ile annual report 2014-2015

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 & ECONOMICSANNUAL REPORT 2014–15

Message froM the Co-Chairs: 1

Board of advisors: 2

Message froM the dean: 6

Message froM the Co-direCtors: 7

roundtaBle PrograMs: 9CorPorate roundtaBle, sPring 2015: 10CorPorate roundtaBle, fall 2014: 12

CorPorate roundtaBle, sPring 2014: 14CorPorate roundtaBle, fall 2013: 14

CorPorate roundtaBle, sPring 2013: 16CorPorate roundtaBle, fall 2012: 16

Panel PrograMs: 19ChanCery Court PrograMs: 20

insights froM PraCtiCe: 26

leCtures: 29law and entrePreneurshiP: 30

distinguished Jurist: 32Past leCtures: 34

aCadeMiC events: 37nyu /Penn ConferenCe, sPring 2015: 38Penn /nyu ConferenCe, sPring 2014: 38

ile /wharton finanCe seMinars: 40CurriCular PartnershiPs: 42

assoCiate faCulty: 44PuBliCations and PaPers: 52

institute investors: 55

MESSAGE FROM THE CO-CHAIRS 1

MESSAGE FROM THE CO-CHAIRS

For almost three decades, Penn’s Institute for Law and Economics has contributed to scholarship, policy, and practice on relevant issues of law and economics that affect

our country’s businesses and financial institutions.

The Institute’s programs have become increasingly relevant and important, focusing on 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, legal practice, finance and academic

scholarship candidly discuss the intersection of theory and practice on a host of matters. 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. The participation of the members of our Board in ILE Programs is a vital component of their success. We are delighted to report some superb additions to our Board of Advisors during the past year. We are pleased to welcome Eric Klinger-Wilensky, Stacy Fox, and Sarkis Jebejian as new members of our Board. These accomplished individuals will greatly enhance the work of the Institute. All of the members of our Board give graciously to the Institute, not just financially but also of their time and expertise, and we are grateful for their contributions. Very special thanks must be given to ILE Benefactors Bob Friedman, Paul G. Haaga, Jr., and Skadden, Arps, Slate, Meagher & Flom LLP (through Eric Friedman). Their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express our sincere appreciation to each of them. Bill Bratton, Jill Fisch, and Michael Wachter continued to be truly outstanding leaders of the Institute. The co-directors’ dedication to all aspects of the Institute’s work, and their ability to originate timely programing and attract ideal participants, are the reasons for the unqualified success of the Institute’s programs. This is why ILE is world-renowned as a major forum for substantive discussions of topical issues relevant to corporations and their legal and financial advisors.

CHARLES “CASEY” COGUTSimpson Thacher & Bartlett LLP

JOSEPH B. FRUMKINSullivan & Cromwell LLP

September 2015

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 Director, Global Head of Raid and Activism DefenseGoldman, Sachs & Co.New York, NY

2 INSTITUTE FOR LAW AND ECONOMICS

BOARD OF ADVISORS

Marshall B. BabsonSeyfarth Shaw LLPNew York, NY

Louis J. BevilacquaCadwalader, Wickersham & Taft LLPNew York, NY

John G. FinleySenior Managing Director and Chief Legal OfficerThe Blackstone Group L.P.New York, NY

Stacy FoxVice President and Assistant General CounselE. I. du Pont de Nemours and CompanyWilmington, DE

Stephen FraidinVice ChairmanPershing Square Capital Management Group, L.P.New York, NY

Joel E. FriedlanderFriedlander & Gorris, P.A.Wilmington, DE

Eric J. FriedmanExecutive PartnerSkadden, Arps, Slate, Meagher & Flom LLPNew York, NY

Martin J. BienenstockProskauer Rose LLPNew York, NY

Daniel H. BurchChairman & CEOMacKenzie Partners, Inc.New York, NY

George A. CaseyShearman & Sterling LLPNew York, NY

Charles I. CogutCo-Chair, 2008–Simpson Thacher & Bartlett LLPNew York, NY

Marcy EngelChief Operating Officerand General CounselEton Park Capital ManagementNew York, NY

Robert L. FriedmanChair, 2001–2007Senior AdvisorThe Blackstone Group L.P.New York, NY

Joseph B. FrumkinCo-Chair, 2008–Sullivan & Cromwell LLPNew York, NY

Eduardo GallardoGibson, Dunn & Crutcher LLPNew York, NY

BOARD OF ADVISORS 3

BOARD OF ADVISORS

Joseph D. GattoPartnerPerella Weinberg PartnersNew York, NY

Scott C. GoebelSenior Vice President and General CounselFidelity Management & Research CompanyBoston, MA

Perry GolkinChief Executive OfficerPPC Enterprises LLCNew York, NY

Mark I. GreeneCravath, Swaine & Moore LLPNew York, NY

Keir D. GumbsCovington & Burling LLPWashington, DC

Paul G. Haaga, Jr.Retired, Former Chairman of the BoardCapital Research and Management CompanyLos Angeles, CA

William R. HarkerCo-Founder and PresidentAshe Capital Management, LLCOld Tappan, NJ

Leon C. Holt, Jr.Retired Vice Chairman and Chief Administrative OfficerAir Products and Chemicals, Inc.Allentown, PA

Hon. Jack B. JacobsJustice, Delaware Supreme Court, 2003–2014Sidley Austin LLPNew York, NY, andWilmington, DE

Sarkis JebejianKirkland & Ellis LLPNew York, NY

Brendan R. KalbGeneral CounselAQR Capital Management, LLCGreenwich, CT

Cynthia B. KaneSpecial Assistant to the Secretary of StateDelaware Department of State Wilmington, DE


Myron J. ResnickRetired Senior Vice President and Chief Investment Officer Allstate Insurance CompanyNorthbrook, IL

Jeffrey J. RosenDebevoise & Plimpton LLPNew York, NY

James RossmanManaging DirectorLazard FreresNew York, NY

Jennifer ShotwellFounding Managing DirectorInnisfree M&A IncorporatedNew York, NY

G. Daniel O’DonnellDechert LLPPhiladelphia, PA

James A. OunsworthManaging PartnerThe S Consulting GroupPhiladelphia, PA

Morton A. PierceWhite & Case LLPNew York, NY

Helen P. PudlinRetired Executive Vice President and General Counsel PNC Financial Services GroupBryn Mawr, PA

Allan N. RauchVice President - Legal and General CounselBed Bath & Beyond Inc.Union, NJ

Eric Klinger-WilenskyMorris, Nichols, Arsht & Tunnell LLP Wilmington, DE

Roy J. KatzoviczChairmanSaddle Point Group, LLC.New York, NY

Bruce N. KuhlikExecutive Vice President and General CounselMerck & Co., Inc. Whitehouse Station, NJ

Mark LebovitchBernstein Litowitz Berger & Grossmann LLPNew York, NY

Kenneth A. LefkowitzHughes Hubbard & Reed LLPNew York, NY

Simon M. LorneVice Chairman and Chief Legal OfficerMillennium Management LLC New York, NY

BOARD OF ADVISORS

BOARD OF ADVISORS 5

Peter L. WelshRopes & Gray LLPBoston, MA

Gregory P. WilliamsRichards, Layton & Finger, P.A.Wilmington, DE

Donald J. Wolfe, Jr.Potter Anderson & Corroon LLPWilmington, DE

Christopher YoungManaging Director and Head of the Contested Situations PracticeCredit SuisseNew York, NY

David M. SilkWachtell, Lipton, Rosen & KatzNew York, NY

Bruce L. SilversteinYoung Conaway Stargatt & Taylor, LLP Wilmington, DE

Richard D. SmithReed Smith LLPNew York, NY

Heidi StamManaging Director and General CounselVanguardWayne, PA

John D. StanleySenior Vice President and General CounselAir Products and Chemicals, Inc.Allentown, PA

Hon. Leo E. Strine, Jr.Chief JusticeDelaware Supreme CourtWilmington, DE

John J. SuydamChief Legal and Compliance OfficerApollo Global Management, LLCNew York, NY

Andrea E. UtechtExecutive Vice President, General Counsel and SecretaryFMC CorporationPhiladelphia, PA

Hon. E. Norman VeaseyChief Justice, Supreme Court of Delaware, 1992–2004Gordon, Fournaris & Mammarella, P.A.

Marc WeingartenSchulte Roth & Zabel LLPNew York, NY

BOARD OF ADVISORS


For over a quarter of a century, the Institute for Law and Economics has successfully demonstrated the benefits of a cross-disciplinary perspective.

ILE is at the forefront of cross-disciplinary programming and serves as a model for bridge-building between disciplines by creating ties between schools, between faculty members, between students, and between experts in the field. 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. Penn Law’s commitment to a cross-disciplinary mission continues to grow even stronger, as we create new partnerships within the University and pursue the cross-disciplinary vision that is at the core of the Institute for Law and Economics and its programs. It is no longer enough to approach complicated questions such as financial regulation, shareholder empowerment, or investment management solely from a legal, economic, or business perspective. Indeed, no significant business issue can be addressed without paying attention to both 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, including shareholder rights and the balance of power between shareholders and management, improving the M&A process, sovereign debt, corporate cash retention, and B Corporations. We are proud of the generous support the Institute receives from contributors who understand the importance of what we do and the unique position the Institute holds. Many of the ILE 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, Jill Fisch, and Bill Bratton. It is because of their commitment and enthusiasm that ILE ranks among the premier institutions of its kind. As I begin my term as Penn Law’s Dean, I look forward to the Institute’s continued growth and prosperity. I extend the deepest appreciation to all ILE supporters and participants for their commitment and investment over the years.

THEODORE RUGER, Dean and Bernard G. Segal Professor of Law,University of Pennsylvania Law School

September 2015

MESSAGE FROM THE DEAN

MESSAGE FROM THE CO-DIRECTORS 7

MESSAGE FROM THE CO-DIRECTORS

The Institute for Law and Economics continues to host corporate law programs that provide a unique venue for high level conversations about important and timely issues in law and business among practitioners, lawmakers, and academics. Our Fall Corporate Roundtable focused on shareholder voting, the cutting-edge topic in corporate

governance. The first morning paper inquired into which firms switch to majority voting and whether the switch has an effect on board behavior. The second paper showed that stock option compensation and management to the market price are tied to reductions in real investment. The afternoon panelists asked how far the shareholders can use voting to influence board composition and business planning. At our Spring Corporate Roundtable, the morning papers explored the role of shareholders in corporate management, while the afternoon panel turned to litigation issues. The first paper challenged the demand for fundamental law reform to correct the imbalance of power between shareholders and management. The second criticized the reliance on empirical research to support the movement to de-stagger corporate boards of directors through the SEC’s shareholder proposal rule. The afternoon was a lively discussion of proposed amendments to Delaware’s corporate code, one addressing litigation by-laws and the other seeking to contain appraisal arbitrage. Our public lecture series featured two engaging speakers and a unique panel program. Our Distinguished Jurist lecturer, John W. Noble, Vice Chancellor of the Delaware Court of Chancery, spoke about the Court’s role in administering Delaware’s new statute on ex post ratification of defective corporate actions. Our fall Law and Entrepreneurship lecture came from Steven Shapiro, who recounted his path from pre-med through law school on to distressed investing. In the spring, our Law and Entrepreneurship panel discussed real world transactions involving benefit corporations, focusing on the groundbreaking sale of a B Corp, Plum Organics, to a large publicly-traded company, Campbell Soup. Our Fall Insights from Practice program, “The Sotheby’s Case,” brought together the key players from Third Point v. Ruprecht, including Vice-Chancellor Donald Parsons. Our first Chancery Court program detailed the steps that legal and financial advisors can take to improve their defensive position in the event of merger litigation. Our second Chancery Court program continued our inquiry into the financial economic inputs in appraisal valuation, this year taking up the derivation of the beta factor. We successfully continued our cross-disciplinary initiatives. The Law and Finance series, held in cooperation with Wharton’s Finance Department, featured, in the fall, a paper on sovereign debt by Stephen Choi of NYU Law and Mitu Gulati of Duke Law. In the spring, John Graham of Duke’s Fuqua School of Business discussed the evolution of corporate cash. In February, NYU hosted the annual Penn/NYU Law and Finance Conference together with Wharton Finance and the Pollack Center for Law and Business at New York University. As in the past, our Institute’s greatest resource is the quality of our supporters and their active participation in our programs. Our board members and sponsors play a critical role in organizing and participating in our programs as well as providing valuable financial support. We continue to benefit from the generous involvement of our board chairs, Casey Cogut of Simpson Thacher & Bartlett LLP and Joseph Frumkin of Sullivan & Cromwell LLP. We are also pleased to welcome three new board members this year: Eric Klinger-Wilensky, Stacy Fox, and Sarkis Jebejian. Eric is the new representative from Morris, Nichols, Arsht & Tunnel LLP, Stacy is the new representative for E.I. du Pont de Nemours and Company, and Sarkis is the new representative for Kirkland & Ellis LLP. We regret that, after 30 years, John Harkins is stepping down from the ILE Board. John was ILE’s first board chairman in 1984 and it was John’s efforts that sowed the seeds for the wonderful board we have today.

