ile annual report 2008-2009

We find “islands of conscious power in this ocean of unconscious co-operation like lumps of butter coagulat-We find “islands of conscious power in this ocean of unconscious co-operation like lumps of butter coagulat-We find “islands of conscious power in this ocean of

ing in a pail of buttermilk.” But in view of the fact that unconscious co-operation like lumps of butter coagulat-ing in a pail of buttermilk.” But in view of the fact that unconscious co-operation like lumps of butter coagulat-

it is usually argued that co-ordination will be done by ing in a pail of buttermilk.” But in view of the fact that it is usually argued that co-ordination will be done by ing in a pail of buttermilk.” But in view of the fact that

the price mechanism, why is such organization neces-it is usually argued that co-ordination will be done by the price mechanism, why is such organization neces-it is usually argued that co-ordination will be done by

sary? Why are there these “islands of conscious power”? the price mechanism, why is such organization neces-sary? Why are there these “islands of conscious power”? the price mechanism, why is such organization neces-

Outside the firm, price movements direct production, sary? Why are there these “islands of conscious power”? Outside the firm, price movements direct production, sary? Why are there these “islands of conscious power”?

which is coordinated through a series of exchange trans-Outside the firm, price movements direct production, which is coordinated through a series of exchange trans-Outside the firm, price movements direct production,

actions on the market. Within a firm, these markets which is coordinated through a series of exchange trans-actions on the market. Within a firm, these markets which is coordinated through a series of exchange trans-

transactions are eliminated and in place of the com-actions on the market. Within a firm, these markets transactions are eliminated and in place of the com-actions on the market. Within a firm, these markets

plicated market structure with exchange transactions is transactions are eliminated and in place of the com-plicated market structure with exchange transactions is transactions are eliminated and in place of the com-

substituted the entrepreneur co-ordinator, who directs plicated market structure with exchange transactions is substituted the entrepreneur co-ordinator, who directs plicated market structure with exchange transactions is

production. It is clear that these are alternative methods substituted the entrepreneur co-ordinator, who directs production. It is clear that these are alternative methods substituted the entrepreneur co-ordinator, who directs

of co-ordinating production. Yet, having regard to the production. It is clear that these are alternative methods of co-ordinating production. Yet, having regard to the production. It is clear that these are alternative methods

fact that if production is regulated by price movements, of co-ordinating production. Yet, having regard to the fact that if production is regulated by price movements, of co-ordinating production. Yet, having regard to the

production could be carried on without any organization fact that if production is regulated by price movements, production could be carried on without any organization fact that if production is regulated by price movements,

at all, well might we ask, why is there any organization?production could be carried on without any organization at all, well might we ask, why is there any organization?production could be carried on without any organization

ANNUAL REPORT 2008–2009

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

institute for

law & economics

Message from the Co-Chairsfor 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 outstanding international reputation for the excellence of its programs, where leaders in business, fi nancial management,

legal practice, and academic scholarship candidly discuss the intersec-tion of theory and practice on a host of signifi cant issues. on behalf of the Institute’s Board of advisors, we want to express our gratitude to everyone who has helped the Institute during this past year, whether through fi nancial contributions or by participation in ILe programs. one of the foremost goals of the Institute is to broaden and diversify our foundation, and once again we have realized that goal. 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: daniel H. Burch (macKenzie partners, Inc.); stuart m. grant (grant & eisenhofer p.a.); and Heidi stam (vanguard). these

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 enables the Institute to continue to lead the fi eld, and we want to express our sincere appreciation to each of them. this year we welcomed Jill Fisch as a co-director of ILe, joining ed rock and michael Wachter. these three distinguished professors have continued to do a truly outstanding job coordinating the work of the Institute. their tireless dedication to all aspects of the Institute’s work and their ability to come up with timely programs and attract the ideal participants to make every program an unqualifi ed success are why ILe is world-renowned as the forum for interesting dialogue on topical issues for corporations and their fi nancial and legal advisors.

Charles “Casey” CogutSimpson Thacher & Bartlett LLP

Joseph B. FrumkinSullivan & Cromwell LLP

september 2009

Message from the Co-Chairs 1Board of Advisors 2Message from the Dean 4Message from the Co-Directors 5Roundtable Programs 6off the record, spring 2009 8Corporate Finance, spring 2009 10Corporate Finance, Fall 2008 12Corporate Finance, spring 2008 14Corporate Finance, Fall 2007 14Panel Programs 16delaware Chancery program 18Corporate governance Conference 18

deal day 20Chancery Court programs 20Lectures 22Law and entrepreneurship 24distinguished Jurist 28past Lectures 30Academic Events 32nYU/penn Conference, spring 2009 34penn/nYU Conference, spring 2008 34ILe/Wharton Finance seminars 36Publications and Papers 38Associate Faculty 40Institute Investors 49

FoUnded In 1980, the Institute for Law and economics at the University of pennsylvania has an ambitious agenda that is timelier than ever. the study of law and economics remains the most rapidly growing movement in legal scholarship and jurisprudence. Under the sponsorship of the Law school, the Wharton school, and the department of economics in penn’s school of arts and sciences, the Institute has played a leading role in this expanding fi eld. Cross-disciplinary research, the cornerstone of ILe, seeks to infl uence the national policy debate by analyzing the impact of law on the global economy, spotlighting the signifi cant role that economics plays in fashioning legal policy. our innovative roundtables and conferences, launched in 1985, complement these goals by provoking in-depth and frequently groundbreaking examinations of critical issues. these and other programs highlighted in this annual report have helped the Institute to stay on the leading edge of this cross-discipline. the Institute for Law and economics has unique advantages. We draw on the research and teaching strengths of the Law school, the Wharton school, and the department of economics. our geographic location is optimal, allowing us to bring together

participants from Washington and new York for full-day meetings and still get everyone home in time for dinner. We have been able to call on the expertise of penn Law school alumni who occupy key positions in law, business, and government. and, critically, we have an extraordinarily distinguished cadre of board members and sponsors who are willing to give of their time and expertise to make our programming a success. In each area, from our public lectures and panels through our closed-door roundtables to our more academically-oriented faculty workshops, we are driven by the same mission: to use the tools of economics to understand the law. In a world in which complex legal rules govern economic relationships, the tools of economics provide a way of asking whether the law creates appropriate incentives to encourage actors to maximize social welfare. Funding for ILe comes from a diverse group of corporations, law fi rms, foundations, and individuals who endorse our work each year. over the past decade, the Institute has more than tripled its donor base to provide ongoing support for the programs discussed in this annual report. a list of Institute Investors for 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.

Corporate roundtable, Fall 2008. paul g. Haaga, Jr., Capital research and management Company.

University of pennsylvania Law school.

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 advisors

Barry M. Abelsonpepper Hamilton LLpphiladelphia, pa

James H. AggerChair, 1994–2001Retired Senior Vice President, General Counsel and Secretaryair products and Chemicals, Inc.allentown, pa

Richard B. Aldridgemorgan Lewis & Bockius LLpphiladelphia, pa

William D. Anderson, Jr.Managing Directorgoldman, sachs & Co.new York, nY

Marshall B. BabsonHughes Hubbard & reed LLpnew York, nY

Fred BlumeChairman EmeritusBlank rome LLpphiladelphia, pa

Charles I. CogutCo-Chair, 2008–simpson thacher & Bartlett LLpnew York, nY

Isaac D. CorréSenior Managing Directoreton park Capital managementnew York, nY

Pamela CravenChief Administrative Offi ceravaya CommunicationsBasking ridge, nJ

Richard D’AvinoV.P. Taxes-GE Capital and NBC Universalgeneral electric Companystamford, Ct

Joel E. FriedlanderBouchard, margules & FriedlanderWilmington, de

Robert L. FriedmanChair, 2001–2007Senior Managing Director and Chief Legal Offi certhe Blackstone group L.p.new York, nY

Joseph B. FrumkinCo-Chair, 2008–sullivan & Cromwell LLpnew York, nY

Joseph D. GattoVice ChairmanLehman Brothers Inc.new York, nY

Joseph GlattPrincipal Counselapollo Capital management, L.p.new York, nY

Perry GolkinMemberKohlberg Kravis roberts & Co.new York, nY

John G. Harkins, Jr.Chair, 1980–1990Harkins Cunningham LLpphiladelphia, pa

Leon C. Holt, Jr.Retired Vice Chairman and Chief Administrative Offi cerair products and Chemicals, Inc.allentown, pa

William B. JohnsonChairman EmeritusWhitman CorporationChicago, IL

Stephen J. JonesVice President, General Counsel and Secretaryair products and Chemicals, Inc.allentown, pa

Cynthia B. KaneSpecial Assistant to the Secretary of Statedelaware department of stateWilmington, de

Roy J. KatzoviczGeneral Counselpershing square Capital management, L.p.new York, nY

Bruce N. KuhlikExecutive Vice President and General Counselmerck & Co., Inc.Whitehouse station, nJ

Mark LebovitchBernstein Litowitz Berger & grossmann LLpnew York, nY

Paul S. LevyFounderJLL partnersnew York, nY

Robert A. LonerganExecutive Vice President, General Counsel and Corporate Secretaryrohm and Haas Companyphiladelphia, pa

Simon M. LorneVice Chairman and Chief Legal Offi cermillennium management, LLCnew York, nY

Michael E. LubowitzWeil, gotshal & manges LLpnew York, nY

J. Anthony MessinaBuchanan Ingersoll & rooney pCphiladelphia, pa

Alan MillerCo-ChairmanInnisfree m&a Incorporatednew York, nY

G. Daniel O’Donnelldechert LLpphiladelphia, pa

James E. OdellGeneral Counsel, The AmericasUBs Investment Bank

new York, nY

James A. OunsworthManaging Directorthe musser Consulting groupWayne, pa

Morton A. Piercedewey & LeBoeuf LLpnew York, nY

Martha L. ReesVice President and Assistant General Counsele. I. du pont de nemours & Company, Inc.Wilmington, de

Myron J. ResnickRetired Senior Vice President and Chief Investment Offi cerallstate Insurance Companynorthbrook, IL

Robert H. RockChairman and Publisher directors & Boards philadelphia, pa

Gerald RosenfeldDeputy Chairmanrothschild north americanew York, nY

Peter G. Samuelsproskauer rose LLpnew York, nY

John F. SchmutzChair, 1990–1994Retired Senior Vice President and General Counsele. I. du pont de nemours & Company, Inc.Wilmington, de

Howard L. Shecterorrick, Herrington & sutcliffe LLpnew York, nY

Robert C. SheehanExecutive Partnerskadden, arps, slate, meagher & Flom LLpnew York, nY

Victoria E. SilbeySenior Vice President–Legal and General Counselsungard data systems Inc.

Wayne, pa

David M. SilkWachtell, Lipton, rosen & Katznew York, nY

Bruce L. SilversteinYoung Conaway stargatt & taylor, LLp Wilmington, de

A. Gilchrist Sparks IIImorris, nichols, arsht & tunnell LLpWilmington, de

Hon. Leo E. Strine, Jr.Vice Chancellordelaware Court of ChanceryWilmington, de

Nancy Straus SundheimSenior Vice President, General Counsel and SecretaryUnisys CorporationBlue Bell, pa

Jere R. ThomsonJones daynew York, nY

Hon. E. Norman VeaseyChief Justice, Supreme Court of Delaware, 1992–2004Weil, gotshal & manges LLpnew York, nY, and Wilmington, de

Marc Weingartenschulte roth & Zabelnew York, nY

Gregory P. Williamsrichards, Layton & Finger, p.a.Wilmington, de

Donald J. Wolfepotter anderson & Corroon LLpWilmington, de

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

James H. AggerChair, 1994–2001Retired Senior Vice President, General Counsel and Secretary air products and Chemicals, Inc.allentown, pa

Richard B. Aldridgemorgan Lewis & Bockius LLp philadelphia, pa

William D. Anderson, Jr.Managing Directorgoldman, sachs & Co.new York, nY

Marshall B. BabsonHughes Hubbard & reed LLp new York, nY

Fred BlumeChairman EmeritusBlank rome LLpphiladelphia, pa

Daniel H. BurchChairman & CEOmacKenzie partners, Inc.new York, nY

Charles I. CogutCo-Chair, 2008–simpson thacher & Bartlett LLpnew York, nY

Isaac D. CorréSenior Managing Directoreton park Capital managementnew York, nY

Kenneth R. FitzpatrickVice President,Chief Legal Offi cer and Corporate Secretarythe dow Chemical Companyphiladelphia, pa

Eric J. FriedmanExecutive Partnerskadden, arps, slate, meagher & Flom LLpnew York, nY

Robert L. FriedmanChair, 2001–2007Senior Managing Director and Chief Legal Offi certhe Blackstone group L.p.new York, nY

Joseph B. FrumkinCo-Chair, 2008–sullivan & Cromwell LLpnew York, nY

Joseph D. GattoVice ChairmanBarclaysnew York, nY

Joseph D. GlattGeneral Counselapollo Capital management, L.p.new York, nY

Perry GolkinMemberKohlberg Kravis roberts & Co.new York, nY

Stuart M. Grantgrant & eisenhofer p.a.Wilmington, de

John G. Harkins, Jr.Chair, 1980–1990Harkins Cunningham LLpphiladelphia, pa

Leon C. Holt, Jr.Retired Vice Chairman and Chief Administrative Offi cerair products and Chemicals, Inc.allentown, pa

Andrew JacobsGeneral Counsel & Chief Compliance Offi cerBam Capital, LLCnew York, nY

William B. JohnsonChairman EmeritusWhitman CorporationChicago, IL

Cynthia B. KaneSpecial Assistant to the Secretary of Statedelaware department of stateWilmington, de

Roy J. KatzoviczChief Legal Offi cerpershing square Capital management, L.p.new York, nY

