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ANNUAL REPORT 2008–2009

We find “islands of conscious power in this ocean of unconscious co-operation like lumps of butter coagula ng in a pail of buttermilk.” But in view of the fact th t is usually argued that co-ordination will be done by he price mechanism, why is such organization neces ary? Why are there these “islands of conscious power”? utside the firm, price movements direct production which is coordinated through a series of exchange tran ctions on the market. Within a firm, these markets ransactions are eliminated and in place of the complicated market structure with exchange transactions ubstituted the entrepreneur co-ordinator, who directs production. It is clear that these are alternative meth institute for f co-ordinating production. Yet, having regard to the & economics act that iflaw production is regulated by price movemen production could be carried on without any organizati t all, well might we ask, why is there any organization

A Joint Research Center of the Law School, the Wharton School, and the Department of Economics in the School of Arts and Sciences at the University of Pennsylvania


Message from the Co-Chairs for almost three decades, penn’s institute for law and economics has contributed to scholarship, policy, and practice on relevant issues of law and economics that affect our country’s businesses and financial institutions. Message from the Co-Chairs Board of Advisors Message from the Dean Message from the Co-Directors Roundtable Programs off the record, spring 2009 Corporate Finance, spring 2009 Corporate Finance, Fall 2008 Corporate Finance, spring 2008 Corporate Finance, Fall 2007 Panel Programs delaware Chancery program Corporate governance Conference

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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 to stay on the leading edge of this cross-discipline. the Institute for Law and economics has unique advantages. We draw on the research and teaching strengths of the Law school, the Wharton school, and the department of economics. our geographic location is optimal, allowing us to bring together

deal day Chancery Court programs Lectures Law and entrepreneurship distinguished Jurist past Lectures Academic Events nYU/penn Conference, spring 2009 penn/nYU Conference, spring 2008 ILe/Wharton Finance seminars Publications and Papers Associate Faculty Institute Investors

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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 the programs discussed in this annual report. a list of Institute Investors for 2008–2009 appears on page 49.

Cover Captions (from left to right) off the record. Hon. e. norman veasey, Weil, gotshal & manges LLp; Lee a. meyerson, simpson thacher & Bartlett LLp; perry golkin, Kohlberg Kravis roberts & Co.; gerald rosenfeld, rothschild north america.

tHe InstItUte’s programs have become increasingly relevant and important in this challenging economic climate, focusing on the issues that the academic, legal, and business communities care about. today the Institute enjoys an outstanding international reputation for the excellence of its programs, where leaders in business, financial management, legal practice, and academic scholarship candidly discuss the intersection of theory and practice on a host of significant issues. on behalf of the Institute’s Board of advisors, we want to express our gratitude to everyone who has helped the Institute during this past year, whether through financial contributions or by participation in ILe programs. one of the foremost goals of the Institute is to broaden and diversify our foundation, and once again we have realized that goal. We are delighted to report some superb additions to our Board of advisors during the past year. We are pleased to welcome the following new members: daniel H. Burch (macKenzie partners, Inc.); stuart m. grant (grant & eisenhofer p.a.); and Heidi stam (vanguard). these accomplished individuals will greatly enhance the work of the Institute and broaden the composition of our Board. all of the members of our Board give graciously to the Institute, not just financially but also of their time and expertise, and we are very grateful for their contributions. very special thanks must be given to ILe Benefactors Bob Friedman, paul Levy, and skadden, arps, slate, meagher & Flom LLp (through eric Friedman). their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express our sincere appreciation to each of them. this year we welcomed Jill Fisch as a co-director of ILe, joining ed rock and michael Wachter. these three distinguished professors have continued to do a truly outstanding job coordinating the work of the Institute. their tireless dedication to all aspects of the Institute’s work and their ability to come up with timely programs and attract the ideal participants to make every program an unqualified success are why ILe is world-renowned as the forum for interesting dialogue on topical issues for corporations and their financial and legal advisors.

Charles “Casey” Cogut Simpson Thacher & Bartlett LLP

Joseph B. Frumkin Sullivan & Cromwell LLP

Corporate roundtable, Fall 2008. paul g. Haaga, Jr., Capital research and management Company. University of pennsylvania Law school.

september 2009

off the record. marcy engel, eton park Capital management. Cover Text ronald Coase, The Nature of the Firm (1937)