WILLIAM W. BRATTON, Co-Director, Institute for Law and EconomicsNicholas F. Gallicchio Professor of Law

JILL E. FISCH, Co-Director, Institute for Law and EconomicsPerry Golkin Professor of Law

MICHAEL L. WACHTER, Co-Director, Institute for Law and EconomicsWilliam B. and Mary Barb Johnson Professor of Law and Economics

September 2015

ROUNDTABLE PROGRAMS

ROUNDTABLE PROGRAMS

At the heart of the Institute’s work is the roundtable series, which brings members of the Institute’s associate faculty and other academics together with corporate executives, practicing

attorneys, judges, and public policymakers. Each roundtable takes up current issues

that emerge from the research and teaching of the Institute and provides a forum for

lively discussion.

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

ROUNDTABLE PROGRAMS 9

22CORPORATE ROUNDTABLE


The Eclipse of the Shareholder Paradigm William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

The authors challenge the prevailing theory in corporate law that fundamental law reform is needed to correct the power imbalance between shareholders and management, when, they assert that the reality is that shareholders are empowered. This article asserts that there has been a shift in the corporate balance of power, but the evaluation of these recent changes is at an early stage with shareholder-manager relations at a new equilibrium and the magnitude of the implicated trade-offs only beginning to be quantified. The authors reject the binary, either/or choice where, under one view, shareholder empowerment intrinsically implies unproductive emphasis on short-term goals at the expense of long-term investment and should be legally constrained, and, under the other, the prevailing shareholder paradigm is favored, including its law reform agenda, as if nothing had changed and dismisses those who complain about short-term shareholder influence as management apologists. A reform-driven, structural shift in the balance of power between shareholders and managers in either direction could have perverse effects on corporate decision-making and productivity. An increase in shareholder power could have the negative effect of triggering destructive short-termism, while a decrease in shareholder power could revive the agency cost problem. Accordingly, all sides in current debates should face the same burden of proof and be required to surmount a presumption against law reform and in favor of the status quo. In the view of the authors, none of the present proponents come close to sustaining such a case.

Did Harvard Violate Federal Securities Law? The Campaign against Classified Boards of DirectorsDaniel M. Gallagher, Commissioner, United States Securities and Exchange CommissionJoseph Grundfest, Stanford University Law School

The Harvard Shareholder Rights Project invokes SEC Rule 14a-8 to propose precatory shareholder resolutions calling for the de-staggering of corporate boards of directors (the "Harvard Proposal"). In support, the Harvard Proposal relies on a summary of academic research that portrays staggered boards as categorically detrimental to shareholder interests, citing only one study reaching a contrary conclusion, but dismissing that study's analysis. The academic research contradicting the Harvard Proposal, which is far more substantial, concludes that studies relied on by the Harvard Proposal are in error because of flawed analytic techniques. This research also documents heterogeneous effects indicating that classified boards are more likely to be beneficial for identifiable categories of corporations. Rule 14a-8 requires that shareholder proposals not be materially false or misleading in violation of Rule 14a-9. The Harvard Proposal's failure accurately to describe the current state of the academic literature can be characterized as a material omission that violates Rule 14a-9. Companies should therefore be able to exclude the Harvard Proposal from the corporate proxy either by seeking no-action relief or through motions for declaratory judgment. Under the principle of respondeat superior, the SEC could bring enforcement proceedings against Harvard University alleging violations of Rule 14a-9. Private party plaintiffs should also be able to prevail in 14a-9 actions against Harvard. Courts have the authority to void prior votes that caused boards to de-stagger, but it is a matter of judicial discretion — and a subject for conjecture — as to whether such a remedy would be imposed as a cure for the material omissions in the Harvard Proposal.

MAY 1, 2015

WelcomeTheodore W. Ruger, Deputy Dean and Professor, University of Pennsylvania Law School

Morning SessionThe Eclipse of the Shareholder Paradigm William W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

commentatorsHon. J. Travis Laster, Vice Chancellor, Delaware Court of ChancerySteven Davidoff Solomon, Professor of Law, Co-Director, Center for Law, Business and the Economy, University of California, Berkeley Law School

Did Harvard Violate Federal Securities Law? The Campaign against Classified Boards of DirectorsJoseph Grundfest, Jr., W.A. Franke Professor of Law and Business, Stanford University Law School

commentatorsDonald C. Langevoort, Thomas Aquinas Reynolds Professor of Law, Georgetown University Law CenterMark Lebovitch, Partner, Bernstein Litowitz Berger & Grossmann LLP

Afternoon SessionLitigation By-Laws and Appraisal Arbitrage

moderatorsWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

panelistsT. Brad Davey, Partner, Potter Anderson & Corroon LLPJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolStephen Fraidin, Vice Chairman, Pershing Square Capital Management, L.PHon. Sam Glasscock, Vice Chancellor, Delaware Court of ChancerySandra Goldstein, Partner, Cravath, Swaine & Moore LLPLarry Hamermesh, Ruby R. Vale Professor, Widener University Delaware Law School, Member, Council of the Delaware State Bar Association Corporation Law Section

CORPORATE ROUNDTABLE


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1 Front row: Larry Hammermesh, Delaware Law School; Steve Fraidin, Pershing Square Capital Management, L.P.; Hon. Sam Glassock; Second row: Bruce Silverstein, Young Conaway Stargatt & Taylor LLP; Third row: Omari Simmons, Wake Forest University School of Law ; Gordon Smith, J. Reuben Clark Law School, Brigham Young University; Eric Roiter, Boston University School of Law; Robert Miller, The University of Iowa College of Law.

2 Michael Wachter, University of Pennsylvania Law School.

3 Joseph Grundfest, Stanford Law School.

4 William Bratton, University of Pennsylvania Law School.

5 Front row: Lou Bevilacqua, Cadwalader, Wickersham & Taft, LLP; David Silk, Wachtell, Lipton, Rosen & Katz; Hon. Travis Laster; Second row: Jeffrey Gorris, Friedlander & Gorris, P.A.; Edward Rock, University of Pennsylvania Law School; Steven Davidoff Solomon, Berkeley Law School.

6 Front row: Sandra Goldstein, Cravath, Swain, & Moore LLP; Brad Davey, Potter Anderson & Corroon LLP; Jill Fisch, University of Pennsylvania Law School; Second row: Joseph Grundfest, Stanford Law School; Roberta Romano, Yale Law School; Jesse Fried, Harvard Law School; Albert Choi, University of Virginia School of Law; Third row: David Hoffman, Temple University Beasley School of Law; Christine Hurt, J. Reuben Clark Law School, Brigham Young University; Tom Lin, Temple University Beasley School of Law; Sean Griffith, Fordham Law School.



Does Majority Voting Improve Board Accountability?Stephen Choi, Murray and Kathleen Bring Professor of Law, NYU Law School, New York UniversityJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolMarcel Kahan, George T. Lowy Professor of Law, NYU Law School, New York UniversityEdward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

The paper studies the adoption and impact of a majority voting rule, one of the most popular and successful governance reforms. Adoption of majority voting poses a puzzle in that directors of companies with majority voting rarely fail to receive majority approval and, even when they do, they are unlikely to be forced to leave the board. The paper tests and finds partial support for four hypotheses that could explain why directors of majority voting firms so rarely fail to receive majority support: selection; deterrence/accountability; electioneering by firms; and restraint by shareholders. The most dramatic finding is a substantial difference between early and later adopters of majority voting. The early adopters of majority voting appear to be more shareholder-responsive than other firms. These firms seem to have adopted majority voting voluntarily, and the adoption of majority voting has made little difference in shareholder-responsiveness going forward. By contrast, shareholders appear to have used the widespread adoption to create pressure on less responsive firms. Among these later adopters, majority voting seems to have led to more shareholder-responsive behavior. The authors suggest that these findings about the spread of corporate governance reforms have important implications for evaluating the effect of governance changes.

Equity Vesting and Managerial Myopia Alex Edmans, Professor of Finance, London Business School, The Wharton SchoolVivian W. Fang, Carlson School of Management, University of MinnesotaKatherine A. Lewellen, Associate Professor of Business Administration, Tuck School of Business at Dartmouth

A CEO’s concerns for the current stock price is linked to reductions in real investment. These concerns depend on the amount of equity he intends to sell in the short-term, but actual equity sales are an endogenous decision. We use the amount of stock and options scheduled to vest in a given year as an instrument for equity sales. Such vesting is determined by equity grants made several years prior, and thus unlikely driven by current investment opportunities. An interquartile increase in instrumented equity sales is associated with a decline of 0.25% in the growth of R&D/assets, 4.6% of the average R&D/assets ratio. Vesting-induced equity sales also increase the likelihood of meeting or marginally beating analyst earnings forecasts, and are associated with higher returns to earnings announcements. More broadly, by introducing a measure of incentives that is not driven by the current contracting environment – vesting-induced equity sales – the paper suggests that CEO contracts affect real outcomes.

DECEMBER 12, 2014

WelcomeMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

Morning SessionDoes Majority Voting Improve Board Accountability?Stephen Choi, Murray and Kathleen Bring Professor of Law, NYU Law School, New York University Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolMarcel Kahan, George T. Lowy Professor of Law, NYU Law School, New York University Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

commentatorsJohn Coates, John F. Cogan, Jr. Professor of Law and Economics, Harvard Law SchoolJennifer Shotwell, Founding Managing Director, Innisfree M&A Incorporated

Equity Vesting and Managerial MyopiaAlex Edmans, Professor of Finance, London Business School, The Wharton SchoolVivian W. Fang, Carlson School of Management, University of MinnesotaKatherine A. Lewellen, Associate Professor of Business Administration, Tuck School of Business at Dartmouth

commentatorsGeoffrey Tate, Associate Professor of Finance, UNC Kenan-Flagler Business SchoolMarc Trevino, Partner, Sullivan & Cromwell LLP

Afternoon SessionShareholder Voting: How Far Do We Go?

moderatorsWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School

panelistsDaniel H. Burch, Chairman & CEO, MacKenzie Partners, IncChris Cernich, Deputy Director of Global Research, Institutional Shareholder ServicesSarah Goller, Senior Manager, VanguardRoy J. Katzovicz, Partner, Investment Team Member and Chief Legal Officer, Pershing Square CapitalMark Morton, Partner, Potter Anderson & Corroon LLPDavid Silk, Partner, Wachtell, Lipton, Rosen & Katz



1 Front row: Joseph Frumkin, Sullivan & Cromwell; James Rossman, Lazard Freres; Joel Friedlander, Friedlander & Gorris, P.A.; Second row: Jennifer Shotwell, Innisfree M&A Incorporated; Alex Edmunds, London Business School, The Wharton School; John Coates, Harvard Law School; Third row: Tom Lin, Temple University Beasley School of Law; Sean Griffith, Fordham Law School; Richard Booth, Villanova University School of Law; David Ross, Seitz Ross Aronstam & Moritz LLP.