Roger KimmelVice Chairmanrothschild Inc.new York, nY

Bruce N. KuhlikExecutive Vice President and General Counselmerck & Co., Inc.Whitehouse station, nJ

Mark LebovitchBernstein Litowitz Berger & grossmann LLpnew York, nY

Paul S. LevyFounderJLL partnersnew York, nY

Simon M. LorneVice Chairman and Chief Legal Offi cermillennium management LLC new York, nY

J. Anthony MessinaBuchanan Ingersoll & rooney pCphiladelphia, pa

Alan MillerCo-ChairmanInnisfree m&a Incorporatednew York, nY

G. Daniel O’Donnelldechert LLpphiladelphia, pa

James E. OdellGeneral Counsel, The AmericasUBs Investment Banknew York, nY

James A. OunsworthManaging Partnerthe sL Consulting groupphiladelphia, pa

Morton A. Piercedewey & LeBoeuf LLpnew York, nY

Martha L. ReesVice President and Assistant General Counsele. I. du pont de nemours & Company, Inc.Wilmington, de

Myron J. ResnickRetired Senior Vice President and Chief Investment Offi cerallstate InsuranceCompanynorthbrook, IL

Peter G. Samuelsproskauer rose LLpnew York, nY

John F. SchmutzChair, 1990–1994Retired Senior Vice President and General Counsele. I. du pont de nemours & Company, Inc.Wilmington, de

Victoria E. SilbeySenior Vice President—Legal and General Counselsungard data systems Inc.Wayne, pa

David M. SilkWachtell, Lipton, rosen & Katznew York, nY

Bruce L. SilversteinYoung Conaway stargatt & taylor, LLp Wilmington, de

A. Gilchrist Sparks IIImorris, nichols, arsht & tunnell LLpWilmington, de

Heidi StamManaging Directorand General CounselvanguardWayne, pa

Hon. Leo E. Strine, Jr.Vice Chancellordelaware Court of ChanceryWilmington, de

Hon. E. Norman VeaseyChief Justice, Supreme Court of Delaware, 1992–2004Weil, gotshal & manges LLpnew York, nY, and Wilmington, de

Marc Weingartenschulte roth & Zabel LLpnew York, nY

Gregory P. Williamsrichards, Layton & Finger, p.a.Wilmington, de

Donald J. Wolfepotter anderson & Corroon LLpWilmington, de

Board of Advisors

1 Lee Holt and Jim Agger

2 Richard Aldridge

3 Marshall Babson

4 Casey Cogut, Dan O’Donnell,

Jack Schmutz

5 Isaac Corré

1 2 3

6 7

9 11

14 15 16 17

8

12

12 Sy Lorne

13 Alan Miller

14 Jim Odell

15 Martha Rees

16 David Silk

17 Bruce Silverstein

18 Gil Sparks

19 Heidi Stam

20 Marc Weingarten

21 Don Wolfe

54

18 19 20

6 Bob Friedman

7 Joe Gatto

8 Perry Golkin

9 Cynthia Kane

10 Roy Katzovicz

11 Paul Levy

21

10 13

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

Message from the Deanfor over twenty years, the institute for law and economics has successfully demonstrated the benefits of a cross- disciplinary perspective. Its programs provIde a model for how to build bridges between disciplines by creating ties between schools, between faculty members, between students, and between experts in the field from around the world. ILe combines penn’s greatest strengths in the Law school, the Wharton school, and the department of economics to focus on complex questions that concern all of these fields. the Institute proves that when you bring the right people—judges, deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more—to convene outside of their own niches, remarkably original insights are generated. as our world grows more complex every day, the topics the Institute addresses are both exciting and relevant. It is no longer enough to approach complicated questions such as the current financial crisis, the role of shareholder activism,

and the enforcement of securities law from solely a legal, economic, or business perspective. Indeed, no significant business issue can be addressed without paying attention to the underlying economic trends and legal regulations. all of ILe’s participants contribute to and benefit from the profound understanding such analysis affords. In addition to its unique focus, another of the Institute’s strengths is the variety of programs it offers. the roundtables—ILe’s signature events—bring together distinguished members of the bar, judiciary, government, business world, and academia for open discussion and intellectual exploration. ILe’s public lectures by leading jurists, executives, and entrepreneurs attract participants from all sectors of the University and from the wider community. during the past year the outstanding talks, panels, and conferences organized by the Institute covered a wide range of topics and programs, from corporate finance and corporate governance to private equity and

hedge funds, as well as large-scale entrepreneurship and management. since my cross-disciplinary vision for the Law school and the purposes of the Institute for Law and economics are so similar, it is personally gratifying to me that the Institute is generously supported by contributors who understand the importance of what we do and the unique position the Institute holds. many of these contributors also serve as members of the Institute’s Board of advisors, helping to plan the direction and focus of the programs and lending their expertise as panelists and commentators for Institute events. ILe’s extraordinary co-chairs, Casey Cogut and Joe Frumkin, have my particular thanks for their many exceptional contributions. Like all who serve as advisors for ILe, Casey and Joe contribute their very valuable time and expertise, in addition to their numerous contacts in the legal and business communities. ILe has benefited substantially from their leadership. I must also thank the three eminent professors who lead the Institute for Law and economics—michael Wachter, 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 past year. With the proper support and sponsorship, the Institute for Law and economics has limitless potential for growth and expansion in the future. We welcome others to join in backing and participating in this extremely worthwhile endeavor.

Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

september 2009

Message from the Co-Directorsthis year’s programs explored some of the most critical issues of the day. 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 shareholders decide to vote their shares. In the spring, as government bailouts left the treasury with equity stakes in private corporations, we took a preliminary look at the “new corporatism” and the role of the government as shareholder. In our spring delaware Chancery program, we examined different forms of shareholder activism and the extent to which labor unions and hedge funds have common interests. over the course of the year, we presented three fascinating Law and entrepreneurship lectures. In the fall, Bill ackman, managing member of pershing square Capital management, spoke to an overflowing audience about investing in a recession. In the spring, Hon. michael nutter, the mayor of philadelphia, spoke on the intersection of education and community, and safra Catz, president of oracle Corporation, gave the audience behind-the-scenes insight into the peoplesoft deal. For our distinguished Jurist lecture, Hon.

randy J. Holland of the delaware supreme Court spoke on “delaware directors’ Fiduciary duties.” at the deal day program, we examined in depth the acquisition of Cnet by CBs. our joint programs with Wharton’s Finance department flourished. the Law and Finance series, a regular part of the Finance workshop schedule, continued with presentations by mark J. roe (david Berg professor of Law, Harvard Law school) and

antoinette schoar (michael m. Koerner associate professor of entrepreneurial Finance, sloan school of management, massachusetts Institute of technology). the fifth annual nYU/penn Law and Finance Conference was held at nYU. the Institute’s greatest strength lies in the quality of our supporters and their active, enthusiastic participation in our programs. our board members and sponsors make our programs possible, both as key participants and with their financial support. We would particularly like to acknowledge our board chairs, Casey Cogut of simpson thacher & Bartlett LLp and Joe Frumkin of sullivan & Cromwell LLp, for their dedicated and enthusiastic work over the past year. We are delighted to have added three new members to the board, and we welcome them: daniel H. Burch (macKenzie partners, Inc.); stuart m. grant (grant & eisenhofer p.a.); and Heidi stam (the vanguard group). We also extend our heartfelt thanks to all of our supporters for bringing your perspective, your ideas, your experience, and your expertise to all that we do. Your participation is necessary to realize the Institute’s purpose and objectives, and it makes our job as Institute directors immensely satisfying and worthwhile.

Jill E. Fisch, Co-Director, Institute for Law and EconomicsPerry Golkin Professor of Law

Edward B. Rock, Co-Director, Institute for Law and EconomicsSaul A. Fox Distinguished Professor of Business Law

Michael L. Wachter, Co-Director, Institute for Law and EconomicsWilliam B. Johnson Professor of Law and Economics

september 2009

institute for law and economics 7 roundtable programs

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.

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.

institute for law and economics 8 roundtable programs institute for law and economics 9 roundtable programs

Off the Record: A Board Discussion of the Financial Crisis26 May 2009

1 2

3

4 5

Eton Park Capital Management, New York City

ModeratorsIsaac d. Corré, Senior Managing Director, Eton Park Capital ManagementJill e. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law Schoolmichael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Introductory Presentations byrichard J. Herring, Jacob Safra Professor of International Banking; Professor of Finance, The Wharton Schooledward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

1 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; Isaac D. Corré, Eton Park Capital Management.

2 G. Daniel O’Donnell, Dechert LLP; Isaac D. Corré, Eton Park Capital Management; Michael L. Wachter, University of Pennsylvania Law School.

3 Perry Golkin, Kohlberg Kravis Roberts & Co.; Gerald Rosenfeld, Rothschild North America; Charles I. Cogut, Simpson Thacher & Bartlett LLP; Jill E. Fisch, University of Pennsylvania Law School; Isaac D. Corré, Eton Park Capital Management; Michael L. Wachter, University of Pennsylvania Law School; Joseph D. Gatto, Barclays; Joseph B. Frumkin, Sullivan & Cromwell LLP; G. Daniel O’Donnell, Dechert LLP; Marcy Engel, Eton Park Capital Management; Robert H. Mundheim, Shearman & Sterling LLP.

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 & Sterling LLP.

Off the Record: A Board Discussion of the Financial Crisis

the off the record program was created as a forum for the ILe Board of advisors and a select group of invitees to candidly discuss the current fi nancial crisis in an informal setting. the presentation by richard Herring provided the context explaining how the crisis came about. edward rock’s presentation detailed several different plans for recovery and suggestions for reform moving forward. the program was hosted at the offi ces of eton park Capital management in new York City.


Corporate Finance8 May 2009

Shareholder Primacy in a Corporatist Political EconomyWilliam W. Bratton, Professor of Law, Georgetown University Law Centermichael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

many look toward enactment of items on shareholder primacy’s law reform agenda to help recovery from the fi nancial crisis. the authors negate that view, arguing that the fi nancial crisis exposes major weakness in the claims of those who favor greater shareholder power. our claim is that shareholder empowerment delivers management a simple and emphatic marching order: manage to maximize the market price of the stock. and that is exactly what the managers of a critical set of fi nancial fi rms did in recent years. they managed to a market that focused on increasing observable earnings and, as it turned out, failed to factor in concomitant increases in risk that went largely unobserved. the fact that management bears primary responsibility for the disastrous results does not by itself effect a policy connection between increased shareholder power and regulatory reform. a policy connection instead turns on a counterfactual question: Whether increased shareholder power would have imported more effective risk management in advance of the crisis. no plausible grounds exist for making such a case.

Big Deal: The Government’s Response to the Financial Crisissteven m. davidoff, Associate Professor of Law, University of Connecticut School of Lawdavid Zaring, Assistant Professor of Legal Studies, The Wharton School

How should we understand the federal government’s response to the fi nancial crisis? the government’s team, largely staffed by investment bankers, pushed the limits of its statutory authority to authorize an ad hoc series of deals designed to mitigate that crisis. It then decided to seek comprehensive legislation that, as it turned out, paved the way for more deals. the result has not been particularly coherent, but it has married transactional practice to administrative law. In fact, we think that regulation by deal provides an organ-izing principle, albeit a loose one, to the government’s response to the fi nancial crisis. dealmakers use contract 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 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 analyze each deal the government concluded, and how it justifi ed those deals within the constraints of the law, using its authority to sometimes stretch but never truly break that law. We consider what the government’s response so far means for transactional and administrative law scholarship, as well as some of the broader implications of crisis governance by deal.

WelcomeMichael a. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

Morning SessionShareholder Primacy in a Corporatist Political EconomyWilliam W. bratton, Professor of Law, Georgetown University Law CenterMichael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

CommentatorsJoseph B. Frumkin, Sullivan & Cromwell LLPmark J. roe, David Berg Professor of Law, Harvard Law School

Big Deal: The Government’s Response to the Financial CrisisSteven M. Davidoff, Associate Professor of Law, University of Connecticut School of LawDavid Zaring, Assistant Professor of Legal Studies, The Wharton School

CommentatorsIsaac d. Corré, Senior Managing Director, Eton Park Capital Managementandrew metrick, Professor of Finance, Yale School of Management

Afternoon SessionPanel on the Government as Shareholder

ModeratorsJill e. Fisch, Perry Golkin Professor of Lawedward B. rock, Saul A. Fox Distinguished Professor of Business Lawmichael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

Panelistsalan Beller, Cleary Gottlieb Steen & Hamilton LLProbert F. Hoyt, Department of the Treasuryrobert H. mundheim, Shearman & Sterling LLProberta romano, Oscar M. Ruebhausen Professor of Law, Yale Law SchoolHon. Leo e. strine, Jr., Vice Chancellor, Delaware Court of ChanceryHeath tarbert, Committee on Capital Markets Regulation

1 2

3 4

5 6

7

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, TIAA-CREF; Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Andrew R. Brownstein, Wachtell, Lipton, Rosen & Katz. Back row: Christopher Foulds, Clerk, Delaware Court of Chancery; Scott Litvinoff, Clerk, Delaware Court of Chancery; Neela Mookerjee, Clerk, Delaware Court of Chancery.

3 Robert L. Friedman, The Blackstone Group L.P.; Alan L. Beller, Cleary Gottlieb Steen & Hamilton LLP; Hon. Leo E. Strine, Jr., Delaware Court of Chancery; Michael L. Wachter, University of Pennsylvania Law School.

4 Robert F. Hoyt, Department of the Treasury.

5 Front row: Heidi Stam, Vanguard; Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; Gerald Rosenfeld, Rothschild North America. Middle row: Eric D. Roiter, Harvard Law School. Back row: Robert T. Miller, Villanova University School of Law; Matthew Rhodes-Kropf, Harvard Business School; Christine T. DiGuglielmo, Weil, Gotshal & Manges LLP.