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Board of Advisors advisors Wayne, pa newMiller York, nY Roy J. B. Katzovicz Robert L. Friedman Eric J. Friedman William Johnson Alan David M. Silk General Emeritus Counsel Chair, 2001–2007 Executive Partner Chairman Co-Chairman Wachtell, Lipton, David&M. Silk James A. Ounsworth pershingCorporation square Capital Innisfree Senior Managing Director and Whitman skadden, arps, slate, m&a Incorporated rosen Katz Wachtell, Lipton, Managing Director management, L.p. Chief Legal cerLLp meagher & Offi Flom Chicago, IL new York, nY new York, nY the musser Consulting group rosen & Katz new York, nY the York, Blackstone new nY group L.p. newL.York, nY new York, nY Cynthia B. Kane G.Wayne, Daniel pa O’Donnell Bruce Silverstein BruceAssistant N. Kuhlikto the Robert L. Friedman Special dechert LLp Young Conaway stargatt Silverstein Morton A. Pierce Executive Joseph B. Frumkin Chair, 2001–2007 Secretary of Vice StatePresident and philadelphia, pa & Bruce taylor,L.LLp Young Conaway stargatt dewey & LeBoeuf LLp General Counsel Co-Chair, 2008– Senior Managing Director delaware department Wilmington, de & taylor, LLp new York, nY merck & Co., Inc. sullivan & Cromwell LLp and Chief Legal Officer of state James E. Odell Wilmington, de Whitehouse station, nJ new York, nY the Blackstone group L.p. Wilmington, de General Counsel, A. Gilchrist Sparks III Martha L. Rees new York, nY The Americas nichols, arsht A. Gilchrist Sparks III Vice President and Assistant morris, Mark Lebovitch Joseph D. Gatto Investment & morris, tunnellnichols, LLp Roy J. Katzovicz arsht General Counsel Bank Bernstein Litowitz Berger & UBs Vice Chairman FrumkinInc. new nYde nemours Wilmington, de Chief Legal OffiLLp cer & tunnell LLp e. I. York, du pont grossmann LehmanB.Brothers morgan Lewis & Bockius LLp Joseph William D. Anderson, Jr. Co-Chair, pershing square Wilmington, de & Company, Inc. new York, nY Capital new York,2008– nY philadelphia, pa sullivan & Cromwell LLp Managing Director James A. Ounsworth Heidi Stam management, L.p. Wilmington, de York, nY goldman, & Co.Jr. new Managing Partner new York, nY Managing Hon. LeoDirector E. Strine, Jr. Paul S. Levy Joseph Glatt William D.sachs Anderson, new York,Director nY the sL Consulting Vice Chancellor Myron J. Resnick group Founder Principal Counsel Managing and General Counsel Joseph Gatto philadelphia, delaware Court of Retired Seniorpa Vice President vanguard JLL partners apollo D. Capital goldman, sachs & Co. Roger Kimmel Marshall Babson Vice Chairman L.p. Chancery and Chief Investment Officer Wayne, new York, nY management, new York,B.nY Vice Chairman pa allstateA.Insurance new York, nY Hughes Hubbard Barclays Morton Pierce Company Wilmington, de rothschild Inc. northbrook, IL LLp Robert Lonergan Marshall B. Babson & reed LLp new York, nY dewey & LeBoeuf new York,A. nY Hon. Leo E. Strine, Jr. Nancy Straus Sundheim Executive Vice President, new York, nY Hughes Hubbard new York, nY & reed LLp Perry Golkin Vice Chancellor Senior Vice President, Robert H. Rock General Counsel and MemberD. Glatt new York, nY Joseph Bruce N. Kuhlik delaware Court of Chancery General Counsel Chairman and Publisher Corporate Secretary Kohlberg Kravis roberts & Co.Executive Fred Blume Martha L. Rees General Counsel Vice President Wilmington, de and Secretary directors & Boards and Counsel Haas Company Vice new York, nY Fred Blume Chairman Emeritus President and apollo Capital androhm General Unisys Corporation philadelphia, paCounsel philadelphia, pa Chairman Emeritus Blank rome LLp Assistant General management, L.p. merck & Co., Inc. Hon. E. Norman Veasey Blue Bell, pa John G. Harkins, Jr. Blank rome LLp philadelphia, pa e. I. du pont de nemours new York, nY Whitehouse station, nJ Chief Justice, Supreme Court Gerald Rosenfeld Simon M. Lorne Chair, 1980–1990 philadelphia, pa & Company, Inc. of Jere Delaware, 1992–2004 R. Thomson Deputy Chairman Vice Chairman and Chief Harkins Cunningham LLp Daniel H. Burch Wilmington, de Perry Golkin Mark Lebovitch gotshal Jones day & manges LLp rothschild north america Weil, Legal Officer philadelphia, pa Charles I. Cogut Chairman & CEO Member Bernstein Litowitz Berger new newYork, York,nY, nYand new York, nY millennium management, Co-Chair, 2008– macKenzie partners, Inc. Kohlberg Myron J. Resnick Kravis & grossmann LLp Wilmington, de LLC Leon C. Holt, Jr. simpson thacher & new York, Retired Vice roberts & Co. new York, nY Hon. E. Norman Veasey PeterSenior G. Samuels new York, nY Retired Vice Chairman and Bartlett LLpnY President androse ChiefLLp new nY Marc ChiefWeingarten Justice, Supreme proskauer ChiefYork, Administrative Officer new York, nY Charles I. Cogut Investment Paul S. LevyE. Lubowitz schulte & Zabel LLp Court ofroth Delaware, new York,Offi nYcer Michael air products and Chemicals, Inc. Co-Chair, 2008– Stuart M. Grant Founder new York, nY 1992–2004 Weil, gotshal & manges LLpallstate Insurance allentown, pa Isaac D. Corré simpson thacher Company grant & eisenhofer p.a. JLLnew partners Weil, gotshal & John F. Schmutz York, nY Senior Managing Director & Bartlett LLp northbrook, IL Wilmington, de new York, nY mangesP.LLp Chair, 1990–1994 William B. Johnson eton park Capital Gregory Williams new York, nY new York, nY, and Retired Senior Vice President richards, J. Anthony Messina Chairman Emeritus management Layton & Wilmington, and General Counsel Buchanan Ingersoll & Whitman Corporation new York, nY Peter G. Samuels John G. Harkins, Jr. Simon M. Lorne Finger, p.a. de e. I. du pont de LLp nemours rooney pC and Chief Chicago, IL Isaac D. Corré proskauer rose Chair, 1980–1990 Vice Chairman Wilmington, de Marc Weingarten & Company, philadelphia, PamelaManaging Craven Director Harkins Cunningham LLp Legal Senior new York, nYInc. Officer pa schulte & Zabel Wilmington, de Stephen J. Jones Chief park Administrative eton Capital Officer philadelphia, pa millennium Donald J. roth Wolfe new anderson York, nY & Alan Miller LLC Vice President, General avaya Communications management John F. Schmutz management potter Howard L. Shecter Co-Chairman Counsel and Secretary Basking ridge, new York, nY nJ Chair, 1990–1994 Leon C. Holt, Jr. new York, nY Corroon LLp Gregory P. Williams orrick, Herrington air products and Chemicals, Senior Vice & Retired Vice Chairman and Inc. Innisfree m&a Incorporated Retired Wilmington, de richards, Layton & sutcliffe LLp new York, nY allentown, pa Richard D’Avino Kenneth R. Fitzpatrick President and Chief Administrative Officer J. Anthony Messina Finger, p.a. new York, nY V.P. Taxes-GE Vice President,Capital and General Counsel air products and Buchanan Ingersoll & Wilmington, de G. Daniel O’Donnell Cynthia B. Kane NBC Universal Chief Legal Officer and e. I. du pont de nemours Chemicals, Inc. rooney pC Robert C. Sheehan dechert LLp general electric Company Special Assistant to the Corporate Secretary & Company, Inc. allentown, pa philadelphia, pa Donald J. Wolfe Executive Partner philadelphia, pa Secretary of State stamford, Ct the dow Chemical Wilmington, de slate, potter anderson & skadden, arps, delaware department of state Company Andrew Jacobs Corroon LLp meagher & Flom LLp James E. Odell Wilmington, de Joel E. Friedlander philadelphia, pa Victoria E. Silbey General Counsel & Chief Wilmington, de new York, nY General Counsel, The Bouchard, margules & Senior Vice President— Compliance Officer Americas Friedlander Legal and General Bam Capital, LLC Victoria E. SilbeyCounsel UBs Investment Bank Wilmington, de sungard data systems Inc. new York, nY Senior Vice President–Legal Wayne, pa Counsel and General sungard data systems Inc. Barry M. James H.Abelson Agger pepper1994–2001 Hamilton LLp Chair, philadelphia, Retired Seniorpa Vice President, General James H. Agger Counsel and Secretary Chair, 1994–2001 air products and Retired SeniorInc. Vice Chemicals, President, General allentown, pa Counsel and Secretary air products and Richard B. Aldridge Chemicals, Inc. morgan Lewis & allentown, pa Bockius LLp philadelphia, pa Richard B. Aldridge