2 John Coates, Harvard Law School.

3 Sarah Goller, Vanguard.

4 Alex Edmans, London Business School, The Wharton School.

5 Front row: Roy Katzovicz, Saddle Point Group, LLC; David Silk, Wachtel, Lipton, Rosen & Katz; Chris Cernich, Institutional Shareholder Services; Second row: Keith Gottfried, Morgan Lewis & Bockius LLP; Richard Smith, Reed Smith LLP; Third row: Omari Simmons, Wake Forest University School of Law; Sam Buell, Duke University School of Law; John DiTomo, Morris, Nichols, Arsht & Tunnell LLP; Robert Rasmussen, USC Gould School of Law.

6 Robert Friedman, The Blackstone Group; Casey Cogut, Simpson Thatcher & Bartlett LLP.

7 Front row: Sarah Goller, Vanguard; Mark Morton, Potter Anderson & Corroon LLP; Daniel Burch, MacKenzie Partners, Inc.; Joseph Frumkin, Sullivan & Cromwell LLP; Second Row: William Harker, Ashe Capital Management, LLC; Martin Lessner, Young Conaway Stargatt & Taylor, LLP; Jeremy Delman, Debevoise & Plimpton LLP; Merritt Fox, Columbia Law School; Jennifer Shotwell, Innisfree M&A Incorporated; Third Row: Anthony Casey, The University of Chicago Law School; Fred Tung, Boston University School of Law; Verity Winship, University of Illinois College of Law; Tom Lin, Temple University Beasley School of Law.

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MAY 2, 2014

WelcomeWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

Morning SessionThe Pricing of Bond CovenantsDavid Musto, Ronald O. Perelman Professor in Finance, The Wharton SchoolJillian Popadak, Business Economics Doctoral Student, The Wharton School

commentatorsMartin Fridson, Chief Executive Officer, Fridson Vision LLCMichael Klausner, Nancy & Charles Munger Professor of Business and Law, Stanford University

For Diversity in the International Regulation of Financial Institutions: Critiquing and Recalibrating the Basel ArchitectureRoberta Romano, Sterling Professor of Law, Yale Law School

commentatorsRichard J. Herring, Jacob Safra Professor of International Banking, The Wharton SchoolMark J. Welshimer, Deputy Managing Partner, Sullivan & Cromwell, LLP

Afternoon SessionPanel on Short Term Credit Markets


panelistsMatthew J. Eichner, Deputy Director, Federal Reserve BoardDaniel M. Gallagher, Commissioner, Securities and Exchange CommissionRandall D. Guynn, Partner, Davis PolkAdam J. Levitin, Professor of Law, Georgetown LawAnnette L. Nazareth, Partner, Davis Polk

DECEMBER 13, 2013

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

Morning SessionBankers and ChancellorsWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

commentatorsDeborah DeMott, David F. Cavers Professor of Law, Duke Law SchoolCasey Kobi, Managing Director, Barclays

No Free Shop: Why Target Companies in MBOs and Private Equity Transactions Sometimes Choose Not to Buy ‘Go Shop’ OptionsCharles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University Graduate School of BusinessDonna M. Hitscherich, Senior Lecturer in Discipline in Business, Finance and Economics, Director, Private Equity Program, Columbia University Graduate School of Business

commentatorsMarcel Kahan, George T. Lowy Professor of Law, NYU Law School, New York UniversityAllison Schneirov, Partner, Skadden, Arps, Slate, Meagher & Flom LLP

Afternoon SessionPanel on The Dell Deal


panelistsCharles I. Cogut, Simpson Thacher & Bartlett LLPJoseph B. Frumkin, Sullivan & Cromwell LLPJeffrey J. Rosen, Debevoise & Plimpton LLPSteven A. Rosenblum, Wachtell, Lipton, Rosen & KatzMatthew Schoenfeld, Associate, Special Situations Group, Morgan StanleyChristopher A. Wightman, Principal, CamberView Partners, LLC



1 Richard J. Herring, The Wharton School.

2 Front row: Richard D. Smith, Reed Smith LLP; David M. Silk, Wachtell, Lipton, Rosen & Katz; Second row: Frederick Tung, Boston University School of Law.

3 Front row: Matthew J. Eichner, Federal Reserve Board; Annette L. Nazareth, Davis Polk & Wardwell LLP; Second row: Joseph A. McCahery, Tilburg University; Merritt B. Fox, Columbia Law School; Albert H. Choi, University of Virginia School of Law; Third row: Morgan Ricks, Vanderbilt Law School; James A. Fanto, Brooklyn Law School.

4 Michael L. Wachter, University of Pennsylvania Law School.

5 Joseph B. Frumkin, Sullivan & Cromwell LLP.

6 William W. Bratton, University of Pennsylvania Law School.

7 Front row: Robert E. Spatt, Simpson Thatcher & Bartlett LLP; Joseph D. Gatto, Perella Weinberg Partners; Frederick H. Alexander, Morris, Nichols, Arsht & Tunnell LLP; Second row: Allison R. Schneirov, Skadden, Arps, Slate, Meagher & Flom LLP; Deborah DeMott, Duke Law School; Marcel Kahan, NYU School of Law; Third row: Christopher Foulds, Skadden, Arps, Slate, Meagher & Flom LLP; Justin Greenbaum, Hughes Hubbard & Reed LLP; Frederick Tung, Boston University School of Law; Christine Hurt, University of Illinois College of Law.

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APRIL 19, 2013


Morning SessionA Great Game: The Dynamics of State Competition and LitigationMatthew D. Cain, Assistant Professor, University of Notre Dame, Mendoza College of BusinessSteven Davidoff, Associate Professor of Law and Finance, The Ohio State University Moritz College of Law

commentatorsBrian T. Frawley, Sullivan & Cromwell LLPTodd Gormley, Assistant Professor of Finance, The Wharton School

Putting Stockholders First, Not the First-Filed ComplaintLawrence Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of LawMatthew Jennejohn, Associate, Shearman & Sterling LLPHon. Leo E. Strine, Jr., Chancellor, Delaware Court of Chancery

commentatorsTheodore N. Mirvis, Wachtell, Lipton, Rosen & KatzMark J. Roe, David Berg Professor of Law, Harvard Law School

Afternoon SessionPanel on Delaware Corporate Litigation


panelistsMark Lebovitch, Bernstein Litowitz Berger & Grossmann LLPHon. Donald F. Parsons, Jr., Vice Chancellor, Delaware Court of ChanceryRoberta Romano, Oscar M. Ruebhausen Professor of Law and Director, Yale Law SchoolSusan L. Saltzstein, Skadden, Arps, Slate, Meagher & Flom LLPBruce L. Silverstein, Young Conaway Stargatt & Taylor, LLPGregory P. Williams, Richards, Layton & Finger, P.A.

DECEMBER 14, 2012


Morning SessionA Theory of Preferred StockWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

commentatorsD. Gordon Smith, Associate Dean and Glen L. Farr Professor of Law, Brigham Young University - J. Reuben Clark Law SchoolHon. Leo E. Strine, Jr., Chancellor, Delaware Court of Chancery

Private Equity Performance: What Do We Know?Steven N. Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

commentatorsRobert P. Bartlett III, Professor of Law, University of California, Berkeley Law SchoolPerry Golkin, Chief Executive Officer, PPC Enterprises LLC

Afternoon SessionPanel on Private Equity Today


panelistsDavid N. Brooks, General Counsel, Fortress Investment Group LLCCharles I. Cogut, Simpson Thacher & Bartlett LLPJohn G. Finley, Senior Managing Director and Chief Legal Officer, The Blackstone Group L.P.Steve Judge, President & CEO, Private Equity Growth Capital CouncilAlison J. Mass, Managing Director and Co-Head of Financial Sponsors Group, Goldman SachsG. Daniel O’Donnell, Dechert LLP



1 Front row: Joseph B. Frumkin, Sullivan & Cromwell LLP; Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; Susan L. Saltzstein, Skadden, Arps, Slate, Meagher & Flom LLP; Second row: Theodore N. Mirvis, Wachtell, Lipton, Rosen & Katz; Robert E. Spatt, Simpson Thatcher & Bartlett LLP; Martha L. Rees, E. I. du Pont de Nemours and Company; Hon. E. Norman Veasey, Weil, Gotshal & Manges LLP; Third row: Moshe A. Cohen, Columbia Business School; Christine T. DiGuglielmo, Weil, Gotshal & Manges LLP; Rich Hynes, University of Virginia School of Law; Sean J. Griffith, Fordham Law School.

2 Front row: Roberta Romano, Yale Law School; Robert L. Friedman, The Blackstone Group L.P.; Hon. Leo E. Strine, Jr., Delaware Court of Chancery. Second row: Eric Klinger-Wilensky, Morris, Nichols, Arsht & Tunnell LLP; Brian T. Frawley, Sullivan & Cromwell LLP; Lawrence Hamermesh, Widener University School of Law. Third row: D. Gordon Smith, Brigham Young University – J. Reuben Clark Law School; Christopher Foulds, Skadden, Arps, Slate, Meagher & Flom LLP; Camille Lautier, University of Pennsylvania Law School.

3 Front row: Alison J. Mass, The Goldman Sachs Group, Inc.; Hon. Travis Laster, Delaware Court of Chancery; Robert L. Friedman, The Blackstone Group L.P. Second row: Marc H. Kushner, Lazard Frères & Co. LLC; David K. Musto, The Wharton School; Steven N. Kaplan, The University of Chicago Graduate School of Business.

4 Steven N. Kaplan, The University of Chicago Graduate School of Business.

5 Theodore N. Mirvis, Wachtell, Lipton, Rosen & Katz.

6 A. Gilchrist Sparks III, Morris, Nichols, Arsht & Tunnell LLP; Perry Golkin, PPC Enterprises LLC.

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PANEL PROGRAMS

PANEL PROGRAMS 19

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

PANEL PROGRAMS

In addition to the roundtable series, the Institute hosts several panel programs each year that explore

important topics in the areas of law and finance. The panelists on these programs provide students and other attendees with real-world examples of

the complex situations they face in their professional careers.


22CHANCERY COURT PROGRAMS

APRIL 7, 2015

Beta: Has Experience Proved its Utility? What is the State of the Art Now?

Appraisal jurisprudence does not lie at the core of Delaware corporate law, but its position in law and economics is unique nonetheless. Appraisal is the one space where educated and astute legal decision-makers must confront cutting-edge financial economics in a fact-finding process. This program was the second of a series of Chancery Court Programs directed to the key financial economic inputs in appraisal valuation. Last year’s event looked into one component of the Capital Asset Pricing Model, the equity risk premium. This year’s program took up another, beta. As in the previous year, the panel brought together investment bankers with extensive practical experience in valuation and leading academics on asset pricing from the Wharton faculty. The spirited debate revealed that beta determinations are considerably less cut-and-dried than basic finance textbooks would lead one to understand. Chief Justice Leo E. Strine, Jr. introduced Chancellor Andre Bouchard, Delaware Court of Chancery, to members of the Institute’s Board of Advisors prior to the program.

moderatorsHon. Leo E. Strine, Jr., Chief Justice, Delaware Supreme CourtMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics, University of Pennsylvania Law School

panelistsJames Del Favero, Managing Director, Global Head of Raid and Activism Defense, Goldman, Sachs & Co.Robert W. Holthausen, Professor of Accounting and Finance, Chairperson, Accounting Department, Ernst and Young Professor and The Nomura Securities Professor, The Wharton School Jonathan Mir, Managing Director, LazardLarry Nath, Senior Managing Director, The Blackstone GroupJessica Wachter, Richard B. Worley Professor of Financial Management, Professor of Finance, The Wharton School

PANEL PROGRAMS 21

CHANCERY COURT PROGRAMS1 Jessica Wachter, The Wharton School; Larry Nath, The Blackstone Group; Jonathan Mir, Lazard; James Del Favero, Goldman, Sachs & Co.; Robert W. Holthausen, The Wharton School.

2 Casey Cogut, Simpson Thatcher & Bartlett LLP; Hon. Leo E. Strine, Jr.; John Finley, The Blackstone Group.

3 Hon. Andre Bouchard; Hon. Leo E. Strine, Jr.

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22CHANCERY COURT PROGRAMS

FEBRUARY 3, 2015

Documenting the Deal: What is the State of the Art and Does it Make Sense?