6 Hon. Jack B. Jacobs, Supreme Court of Delaware.

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.


Are U.S. CEOs Overpaid?steven n. Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

Critics of U.s. corporate governance claim that public company (a) Ceos are overpaid, (b) Ceos are not paid for performance, and (c) boards do a poor job of compensating and monitoring Ceos. In this paper, I argue that the critics are wrong. While corporate 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 by the same forces that have increased income inequality. they have not done better than several simi-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 tenures are lower than they have been since tenures began to be measured in the 1970s; Ceo turnover is more closely tied to stock performance than it has been since turnover began to be studied in the 1970s. Increased transparency for Ceo pay (required by the seC), increased shareholder activism, and the increased prevalence of majority voting in director elections should further reduce any remaining unwise compensation practices. more regulation, such as the proposed “say on pay” bill to mandate a shareholder vote on executive compensation, is likely to impose costs with little additional benefi t.

Rating the Ratings: How Good Are Commercial Governance Ratingsrobert m. daines, Pritzker Professor of Law and Business, Stanford Law SchoolIan d. gow, Stanford University Graduate School of Businessdavid F. Larcker, James Irvin Miller Professor in Finance, Stanford University Graduate School of Business

proxy advisory and corporate governance rating fi rms play an increasingly important role in U.s. public markets. they rank the quality of fi rm corporate governance, advise shareholders how to vote and sometimes press for governance changes. We examine whether these commercially available corporate governance rankings provide useful information for shareholders. our results suggest that they do not. Commercial governance ratings do not predict governance-related outcomes with the precision necessary to support the bold claims made for them. moreover, we fi nd little or no relation between the governance ratings provided by riskmetrics with either their voting recommendations or the actual votes by shareholders on proxy proposals.

Corporate Finance12 DeCeMber 2008

1

2

3

4 5

6


Morning SessionAre U.S. CEOs Overpaid?Steven n. Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

CommentatorsJohn e. Core, Ira A. Lipman Professor and Professor of Accounting, The Wharton Schooldamon silvers, Associate General Counsel, AFL-CIO

Rating the Ratings: How Good Are Commercial Governance Ratingsrobert M. Daines, Pritzker Professor of Law and Business, Stanford Law SchoolIan D. Gow, Stanford University Graduate School of BusinessDavid F. larcker, James Irvin Miller Professor in Finance, Stanford University Graduate School of Business

Commentatorsmartha Carter, Managing Director, Corporate Governance, RiskMetrics Groupandrew metrick, Professor of Finance, Yale School of Management

Afternoon SessionPanel on How Do Institutional Investors Decide to Vote Their Shares? How Should They Decide?

Moderatorsedward B. rock, Saul A. Fox Distinguished Professor of Business Lawmichael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

Panelistsstephen L. Brown, Director of Corporate Governance, TIAA-CREFJill e. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law Schoolpaul g. Haaga, Jr., Executive Vice President, Capital Research and Management Companymichael mcCauley, Senior Corporate Governance Offi cer, Florida State Board of Administrationrobert mcCormick, Chief Policy Offi cer, Glass Lewis & Co, LLCeric d. roiter, Lecturer, Harvard Law School and Boston University School of Law [former General Counsel, Fidelity Management & Research Company]Hon. myron t. steele, Chief Justice, Supreme Court of Delaware

1 Robert E. Spatt, Simpson Thacher & Bartlett LLP; David M. Silk, Wachtell, Lipton, Rosen & Katz.

2 Front row: Robert McCormick, Glass Lewis & Co, LLC; Eric D. Roiter, Harvard Law School. Middle row: Robert M. Daines, Stanford Law School; Damon Silvers, AFL-CIO; Adam C. Pritchard, The University of Michigan Law School. Back row: Wayne R. Guay, The Wharton School.

3 Front row: Joseph B. Frumkin, Sullivan & Cromwell LLP; Michael McCauley, Florida State Board of Administration (SBA); Robert McCormick, Glass Lewis & Co, LLC. Middle row: David F. Larcker, Stanford University Graduate School of Business; Robert M. Daines, Stanford Law School. Back row: Wayne R. Guay, The Wharton School; Aleine Porterfi eld, Clerk, Supreme Court of Delaware.

4 Heidi Stam, Vanguard.

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.


Corporate Finance6 June 2008

Corporate Finance14 DeCeMber 2007

1

2

3 4

5 6

7


Morning SessionHedge Fund Activism in the Enforcement of Bondholder RightsMarcel Kahan, George T. Lowy Professor of Law, New York University School of Lawedward b. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

CommentatorsIsaac d. Corré, Senior Managing Director, Eton Park Capital Managementmichael r. roberts, Assistant Professor of Finance, The Wharton School, University of Pennsylvania

Anti-Bankruptcy: Hedge Fund Activity in Corporate ReorganizationsDouglas G. baird, Harry A. Bigelow Distinguished Service Professor of Law, University of Chicago Law Schoolrobert K. rasmussen, Dean and Carl Mason Franklin Chair in Law, USC Gould School of Law

Saïd Business School, University of Oxford

Opening AddressColin Mayer and Timothy endicott, Deans of Saïd Business School and Faculty of Law, University of Oxford

Morning SessionHedge Fund Activism in EuropeMarco becht, Director, European Corporate Governance Institute; Professor of Finance and Economics, Université Libre de BruxellesJulian Franks, Professor of Finance, London Business SchoolJeremy Grant, Executive Director of the Centre for Corporate Governance, London Business School

CommentatorsJohn H. armour, Lovells Professorship in Law and Finance, Oriel College, University of Oxfordroy Katzovicz, Chief Legal Offi cer, Pershing Square Capital Management, L.P.

Hedge Fund Activism in the Enforcement of Bond CovenantsMarcel Kahan, George T. Lowy Professor of Law, New York University School of Lawedward b. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

CommentatorsHorst eidenmüller, Professor, University of MunichCarolyn Conner, Allen & Overy LLP

Afternoon SessionPanel Discussion on Doing Deals When the Sky Is Falling

ModeratorsJohn H. armour, Lovells Professorship in Law and Finance, Oriel College, University of Oxfordedward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Panelistsdavid s. Blitzer, Senior Managing Director, Private Equity Group, The Blackstone Group International LimitedCharles Crawshay, Assistant Secretary, The Takeover Paneltodd Fisher, Kohlberg Kravis Roberts & Co.Chris Hale, Travers Smithtim Jenkinson, Professor of Finance, Saïd Business School, University of Oxfordstephanie Keen, Lovells LLPsimon Walker, CEO, British Venture Capital Association

CommentatorsBarry e. adler, Charles Seligson Professor of Law, New York University School of Lawpaul s. Levy, Founder, JLL Partners

Afternoon SessionPanel Discussion on How Is the Changing Credit Environment Affecting Private Equity, Hedge Funds, and Strategic Buyers?

Moderatorsedward B. rock, Saul A. Fox Distinguished Professor of Business Lawmichael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School

PanelistsBrendan Connolly, Managing Director/Leveraged Capital Markets, Group Head, UBS Investment Bankrobert L. Friedman, The Blackstone Group L.P.Joseph d. gatto, Vice Chairman and Co-Head of Corporate Finance, Lehman Brothers Inc.perry golkin, Member, Kohlberg Kravis Roberts & Co.andrew metrick, Professor of Finance, Yale School of Managementduncan o’Brien, General Manager, Global Business Development, General Electric Companymarc Weingarten, Schulte Roth & Zabel LLP

1 Front row: Simon Walker, British Venture Capital Association; Todd Fisher, Kohlberg Kravis Roberts & Co. Back row: Joseph B. Frumkin, Sullivan & Cromwell LLP; Jill Fisch, Fordham University School of Law.

2 Front row: Carolyn Conner, Allen & Overy LLP; David Jackson, BP plc. Back row: Joshua Getzler, Faculty of Law, University of Oxford; Wanjiru Njoya, Faculty of Law, University of Oxford.

3 Marco Becht, European Corporate Governance Institute and Université Libre de Bruxelles.

4 David S. Blitzer, The Blackstone Group International Limited; Chris Hale, Travers Smith; Tim Jenkinson, Saïd Business School, University of Oxford.

7 Front row: Charles I. Cogut, Simpson Thacher & Bartlett LLP; Paul S. Levy, JLL Partners. Middle row: Douglas G. Baird, University of Chicago Law School; Robert K. Rasmussen, USC Gould School of Law.

5 Front row: James E. Odell, UBS Investment Bank; J. Gregory Milmoe, Skadden, Arps, Slate, Meagher & Flom LLP. Back row: William W. Lafferty, Morris, Nichols, Arsht & Tunnell LLP; Richard Booth, Villanova University School of Law.

6 Front row: Roberta Romano, Yale Law School; G. Daniel O’Donnell, Dechert LLP. Back row: Yair J. Listokin, Yale Law School; James D. Cox, Duke University School of Law; Edward M. Iacobucci, Faculty of Law, University of Toronto.

panel programsin 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

institute for law and economics 18 panel programs institute for law and economics 19 panel programs

Delaware Chancery Court Program11 February 2009

11 February 2009Shareholder Activism

ModeratorsHon. stephen p. Lamb, Vice Chancellor, Chancery Court of Delawareedward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania

Speakersdaniel pedrotty, Director, Office of Investment, AFL-CIOmarc Weingarten, Schulte Roth & Zabel LLP

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

Hebrew University, Israel

GreetingsProf. yoav Dotan, Dean, Hebrew University Faculty of Law

M&A Deal Protections: A Comparative Moot Court

Moderatorsassaf Hamdani, Hebrew University Faculty of Lawedward B. rock, University of Pennsylvania Law School

PanelistsChief Justice myron t. steele, Delaware Supreme CourtJudge michal agmon-gonen, Tel Aviv District Courttheodore n. mirvis, Wachtell, Lipton, Rosen & KatzIsrael Leshem, Meitar Liquorniq Geva & Leshem Brendwein

Shareholder Activism and Controlling Shareholders

Moderatoredward B. rock, University of Pennsylvania Law School

PanelistsWilliam a. ackman, Managing Member, Pershing Square Capital Management, L.P.Yael andoran, Ceo, Amitim Pension Fundguy Firer, S. Horowitz & Co.didi Lachman-messer, Former Deputy Attorney General, Israel

Bondholders and the Financial Crisis

Moderatorassaf Hamdani, Hebrew University Faculty of Law

Panelistsshirel gutman-amira, Deputy Director and Counsel, Corporation Finance Department, ISAronen Baharav, Herzog, Fox & Neemanadam o. emmerich, Wachtell, Lipton, Rosen & Katzgil oren, Yigal Arnon & Co.

Delaware Chancery Court Program1 Daniel Pedrotty, AFL-CIO.

2 Marc Weingarten, Schulte Roth & Zabel LLP

3 Daniel Pedrotty, AFL-CIO; Marc Weingarten, Schulte Roth & Zabel LLP; Hon. Stephen P. Lamb, Delaware Court of Chancery; Edward B. Rock, University of Pennsylvania Law School.

1

2 3

4

4 Daniel Pedrotty, AFL-CIO; Marc Weingarten, Schulte Roth & Zabel LLP; Hon. Stephen P. Lamb, Delaware Court of Chancery; Edward B. Rock, University of Pennsylva-nia Law School.

11 February 2009Shareholder Activism

this program explored examples of shareholder activism in corporate governance. activist shareholders attempt to put pressure on corporate managers to meet a wide variety of goals. the program particularly focused on shareholder activism as practiced by hedge funds and labor unions, examining the similarities and differences between them. daniel pedrotty from the aFL-CIo talked about the investment strategies that his organization uses and the goals it hopes to achieve. marc Weingarten discussed several cases in which he has represented activist hedge funds in his practice with schulte roth & Zabel LLp.

institute for law and economics 20 panel programs institute for law and economics 21 panel programs

29 October 2008The Recent Acquisition of CNET by CBS

ModeratorsJill e. Fisch, University of Pennsylvania Law Schooledward B. rock, University of Pennsylvania Law Schoolmichael L. Wachter, University of Pennsylvania Law School

Presentersmorton a. pierce, Chairman, Mergers and Acquisitions Group, Dewey & LeBoeuf LLPChang-do gong, Dewey & LeBoeuf LLPmichelle B. rutta, Dewey & LeBoeuf LLP

CommentatorsItay goldstein, Associate Professor of Finance, The Wharton School, University of Pennsylvaniagerald rosenfeld, Deputy Chairman, Rothschild North America

Deal DayFall 2008

25 March 2008Moderatorsvice Chancellor Leo e. strine, Jr., Chancery Court of Delawaremichael L. Wachter, University of Pennsylvania Law School

Panelistsrobert C. Clark, Harvard Law School, Director: TIAA-CREF and Time WarnerCharles m. elson, Weinberg Center for Corporate Governance, University of Delaware, Director: Autozone, Inc. and HealthSouth Corp.v. Janet Hill, Alexander & Associates, Inc., Director: Sprint Nextel and Wendy’ssusan m. stalnecker, E. I. du Pont de Nemours and Company, Director: PPL Corporation

4 March 2008Moderatorsvice Chancellor Leo e. strine, Jr., Chancery Court of Delawaremichael L. Wachter, University of Pennsylvania Law School

Speakersstephen m. Bainbridge, William D. Warren Professor of Law, University of California- Los Angeles School of LawHarvey J. goldschmid, Dwight Professor of Law, Columbia Law School, Securities and Exchange Commission, 2002–2005

Chancery Court Programs

25 march 2008The Independent Director’s Most Important Role?: Selecting, Compensating, Overseeing, and Planning for the Succession of the CEO

this panel discussion featured several well-respected and experienced independent directors. the panelists shared their perspectives on how boards carry out these important functions, how boards should ideally organize themselves to effectively address these responsibilities, and what, if any, public policy changes would better aid independent directors in this vital area.

