative game theory, Professor Mundheim is the organizer and presiding officer Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, economics and economic theory. evolutionary game theory, social norms, and the foundations of emeritus of the International Faculty for Corporate and Capital School of Arts and Sciences; Professor of Finance, The Wharton School reputations, law, and authority. Market Law, a former Trustee and President of the American Reed Shuldiner, Alvin L. Snowiss Professor of Law Academy in Berlin, a Trustee of the New School University, a Professor Postlewaite received his Ph.D. from Northwestern University in 1974 and joined the Penn faculty from the University Professor Shuldiner is a recognized expert in the taxation of Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law former director and President of the Appleseed Foundation, and a member of the Council of the American Law Institute and of Illinois in 1980. He is editor of American Economic Journal: financial instruments and transactions. His area of research is Professor Mooney received his J.D. from Harvard Law School in Chairman of its Governance Committee. He also serves on the Microeconomics, past editor of the International Economic Review taxation and tax policy. His current research includes the taxation 1972. He practiced law with the Oklahoma firm of Crowe and American Bar Association’s Standing Committee on Ethics and and past co-editor of Econometrica. He serves on the Board of of risk under income, wealth and consumption taxes, and the Dunlevy and as a partner of the New York firm of Shearman & Professional Responsibility. He most recently served as the Directors of the National Bureau of Economic Research, the viability and effects of a federal wealth tax (with David Shakow). Sterling. Professor Mooney joined the Penn faculty in 1986, and chairman of the Quadra Realty Trust Board of Directors and as a Executive Committee of the Game Theory Society, and on the Professor Shuldiner served as Associate Dean at Penn Law from during 1999 and 2000 he served as Interim Dean of the Law director of eCollege, Inc. and of Arnhold & S. Bleichroeder Executive Committee of the American Economic Association. 2000–02. During spring 2005, Professor Shuldiner was the School. From 1998 to 2000 and from 2008 to 2009 he served as Holdings, Inc. He is also the Chairman of the Legal Advisory Board He has published widely in the areas of strategic behavior and William K. Jacobs, Jr. Visiting Professor of Law at Harvard Law Associate Dean for Academic Affairs. He is an active member of NASDAQ. Mr. Mundheim has served as a Consultant to the industrial organization. School. He was a Visiting Assistant Professor at Yale Law School of the American Law Institute and the American Bar Association. American Law Institute’s Principles of Corporate Governance: during 1994–95. Before joining the Penn law faculty in 1990, he He served as a member of the Uniform Commercial Code Analysis and Recommendations (1978–1994), as a member of the Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law; served in the Office ofT ax Legislative Counsel of the U.S. Depart- Permanent Editorial Board Article 2 (Sales) Study Committee and American Bar Association President’s Task Force on Corporate Co-Director, Institute for Law and Economics ment of the Treasury, was counsel to the law firm of Cadwalader, also served as a reporter for that Board’s Article 9 (Secured Responsibility (2002–2003), and as a member of the Association Professor Rock received his J.D. from the University of Pennsylvania Wickersham and Taft, and was an associate with the Washington, Transactions) Study Committee and as a reporter for the Revised of the Bar of the City of New York’s Presidential Task Force on in 1983. He joined the Penn faculty in 1989 from the Philadelphia D.C., law firm of Wilmer, Cutler and Pickering. Professor Shuldiner Article 9 drafting committee. He served as a member of the U.S. Lawyers’ Role in Corporate Governance. He has written in the law firm of Fine, Kaplan and Black, where he specialized in received his J.D. from Harvard University in 1983 and his Ph.D. in Security and Exchange Commission’s Advisory Committee on areas of corporate governance, securities regulation, corporations, antitrust, corporate, and securities litigation. He has written widely economics from the Massachusetts Institute of Technology in 1985. Market Transactions. Mooney was awarded the Distinguished and professional responsibility. in corporate law, on topics including: hedge funds; the role of Service Award, presented by the American College of Commercial institutional investors in corporate governance; close corporations; David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law Finance Lawyers. He also served as U.S. Delegate and Position David K. Musto, Ronald O. Perelman Professor in Finance, the role of norms in corporate law; the overlap between corporate Professor Skeel joined the Penn faculty in 1999. He graduated in Coordinator (appointed by U.S. Department of State) at the The Wharton School law and antitrust; the overlap between corporate law and labor 1987 from the University of Virginia School of Law, where he was Diplomatic Conference for the Cape Town Convention on David K. Musto is the Ronald O. Perelman Professor in Finance at law; comparative corporate law; and the regulation of mutual editor of the Virginia Law Review and a member of