It is said that the sale of a public company is inevitably accompanied by litigation — such litigation has been characterized as a "merger tax." A natural result of the litigation challenges is that the actions of those who put the transaction together become the subject of the second-guessing. This program looked into various steps that legal and financial advisors in mergers and acquisitions can take to conduct a sale process in a manner that deflects challenge. The program identified the ways in which conflicts of interest can be reduced, eliminated, or addressed most effectively. The program highlighted the critical importance of maintaining appropriate records that contemporaneously document the decision-making process both to demonstrate the basis for strategic judgments and to assist transaction participants in accounting reconstructing that process after-the-fact. The panelists compellingly demonstrated the practical payoff to a careful deal process — not only does a high quality process reduce the target zone for plaintiffs' lawyers but it fosters better deals.

moderatorsHon. Leo E. Strine, Jr., Chief Justice, Delaware Supreme CourtMichael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics

panelistsDavid A. Katz, Partner, Wachtell, Lipton, Rosen & KatzStephen M. Kotran, Partner, Sullivan & Cromwell LLPGregory V. Varallo, Director, Executive Vice President, Richards Layton & Finger, P.A.

PANEL PROGRAMS 23

CHANCERY COURT PROGRAMS1 Martin Lessner, Young Conway Stargatt & Taylor LLP; Jill Fisch, University of Pennsylvania Law School; Joel Friedlander, Friedlander & Gorris, P.A.

2 Daniel O'Donnell, Dechert LLP; Joseph Frumkin, Sullivan & Cromwell LLP.

3 Stephen Kotran, Sullivan & Cromwell; David Katz, Wachtell, Lipton, Rosen & Katz; Hon. Leo Strine.

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2 2CHANCERY COURT PROGRAMS

APRIL 1, 2014

The Equity Risk Premium

Valuation is the preeminent point of intersection between corporate law and financial economics. Valuation is also a point at which a cornerstone of financial economic theory, the capital asset pricing model, is specified for practical application. A surprisingly wide range of choices must be made in this theory-to-practice transition, choices that directly flow through to Delaware Chancery Court’s appraisal jurisprudence. For dollars-and-cents implications in a discounted cash flow valuation, the choice that looms largest is the value of the equity risk premium. This program took a broad-ranging look at the factors that come to bear on the derivation of this value, with leading academics describing the current state of the theory and investment bankers describing the valuation practice at their respective institutions.

FEBRUARY 11, 2014

The USA or EU: Which Has — As a Matter of Fact — A More Open Market For Corporate Control?

This program took a comparative look at the markets for corporate control in the US and the EU, addressing the question as to the relative openness of the playing fields on each side of the Atlantic. Under current conventional wisdom, Europe, with its “no frustrating actions” constraint against defensive tactics, has the openness advantage. The participants, experts in global mergers and acquisitions from both the USA and EU, offered a contrasting picture, highlighting the importance of differences in governmental policies, member state regulations, and cultural expectations. The overall conclusion was that Delaware corporate law and federal securities regulation provided greater flexibility.


panelistsGeorge A. Casey, Partner, Shearman & Sterling LLPRichard Hall, Partner, Cravath, Swaine & Moore LLPHein Hooghoudt, Partner, NautaDutilhScott V. Simpson, Partner, Skadden, Arps, Slate, Meagher & Flom (UK) LLP


panelistsGreg Dalvito, Managing Director, Barclays CapitalJames Del Favero, Managing Director, Goldman, Sachs & Co.Robert W. Holthausen, Professor of Accounting and Finance, Chairperson, Accounting Department, Ernst and Young Professor and The Nomura Securities Professor, The Wharton SchoolJonathan Mir, Managing Director, LazardJessica A. Wachter, Professor of Finance, The Wharton School

PANEL PROGRAMS 25

1 Robert W. Holthausen, The Wharton School; James Del Favero, Goldman, Sachs & Co.; Jonathan Mir, Lazard; Michael L. Wachter, University of Pennsylvania Law School; Greg Dalvito, Barclays Capital; Jessica A. Wachter, The Wharton School.

2 Hon. Leo E. Strine, Jr.

3 Jessica A. Wachter, The Wharton School.

4 Lorenzo Corte, Skadden, Arps, Slate, Meagher & Flom (UK) LLP; George A. Casey, Shearman & Sterling LLP; Richard Hall, Cravath, Swaine & Moore LLP; Hein Hooghoudt, NautaDutilh.

CHANCERY COURT PROGRAMS

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2 2INSIGHTS FROM PRACTICE

NOVEMBER 5, 2014

This fall’s Insights from Practice program featured a panel discussion on “The Sotheby’s Case.”

Hedge fund activists have become increasingly aggressive in challenging issuers’ business plans, and issuers have responded with creative new defensive measures. Despite the frequency of hostile campaigns, little in the way of new law has resulted. That’s why Third Point v. Ruprecht emerged as a leading case even before it was decided. The defending board in a proxy fight promulgated a poison pill with a 10 percent trigger that applied only to activists rather than the 20 percent trigger that applied to passive investors. The pill cut off the hedge fund’s ability to purchase more stock and so increase its vote in the imminent election contest. The hedge fund failed to persuade the court to issue an injunction precluding the application of the pill. In the process, the court reaffirmed the authority of a board to defend against an activist campaign, bringing to bear the law of takeover defense. Our panelists included Vice-Chancellor Parsons, who ruled on the motion, and counsel for both sides. They took us through the litigation point by point, highlighting layers of complexity and planning that are invisible to a reader of the final opinion.

OCTOBER 30, 2013

Our fall 2013 Insights from Practice program looked at compliance issues in a global company from its general counsel’s point of view, building on the previous year’s program on the special role of corporate general counsel. Peter Y. Solmssen of Siemens AG discussed the company’s turnaround in the wake of a compliance crisis in 2006, a recovery that turned on the inclusion of counsel at the top level of the company, there to protect the company’s reputation for integrity and mitigate risk. Mr. Solmssen pointed to the Siemens experience as an example of the evolving role of general counsel as a corporate leader.

speakerPeter Y. Solmssen, Member of the Managing Board and General Counsel at Siemens AG

commentatorBruce N. Kuhlik, Executive Vice President and General Counsel, Merck & Co., Inc.

moderatorsJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolHelen P. Pudlin, Retired Executive Vice President and General Counsel, PNC Financial Services Group

panelistsWilliam M. Lafferty, Partner, Morris, Nichols, Arsht & Tunnell LLP Mark Lebovitch, Partner, Bernstein Litowitz Berger & Grossmann LLP Honorable Donald F. Parsons, Jr., Vice Chancellor, Delaware Court of ChanceryWilliam D. Savitt, Partner, Wachtell, Lipton, Rosen & Katz Kevin R. Shannon, Partner, Potter Anderson & Corroon LLP


PANEL PROGRAMS 27

INSIGHTS FROM PRACTICE1 Hon. Donald Parsons; William Lafferty, Morris, Nichols, Arsht & Tunnell LLP; Mark Lebovitch, Bernstein Litowitz Berger & Grossman LLP; William Savitt, Wachtel, Lipton, Rosen & Katz; Kevin Shannon, Potter Anderson & Corroon LLP.

2 Peter Y. Solmssen, Siemens AG.

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LECTURES

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

LECTURES

The Law and Entrepreneurship Lecture and the Distinguished Jurist Lecture are the Institute’s principal public programs. In sponsoring these

events, the Institute aims to spotlight and honor lawyers who have led noteworthy careers and made significant contributions as corporate

executives and entrepreneurs or as jurists at the state and federal levels. We also sponsor

lectures in cooperation with Penn Law’s International Program.

LECTURES 29


FEBRUARY 17, 2015

Doing Well and Doing Good: The Story of Plum Organics and the New Benefit Corporation Movement

Chief Justice Leo Strine and Professor Michael Wachter moderated a discussion about benefit corporations. To date, 31 states have adopted benefit corporation legislation, and over 3,000 benefit corporations have been created. The panelists covered recent events both on the ground and in the law, including the growing number of mainstream investors with an interest in investing in benefit corporations. The discussion focused in particular on the groundbreaking Campbell Soup/Plum Organics transaction that resulted in Plum Organics becoming a Public Benefit Corporation that operates as a wholly owned subsidiary of the publicly traded Campbell Soup Company. The panel also discussed possible

NOVEMBER 18, 2014

A Happy Guy in Distressed… From Pre-Med to JD to Distressed InvestingSteven T. Shapiro, Founding Partner and Senior Portfolio Manager, GoldenTree Asset Management

Steve Shapiro sits on GoldenTree Asset Management’s Executive Committee and is responsible for overseeing GoldenTree’s distressed investments and the firm’s investments in media and communications. He also participates in the management of GoldenTree’s absolute return portfolios. Mr. Shapiro graduated with Honors from the University of Pennsylvania College of Arts and Sciences in 1989 and from the University of Pennsylvania Law School in 1992, where he served

as Senior Editor of the Labor Law Journal. Upon graduation, he joined Stroock & Stroock & Lavan in New York where he practiced bankruptcy law. He went on to become a research analyst with the Argosy Group, a high yield investment banking firm in New York. After the Argosy Group was acquired by CIBC World Markets, Mr. Shapiro was involved with numerous financings for media and communications companies in broadcasting, publishing, and telecommunications. He left CIBC as Managing Director in the High Yield Group to join GoldenTree.

amendments to the Delaware Public Benefit Corporation statute that would make it more practical for publicly traded companies to choose benefit corporation status. Those amendments have since been adopted.

panelistsFrederick Alexander, Counsel, Morris, Nichols, Arsht & Tunnell LLP and Advisor for Legal Policy, B LabNeil Grimmer, CEO and Co-Founder, Plum OrganicsBart Houlahan, Co-Founder, B LabRay Liguori, Vice President of Corporate Development, Campbell Soup CompanyKeely Stewart, Associate Corporate Counsel, Campbell Soup Company

22LAW AND ENTREPRENEURSHIP LECTURES

LECTURES 31

LAW AND ENTREPRENEURSHIP LECTURES


MARCH 19, 2015

Fixing Lawyers’ Mistakes: The Court’s Role in Administering Delaware’s Corporate StatuteHon. John W. Noble, Vice Chancellor, Delaware Court of Chancery

Vice Chancellor Noble spoke about what the Court of Chancery can do to fix defective corporate acts. Delaware law has demanding requirements for some corporate actions, particularly those affecting the capital structure and, prior to 2013, some actions that failed to meet the statutory requirements could not be cured despite the unfair results that might ensue. The Delaware legislature enacted sections 204 and 205 of the General Corporation Law in 2013 to address this problem. Section 204 sets out a procedure for ex post ratification of defective corporate actions, particularly defective issues of stock. Section 205 allows the Court to exercise its equitable powers to achieve a comparable result. Vice Chancellor Noble explained how the new legislation fits within the Chancery Court’s historical tradition, spanning almost 225 years, of using equitable considerations to fix mistakes. Nonetheless,

NOVEMBER 19, 2013

The Paucity of Criminal Prosecutions Arising from the Financial Crisis: Unaccountable?Hon. Jed S. Rakoff, United States District Judge, Southern District of New York

Many people believe the financial crisis from which we are still suffering was the product, not just of mistakes and wrong guesses, but fraudulent practices and misrepresentations. Yet few if any high-level executives associated with these alleged misdeeds have been criminally prosecuted. Bringing to bear his combined experience as a former federal prosecutor, former white collar criminal defense lawyer, and (for the past 18 years) experienced federal jurist, Judge Rakoff suggests that the paucity of such prosecutions may be tied, not just to the facts of any given case, but to disturbing trends in federal regulatory and prosecution policies over the past decade and more.