4 march 2008Say On Pay: A Positive Contribution To Corporate Effectiveness and Accountability 0r An Unprincipled and Costly Incursion Into Director Authority?

In this program, two distinguished academics debated the question of whether and to what extent stockholders should vote on executive compensation. professor goldschmid argued that shareholders should be given advisory votes on executive compensation, while professor Bainbridge took the opposite position. the participants articulated their views on whether increased stockholder voting rights over executive compensation is compatible with the traditional american approach to corporation law and what effects the creation of such a right would have on the authority of boards of directors, and on their behavior. Chancery Court Programs

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

5 Victoria Silbey, SunGard Data Systems, Inc.

Deal Day1 Gerald Rosenfeld, Rothschild North America; Chang-Do Gong, Dewey & LeBoeuf LLP; Morton A. Pierce, Dewey & LeBoeuf LLP; Michelle B. Rutta, Dewey & LeBoeuf LLP; Itay Goldstein, The Wharton School.

2 Itay Goldstein, The Wharton School.

3 Gerald Rosenfeld, Rothschild North America.

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.

1

2

3

4

5

6

29 october 2008The Recent Acquisition of CNET by CBS

For this deal day program, morton pierce and his legal team spoke about their role representing Cnet in its merger with CBs. prior to the merger, Cnet was undergoing a proxy battle with hedge fund Jana partners. mr. pierce and his associates took the audience through the background of the deal and the specifics of the merger process. Itay goldstein from the Wharton school and gerald rosenfeld from rothschild north america provided commentary on the presentation.

institute for law and economics 23 lectures

lecturesthe institute for law and economics presents two series of public lectures: law and entrepreneurship and distinguished 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 24 lectures institute for law and economics 25 lectures

31 march 2009The PeopleSoft DealSafra Catz, President, Oracle Corporation

safra Catz is president of oracle Corporation. In her lecture for ILe, Catz provided an inside look at oracle’s acquisition of peoplesoft and the lessons she learned from that deal. Catz has been a member of oracle’s Board of directors since october 2001. she serves on oracle’s executive management Committee and is responsible for global operations. previously, she served as executive vice president and senior vice president. prior to joining oracle, Catz was at donaldson, Lufkin & Jenrette, a global investment bank that has since merged with Credit suisse First Boston, where she was a managing director from February 1997 to march 1999, and a senior vice president from January 1994 until February 1997. Catz is a graduate of the Wharton school and the University of pennsylvania Law school.

3 march 2009Defining the 21st Century Campus: The Intersection of Education and CommunityHon. Michael nutter, Mayor, City of Philadelphia

In his first public appearance at penn since his election, mayor nutter delivered a noteworthy speech on the importance of education in the scope of his plans for the city. the Hon. michael a. nutter was sworn-in as the 98th mayor of philadelphia on January 7th, 2008. mayor nutter is a native philadelphian with an accomplished career in public service, business and financial administration. He served as a philadelphia City Councilman for nearly 15 years representing the city’s Fourth district. Before pursuing his career in public service, mayor nutter worked as an investment manager at one of the nation’s leading minority-owned investment banking and brokerage firms. mayor nutter is a graduate of the Wharton school of Business.

Law and Entrepreneurship Lecture“ some of the worst mistakes in business could have been avoided if someone had just challenged convention.” —safra catz


17 september 2008Retailers in a Recession: A Fireside Chat on Investing with Bill AckmanWilliam a. ackman, Managing Member, Pershing Square Capital Management, L.P.

Bill ackman is the managing member and portfolio manager of pershing square Capital management, L.p., a concentrated research-intensive fundamental value investor in long and occasionally short investments in the public markets with assets under management of approximately $6 billion. His talk for ILe focused on investment decisions he had made in the past and their outcomes. pershing square has played an active role in creating value at companies including Wendy’s International, mcdonald’s, Ceridian Corporation, and sears Canada. prior to forming pershing square, mr. ackman co-founded gotham partners, L.p., a public and private equity investment partnership. prior to gotham partners, mr. ackman began his career in real estate investment banking at ackman Brothers & singer, Inc. mr. ackman received a Bachelor of arts degree from Harvard College magna cum laude and an mBa from the Harvard Business school.

19 september 2007Tales from Blackstone’s IPOrobert l. Friedman, Senior Managing Director and Chief Legal Officer, The Blackstone Group L.P.

robert L. Friedman is a senior managing director at Blackstone and he also serves as the chief legal officer. His talk for ILe focused on his experiences as part of the team that took Blackstone public on June 22. at that time, Blackstone’s Ipo was the third-largest public offering in history, and the first by a large private equity house. Friedman has been with Blackstone since 1999. He has worked primarily in Blackstone’s private equity group and has also participated in the work of the Corporate and mergers and acquisitions advisory group. since early 2003, he has also been the Chief Legal officer. Before joining Blackstone, mr. Friedman had been a partner with simpson thacher & Bartlett for 25 years, where he was a senior member of that law firm’s mergers and acquisitions practice. at simpson thacher, mr. Friedman advised the Blackstone group since the firm was founded in 1985. Friedman graduated from Columbia College and received a Jd from the University of pennsylvania Law school. He is a member of the Board of advisors for the Institute for Law and economics of the University of pennsylvania, and he served 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 nantucket Land Council, and a trustee of Chess-in-the-schools and new alternatives for Children, two charitable organizations with programs for disadvantaged youth in new York City.

Law and Entrepreneurship Lecture

“ fifty percent of being a successful investor is being a good analyst. the other fifty percent is emotional and psychological. the wharton school can teach you to be a great analyst, but the other half of the picture you can only learn by experience. what do you do when the price of a stock you believe in drops 50% in forty-eight hours?” —william ackman


11 november 2008Delaware Directors’ Fiduciary Duties: The Focus on LoyaltyHon. randy Holland, Justice, Supreme Court of Delaware

the Honorable randy J. Holland presently serves on the delaware supreme Court. He is the youngest person to serve on the delaware supreme Court, having been recommended to the governor by a bipartisan merit selection committee. prior to his appointment and confirmation in 1986, Justice Holland was in private practice as a partner at morris, nichols, arsht & tunnell. In January 1999, he was reappointed and confirmed unanimously for a second twelve- year term. Justice Holland graduated from swarthmore College. He also graduated from the University of pennsylvania Law school, cum laude, where he received an award for legal ethics. Justice Holland received a master of Laws in the Judicial process from the University of virginia Law school.

Distinguished Jurist Lectures

24 october 2007The Future of Securities Regulationbrian G. Cartwright, General Counsel, Securities and Exchange Commission

Brian g. Cartwright currently serves as the general counsel for the securities and exchange Commission. Cartwright began his legal career in 1980 after earning a J.d. from Harvard Law school, where he was president of the Harvard Law Review and winner of the sears prize. He served as a law clerk to Judge malcolm r. Wilkey of the U.s. Court of appeals for the district of Columbia Circuit and to associate Justice sandra day o’Connor of the U.s. supreme Court. Cartwright then joined the law firm of Latham & Watkins in 1982, and became a partner in 1988. among the management positions he held at Latham & Watkins, mr. Cartwright served 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


28 February 2007Law, Legal Risks, and the Financial MarketsIsaac d. Corré, Senior Managing Director, Eton Park Capital Management

29 november 2006Large-Scale Entrepreneur-ship: Business Development at GEpamela daley, Senior Vice Presi-dent for Corporate Business Development, General Electric Company

26 october 2006Managing in the 21st CenturyHenry r. silverman, Chairman & CEO, Realogy Corporation

16 February 2006The Banker as Entrepreneurmichael J. Biondi, Co-Chairman, Investment Banking, Lazard Frères & Co. LLC

11 october 2006The Embattled CorporationHon. richard a. posner, U.S. Seventh Circuit Court of Appeals and University of Chicago Law School

16 march 2006Technology Mergers in a Shrinking WorldHon. vaughn r. Walker, Chief Judge, U.S. District Court for the Northern District of California

3 march 2005Corporate Federalism: Event Horizons in Corporate GovernanceHon. myron t. steele, Chief Justice, Delaware Supreme Court

28 october 2004A Twelve-Year Retrospective on Delaware Corporate Jurisprudence and Governance IssuesHon. e. norman veasey, Chief Justice, Delaware Supreme Court

Past Law and Entrepreneurship Lectures

26 october 2005Founding and Building a New Venture: The Story of the National Women’s Law Centermarcia greenberger, Founder and Co-President, National Women’s Law Center

7 april 2005A Swing of the Pendulum: 20 Years in M&AJoseph d. gatto, Managing Director, Goldman, Sachs & Co.

24 march 2004The WNBA and Women’s Team Sports: A New Sports Marketing Proposition for the New Millenniumval ackerman, President, Women’s National Basketball Association

4 march 2004Corporate Decision-Making in Delaware Courtsthe Honorable Carolyn Berger, Justice, Delaware Supreme Court

27 February 2003The Effects of Collegiality on Judicial Decision Makingthe Honorable Harry t. edwards, Circuit Judge, U.S. Court of Appeals for the D.C. Circuit

29 november 2001Fee Shifting as a Control Against the Rogue Litigantthe Honorable Jack B. Jacobs, Justice, Supreme Court of Delaware

6 march 2001Administering Capital Punishment: Is Texas Different?the Honorable patrick e. Higginbotham, U.S. Court of Appeals for the Fifth Circuit

30 october 2003The Role of Entrepreneurship in Urban Education: Past, Present and FutureJames e. nevels, Chairman and CEO, The Swarthmore Group, Inc.; Chairman, Philadelphia School Reform Commission

6 november 2002Public Trust—and Distrust— in American Business: What Needs to Be Donepeter g. peterson, Chairman, The Blackstone Group; Chairman, Federal Reserve Bank of New York; Co-Chair, Conference Board Commission on Public Trust and Private Enterprise

26 september 2002What They Did Not Teach Me in Law Schoolrobert m. potamkin, Co-Chairman and Co-CEO, Planet Automotive Group, Inc.

24 February 2000The Court of Chancery as Teacher of Corporate Lawthe Honorable William B. Chandler III, Chancellor, Delaware Court of Chancery

11 February 1999Why Do People Bring Employment Discrimination Cases When They Usually Lose?the Honorable diane Wood, U.S. Court of Appeals for the Seventh Circuit

12 February 1998The Value of Predictability in Corporate Lawthe Honorable e. norman veasey, Chief Justice, Delaware Supreme Court

19 april 2002Smart People Making and Losing Money: Some Recent Examplesperry golkin, Kohlberg Kravis Roberts & Co.

25 october 2001The Economics of Sports Team Franchises for CitiesHon. edward g. rendell, Governor, Commonwealth of Pennsylvania

21 February 2001Private Equity: Difficult Investing in a Difficult Timepaul s. Levy, Senior Managing Director, Joseph Littlejohn & Levy

2 march 2000Perspectives on the Health Care RevolutionCharles a. Heimbold, Jr., Chairman and CEO, Bristol-Myers Squibb Company

11 February 1997What Economics of Law Must Address Next: Some Thoughts on Theorythe Honorable guido Calabresi, U.S. Court of Appeals for the Second Circuit

7 February 1996The MTV Constitutionthe Honorable alex Kozinski, U.S. Court of Appeals for the Ninth Circuit

22 march 1995Accountability: Popular Will, Interest Groups, or the Invisible Handthe Honorable stephen F. Williams, U.S. Court of Appeals for the District of Columbia

13 april 1994On the Constitution the Honorable antonin scalia, Associate Justice, U.S. Supreme Court

18 november 1999Ethics in Sports: Deciding the Gameanita deFrantz, vice President, International Olympic Committee; President, Amateur Athletic Foundation

23 october 1997How to Maintain Entrepreneurial Values While Your Company Climbs into the Fortune 500Brian L. roberts, President, Comcast Corporation

27 march 1997The Unique Impact of the Law on the Leveraged Buyout Businesssaul a. Fox, Fox Paine & Company, LLC

14 october 1992Nonprice Competitionthe Honorable douglas H. ginsberg, U.S. Court of Appeals for the District of Columbia

3 december 1991Corporate Takeovers and Our Schizophrenic Conception of the Corporationthe Honorable William t. allen, Chancellor, Delaware Court of Chancery

1990The Constitution and the Spirit of Freedomthe Honorable anthony m. Kennedy, Associate Justice, U.S. Supreme

Past Distinguished Jurist LecturesPast Law and

Entrepreneurship Lectures

1 Isaac D. Corré

2 Pamela Daley

3 Marcia Greenberger

4 Val Ackerman

5 James E. Nevels

6 Joseph D. Gatto

7 Edward G. Rendell

Past Distinguished Jurist Lectures

8 Hon. Myron T. Steele

9 The Honorable Diane Wood

10 The Honorable Carolyn Berger

11 The Honorable William B. Chandler III

12 The Honorable E. Norman Veasey

13 The Honorable Jack B. Jacobs

14 The Honorable Harry T. Edwards

7

8 9

10

1

2 3 4

5 6

11 12

13 14

Academic Eventsmajor one-and two-day symposia are organized under the sole sponsorship of the institute for law and economics, and in cooperation with other organizations.

institute for law and economics 33 academic events

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 34 academic events institute for law and economics 35 academic events

NYU/Penn Conference on Law and Finance27–28 February 2009

Penn/NYU Conference on Law and Finance29 February anD 1 MarCH 2008

New York University School of Law

Jointly sponsored byInstitute for Law and economics University of PennsylvaniaFinancial Institutions Center The Wharton SchoolCenter for Law & Business New York University