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4 1 Lee Holt and Jim Agger 2 Richard Aldridge 3 Marshall Babson 4 Casey Cogut, Dan O’Donnell, Jack Schmutz 5 Isaac Corré

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Message from the Dean for over twenty years, the institute for law and economics has successfully demonstrated the benefits of a crossdisciplinary perspective. Its programs provide a model for how to build bridges between disciplines by creating ties between schools, between faculty members, between students, and between experts in the field from around the world. ILE combines Penn’s greatest strengths in the Law School, the Wharton School, and the Department of Economics to focus on complex questions that concern all of these fields. The Institute proves that when you bring the right people—judges, deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more—to convene outside of their own niches, remarkably original insights are generated. As our world grows more complex every day, the topics the Institute addresses are both exciting and relevant. It is no longer enough to approach complicated questions such as the current financial crisis, the role of shareholder activism, and the enforcement of securities law from solely a legal, economic, or business perspective. Indeed, no significant business issue can be addressed without paying attention to the underlying economic trends and legal regulations. All of ILE’s participants contribute to and benefit from the profound understanding such analysis affords. In addition to its unique focus, another of the Institute’s strengths is the variety of programs it offers. The roundtables—ILE’s signature events—bring together distinguished members of the bar, judiciary, government, business world, and academia for open discussion and intellectual exploration. ILE’s public lectures by leading jurists, executives, and entrepreneurs attract participants from all sectors of the University and from the wider community. During the past year the outstanding talks, panels, and conferences organized by the Institute covered a wide range of topics and programs, from corporate finance and corporate governance to private equity and hedge funds, as well as large-scale entrepreneurship and management. Since my cross-disciplinary vision for the Law School and the purposes of the Institute for Law and Economics are so similar, it is personally gratifying to me that the Institute is generously supported by contributors who understand the importance of what we do and the unique position the Institute holds. Many of these contributors also serve as members of the Institute’s Board of Advisors, helping to plan the direction and focus of the programs and lending their expertise as panelists and commentators for Institute events. ILE’s extraordinary co-chairs, Casey Cogut and Joe Frumkin, have my particular thanks for their many exceptional contributions. Like all who serve as advisors for ILE, Casey and Joe contribute their very valuable time and expertise, in addition to their numerous contacts in the legal and business communities. ILE has benefited substantially from their leadership. I must also thank the three eminent professors who lead the Institute for Law and Economics—Michael Wachter, Ed Rock, and Jill Fisch. It is because of their commitment and enthusiasm that ILE ranks among the premier institutions of its kind. I extend the deepest appreciation to all ILE supporters and participants for their commitment and investment during the past year. With the proper support and sponsorship, the Institute for Law and Economics has limitless potential for growth and expansion in the future. We welcome others to join in backing and participating in this extremely worthwhile endeavor.

Message from the Co-Directors this year’s programs explored some of the most critical issues of the day. Our Fall Corporate Finance Roundtable looked behind the hype on the question of whether CEOs are in fact overpaid. We also examined the role of corporate governance ratings and the factors that determine how institutional shareholders decide to vote their shares. In the spring, as government bailouts left the Treasury with equity stakes in private corporations, we took a preliminary look at the “new corporatism” and the role of the government as shareholder. In our spring Delaware Chancery program, we examined different forms of shareholder activism and the extent to which labor unions and hedge funds have common interests. Over the course of the year, we presented three fascinating Law and Entrepreneurship lectures. In the fall, Bill Ackman, Managing Member of Pershing Square Capital Management, spoke to an overflowing audience about investing in a recession. In the spring, Hon. Michael Nutter, the Mayor of Philadelphia, spoke on the intersection of education and community, and Safra Catz, President of Oracle Corporation, gave the audience behind-the-scenes insight into the PeopleSoft deal. For our Distinguished Jurist lecture, Hon. Randy J. Holland of the Delaware Supreme Court spoke on “Delaware Directors’ Fiduciary Duties.” At the Deal Day program, we examined in depth the acquisition of CNET by CBS. Our joint programs with Wharton’s Finance Department flourished. The Law and Finance series, a regular part of the Finance workshop schedule, continued with presentations by Mark J. Roe (David Berg Professor of Law, Harvard Law School) and Antoinette Schoar (Michael M. Koerner Associate Professor of Entrepreneurial Finance, Sloan School of Management, Massachusetts Institute of Technology). The fifth annual NYU/Penn Law and Finance Conference was held at NYU. The Institute’s greatest strength lies in the quality of our supporters and their active, enthusiastic participation in our programs. Our board members and sponsors make our programs possible, both as key participants and with their financial support. We would particularly like to acknowledge our board chairs, Casey Cogut of Simpson Thacher & Bartlett LLP and Joe Frumkin of Sullivan & Cromwell LLP, for their dedicated and enthusiastic work over the past year. We are delighted to have added three new members to the board, and we welcome them: Daniel H. Burch (MacKenzie Partners, Inc.); Stuart M. Grant (Grant & Eisenhofer P.A.); and Heidi Stam (The Vanguard Group). We also extend our heartfelt thanks to all of our supporters for bringing your perspective, your ideas, your experience, and your expertise to all that we do. Your participation is necessary to realize the Institute’s purpose and objectives, and it makes our job as Institute directors immensely satisfying and worthwhile.

Jill E. Fisch, Co-Director, Institute for Law and Economics Perry Golkin Professor of Law Edward B. Rock, Co-Director, Institute for Law and Economics Saul A. Fox Distinguished Professor of Business Law

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

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

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Roundtable Programs at the heart of the institute’s work is the roundtable series, which brings together members of the institute’s associate faculty and other academics with corporate executives, practicing attorneys, judges, public policymakers, and students. each roundtable provides a forum for lively discussion of current issues that emerge from the research and teaching of the institute.

Over the years, the Institute has sponsored roundtables on a broad range of topics—including labor law and bankruptcy, as well as corporate law, governance, and finance—engaging the interest and participation not only of scholars but also of leaders in the business and public sectors. The high caliber of the participants guarantees that each affair is intense and informative. ILE’s longstanding off-the-record policy for the 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.

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1 Hon. E. Norman Veasey, Weil, Gotshal & Manges LLP; Lee A. Meyerson, Simpson Thacher & Bartlett LLP; Perry Golkin, Kohlberg Kravis Roberts & Co.; Gerald Rosenfeld, Rothschild North America; Isaac D. Corré, Eton Park Capital Management.