the Order of the International Interests in Mobile Equipment and the Protocol on funds. In 1994, Professor Rock was a Visiting Professor of Coif. He clerked for the Honorable Walter K. Stapleton on the U.S. Matters Specific to Aircraft Equipment, in Cape Town, South the Wharton School, where he has been on the faculty since 1995. He has a B.A. from Yale University and a Ph.D. from the University International Banking and Capital Markets at the Institut für Court of Appeals for the Third Circuit, and practiced for several Africa. He currently serves as a U.S. Delegate for the UNIDROIT Arbeits-, Wirtschafts- und Zivil Recht, Johann Wolfgang Goethe- years at Duane, Morris & Heckscher in Philadelphia, before joining draft convention on intermediated securities. His current research of Chicago, and between college and graduate school he worked for Roll and Ross Asset Management in Los Angeles. He is an Universität, Frankfurt am Main, Germany. During the 1995–96 the Temple University School of Law in 1990. Professor Skeel has centers on intermediated securities, security interests in bank- academic year, he was a Fulbright Senior Scholar and Visiting also held visiting appointments at the University of Wisconsin ruptcy, and bankruptcy theory. editor of the Journal of Financial Services Research and an Associate Editor of the Journal of Finance. Most of his work, both theoretical Professor of Law at the Law Faculty of the Hebrew University of Law School (1993–94), the University of Virginia School of Law Jerusalem, Israel. In 2001, he was appointed the first Saul A. Fox (spring 1994), Georgetown University Law Center (fall 2004), and Robert H. Mundheim, University Professor of Law and Finance and empirical, is in the area of consumer financial services, mutual funds and consumer credit in particular. He has also published Distinguished Professor of Business Law. During 2005–06, the University of Pennsylvania Law School (fall 1997). Professor Emeritus, University of Pennsylvania; Of Counsel, Shearman & Sterling; he was again a Visiting Professor of Law, and Lady Davis Fellow, Skeel specializes in corporate and commercial law and has written formerly General Counsel, U.S. Treasury and Senior Executive Vice work on corporate and political voting, option pricing, short selling, and cross-border taxation. at Hebrew University. Professor Rock’s current research focuses widely on corporate law, bankruptcy, and sovereign debt. He has President and General Counsel of Salomon Smith Barney Holdings, Inc. on government ownership of corporations, mergers and acquisi- also has written on law and religion, and poetry and law. Professor Mundheim received his LL.B. from Harvard Law School tions, hedge funds, and corporate voting. in 1957. He joined the New York firm of Shearman & Sterling, of which he is now Of Counsel, and then served as special counsel to the U.S. Securities and Exchange Commission before joining the Penn faculty in 1965. Professor Mundheim served as Dean of the

institute for law and economics 46 associate faculty institute for law and economics 47 associate faculty Michael L. Wachter, William B. Johnson Professor of Law and Amy Wax, Robert Mundheim Professor of Law Economics; Co-Director, Institute for Law and Economics a graduate of Yale College and Harvard medical school, professor professor Wachter received his ph.d. in economics from Harvard Wax trained as a neurologist at new York Hospital before University and joined the penn faculty in 1970. He has held full completing a law degree at Columbia Law school in 1987. she ILE Investors, 2008–2009 professorships in three of penn’s schools: the school of arts and served as a clerk to the Honorable abner J. mikva of the U.s. sciences, where he has been professor of economics since 1976; Court of appeals for the d.C. Circuit and worked for six years at funding for the institute for law and economics the Wharton school, where he was professor of management, the offi ce of the solicitor general at the U.s. department of 1980–92; and the Law school, where he became professor of law Justice, where she argued 15 cases before the U.s. supreme Court. comes from a diverse group of individuals, law fi rms, and economics in 1984. He has been senior advisor to the she taught from 1994 to 2001 at the University of virginia Law corporations, and foundations who endorse our Brookings panel on economic activity in addition to consulting school. Her areas of teaching and research include civil procedure, for the Federal reserve’s Board of governors and the Council of remedies, labor and employment law, poverty law and welfare work each year. we are pleased and privileged to economic advisors. He has also served as a member of the policy, the law and economics of work and family, and social national Council on employment policy and as a commissioner science and the law. professor Wax joined the penn Law Faculty recognize and thank the ile investors whose generous on the minimum Wage study Commission. professor Wachter in fall 2001. served as deputy provost of the University of pennsylvania from contributions underwrite the activities described July 1995 to January 1998, and as Interim provost from January to december 1998. He is the author of numerous articles in in this report. we deeply appreciate their support and law and economics, as well as in corporation law and labor law their active participation in institute programs. and economics.