Organized byWilliam t. allen, NYU Stern School of Business and NYU School of Law, New York UniversityYakov amihud, Stern School of Business, New York Universitymichael roberts, The Wharton School, University of Pennsylvaniaedward B. rock, University of Pennsylvania Law School

Session IComparing Legal and Alternative Institutions in Finance and CommerceH. Franklin allen, The Wharton School, University of PennsylvaniaJun Qian, Carroll School of Management, Boston College

CommentatorCurtis milhaupt, Columbia University Law School

ModeratorWilliam allen, NYU Stern School of Business and NYU School of Law, New York University

Session IIMotions for Lead Plaintiff in Securities Class Actionsstephen Choi, New York University School of Law

Commentatoralexander dyck, Joseph J. Rotman School of Management, University of Toronto

Moderatoredward B. rock, University of Pennsylvania Law School

Session IIIInternal Governance of Firmsviral v. acharya, London Business Schoolstewart C. myers, Sloan School of Management, MITraghuram rajan, Graduate School of Business, University of Chicago

Commentatoralan schwartz, Yale Law School

Moderatormarcel Kahan, New York University School of Law

Session IVThe Decisions of Corporate Special Litigation Committees: An Empirical Investigationminor myers, Brooklyn Law School

Commentatorsanjai Bhagat, Leeds School of Business, University of Colorado at Boulder

Moderatorgerald rosenfeld, NYU Stern School of Business

Session VThe Market Value of the Vote: A Contingent Claims and One Share-One Vote is Unenforce-able and Sub-optimalavner Kalay, David Eccles School of Business, University of Utahshagun pant, David Eccles School of Business, University of Utah

CommentatorHenry Hu, The University of Texas Law School

Moderatorgerald rosenfeld, NYU Stern School of Business

Session VIThe Returns to Hedge Fund Activismalon Brav, Duke University Graduate SchoolWei Jiang, Columbia Business SchoolFrank partnoy, University of San Diego School of Lawrandall thomas, Vanderbilt University Law School

Commentatorstuart gillan, Rawls College of Business Administration, Texas Tech University

Moderatorrichard Kihlstrom, The Wharton School, University of Pennsylvania

Session VIIRationalizing Appraisal Standards in Compulsory Buyouts

Lawrence Hamermesh, Widener University School of Lawmichael L. Wachter, University of Pennsylvania Law School

Commentatordaniel Wolfenzon, Columbia Business School

Moderatorrichard Kihlstrom, The Wharton School, University of Pennsylvania

Session VIIIDoes Board Classification Matter for Industry Rivals? Evidence of Spillover Effects in the Market for Corporate ControlKose John, NYU Stern School of Businessdalida Kadyrzhanova, Robert H. Smith School of Business, University of Maryland

Commentatoralicia davis evans, University of Michigan Law School

Moderatormichael L. Wachter, University of Pennsylvania Law School

Jointly sponsored byInstitute for Law and economics University of PennsylvaniaFinancial Institutions Center The Wharton SchoolCenter for Law & Business New York University

Organized byYakov amihud, Stern School of Business, New York Universitymarcel Kahan, New York University School of LawH. Franklin allen, The Wharton School, University of Pennsylvaniamichael L. Wachter, University of Pennsylvania Law School

Session IRating the Ratings: How Good Are Commercial Governance Ratings?robert m. daines, Stanford Law SchoolIan gow, Stanford Graduate School of Businessdavid F. Larcker, Stanford Graduate School of Business

Commentatordavid Yermack, Stern School of Business, New York University

ModeratorHon. Leo e. strine, Jr., Delaware Court of Chancery

Session IICreditor Rights and Corporate Risk-Takingviral acharya, London Business SchoolYakov amihud, Stern School of Business, New York UniversityLubomir Litov, Olin School of Business, Washington University in St. Louis

CommentatorKatharina pistor, Columbia Law School

ModeratorHon. Leo e. strine, Jr., Delaware Court of Chancery

Session IIIAttorneys as Arbitratorsstephen Choi, New York University School of LawJill Fisch, Fordham University School of Lawadam pritchard, The University of Michigan Law School

Commentatorantoinette schoar, Sloan School of Management, MIT

ModeratorHon. stephen p. Lamb, Delaware Court of Chancery

Session IVBlockholders, Market Efficiency, and Managerial Myopiaalex edmans, The Wharton School, University of Pennsylvania

Commentatoralan schwartz, Yale Law School


Session VHedge Fund Activism in the Enforcement of Bondholder Rightsmarcel Kahan, New York University School of Lawedward B. rock, University of Pennsylvania Law School

CommentatorWei Jiang, Columbia Business School


Session VIWall Street and Main Street: What Contributes to the Rise in the Highest Incomes?steven n. Kaplan, The University of Chicago Graduate School of BusinessJoshua rauh, The University of Chicago Graduate School of Business

Commentatordavid I. Walker, Boston University School of Law

Moderatorrichard e. Kihlstrom, The Wharton School, University of Pennsylvania

Session VIIValue Destruction in the New Era of Chapter 11Barry e. adler, New York University School of Lawvedran Capkun, HEC School of ManagementLawrence a. Weiss, McDonough School of Business, Georgetown University

CommentatorJulian Franks, London Business School


Session VIIIDifferences in Governance Practices between U.S. and Foreign Firms: Measurements, Causes, and Consequences reena aggerwal, McDonough School of Business, Georgetown UniversityIsil erel, Fisher College of Business, The Ohio State Universityrené stulz, Fisher College of Business, The Ohio State Universityrohan Williamson, McDonough School of Business, Georgetown University

Commentatoredward m. Iacobucci, Faculty of Law, University of Toronto


University of Pennsylvania Law School

NYU/PENN 091 Jennifer H. Arlen, New York University School of Law.

2 Raghuram G. Rajan, International Monetary Fund.

3 Marcel Kahan, New York University School of Law.

4 Alicia Davis Evans, The University of Michigan Law School.

PENN/NYU 086 Gerald Rosenfeld, Rothschild North America, and Robert H. Mundheim, University of Pennsylvania and Shearman & Sterling.

7 Katharina Pistor, Columbia Law School, and Michal Barzuza, University of Virginia School of Law.

8 Andrew Metrick, Yale School of Management.

9 Alex Edmans, The Wharton School, University of Pennsylvania.

1

2

3 4

6

8 9

5

7

5 H. Franklin Allen, The Wharton School.


ILE/Wharton Finance Seminars

2 april 2009CEO Careers and Styleantoinette Schoar, Michael M. Koerner Associate Professor of Entrepreneurial Finance, Sloan School of Management, MIT

prof. schoar examines how early career experiences affect the career path and promotion of managers as well as the managerial style that they develop when becoming Ceo. she differentiates between exogenous shocks to managers’ careers such as the business cycle at starting date and endogenous choices of individuals such as the industry, type and size of firm that someone starts in. she shows that the economic conditions at the beginning of a manager’s career have lasting effects on the career path and the ultimate outcome as a Ceo. Ceos who start in recessions tend to take longer time to become Ceo, are more likely to rise through the ranks within a given firm rather than moving across firms and industries and ultimately end up as Ceos in smaller firms. moreover, managers who start in recessions have more conservative management styles once they become Ceos. these managers have less leverage in the firm where they are Ceos, rely more on internal investments rather than acquisitions, have lower sg&a and higher roa.

25 september 2008Public and Private Enforcement of Securities Law: Resource-Based Evidence (co-authored with Howell E. Jackson)Mark J. roe, David Berg Professor of Law, Harvard Law School

recent work in finance concludes that financial market development is facilitated by private enforcement of investor protection—primarily via disclosure and private lawsuits—but not by public enforcement of regulatory rules, or even criminal penalties. In contrast to prior work, which used formal enforcement powers to measure public enforcement strength, we use new measures based on securities regulators’ real resources—their staffing levels and budgets. these resource-based measures of public enforcement are significantly associated with standard measures of stock market development (stock market capitalization, trading volume, the number of domestic firms, and the number of Ipos), with more intense public enforcement regularly and significantly correlating with more robust financial outcomes. In horse races between our measures of public enforcement and the most common measures of private enforcement, public enforcement 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.

Co-Sponsored byInstitute for Law and economics and department of Finance, the Wharton school 2 april 2009CEO Careers and Styleantoinette schoar, Michael M. Koerner Associate Professor of Entrepreneurial Finance, Sloan School of Management, MIT

Commentatorsphilip Bond, Wharton FinanceJill Fisch, Penn LawLucian taylor, Wharton Financemichael Wachter, Penn Law

25 september 2008Public and Private Enforcement of Securities Law: Resource-Based Evidence (co-authored with Howell E. Jackson)mark J. roe, David Berg Professor of Law, Harvard Law School

Commentatorsdavid abrams, Penn Lawgustav sigurdsson, Wharton FinanceJoel Friedlander, Bouchard Margules & FriedlanderLucian taylor, Wharton Financemark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP


27 march 2008Where Do Firms Incorporate: Deregulation and the Cost of Entry (co-authored with Marco Becht and Hannes F. Wagner)Colin mayer, Peter Moores Dean of the Saïd Business School and Peter Moores Professor of Management Studies, University of Oxford

8 november 2007Identifying the Effect of Board Structure on Firm Value: Event Study, DiD, Firm Fixed Effects, and IV Evidence from Korea (co-authored with Woochan Kim)Bernard s. Black, Hayden W. Head Regents Chair for Faculty Excellence, The University of Texas at Austin School of Law

Commentatorsassaf Hamdani, Penn Law (visiting)Jonathan Klick, Penn Law (visiting)andrew metrick, Wharton Financedavid K. musto, Wharton Finance

22 march 2007Law and the Market: The Impact of EnforcementJohn C. Coffee, Jr., Adolf A. Berle Professor of Law, Columbia University School of Law

Commentatorsphilip Bond, Wharton FinanceJill Fisch, Penn Law (visiting)Wayne r. guay, Wharton Financetobias B. Wolff, Penn Law

30 november 2006Who Blows the Whistle on Corporate Fraud? (co-authored with Alexander Dyck and Adair Morse)Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

Commentatorsaditi Bagchi, Penn LawJohn e. Core, Wharton Financeandrew metrick, Wharton Financeedward B. rock, Penn Law

Past ILE/Wharton Finance Seminars

6 april 2006The States as Laboratory: Legal Innovation and State Competition for Corporate Chartersroberta romano, Allen Duffy/Class of 1960 Professor of Law, Yale University Law School

Commentatorsrichard e. Kihlstrom, Wharton Financeandrew metrick, Wharton FinanceChris W. sanchirico, Penn LawBruce L. silverstein, Young Conaway Stargatt & Taylor, LLP

20 october 2005Creating Constituencies for Reformraghuram g. rajan, Economic Counsellor and Director, Research International Monetary Fund

CommentatorsWilliam W. Burke-White, Penn Lawrobert p. Inman, Wharton FinanceJason scott Johnston, Penn LawBilge Yilmaz, Wharton Finance

31 march 2005What Matters in Corporate Governance?Lucian arye Bebchuk, Harvard Law School

CommentatorsHulya eraslan, Wharton Financeandrew metrick, Wharton Financeedward B. rock, Penn Lawdavid a. skeel, Penn Law

11 november 2004Venture Capital Investment Cycles: The Role of Experience and Specializationpaul a. gompers, Graduate School of Business Administration, Harvard University

Commentatorsrafi amit, Wharton Financesean griffith, Penn Law (visiting)richard Kihlstrom, Wharton Financepolk Wagner, Penn Law

21 april 2004The State of U.S. Corporate Governance: What’s Right and What’s Wrongsteven Kaplan, Graduate School of Business, University of Chicago

CommentatorsFranklin allen, Wharton Financeandrew metrick, Wharton FinanceKatharina pistor, Penn Law (visiting)

9 october 2003Understanding Material Adverse Change Clauses: Moral Hazard in Acquisitions (co-authored with Alan Schwartz)ronald J. gilson, Columbia Law School and Stanford Law School

CommentatorsFranklin allen, Wharton FinanceKristin madison, Penn Lawandy postlewaite, Penn Economics

31 october 2002Law and Finance: The Practice of Justiceandrei shleifer, Harvard University

Commentatorsrichard e. Kihlstrom, Wharton Financemichael s. Knoll, Penn LawJason scott Johnston, Penn Lawandrew metrick, Wharton Finance


Matthew D. Adler, Leon Meltzer Professor of Law

Bounded rationality and Legal scholarship, in Theoretical Foundations of Law and Economics, 2009.

Happiness research and Cost- Benefit analysis (with eric posner), Journal of Legal Studies, 2008.

risk equity: a new proposal, Harvard Environmental Law Review, 2008.

Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School

mark-to-market accounting and Liquidity pricing (with e. Carletti), Journal of Accounting and Economics, forthcoming.

Understanding Financial Crises (with d. gale), oxford University press, 2007.

Beauty Contests, Bubbles and Iterated expectations in asset prices (with s. morris and H. shin), Review of Financial Studies, 2006.

Aditi Bagchi, Assistant Professor of Law

Contract versus promise, Working paper.

the myth of equality in the employment relation, Working paper.

distributive Injustice and private Law, Hastings Law Journal, 2008.

Publications and Papers

Listed below is a sampling of recently published papers and work in progress by members of the associate Faculty of the Institute for Law and economics. ILe maintains a series of research papers and provides copies—electronic or paper—to interested parties upon request to [email protected]. the Institute is a member of the Legal scholarship network (Lsn), a subset of the social science research network. Current ILe research papers are posted in the University of pennsylvania Law and economics research paper series on the Lsn Web site. abstracts as well as complete papers can be downloaded (www.ssrn.com/link/penn-lawecon. html). Faculty appointments are in the University of pennsylvania Law school unless otherwise noted.