Jed Saul Rakoff is a federal judge for the United States District Court for the Southern District of New York. He joined the court in 1996 after being nominated by President Bill Clinton and assumed senior status on December 31, 2010. Prior to his appointment, Judge Rakoff was Chief Prosecutor of the Business and Securities Fraud Prosecutions Unit. Before serving as Chief Prosecutor, he was the Assistant U.S. Attorney for the U.S. Attorney’s Office in the Southern District of New York. He received his B.A. from Swarthmore, his M.A. in Philosophy from Oxford-England, and his J.D. from Harvard Law School.

Vice Chancellor Noble warned that the new legislation is potentially far-reaching in that it grants the court a wide range of discretion, leaving it to the court to determine how best to exercise that discretion. The Honorable John W. Noble has been a Vice Chancellor of the Delaware Court of Chancery since November 2000. Vice Chancellor Noble is a graduate of Bucknell University (B.S. in Chemical Engineering, magna cum laude, 1972) and the University of Pennsylvania Law School (J.D., cum laude, 1975), where he was an Editor of its Law Review and elected to the Order of the Coif. Following law school, he clerked for the Chief Judge of the United States District Court for the District of Delaware. From 1977 until his appointment, he was a principal in Parkowski, Noble & Guerke, P.A., in Dover, Delaware.

22DISTINGUISHED JURIST LECTURES

LECTURES 33

DISTINGUISHED JURIST LECTURES


22PAST LECTURES

Past Law and Entrepreneurship Lectures

23 April 2014Blackstone Navigating a Sea of Regulatory ChangeJohn G. Finley, Senior Managing Director and Chief Legal Officer, The Blackstone Group

12 November 2013Shazam! – A ’63 Law Grad is Transformed into a High Tech EntrepreneurJ. Haig Farris, President, Fractal Capital Corporation

25 February 2013From Corporate Management to Sports Management: Turning Around the 76ersAdam Aron, CEO and Co-Owner, Philadelphia 76ers

18 October 2012The Cross-Cultural CEO: Growing a Business in a World Without BordersDavid Perla, Co-Chief Executive Officer, Pangea3 LLC

15 November 2011Too Dull for Davos: My Life in Long-Only, Objective-Based, Active Money Management and Why I Think It Still Makes SensePaul G. Haaga, Jr., Chairman of the Board, Capital Research and Management Company

Past Distinguished Jurist Lectures

19 November 2013The Paucity of Criminal Prosecutions Arising from the Financial Crisis: Unaccountable?Hon. Jed S. Rakoff, United States District Judge, Southern District of New York

10 October 2012Financial Stability RegulationDaniel K. Tarullo, Governor, Board of Governors of the Federal Reserve System

15 February 2012Regular Order as EquityHon. Leo E. Strine, Jr., Chancellor, Delaware Court of Chancery

25 October 2011The Delaware Court of Chancery from 1989 – 2011: An Insider’s ViewHon. William B. Chandler III, Chancellor, Delaware Court of Chancery

23 March 2011Treasury’s Performance as Pay Tsar: Precedent or Aberration?Kenneth R. Feinberg, Feinberg Rozen, LLP

2 March 2011Competitive Places and Inner City Opportunities: Reflections on 25 Years of Community InvestmentJeremy Nowak, President and Chief Executive Officer, The Reinvestment Fund

2 November 2010The Financial Crisis: Aftermath and ImplicationsH. Rodgin Cohen, Sullivan & Cromwell LLP

3 March 2010Managing Through Change, Managing Through Crisis in Financial ServicesJoseph D. Gatto, Chairman of Investment Banking, Barclays Capital Americas

30 September 2009The ‘Ten Points’ for Maintaining a Risk-Taking Entrepreneurial Spirit in a Large CorporationJ.P. Suarez, Senior Vice President and General Counsel, Wal-Mart Stores International Division

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

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

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

29 October 2009Private Securities Litigation — Time for a Fresh Start?Hon. Lewis A. Kaplan, United States District Judge, Southern District of New York

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

24 October 2007The Future of Securities RegulationBrian G. Cartwright, General Counsel, Securities and Exchange Commission

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

31 March 2008Making Every Mistake OnceSafra Catz, President, Oracle Corporation

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

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

29 November 2006Large-Scale Entrepreneurship: Business Development at GEPamela Daley, Senior Vice President 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

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

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

4 March 2004Corporate Decision-Making in Delaware CourtsHon. Carolyn Berger, Justice, Delaware Supreme Court

27 February 2003The Effects of Collegiality on Judicial Decision MakingHon. 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 LitigantHon. Jack B. Jacobs, Justice, Supreme Court of Delaware

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

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.

6 March 2001Administering Capital Punishment: Is Texas Different?Hon. Patrick E. Higginbotham, U.S. Court of Appeals for the Fifth Circuit

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

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

12 February 1998The Value of Predictability in Corporate LawHon. E. Norman Veasey, Chief Justice, Delaware Supreme Court

LECTURES 35

PAST LECTURESPast Law and Entrepreneurship Lectures

1 John Finley

2 J. Haig Farris

3 Adam Aron

4 David Perla

5 Paul G. Haaga, Jr.

6 Jeremy Nowak

7 H. Rodgin Cohen

8 Joseph D. Gatto

9 J.P. Suarez

10 Safra Catz

11 Hon. Michael Nutter

12 William A. Ackman

13 Robert L. Friedman

14 Isaac D. Corré

Past Distinguished Jurist Lectures

15 Hon. Jed S. Rakoff

16 Daniel K. Tarullo

17 Hon. Leo E. Strine, Jr.

18 Hon. William B. Chandler III

19 Kenneth R. Feinberg

20 Hon. Lewis A. Kaplan

21 Hon. Randy Holland

22 Brian G. Cartwright

23 Hon. Richard A. Posner

24 Hon. Vaugn R. Walker

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

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

Major one-and two-day symposia are organized under the sole sponsorship of the Institute for Law

and Economics, and in cooperation with other organizations.

ACADEMIC EVENTS

ACADEMIC EVENTS 37


22PENN/NYU CONFERENCE ON LAW AND FINANCE

February 20–21 2015New York University School of Law

Jointly sponsored byInstitute for Law and Economics, University of PennsylvaniaPollack Center for Law & Business, New York University

Organized byStephen Choi, NYU School of Law, New York UniversityJill E. Fisch, University of Pennsylvania Law SchoolItay Goldstein, The Wharton School, University of PennsylvaniaDavid Yermack, NYU Stern School of Business, New York University

Session IPassive Investors, Not Passive OwnersIan Appel, The Wharton School, University of PennsylvaniaTodd Gormley, The Wharton School, University of PennsylvaniaDonald B. Keim, The Wharton School, University of Pennsylvania

CommentatorRobert Jackson, Columbia Law School

ModeratorJennifer Arlen, NYU School of Law, New York University

Session IIShall We Haggle in Pennies at the Speed of Light or in Nickels in the Dark? How Minimum Price Variation

February 28 and March 1 2014University of Pennsylvania Law School

Jointly sponsored byInstitute for Law and Economics, University of PennsylvaniaPollack Center for Law & Business, New York University

Organized byWilliam T. Allen, NYU Stern School of Business and NYU School of Law, New York UniversityYakov Amihud, NYU Stern School of Business, New York UniversityStephen Choi, NYU School of Law, New York UniversityJill E. Fisch, University of Pennsylvania Law SchoolItay Goldstein, The Wharton School, University of PennsylvaniaDavid Yermack, NYU Stern School of Business, New York University

Session IDo Private Firms Invest Differently than Public Firms? Taking Cues from the Natural Gas IndustryErik Gilje, The Wharton School, University of PennsylvaniaJérôme P. Taillard, Carroll School of Management, Boston College

CommentatorTodd Henderson, University of Chicago Law School

Regulates High Frequency Trading and Dark LiquidityRobert Bartlett, University of California, Berkeley Law SchoolJustin McCrary, University of California, Berkeley Law School

CommentatorChester Spatt, Carnegie Mellon, Tepper School of Business

ModeratorWilliam T. Allen, NYU School of Law, New York University

Session IIIThe Price of Political Uncertainty: Theory and Evidence from the Option MarketBryan Kelly, University of Chicago Booth School of BusinessLubos Pastor, University of Chicago Booth School of BusinessPietro Veronesi, University of Chicago Booth School of Business

CommentatorEric Talley, University of California, Berkeley Law School

ModeratorMichael Wachter, University of Pennsylvania Law School

Session IVDoes Majority Voting Improve Board Accountability?Stephen Choi, NYU School of Law, New York University

ModeratorWilliam W. Bratton, University of Pennsylvania Law School

Session IISymbolic Corporate Governance PoliticsMarcel Kahan, NYU School of Law, New York UniversityEdward Rock, University of Pennsylvania Law School

CommentatorDaniel Wolfenzon, Columbia Business School


Session IIIQuadratic Voting as Efficient Corporate GovernanceEric A. Posner, University of Chicago Law SchoolE. Glen Weyl, University of Chicago Law School

CommentatorDavid Yermack, NYU Stern School of Business, New York University

ModeratorStephen Choi, NYU School of Law, New York University

Session IVInformed Options Trading prior to M&A Announcements: Insider Trading?Patrick Augustin, Desautels Faculty of Management, McGill University

Jill Fisch, University of Pennsylvania Law SchoolMarcel Kahan, NYU School of Law, New York UniversityEdward Rock, University of Pennsylvania Law School

CommentatorWei Jiang, Columbia Business School

ModeratorMichael Klausner, Stanford Law School

Session VLiquidity and GovernanceKerry Back, Rice University Jones Graduate School of Business Tao Li, City University of Hong KongAlexander Ljungqvist, NYU Stern School of Business, New York University

CommentatorQuinn Curtis, University of Virginia Law School

ModeratorJill Fisch, University of Pennsylvania Law School

Session VIThe Law and Finance of Anti-Takeover StatutesEmiliano Catan, NYU School of Law, New York UniversityMarcel Kahan, NYU School of Law New York University

CommentatorEspen Eckbo, Dartmouth College Tuck School of Business

Menachem Brenner, NYU Stern School of Business, New York UniversityMarti Subrahmanyam, NYU Stern School of Business, New York University

CommentatorVic Khanna, University of Michigan Law School

ModeratorStephen Choi, NYU School of Law, New York University

Session VThe Separation of Funds and Managers: A Theory of Investment Fund Structure and RegulationJohn Morley, Yale Law School

CommentatorMartijn Cremers, University of Notre Dame, Mendoza College of Business

ModeratorJill E. Fisch, University of Pennsylvania Law School

Session VIAre stock-financed takeovers opportunistic?B. Espen Eckbo, Tuck School of Business, Dartmouth CollegeTanakorn Makaew, Darla Moore School of Business, University of South CarolinaKarin S. Thornburn, Norwegian School of Economics

CommentatorEric Talley, University of California, Berkeley Law School


Session VIIDo Managers Do Good with Other People’s Money?Ing-Haw Cheng, Dartmouth College Tuck School of BusinessHarrison G. Hong, Princeton University Department of EconomicsKelly Shue, Chicago Booth School of Business

CommentatorBrett McDonnell, University of Minnesota Law School

ModeratorItay Goldstein, The Wharton School, University of Pennsylvania

Session VIIIThe Costs and Benefits of Mandatory Securities Regulation: Evidence from the Market Reactions to the Jobs Act of 2012Dhammika Dharmapala, University of Chicago Law SchoolVikramaditya S. Khanna, University of Michigan Law School

CommentatorCraig Lewis, Vanderbilt University Owen School of Business

ModeratorTodd Gormley, The Wharton School, University of Pennsylvania


Session VIIShareholder Empowerment and Bank BailoutsDaniel Ferreira, London School of EconomicsDavid Kershaw, London School of Economics Tom Kirchmaier, London School of Economics Edmund Schuster, London School of Economics

CommentatorPhilipp Schnabl, NYU Stern School of Business, New York University


Session VIIITransparency and Talent Allocation in Money ManagementSimon Gervais, The Fuqua School of Business, Duke UniversityGünter Strobl, Frankfurt School of Finance and Management

CommentatorRyan Bubb, NYU School of Law, New York University

ModeratorMichael L. Wachter, University of Pennsylvania Law School

ACADEMIC EVENTS 39

1 Yakov Amihud, NYU Stern School of Business, New York University.

2 Robert Daines, Stanford Law School; William T. Allen, NYU Stern School of Business and NYU School of Law, New York University.