Off the Record: A Board Discussion of the Financial Crisis 26 May 2009

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

Eton Park Capital Management, New York City

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

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

Moderators Isaac d. Corré, Senior Managing Director, Eton Park Capital Management Jill e. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School michael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School Introductory Presentations by richard J. Herring, Jacob Safra Professor of International Banking; Professor of Finance, The Wharton School edward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

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4 James E. Odell, UBS Investment Bank; Simon M. Lorne, Millennium Management LLC; Michael J. Macaluso, Morgan, Lewis & Bockius LLP; Richard D’Avino, General Electric Company. 5 G. Daniel O’Donnell, Dechert LLP; Marcy Engel, Eton Park Capital Management; Robert H. Mundheim, Shearman & Sterling LLP.

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1 Joseph B. Frumkin, Sullivan & Cromwell LLP. 2 Front row: William W. Bratton, Georgetown University Law Center; Martha L. Rees, DuPont. Middle row: Stephen L. Brown, TIAA-CREF; Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Andrew R. Brownstein, Wachtell, Lipton, Rosen & Katz. Back row: Christopher Foulds, Clerk, Delaware Court of Chancery; Scott Litvinoff, Clerk, Delaware Court of Chancery; Neela Mookerjee, Clerk, Delaware Court of Chancery.

Corporate Finance 8 May 2009 Welcome Michael a. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

Shareholder Primacy in a Corporatist Political Economy William W. Bratton, Professor of Law, Georgetown University Law Center michael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School many look toward enactment of items on shareholder primacy’s law reform agenda to help recovery from the financial crisis. the authors negate that view, arguing that the financial crisis exposes major weakness in the claims of those who favor greater shareholder power. our claim is that shareholder empowerment delivers management a simple and emphatic marching order: manage to maximize the market price of the stock. and that is exactly what the managers of a critical set of financial firms did in recent years. they managed to a market that focused on increasing observable earnings and, as it turned out, failed to factor in concomitant increases in risk that went largely unobserved. the fact that management bears primary responsibility for the disastrous results does not by itself effect a policy connection between increased shareholder power and regulatory reform. a policy connection instead turns on a counterfactual question: Whether increased shareholder power would have imported more effective risk management in advance of the crisis. no plausible grounds exist for making such a case. Big Deal: The Government’s Response to the Financial Crisis steven m. davidoff, Associate Professor of Law, University of Connecticut School of Law david Zaring, Assistant Professor of Legal Studies, The Wharton School How should we understand the federal government’s response to the financial crisis? the government’s team, largely staffed by investment bankers, pushed the limits of its statutory authority to authorize an ad hoc series of deals designed to mitigate that crisis. It then decided to seek comprehensive legislation that, as it turned out, paved the way for more deals. the result has not been particularly coherent, but it has married transactional practice to administrative law. In fact, we think that regulation by deal provides an organizing principle, albeit a loose one, to the government’s response to the financial crisis. dealmakers use contract to avoid some legal constraints, and often prefer to focus on arms-length negotiation, rather than regulatory authorization, as the source of legitimacy for their actions, though the law does provide a structure to their deals. they also do not always take the long view or place value on consistency, instead preferring to complete the latest deal at hand and move to the next transaction. In this paper, we offer a first look at the history of the financial crisis from the fall of Bear stearns up to, and including, the initial implementation of the economic emergency stability act of 2008. We analyze each deal the government concluded, and how it justified those deals within the constraints of the law, using its authority to sometimes stretch but never truly break that law. We consider what the government’s response so far means for transactional and administrative law scholarship, as well as some of the broader implications of crisis governance by deal.

Morning Session Shareholder Primacy in a Corporatist Political Economy William W. bratton, Professor of Law, Georgetown University Law Center Michael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Commentators Joseph B. Frumkin, Sullivan & Cromwell LLP mark J. roe, David Berg Professor of Law, Harvard Law School

3 Robert L. Friedman, The Blackstone Group L.P.; Alan L. Beller, Cleary Gottlieb Steen & Hamilton LLP; Hon. Leo E. Strine, Jr., Delaware Court of Chancery; Michael L. Wachter, University of Pennsylvania Law School. 4 Robert F. Hoyt, Department of the Treasury. 1

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Big Deal: The Government’s Response to the Financial Crisis Steven M. Davidoff, Associate Professor of Law, University of Connecticut School of Law David Zaring, Assistant Professor of Legal Studies, The Wharton School Commentators Isaac d. Corré, Senior Managing Director, Eton Park Capital Management andrew metrick, Professor of Finance, Yale School of Management Afternoon Session Panel on the Government as Shareholder

Moderators Jill e. Fisch, Perry Golkin Professor of Law edward B. rock, Saul A. Fox Distinguished Professor of Business Law michael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School Panelists alan Beller, Cleary Gottlieb Steen & Hamilton LLP robert F. Hoyt, Department of the Treasury robert H. mundheim, Shearman & Sterling LLP roberta romano, Oscar M. Ruebhausen Professor of Law, Yale Law School Hon. Leo e. strine, Jr., Vice Chancellor, Delaware Court of Chancery Heath tarbert, Committee on Capital Markets Regulation

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6 5 Front row: Heidi Stam, Vanguard; Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; Gerald Rosenfeld, Rothschild North America. Middle row: Eric D. Roiter, Harvard Law School. Back row: Robert T. Miller, Villanova University School of Law; Matthew Rhodes-Kropf, Harvard Business School; Christine T. DiGuglielmo, Weil, Gotshal & Manges LLP. 6 Hon. Jack B. Jacobs, Supreme Court of Delaware.

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7 Front row: Hon. William B. Chandler III, Delaware Court of Chancery; Joseph B. Frumkin, Sullivan & Cromwell LLP. Middle row: Mark J. Roe, Harvard Law School; Ronald J. Gilson, Stanford Law School. Back row: Joshua Ronen, NYU Stern School of Business; Jenny Pak, RiskMetrics Group; Richard Squire, Fordham University School of Law; Robert T. Miller, Villanova University School of Law.

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Corporate Finance 12 DeCeMber 2008 Are U.S. CEOs Overpaid? steven n. Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

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

Critics of U.s. corporate governance claim that public company (a) Ceos are overpaid, (b) Ceos are not paid for performance, and (c) boards do a poor job of compensating and monitoring Ceos. In this paper, I argue that the critics are wrong. While corporate governance and Ceo pay are not perfect, a great deal of evidence suggests that Ceo pay is largely determined by market forces. Ceos have been affected by the same forces that have increased income inequality. they have not done better than several similar groups. (In fact, average Ceo pay declined in real terms from 2000 to 2006.) Ceos are strongly paid for performance. and boards do monitor Ceos. Ceo tenures are lower than they have been since tenures began to be measured in the 1970s; Ceo turnover is more closely tied to stock performance than it has been since turnover began to be studied in the 1970s. Increased transparency for Ceo pay (required by the seC), increased shareholder activism, and the increased prevalence of majority voting in director elections should further reduce any remaining unwise compensation practices. more regulation, such as the proposed “say on pay” bill to mandate a shareholder vote on executive compensation, is likely to impose costs with little additional benefit.