Howard F. Chang, Earle Hepburn Professor of Law

Immigration restriction as redistributive taxation: Working Women and the Costs of protectionism in the Labor market, Journal of Law, Economics and Policy, forthcoming.

guest Workers and Justice in a second-Best World, University of Dayton Law Review, 2008.

the disadvantages of Immigration restriction as a policy to Improve Income distribution, SMU Law Review, 2008.

Cary Coglianese, Associate Dean for Academic Affairs, Edward B. Shils Professor of Law and Professor of Political Science

environmental Leadership programs: toward an empirical assessment of their perfor-mance, Ecology Law Quarterly (with Jonathan Borck & Jennifer nash), 2009.

evaluating the social effects of environmental Leadership programs, Environmental Law Reporter (with Jonathan Borck & Jennifer nash), 2008.

the managerial turn in environmental protection, New York University Environmental Law Journal, 2008.

John E. Core, Ira A. Lipman Professor of Accounting, The Wharton School

are Firms Under-Leveraged? evidence from Improved estimates of marginal tax rates (with J. Blouin and W. guay), Working paper.

Can differences in U.s. and U.K. Ceo pay Be explained by differences in equity Incentives? (with W. guay and m. Conyon), Working paper.

agency problems of excess endowments in not-for-profit Firms (with W. guay and r.verdi), Journal of Accounting and Economics, 2006.

Jill Fisch, Perry Golkin Professor of Law; Co-Director, Institute for Law and Economics

director elections and the role of proxy advisors (with stephen Choi and marcel Kahan), forthcoming 2009.

attorneys as arbitrators (with stephen Choi and a.C. pritchard), forthcoming 2009.

Cause for Concern: Causation and Federal securities Fraud, Iowa Law Review, 2009.

Lawrence A. Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law

Loyalty’s Core demand: the defining role of good Faith in Corporate Law (with Leo strine, Jr., r. Franklin Balotti & Jeffrey gorris), forthcoming.

rationalizing appraisal standards in Compulsory Buyouts (with michael Wachter), Boston College Law Review, forthcoming 2009.

the short and puzzling Life of the “Implicit minority discount” in delaware appraisal Law (with michael Wachter), University of Pennsylvania Law Review, 2007.

Robert P. Inman, Richard King Mellon Professor of Finance; Profes-sor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School

How should suburbs Help their Central Cities? growth and Welfare enhancing Intra-metro-politan Fiscal distributions, Annals of the American Academy of Political and Social Sciences, forthcoming 2009.

Making Cities Work: Prospects and Policies for Urban America, princeton University press, 2009.

the Flypaper effect, The New Palgrave Dictionary of Economics, 2009.

Jason Scott Johnston, Robert G. Fuller Jr. Professor of Law and Director, Program on Law, the Environment and the Economy

problems of equity and efficiency in the design of International greenhouse gas Cap and trade schemes, Harvard Environmental Law Review, 2009.

Climate Change Confusion and the supreme Court: the misguided regulation of greenhouse gas emissions under the Clean air act, Notre Dame Law Review, 2008.

tradable pollution permits and the regulatory game, in Moving to Markets in Environmental Regulation: Lessons from Twenty Years of Experience, oxford University press, 2007.

Michael S. Knoll, Theodore K. Warner Professor of Law, Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy

the taxation of private equity Carried Interests: estimating the revenue effects of taxing profit Interests as ordinary Income, William & Mary Law Review, 2008.

the ancient roots of modern Financial Innovation: the early History of regulatory arbitrage, Oregon Law Review, 2008.

the UBIt: Leveling an Uneven playing Field or tilting a Level one, Fordham Law Review, 2007.

Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law

Medien, Menschenrechte und Demokratie (Media, Human Rights, and Democracy), forthcoming.

recht und sozialwissen-schaften—Herausforderungen und Chancen der verhalten-sökonomie (Law and social sciences—the Challenge and the promise of Behavioral economics) (with dorothea Kubler), Kritische Vierteljahress-chrift für Gesetzgebung und Rechtswissenschaft, 2007.

Gesellschaftsrecht (comprehen-sive treatise of german corporate law) (with Hans-dieter assmann), 2006.

Peter D. Linneman, Albert Sussman Professor of Real Estate, Finance, and Public Policy, The Wharton School

Is this the Worst ever Yet?, Wharton Real Estate Review, spring 2009.

realizing the value of Corporate real estate management (with Hartmann, s., pfnür, a., siperstein, B.), Wharton Real Estate Review, spring 2009.

Is this the Worst ever? (with John Williams), Wharton Real Estate Review, Fall 2008.

Kristin Madison, Professor of Law

Quality regulation in the Information age: Challenges for medical professionalism (with mark Hall), in Medical Professionalism in the New Information Age, forthcoming 2009.

the Law and policy of Health Care Quality reporting, Campbell Law Review, forthcoming 2009.

Hospital mergers in an era of Quality Improvement, Houston Journal of Health Law and Policy, 2007.

George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences

Common Learning (with martin W. Cripps, Jeffrey C. ely, and Larry samuelson), Econometrica, July 2008.


purification in the Infinitely-repeated prisoners’ dilemma (with v. Bhaskar and stephen morris), Review of Economic Dynamics, July 2008.

does Competitive pricing Cause market Breakdown Under extreme adverse selection? (with georg nöldeke), Journal of Economic Theory, may 2008.

Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law

Core Issues Under the UNIDROIT [Draft] Convention on Intermedi-ated Securities: Views From the United States and Japan, Hart publishing, forthcoming 2009.

Law and systems for Intermediated securities and the relationship of private property Law to securities Clearance and settlement: United states, Japan, and the UnIdroIt draft Convention, Institute for Monetary and Economic Studies, 2008.

Introductory note to Convention on the Law applicable to Certain rights in respect of securities Held with an Intermediary, International Legal Materials, 2007.

David K. Musto, Ronald O. Perelman Associate Professor of Finance, The Wharton School

predatory mortgage Lending (with philip Bond and Bilge Yilmaz), Journal of Financial Economics, forthcoming.

vote trading and Information aggregation (with susan Christoffersen, Chris geczy, and adam reed), Journal of Finance, 2007.

a portfolio view of Consumer Credit (with nicholas souleles), Journal of Monetary Economics, 2006.

Gideon Parchomovsky, Professor of Law

Bribes v. Bombs: a study in Coasean Warfare (with peter siegelman), International Review of Law and Economics, forthcoming 2009.

Law and the Boundaries of technology Intensive Firms (with oren Bar gill), University of Pennsylvania Law Review, forthcoming 2009.

reconceptualizing trespass (with alex stein), Northwestern University Law Review, forthcoming 2009.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School

political reputations and Campaign promises (with e. aragones and t. palfrey), Journal of the European Economic Association, 2007.

Courts of Law and Unforeseen Contingencies (with L. anderlini and L. Felli), Journal of Law, Economics and Organization, 2007.

social assets (with g. mailath), International Economic Review, 2006.

Edward B. Rock., Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics

the Hanging Chads of Corporate voting (with marcel Kahan), Georgetown Law Journal, 2008.

Corporate taxation and International Charter Competition (with mitchell Kane), Michigan Law Review, 2008.

Hedge Funds in Corporate governance and Corporate Control (with marcel Kahan), University of Pennsylvania Law Review, 2007.

Chris W. Sanchirico, Professor of Law, Professor of Business and Public Policy, The Wharton School

a Critical Look at the economic argument for taxing only Labor Income, University of pennsylvania Institute for Law and economics research paper series, 2009.

progressivity and potential Income: measuring the effect of Changing Work patterns on Income tax progressivity, Columbia Law Review, 2008.

the tax advantage to paying private equity Fund managers with profit shares: What is it? Why is it Bad? University of Chicago Law Review, 2008.

Reed Shuldiner, Alvin Snowiss Professor of Law

Comment on “does the United states tax Capital Income,” in Taxing Capital Income, Brookings Institution and Urban Institute, 2007.

Taxation of Risky Investments, 2005.

David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law

governance in the ruins, Harvard Law Review, 2008 (essay review of Curtis milhaupt & Katharina pistor, Law and Capitalism).

Who makes the rules for Hostile takeovers, and Why? the peculiar divergence of Us and UK takeover regulation (with John armour), Georgetown Law Journal, 2007.

the promise and perils of Credit derivatives (with Frank partnoy), University of Cincinnati Law Review, 2007.

Michael L. Wachter, William B. Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

rationalizing appraisal standards in Compulsory Buyouts (with Lawrence a. Hamermesh), Boston College Law Review, forthcoming 2009.

shareholder primacy’s Corporatist origins: adolf Berle and the modern Corporation (with William W. Bratton), Journal of Corporate Law, forthcoming 2008.

the short and puzzling Life of the “Implicit minority discount” in delaware appraisal Law (with Lawrence a. Hamermesh), University of Pennsylvania Law Review, 2007.

Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research

system risk and market Institutions (with andrey pavlov), Yale Journal on Regulation, forthcoming 2009.

systemic risk through securitization: the result of deregulation and regulatory Failure (with patricia mcCoy and andrey pavlov), Connecticut Law Review, forthcoming 2009.

state and Local anti-predatory Lending Laws: the effect of Legal enforcement mechanisms (with raphael W. Bostic, Kathleen C. engel, patricia a. mcCoy, and anthony n. pennington-Cross), Journal of Economics and Business, 2008.

Amy Wax, Robert Mundheim Professor of Law

Race, Wrongs, and Remedies: Group Justice in the 21st Century, Hoover Institution press/rowman and Littlefield, may 2009.

stereotype threat: a Case of overclaim syndrome?, in Stereotype Threat and Unconscious Bias: The State of the Research, american enterprise Institute, 2009. the Family Law doctrine of equivalence, Michigan Law Review, 2009.

Associate Faculty

institute for law and economics 41 associate faculty

1 Matthew Adler

2 Aditi Bagchi

3 Richard E. Kihlstrom

4 Howard F. Chang

5 Cary Coglianese

6 Robert W. Holthausen

7 Richard J. Herring

8 John Core

9 Charles W. Mooney, Jr.

10 Jason S. Johnston

11 Michael S. Knoll

12 Friedrich K. Kübler

13 Kristin Madison

14 Franklin Allen

15 Gideon Parchomovsky

16 David K. Musto

17 Andrew Postlewaite

18 Susan M. Wachter

19 Chris W. Sanchirico

20 Reed Shuldiner

21 David A. Skeel, Jr.

22 Amy L. Wax

31 2 4

5

8

6 7

9 10 11

12 13 14 15

16 1817 19

21 2220

institute for law and economics 42 associate faculty institute for law and economics 43 associate faculty

Matthew D. Adler, Leon Meltzer Professor of Law

professor adler is a graduate of Yale College, st. antony’s College of oxford University, and the Yale Law school. prior to teaching at penn, he worked as a law clerk for Judge Harry edwards, U.s. Court of appeals for the d.C. Circuit, and for Justice sandra day o’Connor, U.s. supreme Court, and practiced law at paul, Weiss, rifkind, Wharton & garrison in new York City. at the penn Law school, professor adler teaches administrative law, constitutional law, and regulation. His current research focuses on policy analysis and on risk regulation.

Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School

Franklin allen is the nippon Life professor of Finance and professor of economics at the Wharton school of the University of pennsyl-vania. He has been on the faculty since 1980. He is currently Co-director of the Wharton Financial Institutions Center. He was formerly vice dean and director of Wharton doctoral programs and executive editor of the Review of Financial Studies, one of the leading academic finance journals. He is a past president of the american Finance association, the Western Finance association, the society of Financial studies, and the Financial Intermediation research society. He received his doctorate from oxford University. dr. allen’s main areas of interest are corporate finance, asset pricing, comparative financial systems, and financial crises. He is a co-author with richard Brealey and stewart myers of the eighth and ninth editions of the textbook Principles of Corporate Finance.

Aditi Bagchi, assistant Professor of Law

professor Bagchi received a J.d. from Yale Law school in 2003 and a m.sc. in economic and social history from oxford University in 2000. she clerked for United states Court of appeals Judge Julio Fuentes and practiced law with Cravath, swaine & moore LLp in new York. she joined the penn Law faculty in 2006 and currently teaches contracts and labor law. Her areas of research include normative theories of private law and comparative political economy.

Elizabeth Bailey, John C. Hower Professor of Business and Public Policy, The Wharton School

professor Bailey received her ph.d. in economics from princeton University in 1972. From 1983 until 1990, professor Bailey served as dean of the graduate school of Industrial administration at Carnegie mellon University. she joined the Wharton faculty in 1991 where she served as Chair, department of Business and public policy from 1997 to 2005. she served as head of the economics research department and member of the technical staff at Bell Laboratories between 1960 and 1977 and was commissioner and vice-chairman of the Civil aeroneutics Board from 1977 until 1983. she has served on the boards of many

Associate Faculty

organizations, including princeton University, Brookings Institu-tion, standard oil (ohio), Honeywell and CsX. she currently serves on the boards of altria group, Inc., tIaa/CreF, and the national Bureau of economic research. Her research interests concern public policies that affect business, particularly those involving regulation, deregulation, and corporate governance.

Howard F. Chang, Earle Hepburn Professor of Law

professor Chang received a ph.d. in economics from the massa-chusetts Institute of technology in 1992, a J.d. from Harvard Law school in 1987, a master in public affairs from princeton University in 1985, and an a.B. from Harvard College in 1982. prior to joining the penn faculty in 1999, he was a professor of Law at the University of southern California Law school, where he began teaching in 1992. He was a visiting professor of Law at stanford Law school in 1998, at Harvard Law school and at the new York University school of Law in 2001, at the University of michigan Law school in 2002, and at the University of Chicago Law school in 2007, and a visiting associate professor of Law at the georgetown University Law Center from 1996 to 1997. He served as a law clerk for the Honorable ruth Bader ginsburg on the U.s. Court of appeals for the d.C. Circuit from 1988 to1989. He served on the Board of directors of the american Law and economics association from 2004 to 2007. He has written on a wide variety of subjects including environmental protection, international trade, immigration, intellectual property, and the economics of litigation and settlement.