3 Todd Gormley, The Wharton School, University of Pennsylvania.

4 Edward Rock, University of Pennsylvania Law School.

5 Wei Jiang, Columbia Business School.

6 Chester Spatt, Tepper School of Business, Carnegie Mellon University; William T. Allen, NYU Stern School of Business and NYU School of Law, New York University; Justin McCrary, University of California, Berkeley Law School; Robert Bartlett, University of California, Berkley Law School.

7 Stephen Choi, NYU School of Law, New York University.

PENN/NYU CONFERENCE ON LAW AND FINANCE

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22ILE/WHARTON FINANCE SEMINARS

MARCH 26, 2015

The Evolution of Corporate Cash (co-authored with Mark T. Leary)John Graham, D. Richard Mead, Jr. Family Professor of Finance, Fuqua School of Business, Duke University

The paper studies how corporate cash holdings evolved from 1920 to 2012, noting that the well-documented increase in average cash holdings in recent decades is similar in magnitude and rate of change to cash dynamics that occurred nearly a century ago, while the cross-section of cash holdings has evolved quite differently in recent years relative to earlier periods. In earlier periods, dramatic changes in cash holdings occurred at all points in the distribution of firms, among companies of all sizes, and among both new and existing firms. Modern average cash trends are dominated by new Nasdaq firms in the technology and healthcare sectors entering the sample. For most of the recent sample period, within-firm changes in cash are negative or flat.

OCTOBER 2, 2014

Sovereign Debt Market: From Pigs to HogsStephen Choi, Murray and Kathleen Bring Professor of Law, NYU Law School, New York UniversityMitu Gulati, Professor of Law, Duke University Law School

The paper presents an empirical analysis of sovereign debt issues during three distinct periods related to the Greek debt restructuring of 2012: 1) “Pre Crisis,” prior to April 2010; 2) the “Crisis” period from April 2010–March 2012 and 3) the “Post Crisis” recovery period from April 2012–early 2014. Choi and Gulati ask whether bond prices reflect differences in bond contract terms and hypothesize that sovereign guaranteed bonds had a contractual advantage over garden variety sovereign bonds during the periods in question. The paper finds that the market did indeed price guaranteed bonds at an advantage in the months immediately prior to the Greek restructuring but that a pricing anomaly followed during the post crisis period, and explores possible explanations for the results.

The paper also examines the ability of standard models of cash holdings to explain these shifts in the nature of cash policies, finding little change in the dynamics of cash management over time, but some evidence that the determinants of cash targets have changed. It also shows that cash targets based solely on firm characteristics have little ability to explain the large time-series changes in average or aggregate cash through the century. Including macroeconomic variables such as productivity and GDP growth improves the model’s ability to capture the time series evolution of corporate cash.

commentatorsWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolMichael R. Roberts, William H. Lawrence Professor of Finance, The Wharton SchoolLuke Taylor, Assistant Professor of Finance, The Wharton School

commentatorsWilliam W. Bratton, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law SchoolJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolTodd Gormley, Assistant Professor of Finance, The Wharton SchoolDavid Musto, Ronald O. Perelman Professor in Finance, The Wharton School

ACADEMIC EVENTS 41

ILE/WHARTON FINANCE SEMINARS1 John Graham, Fuqua School of Business, Duke University.

2 Stephen Choi, NYU Law School; Mitu Gulati, Duke University Law School.

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2 2CURRICULAR PARTNERSHIPS

The Institute for Law and Economics also engages in curricular partnerships that serve the educational mission of Penn Law School. Members of our board of advisors share their professional expertise with Penn Law students as adjunct members of the Penn Law faculty and as participants in our classes and seminars.

FALL 2013 – SPRING 2015

Advanced Issues in Corporate LawJack Jacobs and Edward Rock

Business Strategy and Corporate LawyeringPerry Golkin

Challenges Facing Corporate CounselHelen Pudlin and Michael Holston

Challenges Facing the General CounselJill E. Fisch, Bruce Kuhlik and Helen Pudlin

Corporate Governance SeminarJill E. Fisch and William W. Bratton

Cross Border M&AGeorge Casey and Scott Petepiece

M&A Through the Business CycleJoseph Gatto and Joseph Frumkin

Professional Responsibility: Real World Ethical Corporate LawyeringNorm Veasey

Transactional DraftingEric Klinger-Wilensky

Transactional LawyeringCasey Cogut

Widening the Lens on Corporate LawMichael L. Wachter and Hon. Leo E. Strine, Jr.

ACADEMIC EVENTS 43

CURRICULAR PARTNERSHIPS1 Helen Pudlin; Jamie Lau, Interdigital; Michael Holston, Merck & Co., Inc.

2 Jill Fisch, University of Pennsylvania Law School; Roy Katzovicz, Saddle Point Group, LLC; William Bratton, University of Pennsylvania Law School.

3 George A. Casey, Shearman & Sterling LLP.

4 Michael L. Wachter, University of Pennsylvania Law School; Eileen Nugent, Skadden, Arps, Slate, Meagher & Flom LLP.

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ASSOCIATE FACULTY 45

1 Franklin Allen

2 Tom Baker

3 Howard F. Chang

4 Cary Coglianese

5 Itay Goldstein

6 Lawrence Hamermesh

7 Richard J. Herring

8 Robert W. Holthausen

9 Robert P. Inman

10 Richard E. Kihlstrom

11 Jonathan Klick

12 Michael S. Knoll

13 George Malaith

14 Charles W. Mooney, Jr.

15 David K. Musto

16 Gideon Parchomovsky

17 Andrew Postlewaite

18 Michael R. Roberts

19 Edward B. Rock

20 Reed Shuldiner

21 David A. Skeel, Jr.

22 Susan M. Wachter

23 Amy L. Wax

24 Bilge Yilmaz

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Franklin AllenNippon 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 Pennsylvania. 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. He is currently Managing Editor of the Review of Finance, the journal of the European Finance Association. 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 is a Fellow of the Econometric Society. He received his doctorate from Oxford University. Dr. Allen’s main areas of interest are comparative financial systems, banking, and financial crises. He is a co-author with Richard Brealey and Stewart Myers of the eighth through tenth editions of the textbook Principles of Corporate Finance.

Tom BakerWilliam Maul Measey Professor of Law and Health Sciences

Tom Baker is the William Maul Measey Professor of Law and Health Sciences at Penn Law School. His work explores insurance, risk, and responsibility in a wide variety of settings, using methods and perspectives drawn from economics, sociology, psychology, and history. He is the author of The Medical Malpractice Myth (U. Chicago P. 2005) and a contributing editor of Embracing Risk: The Changing Culture of Insurance and Responsibility (U. Chicago P. 2002). His latest book Ensuring Corporate Misconduct: How Liability Insurance Undermines Shareholder Litigation, co-authored with Sean Griffith, analyzes the relationship between D&O insurance and securities litigation based on in-depth interviews with underwriters, claims managers, plaintiffs and defense lawyers, actuaries, brokers and others. He has a secondary appointment in the Business Economics and Public Policy Department at Wharton, where he teaches risk management. He is the Reporter for the American Law Institute's Principles of Liability Insurance Project. He was the Connecticut Mutual Professor and Director of the Insurance Law Center at the University of Connecticut before joining the Penn Law faculty. He clerked for United States Court of Appeals Judge Juan Torruella and practiced with the firm of Covington and Burling.

William W. BrattonNicholas F. Gallicchio Professor of Law; Co-Director, Institute for Law and Economics

Professor Bratton joined the Penn Law faculty in 2010. He graduated in 1976 from Columbia Law School where he was articles editor of the Law Review and a James Kent Scholar. He clerked for the Honorable William H. Timbers on the U.S. Court of Appeals for the Second Circuit and practiced for several years at Debevoise & Plimpton in New York. He served on the Cardozo, Rutgers, and George Washington law faculties before joining the faculty of the Georgetown University Law Center, where he was the Peter P. Weidenbruch, Jr., Professor of Business Law. He also has been the Unilever Visiting Professor at the Faculty of Law of the University of Leiden, the Simizu Visiting Professor at the Faculty of Law of the London School of Economics, and a visiting professor at the Duke and Stanford law schools. He is a Research Associate of the European Corporate Governance Institute and in 2010 was the Anton Philips Professor at the faculty of law of the University of Tilburg. He has published many articles and book chapters on topics in corporate law, the theory of the firm, law and economics, and legal history, and is the editor of the leading law school casebook on corporate finance.

Howard F. ChangEarle Hepburn Professor of Law

Professor Chang received a Ph.D. in economics from the Massachusetts 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.

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Department in Management Science and an editor of the Journal of Financial Intermediation. He has served as an academic advisor at the Federal Reserve Banks of New York, Philadelphia, and Richmond, the Bank of Canada, and the Committee for Capital Markets Regulation. He was the co-founder and the first president of the Finance Theory Group. He has taught various undergraduate, M.B.A., Ph.D., and executive education courses in finance and economics. Prior to joining Wharton, Professor Goldstein has served on the faculty of Duke University’s Fuqua School of Business. He had also worked in the research department of the bank of Israel.

Lawrence HamermeshRuby R. Vale Professor of Corporate and Business Law, Widener University Delaware Law School (Senior Special Counsel, Securities and Exchange Commission Division of Corporation Finance, 2010–2011)

Professor Hamermesh received a B.A. from Haverford College in 1973, and a J.D. from Yale Law School in 1976. Professor Hamermesh 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 Delaware Law School 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. Since 2013 he has been the Reporter for the American Bar Association Business Law Section’s Corporate Laws Committee, which supervises the drafting of the Model Business Corporation Act. He is a member of the American Law Institute. Professor Hamermesh is also a member of the Board of Directors of the Music School of Delaware.

Richard J. HerringJacob 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.

Cary CoglianeseEdward B. Shils Professor of Law and Professor of Political Science

Cary Coglianese is the Edward B. Shils Professor of Law at the University of Pennsylvania 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 chair of the e-government committee 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, as well as the founder and faculty advisor to RegBlog.org, the first university-based online source of daily regulatory news and analysis. 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.

Jill FischPerry 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. Professor Fisch is a director of the European Corporate Governance Institute.

Itay GoldsteinProfessor of Finance, The Wharton School

Itay Goldstein is the Joel S. Ehrenkranz Family Professor in the Finance Department at the Wharton School of the University of Pennsylvania. He is also the coordinator of the Ph.D. program in Finance. He has been on the faculty of the Wharton School since 2004. Professor Goldstein earned his Ph.D. in Economics in 2001 from Tel Aviv University. He is an expert in the areas of corporate finance, financial institutions, and financial markets, focusing on financial fragility and crises and on the feedback effects between firms and financial markets. His research has been published in top academic journals, including the American Economic Review, the Journal of Finance, the Journal of Financial Economics, the Review of Economic Studies, and the Review of Financial Studies. His research has also been featured in the popular press in the Economist, Financial Times, Bloomberg, Forbes, National Public Radio, and others. Professor Goldstein is an editor of the Review of Financial Studies. He has been an editor of the Finance

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Outside the university, he is co-chair of the US Shadow Financial Regulatory Committee and Executive Director of the Financial Economist’s Roundtable, a member of the Advisory Board of the European Banking Report in Rome, the Institute for Financial Studies in Frankfurt, and the International Centre for Financial Regulation in London. In addition, he is a member of the FDIC Systemic Risk Advisory Committee. 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 and of Barclays Bank, Delaware. 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. HolthausenThe Nomura Securities Company Professor and Ernst and Young Professor, Professor of Accounting and Finance, and Chairman, Accounting Department, The Wharton School

Professor Holthausen earned his Ph.D. and his M.B.A. at the University of Rochester. He joined the Wharton School in 1989. Prior to joining the Penn faculty, he was a member of the accounting and finance faculty at the Graduate School of Business of the University of Chicago. Professor Holthausen teaches Corporate Valuation, a course he created for Wharton when he arrived and has been teaching ever since. 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. He is also the author of a detailed book on valuation entitled Corporate Valuation: Theory, Evidence and Practice.