Susan M. Wachter, Richard B. Worley Professor of Financial Benefactors goldman, sachs & Co. vanguard Management, Professor of Real Estate and Finance, The Wharton $25,000 or above perry golkin Wachtell, Lipton, rosen School; Co-Director, Institute for Urban Research Charles I. Cogut grant & eisenhofer p.a. & Katz From 1998 to 2001, as assistant secretary for policy development robert L. Friedman paul g. Haaga, Jr. Young Conaway stargatt and research, U.s. department of Housing and Urban develop- paul s. Levy Leon C. Holt, Jr. & taylor, LLp ment, dr. Wachter served as the senior urban policy offi cial and skadden, arps, slate, meagher Hughes Hubbard & reed LLp principal advisor to the secretary on overall HUd policies and & Flom LLp Innisfree m&a Incorporated Members programs. at Wharton, dr. Wachter was Chairperson of the real sullivan & Cromwell LLp andrew s. Jacobs $5,000 to $9,999 estate department and professor of real estate and Finance from roy J. Katzovicz James H. agger July 1997 until her 1998 appointment to HUd. she founded and Sponsors macKenzie partners, Inc Blank rome LLp currently serves as director of Wharton’s geographical Information $10,000 to $24,999 merck & Co., Inc. Harkins Cunningham LLp systems Lab. dr. Wachter served as a member of the Board of apollo Capital management, L.p. millennium management Lockheed martin directors of the Benefi cial Corporation from 1985 to 1998 and of Barclays Foundation Kenneth W. Willman the mIg residential reIt from 1994 to 1998. she was the editor Bernstein Litowitz Berger morgan, Lewis & Bockius LLp of Real Estate Economics from 1997 to 1999 and serves on the & grossmann LLp morris, nichols, arsht Donors editorial boards for several real estate journals. dr. Wachter has Buchanan Ingersoll & rooney pC & tunnell LLp Up to $4,999 been a member of the advanced studies Institute of the Homer Isaac d. Corré potter anderson & Corroon LLp mary J. grendell Hoyt Institute since 1989. she is author of more than 100 Ct, a Wolters Kluwer Business proskauer rose LLp andrew metrick scholarly publications and is the recipient of several awards for dechert LLp richards, Layton & Finger, p.a. James a. ounsworth teaching excellence at the Wharton school. delaware department of state rothschild Inc. myron J. resnick dewey & LeBoeuf LLp schulte roth & Zabel LLp John F. schmutz the dow Chemical Company a. gilchrist sparks III eric Wilensky dupont sungard data systems Inc. saul a. Fox research endowment UBs Investment Bank

institute for law and economics 48 associate faculty institute for law and economics 49 ile investors Institute for Law and Economics Michael L. Wachter, Co-Director Jill E. Fisch, Co-Director University of Pennsylvania William B. Johnson Professor Perry Golkin Professor of Law 3400 Chestnut Street of Law and Economics 215.746.3454 Philadelphia, PA 19104-6204 215.898.7852 [email protected] 215.898.7719 [email protected] www.law.upenn.edu/ile/ Vicki L. Hewitt, Program Director Edward B. Rock, Co-Director 215.898.7719 September 2009 Saul A. Fox Distinguished Professor fax 215.573.2025 of Business Law [email protected] 215.898.8631 [email protected]