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

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

Commentators John e. Core, Ira A. Lipman Professor and Professor of Accounting, The Wharton School damon silvers, Associate General Counsel, AFL-CIO Rating the Ratings: How Good Are Commercial Governance Ratings robert M. Daines, Pritzker Professor of Law and Business, Stanford Law School Ian D. Gow, Stanford University Graduate School of Business David F. larcker, James Irvin Miller Professor in Finance, Stanford University Graduate School of Business Commentators martha Carter, Managing Director, Corporate Governance, RiskMetrics Group andrew metrick, Professor of Finance, Yale School of Management Afternoon Session Panel on How Do Institutional Investors Decide to Vote Their Shares? How Should They Decide?

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

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

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Panelists stephen L. Brown, Director of Corporate Governance, TIAA-CREF Jill e. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School paul g. Haaga, Jr., Executive Vice President, Capital Research and Management Company michael mcCauley, Senior Corporate Governance Officer, Florida State Board of Administration robert mcCormick, Chief Policy Officer, Glass Lewis & Co, LLC eric d. roiter, Lecturer, Harvard Law School and Boston University School of Law [former General Counsel, Fidelity Management & Research Company] Hon. myron t. steele, Chief Justice, Supreme Court of Delaware

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1 Robert E. Spatt, Simpson Thacher & Bartlett LLP; David M. Silk, Wachtell, Lipton, Rosen & Katz. 2 Front row: Robert McCormick, Glass Lewis & Co, LLC; Eric D. Roiter, Harvard Law School. Middle row: Robert M. Daines, Stanford Law School; Damon Silvers, AFL-CIO; Adam C. Pritchard, The University of Michigan Law School. Back row: Wayne R. Guay, The Wharton School.

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3 Front row: Joseph B. Frumkin, Sullivan & Cromwell LLP; Michael McCauley, Florida State Board of Administration (SBA); Robert McCormick, Glass Lewis & Co, LLC. Middle row: David F. Larcker, Stanford University Graduate School of Business; Robert M. Daines, Stanford Law School. Back row: Wayne R. Guay, The Wharton School; Aleine Porterfield, Clerk, Supreme Court of Delaware. 4

5 4 Heidi Stam, Vanguard. 5 Paul G. Haaga, Jr., Capital Research and Management Company. 6 Front Row: Stephen L. Brown, TIAA-CREF; Hon. Myron T. Steele, Supreme Court of Delaware. Middle row: Alan Miller, Innisfree M&A Incorporated; Anna Gelpern, Rutgers School of Law— Newark; Jennifer Shotwell, Innisfree M&A Incorporated. Back row: Yair J. Listokin, Yale Law School; Tom Baker, University of Pennsylvania Law School; Faith Stevelman, New York Law School.

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Corporate Finance

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

6 June 2008 Saïd Business School, University of Oxford Opening Address Colin Mayer and Timothy endicott, Deans of Saïd Business School and Faculty of Law, University of Oxford Morning Session Hedge Fund Activism in Europe Marco becht, Director, European Corporate Governance Institute; Professor of Finance and Economics, Université Libre de Bruxelles Julian Franks, Professor of Finance, London Business School Jeremy Grant, Executive Director of the Centre for Corporate Governance, London Business School

Commentators John H. armour, Lovells Professorship in Law and Finance, Oriel College, University of Oxford roy Katzovicz, Chief Legal Officer, Pershing Square Capital Management, L.P. Hedge Fund Activism in the Enforcement of Bond Covenants Marcel Kahan, George T. Lowy Professor of Law, New York University School of Law edward b. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Moderators John H. armour, Lovells Professorship in Law and Finance, Oriel College, University of Oxford edward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School Panelists david s. Blitzer, Senior Managing Director, Private Equity Group, The Blackstone Group International Limited Charles Crawshay, Assistant Secretary, The Takeover Panel todd Fisher, Kohlberg Kravis Roberts & Co. Chris Hale, Travers Smith tim Jenkinson, Professor of Finance, Saïd Business School, University of Oxford stephanie Keen, Lovells LLP simon Walker, CEO, British Venture Capital Association

Commentators Isaac d. Corré, Senior Managing Director, Eton Park Capital Management michael r. roberts, Assistant Professor of Finance, The Wharton School, University of Pennsylvania Anti-Bankruptcy: Hedge Fund Activity in Corporate Reorganizations Douglas G. baird, Harry A. Bigelow Distinguished Service Professor of Law, University of Chicago Law School robert K. rasmussen, Dean and Carl Mason Franklin Chair in Law, USC Gould School of Law

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

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

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

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14 DeCeMber 2007

Morning Session Hedge Fund Activism in the Enforcement of Bondholder Rights Marcel Kahan, George T. Lowy Professor of Law, New York University School of Law edward b. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

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

Afternoon Session Panel Discussion on Doing Deals When the Sky Is Falling

Corporate Finance Welcome Michael a. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

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

Commentators Horst eidenmüller, Professor, University of Munich Carolyn Conner, Allen & Overy LLP

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Commentators Barry e. adler, Charles Seligson Professor of Law, New York University School of Law paul s. Levy, Founder, JLL Partners Afternoon Session Panel Discussion on How Is the Changing Credit Environment Affecting Private Equity, Hedge Funds, and Strategic Buyers?

Moderators edward B. rock, Saul A. Fox Distinguished Professor of Business Law michael L. Wachter, William B. Johnson Professor of Law and Economics University of Pennsylvania Law School Panelists Brendan Connolly, Managing Director/Leveraged Capital Markets, Group Head, UBS Investment Bank robert L. Friedman, The Blackstone Group L.P. Joseph d. gatto, Vice Chairman and Co-Head of Corporate Finance, Lehman Brothers Inc. perry golkin, Member, Kohlberg Kravis Roberts & Co. andrew metrick, Professor of Finance, Yale School of Management duncan o’Brien, General Manager, Global Business Development, General Electric Company marc Weingarten, Schulte Roth & Zabel LLP

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6 7 Front row: Charles I. Cogut, Simpson Thacher & Bartlett LLP; Paul S. Levy, JLL Partners. Middle row: Douglas G. Baird, University of Chicago Law School; Robert K. Rasmussen, USC Gould School of Law.

