INSTITUTE FOR LAW & ECONOMICS ANNUAL REPORt 2011–12 A Joint Research Center of the Law School, the Wharton School, and the Department of Economics in the School of Arts and Sciences at the University of Pennsylvania MESSAGE FROM THE CO-CHAIRS For almost three decades, Penn’s Institute for Law and Economics has contributed Message froM the Co-Chairs: 1 to scholarship, policy, and practice on relevant issues of law and economics that affect Board of advisors: 2 our country’s businesses and financial institutions. Message froM the dean: 6 Message froM the Co-direCtors: 7 he Institute’s programs have become increasingly relevant and important in this roundtaBle PrograMs: 9 challenging economic climate, focusing on the issues that the academic, legal, and business communities care about. Today the Institute enjoys an outstanding CorPorate roundtaBle, sPring 2012: 10 T international reputation for the excellence of its programs, where leaders in business, financial management, legal practice, and academic scholarship candidly discuss CorPorate roundtaBle, fall 2011: 12 the intersection of theory and practice on a host of significant issues. Your participation in CorPorate roundtaBle, sPring 2011: 14 these programs is a vital component of their success. On behalf of the Institute’s Board of Advisors, we want to express our gratitude to CorPorate roundtaBle, fall 2010: 14 everyone who has helped the Institute during this past year, whether through financial contributions or by participation in ILE programs. One of the foremost goals of the Institute CorPorate roundtaBle, sPring 2010: 16 is to broaden and diversify our foundation, and once again we have realized that goal. CorPorate roundtaBle, fall 2009: 16 We are delighted to report some superb additions to our Board of Advisors during the past year. We are pleased to welcome the following new members: Kevin Genirs (Barclays Panel PrograMs: 19 Capital); Jennifer Shotwell (Innisfree M&A Incorporated); Richard D. Smith (Allen & Overy LLP); Andrea E. Utecht (FMC Corporation); and Antonio Weiss (Lazard). These ChanCery Court PrograMs: 20 accomplished individuals will greatly enhance the work of the Institute and broaden the insights froM PraCtiCe: 22 composition of our Board. We would also like to welcome The Depository Trust and Clearing Corporation and White & Case LLP as ILE sponsors, through long-standing board members leCtures: 25 James E. Odell and Morton A. Pierce. All of the members of our Board give graciously to the Institute, not just financially but also of their time and law and entrePreneurshiP: 26 expertise, and we are grateful for their contributions. Very special thanks must be given to ILE Benefactors Bob distinguished Jurist: 28 Friedman, Paul G. Haaga, Jr., and Skadden, Arps, Slate, Meagher & Flom LLP (through Eric Friedman). Their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express international PrograM leCtures: 30 our sincere appreciation to each of them. Bill Bratton, Jill Fisch, and Michael Wachter continued to be truly outstanding as co-directors of the Institute. Past leCtures: 32 The co-directors’ dedication to all aspects of the Institute’s work and their ability to come up with timely programs aCadeMiC events: 35 and attract the ideal participants to make every program an unqualified success are why ILE is world-renowned as the forum for interesting dialogue on topical issues for corporations and their financial and legal advisors. Penn /NYU ConferenCe, sPring 2012: 36 NYU/Penn ConferenCe, sPring 2011: 36 Charles “Casey” Cogut Simpson Thacher & Bartlett LLP ILE/wharton finanCe seMinars: 38 Joseph B. Frumkin CurriCular PartnershiPs: 40 Sullivan & Cromwell LLP PuBliCations and PaPers: 42 September 2012 assoCiate faCulty: 44 institute investors: 53 message from the co-chairs 1 BOARD OF ADVISORS BOARD OF ADVISORS James H. Agger Richard B. Aldridge William D. Anderson, Jr. Marshall B. Babson Louis J. Bevilacqua Joseph B. Frumkin Kevin Genirs Scott C. Goebel Perry Golkin Stuart M. Grant chair, 1994-2001 morgan, Lewis & Bockius LLP Managing Director, Global seyfarth shaw LLP cadwalader, wickersham Co-Chair, 2008- Managing Director Senior Vice President and Chief Executive Officer grant & eisenhofer P.a. Retired Senior Vice President, Philadelphia, Pa Head of Raid and Activism New York, NY & taft LLP sullivan & cromwell LLP Barclays capital General Counsel PPc enterprises LLc wilmington, de General Counsel and Secretary Defense New York, NY New York, NY New York, NY fidelity management & New York, NY air Products and chemicals, inc. goldman, sachs & co. research company allentown, Pa New York, NY Boston, MA Fred Blume Daniel H. Burch George A. Casey Charles I. Cogut Isaac D. Corré Mark I. Greene Paul G. Haaga, Jr. John