Robert P. InmanRichard 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.

Richard E. KihlstromErvin 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.

Jonathan KlickProfessor of Law and Erasmus Chair of Empirical Legal Studies at Erasmus University Rotterdam

Professor Klick earned his Ph.D. in economics in 2002 and his J.D. in 2003 from George Mason University. He was the Jeffrey A. Stoops Professor of Law and Economics at Florida State University from 2005–2008. He has been a visiting professor at Columbia University, Northwestern University, the University of Southern California, and the University of Hamburg, and he was an Erskine Fellow in the Department of Finance and Economics at the University of Canterbury in Christchurch, New Zealand. Klick’s work lies in the area of empirical law and economics, and every year he thinks the Flyers will win the Stanley Cup.

ASSOCIATE FACULTY


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 is a Fellow and Director of the American College of Bankruptcy. 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 also served as a U.S. Delegate for the UNIDROIT Geneva Securities Convention at the Diplomatic Conferences in Geneva. His current research centers on intermediated securities, sovereign debt restructuring, security interests in bankruptcy, and bankruptcy theory.

Robert H. MundheimUniversity Professor of Law and Finance Emeritus and former Dean, University of Pennsylvania; Of Counsel, Shearman & Sterling; Professor of Corporate Law and Finance, University of Arizona Law School; formerly General Counsel, U.S. Treasury and Executive Vice President and General Counsel of Salomon, Inc.

Mr. Mundheim is Vice Chair of the Board of Trustees of the New School University, a member of the Council and Executive Committee of the American Law Institute, a Trustee of the Curtis Institute of Music, and Chairman of the American Bar Association’s Standing Committee on Ethics and Professional Responsibility.

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

David K. Musto is the Ronald O. Perelman Professor in Finance and Chair of the Finance Department 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 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.

Michael S. KnollTheodore 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), Virginia (2000), and Columbia (2009). 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), a John M. Olin Distinguished Visiting Professor of Law at Toronto University (1998), and a John Raneri Atax Fellow at the University of New South Wales (2011). Prior to entering teaching, he clerked for the Honorable Alex Kozinski on the U.S. Court of Appeals, Ninth Circuit, and served as legal advisor to the Vice Chairman of the U.S. International Trade Commission. He has published extensively in the fields of corporate finance, taxation, economics, and real estate finance.

George J. MailathWalter 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 American Academy of Arts and Sciences and of the Econometric Society. He currently serves on the Council of the Econometric Society and served on the Council of the Game Theory Society 2005–2011, and was one of the founders of the journal Theoretical Economics. He is currently editor of Theoretical Economics, and 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 was co-editor of the Econometric Society Monograph Series and has been 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.

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Gideon ParchomovskyProfessor 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. PostlewaiteHarry 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 and on the Executive Committee of the American Economic Association. He has published widely in the areas of strategic behavior and industrial organization.

Michael R. RobertsWilliam H. Lawrence Professor of Finance, The Wharton School

Michael R. Roberts is a tenured Professor of Finance at the Wharton School of the University of Pennsylvania and a Research Associate of the National Bureau of Economic Research. Professor Roberts earned his B.A. in Economics from the University of California at San Diego, and his M.A. in Statistics and Ph.D. in Economics from the University of California at Berkeley. His primary research is in the area of corporate finance and in particular: capital structure, investment policy, financial contracting, and payout policy. Recent work has examined issues at the intersection of macroeconomics and finance including the role of government borrowing in affecting the supply of credit to and investment behavior of corporations. His research has received several awards including two Brattle Prizes for Distinguished Paper published in the Journal of Finance, and Best Paper awards at the Financial Management Association and Southwestern Finance Association annual conferences. Professor Roberts has served on nine journal editorial boards and is currently the co-editor of the Journal of Finance.

In addition to his research, Professor Roberts has earned a number of teaching awards at the Wharton School including the David W. Hauk Award, multiple Excellence in Teaching awards, and a nomination for the Helen Kardon Moss Anvil Teaching Award. While at Duke University, he also won the Daimler-Chrysler Core Teaching Award at the Fuqua School of Business. He has taught undergraduate, M.B.A., Ph.D., and executive education courses in Finance, Economics, and Statistics. Prior to joining academia, Professor Roberts was a Financial Engineer at Financial Engineering Associates Inc. and a Senior Analyst for Regional Economic Research Inc.

Edward B. RockSaul A. Fox Distinguished Professor of Business Law

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: proxy access, corporate voting, government ownership, hedge funds, and comparative corporate law. He has taught as a visiting professor at Columbia, NYU, Hebrew University, Israel, and the Johann Wolfgang Goethe-Universität, Frankfurt am Main, Germany. Professor Rock served as co-director of ILE from 1998–2010.

Reed ShuldinerAlvin 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. Department 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.

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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. Wachter co-founded and is co-director of the Institute for Urban Research at Penn. She is author of more than 150 scholarly publications and is the recipient of several awards for teaching excellence at The Wharton School.

Amy WaxRobert 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 Office 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.

Bilge YilmazWharton Private Equity Professor, Professor of Finance, The Wharton School

Bilge Yılmaz is the Wharton Private Equity Professor and Professor of Finance at the Wharton School. Prior to his current appointment, he taught at the Graduate School of Business, Stanford University, and held visiting positions at the University of Chicago and INSEAD. He received his BS degrees in Electrical Engineering and Physics from Bogaziçi University, and his PhD in Economics from Princeton University. His research focuses on corporate finance, political economy and game theory. Recently, he has written articles on corporate governance, credit rating agencies, hedge funds, private equity, security design, short-selling constraints, corporate bankruptcy, predatory lending and strategic voting.

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.

Michael L. WachterWilliam B. and Mary Barb 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. WachterAlbert E. Sussman Professor of Real Estate, Professor of Finance, The Wharton School; Co-Director, Penn Institute for Urban Research

From 1998 to 2001, as Assistant Secretary for Policy Development and Research, U.S. Department of Housing and Urban Development, Dr. Wachter served as the senior urban policy official 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 Beneficial Corporation from 1985 to 1998 and of the MIG Residential REIT from 1994 to 1998 and is currently on the Board of Advisors to Momentum Realty. She was


22PUBLICATIONS AND PAPERS

Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School Money, Financial Stability, and Efficiency (with E. Carletti and D. Gale), Journal of Economic Theory 149, 2014, 100–127.

The IPO of Industrial and Commercial Bank of China and the ‘Chinese Model’ of Privatizing Large Financial Institutions (with J. Qian, S. Chan and M. Zhao), European Journal of Finance, forthcoming.

Stakeholder Governance, Competition and Firm Value, (with E. Carletti and R. Marquez), Review of Finance, forthcoming. Tom Baker, William Maul Measey Professor of Law and Health Sciences

Liability Insurer Data as a Window on Lawyers’ Professional Liability (with R. Swedloff), U.C. Irvine L. Rev., forthcoming 2015.

Everything’s Bigger in Texas except the Medmal Settlements (with E. Helland and J. Klick), Conn. Ins. L. J., forthcoming 2015.

Putting the Health Back in Health Insurance (with P. Atanasov), Medical Care Research and Review, forthcoming 2014. Can Consumers Make Affordable Care Affordable? The value of choice architecture (with E. Johnson, R. Hassin, A. Bajger, and G. Treuer), 8(12) PLOS ONE e81521, http://dx.plos.org/10.1371/journal.pone.0081521, 2013. You Want Insurance with That? Using Behavioral Economics to Protect Consumers from Add-On Insurance Products (with P. Siegelman), 20 Conn. Ins. L. J. 1 , 2013.

William W. Bratton, Nicholas F. Gallicchio Professor of Law; Co-Director, Institute for Law and Economics Bankers and Chancellors (with M. Wachter), 93 Texas Law Review, 1, 2014.

Institutional Investor Activism: Hedge Funds and Private Equity, Economics and Regulation (with J.A. McCahery). Oxford University Press, 2015. A Transactional Genealogy of Scandal from Milken to Enron to Goldman Sachs (with A. Levitin), Southern California Law Review, 2013. A Theory of Preferred Stock (with M. Wachter), University of Pennsylvania Law Review, 2013. Howard F. Chang, Earle Hepburn Professor of Law An Empirical Analysis of Cost Recovery in Superfund Cases: Implications for Brownfields and Joint and Several Liability (with H. Sigman), Journal of Empirical Legal Studies, 2014. Endogenous Decentralization in Federal Environmental Policies (with H. Sigman & L. Traub), International Review of Law and Economics, 2014. The Effect of Allowing Pollution Offsets with Imperfect Enforcement (with H. Sigman), American Economic Review, 2011. Cary Coglianese, Edward B. Shils Professor of Law and Professor of Political Science Performance-Based Regulation: Concepts and Challenges, in Francesca Bignami and David Zaring, eds., Elgar Handbook of Comparative Law and Regulation, forthcoming.

Using Public Law to Shape Private Organizations (with J. Nash), in Austin Sarat and Patricia Ewick, eds., The Wiley Handbook of Law and Society, forthcoming.

Administrative Law: The U.S. and Beyond, in James D. Wright, ed., International Encyclopedia of Social and Behavioral Sciences, 2d ed., Elsevier, 2015. Capturing Regulatory Reality: Stigler’s The Theory of Economic Regulation (with C. Carrigan), in Steven Balla, Martin Lodge and Edward Page, eds., Oxford Handbook of the Classics of Public Policy, 2015. Performance Track’s Postmortem: Lessons from the Rise and Fall of EPA’s ‘Flagship’ Voluntary Program (with J. Nash), Harvard Environmental Law Review, 38:1–86, 2014.

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

How Corporate Governance Is Made: The Case of the Golden Leash (with M.D. Cain, S.J. Griffith, and S. Davidoff Solomon), U. Pa. L. Rev., forthcoming.

The Broken Buck Stops Here: Embracing Sponsor Support in Money Market Fund Reform, 93 N. Car. L. Rev., 935, 2015.

Confronting the Peppercorn Settlement in Merger Litigation: An Empirical Analysis and a Proposal for Reform (with S.J. Griffith and S. Davidoff Solomon), 93 Tex. L. Rev., 557, 2015.

Why Do Retail Investors Make Costly Mistakes?: An Experiment on Mutual Fund Choice (with T. Wilkinson-Ryan), 162 U. Pa. L. Rev., 605, 2014.

Who Calls the Shots? How Mutual Funds Vote on Director Elections (with S. Choi and M. Kahan), 3 Harv. Bus. L. Rev., 35, 2013.

Itay Goldstein, Joel S. Ehrenkranz Family Professor of Finance, The Wharton School Feedback Effects, Asymmetric Trading, and the Limits to Arbitrage (with A. Edmans and W. Jiang), American Economic Review, forthcoming.

Government Intervention and Information Aggregation by Prices (with P. Bond), Journal of Finance, forthcoming.

Information Diversity and Complementarities in Trading and Information Acquisition (with L. Yang), Journal of Finance, August 2015. Speculation and Hedging in Segmented Markets (with Y. Li and L. Yang), Review of Financial Studies, March 2014.

Trading Frenzies and Their Impact on Real Investment (with E. Ozdenoren and K. Yuan), Journal of Financial Economics, August 2013. Lawrence A. Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University Delaware Law School (Senior Special Counsel, Securities and Exchange Commission Division of Corporation Finance, 2010–2011) The Importance of Being Dismissive: The Efficiency Role of Pleading Stage Evaluation of Shareholder Litigation (with M. Wachter), forthcoming 2015.

Director Nominations, Delaware Journal of Corporate Law, 2014. Putting Stockholders First, Not the First-Filed Complaint (with L. Strine, Jr. and M.C. Jennejohn), The Business Lawyer, 2013. Who Let You Into the House?, Wisconsin Law Review, 2012.

Richard J. Herring, Jacob Safra Professor of International Banking, Professor of Finance, The Wharton School; Co-Director, Wharton Financial Institutions Center How to Reform the Credit-Rating Process to Support a Revival of Private-Label Securitization (with E. Kane), Quarterly Journal of Finance, 2012.