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

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

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Delaware Chancery Court Program 11 February 2009 11 February 2009 Shareholder Activism Moderators Hon. Stephen P. Lamb, Vice Chancellor, Chancery Court of Delaware Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Speakers Daniel Pedrotty, Director, Office of Investment, AFL-CIO Marc Weingarten, Schulte Roth & Zabel LLP

11 February 2009 Shareholder Activism This program explored examples of shareholder activism in corporate governance. Activist shareholders attempt to put pressure on corporate managers to meet a wide variety of goals. The program particularly focused on shareholder activism as practiced by hedge funds and labor unions, examining the similarities and differences between them. Daniel Pedrotty from the AFL-CIO talked about the investment strategies that his organization uses and the goals it hopes to achieve. Marc Weingarten discussed several cases in which he has represented activist hedge funds in his practice with Schulte Roth & Zabel LLP.

U.S./Israel Comparative Corporate Governance conference 8 January 2009 1

Hebrew University, Israel

Bondholders and the Financial Crisis

Greetings Prof. Yoav Dotan, Dean, Hebrew University Faculty of Law

Moderator Assaf Hamdani, Hebrew University Faculty of Law

M&A Deal Protections: A Comparative Moot Court

Panelists Shirel Gutman-Amira, Deputy Director and Counsel, Corporation Finance Department, ISA Ronen Baharav, Herzog, Fox & Neeman Adam O. Emmerich, Wachtell, Lipton, Rosen & Katz Gil Oren, Yigal Arnon & Co.

Delaware Chancery Court Program 1 Daniel Pedrotty, AFL-CIO. 2 Marc Weingarten, Schulte Roth & Zabel LLP

Moderators Assaf Hamdani, Hebrew University Faculty of Law Edward B. Rock, University of Pennsylvania Law School Panelists Chief Justice Myron T. Steele, Delaware Supreme Court Judge Michal Agmon-Gonen, Tel Aviv District Court Theodore N. Mirvis, Wachtell, Lipton, Rosen & Katz Israel Leshem, Meitar Liquorniq Geva & Leshem Brendwein

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

Shareholder Activism and Controlling Shareholders Moderator Edward B. Rock, University of Pennsylvania Law School

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

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Deal Day Fall 2008 29 October 2008 The Recent Acquisition of CNET by CBS Moderators Jill E. Fisch, University of Pennsylvania Law School Edward B. Rock, University of Pennsylvania Law School Michael L. Wachter, University of Pennsylvania Law School Presenters Morton A. Pierce, Chairman, Mergers and Acquisitions Group, Dewey & LeBoeuf LLP Chang-Do Gong, Dewey & LeBoeuf LLP Michelle B. Rutta, Dewey & LeBoeuf LLP

29 October 2008 The Recent Acquisition of CNET by CBS For this Deal Day program, Morton Pierce and his legal team spoke about their role representing CNET in its merger with CBS. Prior to the merger, CNET was undergoing a proxy battle with hedge fund Jana Partners. Mr. Pierce and his associates took the audience through the background of the deal and the specifics of the merger process. Itay Goldstein from the Wharton School and Gerald Rosenfeld from Rothschild North America provided commentary on the presentation.

2 Deal Day 1 Gerald Rosenfeld, Rothschild North America; Chang-Do Gong, Dewey & LeBoeuf LLP; Morton A. Pierce, Dewey & LeBoeuf LLP; Michelle B. Rutta, Dewey & LeBoeuf LLP; Itay Goldstein, The Wharton School. 2 Itay Goldstein, The Wharton School.

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

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3 Gerald Rosenfeld, Rothschild North America.

Chancery Court Programs 25 March 2008 Moderators Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware Michael L. Wachter, University of Pennsylvania Law School Panelists Robert C. Clark, Harvard Law School, Director: TIAA-CREF and Time Warner Charles M. Elson, Weinberg Center for Corporate Governance, University of Delaware, Director: Autozone, Inc. and HealthSouth Corp. V. Janet Hill, Alexander & Associates, Inc., Director: Sprint Nextel and Wendy’s Susan M. Stalnecker, E. I. du Pont de Nemours and Company, Director: PPL Corporation 4 March 2008 Moderators Vice Chancellor Leo E. Strine, Jr., Chancery Court of Delaware Michael L. Wachter, University of Pennsylvania Law School Speakers Stephen M. Bainbridge, William D. Warren Professor of Law, University of California- Los Angeles School of Law Harvey J. Goldschmid, Dwight Professor of Law, Columbia Law School, Securities and Exchange Commission, 2002–2005

25 March 2008 The Independent Director’s Most Important Role?: Selecting, Compensating, Overseeing, and Planning for the Succession of the CEO This panel discussion featured several well-respected and experienced independent directors. The panelists shared their perspectives on how boards carry out these important functions, how boards should ideally organize themselves to effectively address these responsibilities, and what, if any, public policy changes would better aid independent directors in this vital area.

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4 March 2008 Say On Pay: A Positive Contribution To Corporate Effectiveness and Accountability 0r An Unprincipled and Costly Incursion Into Director Authority? In this program, two distinguished academics debated the question of whether and to what extent stockholders should vote on executive compensation. Professor Goldschmid argued that shareholders should be given advisory votes on executive compensation, while Professor Bainbridge took the opposite position. The participants articulated their views on whether increased stockholder voting rights over executive compensation is compatible with the traditional American approach to corporation law and what effects the creation of such a right would have on the authority of boards of directors, and on their behavior.

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Chancery Court Programs 4 Michael Musuraca, AFSCME and Richard C. Ferlauto, AFSCME. 5 Victoria Silbey, SunGard Data Systems, Inc.

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

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lectures the institute for law and economics presents two series of public lectures: law and entrepreneurship and distinguished jurist. in sponsoring these events, the institute aims to spotlight and honor lawyers who have led noteworthy careers and made significant contributions as corporate executives and entrepreneurs, or as jurists at the state or federal levels.

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

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Law and Entrepreneurship Lecture 31 March 2009 The PeopleSoft Deal Safra Catz, President, Oracle Corporation

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

Safra Catz is President of Oracle Corporation. In her lecture for ILE, Catz provided an inside look at Oracle’s acquisition of PeopleSoft and the lessons she learned from that deal. Catz has been a member of Oracle’s Board of Directors since October 2001. She serves on Oracle’s Executive Management Committee and is responsible for global operations. Previously, she served as Executive Vice President and Senior Vice President. Prior to joining Oracle, Catz was at Donaldson, Lufkin & Jenrette, a global investment bank that has since merged with Credit Suisse First Boston, where she was a Managing Director from February 1997 to March 1999, and a Senior Vice President from January 1994 until February 1997. Catz is a graduate of the Wharton School and the University of Pennsylvania Law School.