Cary Coglianese, Associate Dean for Academic Affairs, Edward B. Shils Professor of Law and Professor of Political Science

Cary Coglianese is the associate dean for academic affairs and the edward B. shils professor of Law at the University of pennsyl-vania Law school, as well as professor of political science and the director of the penn program on regulation. Coglianese is the founder of the Law & society association’s international collaborative research network on regulatory governance, a council member of the american Bar association’s section on administrative Law and regulatory practice, and a fellow of the american Bar Foundation. He is also a founder of the peer- reviewed journal Regulation & Governance, for which he now serves on the editorial board. Coglianese received his J.d., m.p.p., and ph.d. in political science from the University of michigan, and for twelve years served on the faculty of the John F. Kennedy school of government at Harvard University. He has also been a visiting professor of law at stanford University and vanderbilt University and an affiliated scholar at the Harvard Law school.

John E. Core, Ira A. Lipman Professor of Accounting, The Wharton School

John Core joined the Wharton school in 1996. He has a B.a. from Yale University and a ph.d. from the Wharton school. He has worked as an investment banker for paineWebber, as a compensa-tion consultant for ernst & Young, and as an assistant professor at mIt sloan school of management. He is an associate editor of the Journal of Accounting and Economics, and serves on the editorial board of the Journal of Accounting Research. He served as an editor of The Accounting Review from 2005 to 2008. His primary research interest is executive compensation and executive stock and option incentives, and he has also published work in the areas of corporate governance, equity valuation, and corporate disclosure.

Patricia M. Danzon, Celia Z. Moh Professor of Health Care Systems, Insurance and Risk Management, The Wharton School

professor danzon received her ph.d. in economics from the University of Chicago in 1973 and joined the penn faculty from duke University in 1985. she is a member of the Institute of medicine and the national academy of social Insurance, and she has served as a consultant to many private and public institutions in the U.s. and worldwide. professor danzon’s research interests are in health care, pharmaceuticals, insurance, law, and economics. she has published widely in scholarly journals on a broad range of subjects related to medical care, pharmaceuticals, insurance, and the economics of law.

Michael A. Fitts, Dean of the Law School and Bernard G. Segal Professor of Law

michael a. Fitts was named dean of the Law school in march 2000. Before joining the penn Law faculty in 1985, dean Fitts served as clerk to the Honorable a. Leon Higginbotham, Jr., U.s. Court of appeals for the third Circuit, and as attorney advisor in the office of Legal Counsel in the U.s. department of Justice. at penn he was appointed associate professor of Law in 1990, professor of Law in 1992 and robert g. Fuller, Jr. professor of Law in 1996. From 1996 to 1998 he served as associate dean for academic affairs at the Law school and was active in establishing a variety of joint programs with other schools within the University. In 1999 he served as visiting professor in political science at swarthmore College. dean Fitts’ current research focuses on the effect of various structural changes (e.g., stronger political parties, presidents or centralized legal institutions) on government budgeting and legislation. He has authored numerous law review and political science articles in this area, several co-authored with political scientists.

Jill Fisch, Perry Golkin Professor of Law; Co-Director, Institute for Law and Economics

professor Fisch received her J.d. from Yale Law school in 1985. Before joining the penn faculty in 2008, she held the t.J. maloney Chair in Business Law at Fordham Law school and served as founding director of the Fordham Corporate Law Center. she has also been a visiting professor at Harvard Law school, Columbia Law school and georgetown University Law Center. prior to entering academia, professor Fisch practiced law with the United states department of Justice and the new York office of Cleary, gottlieb, steen and Hamilton. Her research focuses on corporate governance, business litigation, and securities regulation.

Lawrence Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law

professor Hamermesh received a B.a. from Haverford College in 1973, and a J.d. from Yale Law school in 1976. professor Hamer-mesh practiced law with morris, nichols, arsht & tunnell, Wilmington, delaware, as an associate from 1976–84, and as a partner from 1985–94. professor Hamermesh joined the faculty at Widener in 1994, and teaches and writes in the areas of corporate finance, mergers and acquisitions, securities regulation, business organizations, and professional responsibility. since 1995, professor Hamermesh has been a member of the Council of the Corporation Law section of the delaware state Bar association, which is responsible for the annual review and modernization of the delaware general Corporation Law, and served as Chair of the Council from 2002 to 2004. In 2002 and 2003 he also served as the reporter for the american Bar association’s task Force on Corporate responsibility. He served from 2001 to 2007 as a member of the Committee on Corporate Laws of the american Bar association section of Business Law, which supervises the drafting of the model Business Corporation act. In 2007 professor Hamermesh was appointed as Chair of the section of Business Law’s Committee on Corporate documents and process. In 1999 professor Hamermesh was elected as a member of the american Law Institute. professor Hamermesh is also a member of the Board of directors of aCLU delaware, Inc.

Richard J. Herring, Jacob Safra Professor of International Banking, Professor of Finance, The Wharton School; Co-Director, Wharton Financial Institutions Center

richard J. Herring is Jacob safra professor of International Banking and professor of Finance at the Wharton school, University of pennsylvania, where he is also founding director of the Wharton Financial Institutions Center, one of Wharton’s largest research centers. From 2000 to 2006, he served as the director of the Lauder Institute of International management studies and from 1995 to 2000, he served as vice dean and director of Wharton’s Undergraduate division. during 2006, he was a professorial Fellow at the reserve Bank of new Zealand and victoria University.


He is the author of more than 100 articles, monographs and books on various topics in financial regulation, international banking, and international finance. at various times his research has been funded by grants from the national science Foundation, the Ford Foundation, the Brookings Institution, the sloan Foundation, and the Council on Foreign relations. outside the university, he is co-chair of the Us shadow Financial regulatory Committee and executive director of the Financial economist’s roundtable, the advisory Board of the european Banking report in rome, and the Institute for Financial studies in Frankfurt. He served as co-chair of the multinational Banking seminar from 1992–2004 and was a Fellow of the World economic Forum in davos from 1992–95. He was a member of the group of 30 task force on the reinsurance industry, as well as an earlier study group on international supervision and regulation. Currently, he is an independent director of the dWs scudder mutual fund complex and has served on the predecessor deutsche asset management and Bankers trust boards since 1990. He is also an independent director of the daiwa closed end funds. Herring received his undergraduate degree from oberlin College in 1968 and his phd from princeton University in 1973. He has been a member of the Finance department since 1972. He is married, with two children, and lives in Bryn mawr, pennsylvania.

Robert W. Holthausen, The Nomura Securities Company Professor, Professor of Accounting and Finance and Management, and Chairman, Accounting Department, The Wharton School

professor Holthausen earned his doctorate and his m.B.a. at the University of rochester. prior to his academic career, he was a C.p.a. He worked at price Waterhouse and was also a financial analyst with mobil. He was on the accounting and finance faculty at the graduate school of Business of the University of Chicago for ten years, joining the penn faculty in 1989. during the 2001– 2002 academic year, he was a visiting professor at Harvard Business school. since 1998 he has served as the academic director of Wharton’s mergers and acquisitions program. professor Holthausen’s research interests include the effects of management compensation and governance structures on firm performance, the effects of information on volume and prices, corporate restructuring and valuation, the effects of large block sales on common stock prices, and numerous other topics. He is widely published in both finance and accounting journals and is currently an editor of the Journal of Accounting and Economics. His most recent work is entitled “accounting standards, Financial reporting outcomes and enforcement” and appears in the Journal of Accounting Research (may, 2009, pp. 447-458) as part of the Conference on the regulation of securities markets: perspectives from accounting, Law and Financial economics.

Robert P. Inman, Richard King Mellon Professor of Finance, Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School

professor Inman received his ph.d. in economics from Harvard University and joined the penn faculty in 1972. He is a research associate of the national Bureau of economic research. He has served as a consultant to the city of philadelphia, the state of pennsylvania, Citigroup, Chemical Bank, the U.s. department of the treasury, the Financial and Fiscal Commission of the republic of south africa, the national Bank of sri Lanka, the national academy of sciences, and numerous U.s. federal government agencies. His research is currently focused on fiscal federalism, the urban fiscal crisis, and the political and legal institutions of fiscal policymaking. professor Inman held the Florence Chair in economics at the european University Institute, Florence, Italy, for the spring quarter of 2000. He was a visiting scholar at the rockefeller Foundation’s Bellagio study Center, Fall 2007.

Jason Scott Johnston, Robert G. Fuller Jr. Professor of Law and Director, Program on Law, Environment and Economy

after graduating summa cum laude from dartmouth College, professor Johnston obtained both his J.d. and ph.d. in economics from the University of michigan, where he was an alcoa Fellow in Law and economics and was elected to order of the Coif. He served as law clerk for United states Court of appeals Judge gilbert merritt, was a postdoctoral civil liability fellow at Yale Law school, and in 1995 came to the University of pennsylvania Law school from vanderbilt University Law school. at penn Law, Johnston is the robert g. Fuller Jr. professor of public Law and the founding director of the program on Law, environment and economy. professor Johnston’s research includes both theoretical and empirical projects exploring various aspects of natural resource and environmental law and policy, as well as more general studies of legal rights and entitlements. He is currently writing books on the law and economics of corporate environmentalism and on the foundations of climate change law and policy. In the fall of 2006, he organized a first-of-its kind interdisciplinary conference on the law, economics, and science of liability for global warming, proceedings of which were published in July 2007 as a special issue of the University of Pennsylvania Law Review (the first and so far only time that a top ten american law journal has devoted an issue to climate change). Johnston has published dozens of articles, both in various major american law journals such as the Yale Law Journal, Virginia Law Review, and Columbia Law Review, as well as in peer-reviewed economics journals such as the Journal of Law, Economics and Organization and the Journal of Legal Studies. He is a member of the Board of directors of the searle Civil Justice Institute at northwestern University and an overseer of the program on environmental Law and economics at the University of arizona. Johnston has served on the Board of

directors of the american Law and economics association and on the national science Foundation’s Law and social science grant review panel. He has been an olin visiting Fellow at the University of southern California Law Center and visiting professor at the University of virginia school of Law. during the Fall of 2007, Johnston was awarded the Bosch public policy Fellowship at the american academy in Berlin.

Richard E. Kihlstrom, Ervin Miller-Arthur M. Freedman Professor of Finance and Economics, Chairman, Finance Department, The Wharton School

richard Kihlstrom holds a doctorate from the University of minnesota. He has been a member of the Wharton faculty since 1979, was named to the miller-Freedman professorship in 1986, and previously served as Chair of the Finance department from 1988 to 1994. Before coming to penn, he taught at northwestern University, the University of Illinois, the state University of new York at stony Brook, and the University of massachusetts. He is a Fellow of the econometric society. His areas of research interest include information and uncertainty in economics, financial market equilibrium, and corporate finance.

Michael S. Knoll, Theodore K. Warner Professor of Law; Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy

professor Knoll joined the penn Law and Wharton faculties from the University of southern California Law school in 2000. He teaches courses in corporate finance and taxation in the Law school, the Wharton school, and the Wharton executive program. He is also an affiliate of the Zell/Lurie real estate Center at the Wharton school, and the editor of Forensic Economic Abstracts, an electronic journal published by the social science research network. professor Knoll’s undergraduate and J.d. degrees are from the University of Chicago. He also earned a ph.d. in economics at the University of Chicago. In 1990 he joined the UsC Law faculty as an assistant professor, and in 1995 he was promoted to full professor. He has been a visiting professor of Law at georgetown (1999), penn (1998–99), and virginia (2000). professor Knoll was also a John m. olin senior research scholar at Columbia University school of Law (1996–97), a visiting scholar at new York University Law school (1996–97), and a John m. olin distinguished visiting professor of Law at toronto University. He clerked for the Honorable alex Kozinski on the U.s. Court of appeals, ninth Circuit, from January to august 1986, when he was appointed legal advisor to the vice Chairman of the U.s. International trade Commission. He has published exten-sively in the fields of corporate finance, taxation, economics, and real estate finance.

Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law

after earning a dr. iur. from the University of tübingen in 1961, professor Kübler held appointments as teaching assistant in tübingen and paris; professor of Law, University of giessen (1966–70); visiting Lecturer, Harvard Law school (1968–69); professor of Law and dean of the graduate school of social sciences, University of Konstanz (1971–76); and professor of Law, University of Frankfurt (1976–98). He first came to penn in 1975 and again in 1983 as a visiting professor of Law, and in 1985 he joined the faculty as professor of Law. He has served on the board of the deutscher Juristentag and is a member of the american Law Institute. He was one of the six commissioners regulating concentration in the german television industry and is a member of the european shadow Financial regulatory Committee, as well as of the Frankfurt academy of arts and sciences. professor Kübler’s teaching interests are the european Union, corporations, international finance, and mass communication. His current (comparative) research interests are in the areas of corporate governance and finance, the supervision of transnational financial markets, and broadcast regulation.

Peter D. Linneman, Albert Sussman Professor of Real Estate, Finance, and Public Policy, The Wharton School

dr. peter Linneman is the principal of Linneman associates and the albert sussman professor of real estate, Finance, and public policy at the Wharton school of Business. He is widely recognized as one of the leading strategic thinkers in the real estate industry and was named one of the 25 most influential people in real estate by Realtor Magazine. He is a co-coordinator, co-sponsor and co-mod-erator with samuel Zell of the prestigious industry roundtable, the marshall Bennett Classic. dr. Linneman holds a master’s degree and a doctorate in economics from the University of Chicago. a member of Wharton’s faculty since 1979, he served as the founding chairman of Wharton’s real estate department and was the director of Wharton’s Zell/Lurie real estate Center for 13 years. He is a founding co-editor of The Wharton Real Estate Review.