G. Harkins, Jr. Leon C. Holt, Jr. William B. Johnson Chairman Emeritus Chairman & CEO shearman & sterling LLP Co-Chair, 2008- Senior Managing Director cravath, swaine & moore LLP Retired, Former Chairman of Chair, 1980-1990 Retired Vice Chairman and Chairman Emeritus Blank rome LLP macKenzie Partners, inc. New York, NY simpson thacher & eton Park capital New York, NY the Board harkins cunningham LLP Chief Administrative Officer whitman corporation Philadelphia, Pa New York, NY Bartlett LLP management capital research and Philadelphia, Pa air Products and chemicals, inc. chicago, iL New York, NY New York, NY management company allentown, Pa Los angeles, CA Stephen Fraidin Joel E. Friedlander Dennis J. Friedman Eric J. Friedman Robert L. Friedman Brendan R. Kalb Cynthia B. Kane Roy J. Katzovicz Bruce N. Kuhlik Mark Lebovitch Kirkland & ellis LLP Bouchard margules & gibson, dunn & crutcher LLP Executive Partner Chair, 2001-2007 General Counsel Special Assistant to the Chief Legal Officer and Executive Vice President Bernstein Litowitz Berger & New York, NY friedlander New York, NY skadden, arps, slate, Senior Advisor aQr capital management, LLc Secretary of State Investment Team Member and General Counsel Grossmann LLP wilmington, de meagher & flom LLP the Blackstone group L.P. greenwich, ct delaware department of state Pershing square capital merck & co., inc. New York, NY New York, NY New York, NY wilmington, de management, L.P. whitehouse station, NJ New York, NY 2 iNstitute for Law aNd ecoNomics Board of advisors 3 BOARD OF ADVISORS BOARD OF ADVISORS 13 Kenneth A. Lefkowitz Simon M. Lorne G. Daniel O’Donnell James E. Odell James A. Ounsworth Heidi Stam Hon. Leo E. Strine, Jr. John J. Suydam Andrea E. Utecht Hon. E. Norman Veasey hughes hubbard & reed LLP Vice Chairman and Chief dechert LLP Managing Director Managing Partner Managing Director and Chancellor Chief Legal and Compliance Executive Vice President, Chief Justice, Supreme Court New York, NY Legal Officer Philadelphia, Pa the depository trust and the s consulting group General Counsel delaware court of chancery Officer General Counsel and of Delaware, 1992-2004 millennium management LLc clearing corporation Philadelphia, Pa vanguard wilmington, de apollo global management, LLc Secretary weil, gotshal & manges LLP New York, NY New York, NY wayne, Pa New York, NY FMC corporation New York, NY, and Philadelphia, Pa wilmington, de Morton A. Pierce Allan N. Rauch Martha L. Rees Myron J. Resnick Peter G. Samuels Marc Weingarten Antonio Weiss Gregory P. Williams Donald J. Wolfe, Jr. Christopher Young white & case LLP Vice President - Legal and Vice President and Assistant Retired Senior Vice President Proskauer rose LLP schulte roth & Zabel LLP Global Head of Investment richards, Layton & finger, P.a. Potter anderson & corroon LLP Managing Director and New York, NY General Counsel General Counsel and Chief Investment Officer New York, NY New York, NY Banking wilmington, de wilmington, de Head of the Contested Bed Bath & Beyond inc. e. i. du Pont de Nemours and allstate insurance company Lazard Situations Practice union, NJ company Northbrook, iL credit suisse wilmington, de New York, NY 7 Jennifer Shotwell David M. Silk Bruce L. Silverstein Richard D. Smith A. Gilchrist Sparks III Founding Managing Director wachtell, Lipton, rosen Young conaway stargatt & allen & overy LLP morris, Nichols, arsht & innisfree m&a incorporated & Katz taylor, LLP New York, NY tunnell LLP New York, NY New York, NY wilmington, de wilmington, de 4 iNstitute for Law aNd ecoNomics Board of advisors 5 MESSAGE FROM THE DEAN MESSAGE FROM THE CO-DIRECTORS For over twenty years, the Institute for Law and Economics has successfully The Institute for Law and Economics continues to be the legal academy’s demonstrated the benefits of a cross-disciplinary perspective. most dynamic corporate law program. ts programs provide a model for how to build bridges between disciplines by creating ties between schools, he Institute for Law and Economics endeavors to sponsor the legal academy’s deepest and most between faculty members, between students, and between experts in the field from around the world. ILE compelling corporate law programs. We believe this year’s events met this demanding aspiration. ILE combines Penn’s greatest strengths in the Law School, the Wharton School, and the Department of Economics continues to be a prominent venue for encounters among leading corporate practitioners, lawmakers, to focus on complex questions that concern all of these fields. The Institute proves that when you bring the T and academics and for conversations across academic disciplines. We commit ourselves to achieving I an even higher level of seriousness of endeavor and participant