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

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

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Law and Entrepreneurship Lecture 17 September 2008 Retailers in a Recession: A Fireside Chat on Investing with Bill Ackman William A. Ackman, Managing Member, Pershing Square Capital Management, L.P. Bill Ackman is the managing member and portfolio manager of Pershing Square Capital Management, L.P., a concentrated research-intensive fundamental value investor in long and occasionally short investments in the public markets with assets under management of approximately $6 billion. His talk for ILE focused on investment decisions he had made in the past and their outcomes. Pershing Square has played an active role in creating value at companies including Wendy’s International, McDonald’s, Ceridian Corporation, and Sears Canada. Prior to forming Pershing Square, Mr. Ackman co-founded Gotham Partners, L.P., a public and private equity investment partnership. Prior to Gotham Partners, Mr. Ackman began his career in real estate investment banking at Ackman Brothers & Singer, Inc. Mr. Ackman received a Bachelor of Arts degree from Harvard College magna cum laude and an MBA from the Harvard Business School.

19 September 2007 Tales from Blackstone’s IPO Robert L. Friedman, Senior Managing Director and Chief Legal Officer, The Blackstone Group L.P. Robert L. Friedman is a senior managing director at Blackstone and he also serves as the chief legal officer. His talk for ILE focused on his experiences as part of the team that took Blackstone public on June 22. At that time, Blackstone’s IPO was the third-largest public offering in history, and the first by a large private equity house. Friedman has been with Blackstone since 1999. He has worked primarily in Blackstone’s Private Equity group and has also participated in the work of the Corporate and Mergers and Acquisitions Advisory group. Since early 2003, he has also been the Chief Legal Officer. Before joining Blackstone, Mr. Friedman had been a partner with Simpson Thacher & Bartlett for 25 years, where he was a senior member of that law firm’s mergers and acquisitions practice. At Simpson Thacher, Mr. Friedman advised The Blackstone Group since the firm was founded in 1985. Friedman graduated from Columbia College and received a JD from the University of Pennsylvania Law School. He is a member of the Board of Advisors for the Institute for Law and Economics of the University of Pennsylvania, and he served as its chair from 2001 to 2007. He also serves as a member of the Board of Visitors of Columbia College, a Trustee of the Nantucket Land Council, and a Trustee of Chess-in-the-Schools and New Alternatives for Children, two charitable organizations with programs for disadvantaged youth in New York City.

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

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Distinguished Jurist Lectures 11 November 2008 Delaware Directors’ Fiduciary Duties: The Focus on Loyalty Hon. Randy Holland, Justice, Supreme Court of Delaware The Honorable Randy J. Holland presently serves on the Delaware Supreme Court. He is the youngest person to serve on the Delaware Supreme Court, having been recommended to the Governor by a bipartisan merit selection committee. Prior to his appointment and confirmation in 1986, Justice Holland was in private practice as a partner at Morris, Nichols, Arsht & Tunnell. In January 1999, he was reappointed and confirmed unanimously for a second twelveyear term. Justice Holland graduated from Swarthmore College. He also graduated from the University of Pennsylvania Law School, cum laude, where he received an award for legal ethics. Justice Holland received a Master of Laws in the Judicial Process from the University of Virginia Law School.

24 October 2007 The Future of Securities Regulation Brian G. Cartwright, General Counsel, Securities and Exchange Commission Brian G. Cartwright currently serves as the general counsel for the Securities and Exchange Commission. Cartwright began his legal career in 1980 after earning a J.D. from Harvard Law School, where he was President of the Harvard Law Review and winner of the Sears Prize. He served as a law clerk to Judge Malcolm R. Wilkey of the U.S. Court of Appeals for the District of Columbia Circuit and to Associate Justice Sandra Day O’Connor of the U.S. Supreme Court. Cartwright then joined the law firm of Latham & Watkins in 1982, and became a partner in 1988. Among the management positions he held at Latham & Watkins, Mr. Cartwright served as Global Chair of the firm’s practice representing public companies. While a member of the firm’s Executive Committee, he was one of five partners responsible for the management of the firm as a whole. Prior to joining the legal profession, Mr. Cartwright was an astrophysicist. Following his graduation from Yale University in 1967, he earned a Ph.D. in physics from the University of Chicago in 1971. From 1973 to 1977, he was a Research Physicist in the Department of Physics and Space and Sciences Laboratory of the University of California, Berkeley. While working as an astrophysicist, Mr. Cartwright published many articles in scholarly journals, such as the Astrophysical Journal.

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

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Past Law and Entrepreneurship Lectures 28 February 2007 Law, Legal Risks, and the Financial Markets Isaac D. Corré, Senior Managing Director, Eton Park Capital Management 29 November 2006 Large-Scale Entrepreneurship: Business Development at GE Pamela Daley, Senior Vice President for Corporate Business Development, General Electric Company 26 October 2006 Managing in the 21st Century Henry R. Silverman, Chairman & CEO, Realogy Corporation 16 February 2006 The Banker as Entrepreneur Michael J. Biondi, Co-Chairman, Investment Banking, Lazard Frères & Co. LLC

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

30 October 2003 The Role of Entrepreneurship in Urban Education: Past, Present and Future James E. Nevels, Chairman and CEO, The Swarthmore Group, Inc.; Chairman, Philadelphia School Reform Commission

7 April 2005 A Swing of the Pendulum: 20 Years in M&A Joseph D. Gatto, Managing Director, Goldman, Sachs & Co.

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

21 February 2001 Private Equity: Difficult Investing in a Difficult Time Paul S. Levy, Senior Managing Director, Joseph Littlejohn & Levy

26 September 2002 What They Did Not Teach Me in Law School Robert M. Potamkin, Co-Chairman and Co-CEO, Planet Automotive Group, Inc.

2 March 2000 Perspectives on the Health Care Revolution Charles A. Heimbold, Jr., Chairman and CEO, Bristol-Myers Squibb Company

24 March 2004 The WNBA and Women’s Team Sports: A New Sports Marketing Proposition for the New Millennium Val Ackerman, President, Women’s National Basketball Association

19 April 2002 Smart People Making and Losing Money: Some Recent Examples Perry Golkin, Kohlberg Kravis Roberts & Co. 25 October 2001 The Economics of Sports Team Franchises for Cities Hon. Edward G. Rendell, Governor, Commonwealth of Pennsylvania

18 November 1999 Ethics in Sports: Deciding the Game Anita DeFrantz, Vice President, International Olympic Committee; President, Amateur Athletic Foundation

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23 October 1997 How to Maintain Entrepreneurial Values While Your Company Climbs into the Fortune 500 Brian L. Roberts, President, Comcast Corporation 27 March 1997 The Unique Impact of the Law on the Leveraged Buyout Business Saul A. Fox, Fox Paine & Company, LLC

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Past Distinguished Jurist Lectures 11 October 2006 The Embattled Corporation Hon. Richard A. Posner, U.S. Seventh Circuit Court of Appeals and University of Chicago Law School