Fair Value Accounting and Financial Stability: Does How We Keep Score Affect How the Game is Played?, in Handbook of Key Global Financial Markets, Institutions, and Infrastructure, forthcoming 2012.

How to Use Contingent Capital Buffers (with C. Calomiris), in The Future of Central Banking, Central Banking Publications, 2011.

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

Corporate Valuation: Theory, Evidence and Practice (with M.Zmijewski) Cambridge Business Publishers, 2014.

Valuation with Market Multiples: How to Avoid Pitfalls When Identifying and Using Comparable Companies, Journal of Applied Corporate Finance, 2012.

Listed below is a sampling of recently published papers and works 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.


PUBLICATIONS AND PAPERSPitfalls in Levering and Unlevering Beta and Cost of Capital Estimates in DCF Valuations, Journal of Applied Corporate Finance, 2012.

Robert P. Inman, Richard King Mellon Professor of Finance; Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School Federal Institutions and the Democratic Transition: Learning from South Africa, Journal of Law, Economics, and Organizations, 2011. How Should Suburbs Help Their Central Cities? Growth and Welfare Enhancing Intra-Metropolitan Fiscal Distributions, Annals of the American Academy of Political and Social Sciences, 2009.

Making Cities Work: Prospects and Policies for Urban America, Princeton University Press, 2009. Jonathan Klick, Professor of Law and Erasmus Chair of Empirical Legal Studies at Erasmus University Rotterdam

Does Anyone Get Stopped at the Gate? An Empirical Analysis of State Adoption of the Daubert Trilogy (with E. Helland), Supreme Court Economic Review, 2012. The Relationship between Abortion Liberalization and Sexual Behavior: International Evidence (with S. Neelsen and T. Stratmann), American Law and Economics Review, 2012.

Why Aren’t Regulation and Litigation Substitutes?: An Examination of the Capture Hypothesis (with E. Helland), in Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation, University of Pennsylvania Press, 2012. Michael S. Knoll, Theodore K. Warner Professor of Law, Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy Comptroller v. Wynne: Internal Consistency, A National Marketplace, and Limits on State Sovereignty to Tax (coauthor), 163 University of Pennsylvania Law Review Online, 267, 2015.

Wynne: It’s Not About Double Taxation, (coauthor), 75 State Tax Notes, 413, 2015.

What is Tax Discrimination? (with R. Mason), Yale Law Journal, 2012. The Connection between Competitiveness and International Taxation, Tax Law Review, 2012.

Prejudgment Interest (with J. Colon), in Litigation Services Handbook: The Role of the Financial Expert, 5th Edition, chapter 15, 2012.

George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences Stable Matching with Incomplete Information (with Q. Liu, A. Postlewaite and L. Samuelson), Econometrica, March 2014. Incentive Compatibility and Differentiability: New Results and Classic Applications (with Ernst-Ludwig von Thadden), Journal of Economic Theory, September 2013. A Foundation for Markov Equilibria in Sequential Games with Finite Social Memory (with V. Bhaskar and S. Morris), Review of Economic Studies, July 2013. Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law Great Expectations for True Sales of Receivables, Securitization, and Bankruptcy Policy (with S. Harris), forthcoming 2013. The Bankruptcy Code’s Safe Harbors for Qualified Financial Contracts: Too Safe to Fail, Texas International Law Journal, forthcoming 2013. The Truth about Shortfall of Intermediated Securities: Perspectives Under the Geneva Securities Convention, United States Law, and the Draft European Securities Directive, in Intermediated Securities: The Impact of the Geneva Securities Convention and the European Securities Law Directive, Cambridge University Press, 2013. David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School What do Consumers’ Fund Flows Maximize? Evidence from their Brokers’ Incentives (with S. Christoffersen and R. Evans), Journal of Finance, 2013.

Notes on Bonds: Liquidity at all Costs in the Great Recession (with G. Nini and K. Schwarz), Wharton School, Working Paper. Does Junior Inherit? Refinancing and the Blocking Power of Second Mortgages (with P. Bond, R. Elul, and S. Garyn-Tal), Working Paper. Gideon Parchomovsky, Professor of Law Intellectual Property Defenses (with A. Stein), 114 Colum. L. Rev., forthcoming 2014.

Property Lost in Translation (with A. Bell), 80 U. Chi. L. Rev., forthcoming 2013. Cities, Property, and Positive Externalities (with P. Siegelman), William and Mary Law Review, 2012.

The Case for Imperfect Enforcement of Property Rights (with A. Bell), University of Pennsylvania Law Review, 2012.

The Relational Contingency of Rights (with A. Stein), Virginia Law Review, 2012.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School Economic Models as Analogies (with I. Gilboa, L. Samuelson and D. Schmeidler), Economic Journal, forthcoming. Should Courts Always Enforce What Contracting Parties Write? (with L. Anderlini and L. Felli), Review of Law and Economics, 2011. Political Reputations and Campaign Promises (with E. Aragones and T. Palfrey), Journal of the European Economic Association, 2007. Michael R. Roberts, William H. Lawrence Professor of Finance, The Wharton School A Century of Capital Structure: The Leveraging of Corporate America (with J. Graham and M. Leary), Journal of Financial Economics, forthcoming. Do Peer Firms Affect Corporate Capital Structure (with M. Leary), Journal of Finance, 2014. Corporate Dividend Policies: Lessons from Private Firms (with R. Michaely), Review of Financial Studies, 2012. Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law Symbolic Corporate Governance Politics (with M. Kahan), Boston University Law Review, 2014.

Adapting to the New Shareholder-Centric Reality, University of Pennsylvania Law Review, 2013. Shareholder Eugenics in the Public Corporation, Cornell Law Review, 2012. David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law Bankruptcy Law as a Liquidity Provider (with K. Ayotte), University of Chicago Law Review, 2013.

The New Financial Deal: Understanding the Dodd-Frank Act and its (Unintended) Consequences, Wiley, 2011. Transaction Consistency and the New Finance in Bankruptcy (with T. Jackson), Columbia Law Review, 2012. Michael L. Wachter, William B. and Mary Barb Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

The Importance of Being Dismissive: The Efficiency Role of Pleading Stage Evaluation of Shareholder Litigation (with L.A. Hamermesh), forthcoming 2015.

Bankers and Chancellors (with W.W. Bratton), Texas Law Review, forthcoming 2015.

The Striking Success of the National Labor Relations Act, 37 REGULATION 20, Spring 2014.

A Theory of Preferred Stock (with W.W. Bratton), University of Pennsylvania Law Review, 2013. Susan M. Wachter, Albert E. Sussman Professor of Real Estate, Professor of Finance, The Wharton School; Co-Director, Penn Institute for Urban Research

Transparency in the Mortgage Market, co-authors Andrey D. Pavlov and Albert Zevelev, Journal of Financial Services Research, forthcoming.

Second Liens and the Leverage Option, co-author Adam J. Levitin, Vanderbilt Law Review, forthcoming, Vol. 68, 2015.

The Housing and Credit Bubbles in the United States and Europe: A Comparison, Journal of Money, Credit and Banking, Vol. 47, March/April 2015, pp. 37–42. Borrowing Constraints During the Housing Bubble, co-authors Irina Barakova and Paul Calem, Journal of Housing Economics, Vol. 24, June 2014, pp. 4–20. Amy Wax, Robert Mundheim Professor of Law Diverging Family Structure and Rational Behavior: The Decline in Marriage as a Disorder of Choice, in The Economics of the Family, Elgar Publishers, 2011. Disparate Impact Realism, William and Mary Law Review, 2011. Stereotype Threat: A Case of Overclaim Syndrome?, in The Science on Women and Science, EI Press, 2009. Bilge Yilmaz, Wharton Private Equity Professor, Professor of Finance, The Wharton School Adverse Selection and Convertible Bonds (with A. Chakraborty), Review of Economic Studies, forthcoming. Predatory Mortgage Lending (with P. Bond and D. Musto), Journal of Financial Economics, 2009. Information and Efficiency in Tender Offers (with R. Marquez), Econometrica, 2008.

LECTURES


LECTURES

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

Joel E. FriedlanderJoseph D. GattoGibson, Dunn & Crutcher LLPGoldman, Sachs & Co.Perry Golkin, Mrs. Donna O’Hara Golkin, and The Perry and Donna Golkin Family FoundationLeon C. Holt, Jr.Hughes Hubbard & Reed LLPInnisfree M&A IncorporatedSarkis JebejianRoy J. KatzoviczKirkland & Ellis LLPLazardMacKenzie Partners, Inc.Merck & Co., Inc.Millennium Management FoundationMorgan, Lewis & Bockius LLPMorris, Nichols, Arsht & Tunnell LLPPotter Anderson & Corroon LLPAllan N. RauchReed SmithRichards, Layton & Finger, P.A.Ropes & Gray LLPSchulte Roth & Zabel LLPSeyfarth Shaw LLPShearman & Sterling LLPSidley Austin LLPVanguardWachtell, Lipton, Rosen & KatzWhite & Case LLPYoung Conaway Stargatt & Taylor, LLP

Benefactors$25,000 or aboveCharles I. Cogut and Simpson Thacher & Bartlett LLPRobert L. FriedmanPaul G. Haaga, Jr.Skadden, Arps, Slate, Meagher & Flom LLPSullivan & Cromwell LLP

Sponsors$10,000 to $24,999Air Products and Chemicals, Inc.Apollo Capital Management, L.P.AQR Capital Management, LLCAshe Capital ManagementBernstein Litowitz Berger & Grossmann LLPMartin J. BienenstockCadwalader, Wickersham & Taft LLPCovington & Burling LLPCravath, Swaine & Moore LLPCredit SuisseDebevoise & Plimpton LLPDechert LLPDelaware Department of StateE. I. du Pont de Nemours and CompanyEton Park Capital ManagementFidelity Management & Research CompanyJohn G. FinleyFMC CorporationStephen Fraidin

ILE INVESTORS 2014–2015

Members$5,000 to $9,999James H. AggerEric Klinger-WilenskyMyron J. Resnick

Donors$1,000 up to $4,999John DiTomoEdmund KitchJames A. OunsworthHelen P. PudlinKenneth W. Willman

DonorsUp to $999Joseph CarapietChristopher FouldsMary J. GrendellSarah Hammer

INSTITUTE INVESTORS 55

22


Institute for Law & EconomicsUniversity of Pennsylvania

3501 Sansom Street, Philadelphia, PA 19104–6204215.898.7719, www.law.upenn.edu/ile/

September 2015

FOUNDED IN 1980, the Institute for Law and Economics at the University of Pennsylvania has an ambitious agenda that is timelier than ever. The study of law and economics remains the most rapidly growing movement in legal scholarship and jurisprudence. Under the sponsorship of the Law School, the Wharton School, and the Department of Economics in Penn’s School of Arts and Sciences, the Institute has played a leading role in this expanding field.

Cross-disciplinary research, the cornerstone of ILE, seeks to influence the national policy debate by analyzing the impact of law on the global economy, spotlighting the significant role that economics plays in fashioning legal policy. Our innovative roundtables and conferences, launched in 1985, complement these goals by provoking in-depth and frequently groundbreaking examinations of critical issues. These and other programs highlighted in this Annual Report have helped the Institute stay on the leading edge of this cross-discipline.

The Institute for Law and Economics has unique advantages. We draw on the research and teaching strengths of the Law School, the Wharton School, and the Department of Economics. Our geographic location is optimal, allowing us to bring together 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 firms, foundations, and individuals who endorse our work each year. Over the past decade, the Institute has more than tripled its donor base to provide ongoing support for its programs.

Michael L. Wachter, Co-DirectorWilliam B. and Mary Barb Johnson

Professor of Law and Economics215.898.7852

[email protected]

Jill E. Fisch, Co-DirectorPerry Golkin Professor of Law

[email protected]

William W. Bratton, Co-DirectorNicholas F. Gallicchio Professor of Law

[email protected]

Nadia Jannetta, Program Coordinator215.898.7719

[email protected]

ile annual report 2014-2015

Documents