Kristin Madison, Professor of Law

after receiving a J.d. from Yale Law school and a ph.d. in econom-ics from stanford University, Kristin madison joined the penn Law faculty in 2001. she currently teaches contracts and health care law. Her main areas of research interest are health economics and the regulation of the health care industry. professor madison is currently studying the diffusion of new forms of health care regulation, particularly health care quality reporting requirements.


George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences

professor mailath received his ph.d. in economics from princeton University in 1985. He is a Fellow of the econometric society, a member of the Council of the game theory society, a co-founder of the journal Theoretical Economics, and is or has served as an associate editor or editorial board member of Econometrica, the Review of Economic Studies, the Journal of Economic Theory, Games and Economic Behavior, the International Economic Review, and Economic Theory. He is co-editor of the econometric society monograph series and is a member of the economics advisory panel of the national science Foundation. His research interests include the organization of the firm, noncooperative game theory, evolutionary game theory, social norms, and the foundations of reputations, law, and authority.

Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law

professor mooney received his J.d. from Harvard Law school in 1972. He practiced law with the oklahoma firm of Crowe and dunlevy and as a partner of the new York firm of shearman & sterling. professor mooney joined the penn faculty in 1986, and during 1999 and 2000 he served as Interim dean of the Law school. From 1998 to 2000 and from 2008 to 2009 he served as associate dean for academic affairs. He is an active member of the american Law Institute and the american Bar association. He served as a member of the Uniform Commercial Code permanent editorial Board article 2 (sales) study Committee and also served as a reporter for that Board’s article 9 (secured transactions) study Committee and as a reporter for the revised article 9 drafting committee. He served as a member of the U.s. security and exchange Commission’s advisory Committee on market transactions. mooney was awarded the distinguished service award, presented by the american College of Commercial Finance Lawyers. He also served as U.s. delegate and position Coordinator (appointed by U.s. department of state) at the diplomatic Conference for the Cape town Convention on International Interests in mobile equipment and the protocol on matters specific to aircraft equipment, in Cape town, south africa. He currently serves as a U.s. delegate for the UnIdroIt draft convention on intermediated securities. His current research centers on intermediated securities, security interests in bank-ruptcy, and bankruptcy theory.

Robert H. Mundheim, University Professor of Law and Finance Emeritus, University of Pennsylvania; Of Counsel, Shearman & Sterling; formerly General Counsel, U.S. Treasury and Senior Executive Vice President and General Counsel of Salomon Smith Barney Holdings, Inc.

professor mundheim received his LL.B. from Harvard Law school 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

Law school from 1982 to 1989. He has been a visiting professor at Harvard Law school, UCLa Law school, the James e. rogers College of Law at the University of arizona, and the University of Konstanz in germany. Between 1977 and 1980, he served as general counsel to the U.s. department of the treasury. He also has served as chairman of the U.s. tax Court nominating Commission, a director of the securities Investor protection Corporation, and general counsel to the Chrysler Loan guarantee Board. He was co-chairman of the new York firm Fried, Frank, Harris, shriver and Jacobson from 1989 to 1992. In 1992, he joined salomon Inc. as its general Counsel and as a managing director and member of the executive Committee of salomon Brothers. professor mundheim is the organizer and presiding officer emeritus of the International Faculty for Corporate and Capital market Law, a former trustee and president of the american academy in Berlin, a trustee of the new school University, a former director and president of the appleseed Foundation, and a member of the Council of the american Law Institute and Chairman of its governance Committee. He also serves on the american Bar association’s standing Committee on ethics and professional responsibility. He most recently served as the chairman of the Quadra realty trust Board of directors and as a director of eCollege, Inc. and of arnhold & s. Bleichroeder Holdings, Inc. He is also the Chairman of the Legal advisory Board of nasdaQ. mr. mundheim has served as a Consultant to the american Law Institute’s principles of Corporate governance: analysis and recommendations (1978–1994), as a member of the american Bar association president’s task Force on Corporate responsibility (2002–2003), and as a member of the association of the Bar of the City of new York’s presidential task Force on Lawyers’ role in Corporate governance. He has written in the areas of corporate governance, securities regulation, corporations, and professional responsibility.

David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School

david K. musto is the ronald o. perelman professor in Finance at 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 of Chicago, and between college and graduate school he worked for roll and ross asset management in Los angeles. He is an editor of the Journal of Financial Services Research and an associate editor of the Journal of Finance. most of his work, both theoretical and empirical, is in the area of consumer financial services, mutual funds and consumer credit in particular. He has also published work on corporate and political voting, option pricing, short selling, and cross-border taxation.

Gideon Parchomovsky, Professor of Law

professor parchomovsky received his LL.B. from the Hebrew University of Jerusalem in 1993, his LL.m. from the University of California at Berkeley in 1995, and his s.J.d. from Yale Law school in 1998. prior to joining the penn Law faculty in fall 2002, professor parchomovsky served as an associate professor at Fordham Law school and a visiting Lecturer at Yale Law school. His research interests include intellectual property law and property theory. His recent work focuses on unlocking synergies among sub-fields of intellectual property and devising innovative mechanisms for protecting property entitlements.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School

professor postlewaite received his ph.d. from northwestern University in 1974 and joined the penn faculty from the University of Illinois in 1980. He is editor of American Economic Journal: Microeconomics, past editor of the International Economic Review and past co-editor of Econometrica. He serves on the Board of directors of the national Bureau of economic research, the executive Committee of the game theory society, and on the executive Committee of the american economic association. He has published widely in the areas of strategic behavior and industrial organization.

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics

professor rock received his J.d. from the University of pennsylvania in 1983. He joined the penn faculty in 1989 from the philadelphia law firm of Fine, Kaplan and Black, where he specialized in antitrust, corporate, and securities litigation. He has written widely in corporate law, on topics including: hedge funds; the role of institutional investors in corporate governance; close corporations; the role of norms in corporate law; the overlap between corporate law and antitrust; the overlap between corporate law and labor law; comparative corporate law; and the regulation of mutual funds. In 1994, professor rock was a visiting professor of International Banking and Capital markets at the Institut für arbeits-, Wirtschafts- und Zivil recht, Johann Wolfgang goethe-Universität, Frankfurt am main, germany. during the 1995–96 academic year, he was a Fulbright senior scholar and visiting professor of Law at the Law Faculty of the Hebrew University of Jerusalem, Israel. In 2001, he was appointed the first saul a. Fox distinguished professor of Business Law. during 2005–06, he was again a visiting professor of Law, and Lady davis Fellow, at Hebrew University. professor rock’s current research focuses on government ownership of corporations, mergers and acquisi-tions, hedge funds, and corporate voting.

Chris W. Sanchirico. Professor of Law; Professor of Business and Public Policy, The Wharton School

professor sanchirico received his a.B. from princeton and both his law degree and his ph.d. in economics from Yale. Before joining the penn Law and Wharton faculties in 2003, he was a law professor at the University of virginia and an economics professor at Columbia. professor sanchirico has written widely on tax policy, distributive justice, the information problems of legal enforcement, the rules governing trial evidence and pretrial discovery, and the evolution and stability of social norms. professor sanchirico has published extensively in top law reviews as well as the premier peer-reviewed journals in both law and economics and economic theory.

Reed Shuldiner, Alvin L. Snowiss Professor of Law

professor shuldiner is a recognized expert in the taxation of financial instruments and transactions. His area of research is taxation and tax policy. His current research includes the taxation of risk under income, wealth and consumption taxes, and the viability and effects of a federal wealth tax (with david shakow). professor shuldiner served as associate dean at penn Law from 2000–02. during spring 2005, professor shuldiner was the William K. Jacobs, Jr. visiting professor of Law at Harvard Law school. He was a visiting assistant professor at Yale Law school during 1994–95. Before joining the penn law faculty in 1990, he served in the office of tax Legislative Counsel of the U.s. depart-ment of the treasury, was counsel to the law firm of Cadwalader, Wickersham and taft, and was an associate with the Washington, d.C., law firm of Wilmer, Cutler and pickering. professor shuldiner received his J.d. from Harvard University in 1983 and his ph.d. in economics from the massachusetts Institute of technology in 1985.

David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law

professor skeel joined the penn faculty in 1999. He graduated in 1987 from the University of virginia school of Law, where he was editor of the Virginia Law Review and a member of the order of the Coif. He clerked for the Honorable Walter K. stapleton on the U.s. Court of appeals for the third Circuit, and practiced for several years at duane, morris & Heckscher in philadelphia, before joining the temple University school of Law in 1990. professor skeel has also held visiting appointments at the University of Wisconsin Law school (1993–94), the University of virginia school of Law (spring 1994), georgetown University Law Center (fall 2004), and the University of pennsylvania Law school (fall 1997). professor skeel specializes in corporate and commercial law and has written widely on corporate law, bankruptcy, and sovereign debt. He has also has written on law and religion, and poetry and law.

institute for law and economics 48 associate faculty institute for law and economics 49 ile investors

Michael L. Wachter, William B. Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

professor Wachter received his ph.d. in economics from Harvard University and joined the penn faculty in 1970. He has held full professorships in three of penn’s schools: the school of arts and sciences, where he has been professor of economics since 1976; the Wharton school, where he was professor of management, 1980–92; and the Law school, where he became professor of law and economics in 1984. He has been senior advisor to the Brookings panel on economic activity in addition to consulting for the Federal reserve’s Board of governors and the Council of economic advisors. He has also served as a member of the national Council on employment policy and as a commissioner on the minimum Wage study Commission. professor Wachter served as deputy provost of the University of pennsylvania from July 1995 to January 1998, and as Interim provost from January to december 1998. He is the author of numerous articles in law and economics, as well as in corporation law and labor law and economics.

Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research

From 1998 to 2001, as assistant secretary for policy development and research, U.s. department of Housing and Urban develop-ment, dr. Wachter served as the senior urban policy offi cial and principal advisor to the secretary on overall HUd policies and programs. at Wharton, dr. Wachter was Chairperson of the real estate department and professor of real estate and Finance from July 1997 until her 1998 appointment to HUd. she founded and currently serves as director of Wharton’s geographical Information systems Lab. dr. Wachter served as a member of the Board of directors of the Benefi cial Corporation from 1985 to 1998 and of the mIg residential reIt from 1994 to 1998. she was the editor of Real Estate Economics from 1997 to 1999 and serves on the editorial boards for several real estate journals. dr. Wachter has been a member of the advanced studies Institute of the Homer Hoyt Institute since 1989. she is author of more than 100 scholarly publications and is the recipient of several awards for teaching excellence at the Wharton school.

ILE Investors, 2008–2009funding for the institute for law and economics comes from a diverse group of individuals, law fi rms, corporations, and foundations who endorse our work each year. we are pleased and privileged to recognize and thank the ile investors whose generous contributions underwrite the activities described in this report. we deeply appreciate their support and their active participation in institute programs.

Benefactors$25,000 or aboveCharles I. Cogutrobert L. Friedmanpaul s. Levyskadden, arps, slate, meagher & Flom LLpsullivan & Cromwell LLp

Sponsors$10,000 to $24,999apollo Capital management, L.p.BarclaysBernstein Litowitz Berger & grossmann LLpBuchanan Ingersoll & rooney pCIsaac d. CorréCt, a Wolters Kluwer Businessdechert LLpdelaware department of statedewey & LeBoeuf LLpthe dow Chemical Companydupontsaul a. Fox research endowment

goldman, sachs & Co.perry golkingrant & eisenhofer p.a.paul g. Haaga, Jr.Leon C. Holt, Jr.Hughes Hubbard & reed LLpInnisfree m&a Incorporatedandrew s. Jacobsroy J. KatzoviczmacKenzie partners, Incmerck & Co., Inc.millennium management Foundationmorgan, Lewis & Bockius LLpmorris, nichols, arsht & tunnell LLppotter anderson & Corroon LLpproskauer rose LLprichards, Layton & Finger, p.a.rothschild Inc.schulte roth & Zabel LLpa. gilchrist sparks IIIsungard data systems Inc.UBs Investment Bank

vanguardWachtell, Lipton, rosen & KatzYoung Conaway stargatt & taylor, LLp

Members$5,000 to $9,999James H. aggerBlank rome LLpHarkins Cunningham LLpLockheed martinKenneth W. Willman

DonorsUp to $4,999mary J. grendellandrew metrickJames a. ounsworthmyron J. resnickJohn F. schmutzeric Wilensky

Amy Wax, Robert Mundheim Professor of Law

a graduate of Yale College and Harvard medical school, professor Wax trained as a neurologist at new York Hospital before completing a law degree at Columbia Law school in 1987. she served as a clerk to the Honorable abner J. mikva of the U.s. Court of appeals for the d.C. Circuit and worked for six years at the offi ce of the solicitor general at the U.s. department of Justice, where she argued 15 cases before the U.s. supreme Court. she taught from 1994 to 2001 at the University of virginia Law school. Her areas of teaching and research include civil procedure, remedies, labor and employment law, poverty law and welfare policy, the law and economics of work and family, and social science and the law. professor Wax joined the penn Law Faculty in fall 2001.

Institute for Law and EconomicsUniversity of Pennsylvania3400 Chestnut StreetPhiladelphia, PA 19104-6204215.898.7719www.law.upenn.edu/ile/

September 2009

Michael L. Wachter, Co-DirectorWilliam B. Johnson Professor of Law and [email protected]

Edward B. Rock, Co-DirectorSaul A. Fox Distinguished Professor of Business [email protected]

Jill E. Fisch, Co-DirectorPerry Golkin Professor of [email protected]

Vicki L. Hewitt, Program Director215.898.7719fax [email protected]

ile annual report 2008-2009

Documents

exchange transactions

price mechanism

islands of conscious

markets transactions

organization fact

complicated market structure

alternative methods

organization necessary