4 March 2004 Corporate Decision-Making in Delaware Courts The Honorable Carolyn Berger, Justice, Delaware Supreme Court

16 March 2006 Technology Mergers in a Shrinking World Hon. Vaughn R. Walker, Chief Judge, U.S. District Court for the Northern District of California

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

3 March 2005 Corporate Federalism: Event Horizons in Corporate Governance Hon. Myron T. Steele, Chief Justice, Delaware Supreme Court

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

28 October 2004 A Twelve-Year Retrospective on Delaware Corporate Jurisprudence and Governance Issues Hon. E. Norman Veasey, Chief Justice, Delaware Supreme Court

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

24 February 2000 The Court of Chancery as Teacher of Corporate Law The Honorable William B. Chandler III, Chancellor, Delaware Court of Chancery 11 February 1999 Why Do People Bring Employment Discrimination Cases When They Usually Lose? The Honorable Diane Wood, U.S. Court of Appeals for the Seventh Circuit 12 February 1998 The Value of Predictability in Corporate Law The Honorable E. Norman Veasey, Chief Justice, Delaware Supreme Court

11 February 1997 What Economics of Law Must Address Next: Some Thoughts on Theory The Honorable Guido Calabresi, U.S. Court of Appeals for the Second Circuit 7 February 1996 The MTV Constitution The Honorable Alex Kozinski, U.S. Court of Appeals for the Ninth Circuit 22 March 1995 Accountability: Popular Will, Interest Groups, or the Invisible Hand The Honorable Stephen F. Williams, U.S. Court of Appeals for the District of Columbia

14 October 1992 Nonprice Competition The Honorable Douglas H. Ginsberg, U.S. Court of Appeals for the District of Columbia

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Past Law and Entrepreneurship Lectures 1 Isaac D. Corré 2 Pamela Daley 3 Marcia Greenberger 4 Val Ackerman 5 James E. Nevels 6 Joseph D. Gatto 7 Edward G. Rendell 8

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3 December 1991 Corporate Takeovers and Our Schizophrenic Conception of the Corporation The Honorable William T. Allen, Chancellor, Delaware Court of Chancery 1990 The Constitution and the Spirit of Freedom The Honorable Anthony M. Kennedy, Associate Justice, U.S. Supreme

13 April 1994 On the Constitution The Honorable Antonin Scalia, Associate Justice, U.S. Supreme Court

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Past Distinguished Jurist Lectures 8 Hon. Myron T. Steele 9 The Honorable Diane Wood 10 The Honorable Carolyn Berger 11 The Honorable William B. Chandler III 12 The Honorable E. Norman Veasey 13 The Honorable Jack B. Jacobs 14 The Honorable Harry T. Edwards 13

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

In february 2005 we launched an annual conference on Law and Finance, jointly sponsored by ILE, the Wharton School’s Financial Institutions Center, and NYU’s Pollack Center for Law and Business. The conference location alternates between Penn and NYU. In October 2002 ILE debuted the first installment in the new ILE/Wharton Finance series, providing an opportunity for faculty and advanced students from the Law School, the Wharton School, and the Department of Economics to come together around an area of common interest and strengthening the Institute’s core academic relationships. A dinner follows each presentation, with commentary presented by members of ILE’s Associate Faculty from Law, Wharton Finance, and the Department of Economics and a general discussion.

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academic events


NYU/Penn Conference on Law and Finance 27–28 February 2009 New York University School of Law Jointly sponsored by Institute for Law and Economics University of Pennsylvania Financial Institutions Center The Wharton School Center for Law & Business New York University

Commentator Curtis Milhaupt, Columbia University Law School

Organized by William T. Allen, NYU Stern School of Business and NYU School of Law, New York University Yakov Amihud, Stern School of Business, New York University Michael Roberts, The Wharton School, University of Pennsylvania Edward B. Rock, University of Pennsylvania Law School

Session II Motions for Lead Plaintiff in Securities Class Actions Stephen Choi, New York University School of Law

Moderator William Allen, NYU Stern School of Business and NYU School of Law, New York University

Commentator Alan Schwartz, Yale Law School

Commentator Henry Hu, The University of Texas Law School

Moderator Marcel Kahan, New York University School of Law

Moderator Gerald Rosenfeld, NYU Stern School of Business

Session IV The Decisions of Corporate Special Litigation Committees: An Empirical Investigation Minor Myers, Brooklyn Law School

Session VI The Returns to Hedge Fund Activism Alon Brav, Duke University Graduate School Wei Jiang, Columbia Business School Frank Partnoy, University of San Diego School of Law Randall Thomas, Vanderbilt University Law School

Commentator Sanjai Bhagat, Leeds School of Business, University of Colorado at Boulder

Commentator Alexander Dyck, Joseph J. Rotman School of Management, Moderator University of Toronto Gerald Rosenfeld, NYU Stern School of Business Moderator

Commentator Stuart Gillan, Rawls College of Business Administration, Texas Tech University

Edward B. Rock, University of Pennsylvania Law School

Session V Session I The Market Value of the Vote: Comparing Legal and A Contingent Claims and One Session III Alternative Institutions in Share-One Vote is UnenforceInternal Governance of Firms Finance and Commerce Viral V. Acharya, London Business able and Sub-optimal H. Franklin Allen, The Wharton School Avner Kalay, David Eccles School School, University of Pennsylvania Stewart C. Myers, Sloan School of Business, University of Utah Jun Qian, Carroll School of Shagun Pant, David Eccles School of Management, MIT Management, Boston College Raghuram Rajan, Graduate School of Business, University of Utah of Business, University of Chicago

Lawrence Hamermesh, Widener University School of Law Michael L. Wachter, University of Pennsylvania Law School Commentator Daniel Wolfenzon, Columbia Business School

NYU/Penn 09 1 Jennifer H. Arlen, New York University School of Law.

Moderator Richard Kihlstrom, The Wharton School, University of Pennsylvania

2 Raghuram G. Rajan, International Monetary Fund.

Session VIII Does Board Classification Matter for Industry Rivals? Evidence of Spillover Effects in the Market for Corporate Control Kose John, NYU Stern School of Business Dalida Kadyrzhanova, Robert H. Smith School of Business, University of Maryland

3 Marcel Kahan, New York University School of Law. 4 Alicia Davis Evans, The University of Michigan Law School.

1 5 H. Franklin Allen, The Wharton School. 2

Commentator Moderator Alicia Davis Evans, University of Richard Kihlstrom, The Wharton Michigan Law School School, University of Pennsylvania Moderator Session VII Michael L. Wachter, University of Rationalizing Appraisal Pennsylvania Law School Standards in Compulsory Buyouts

Penn/NYU Conference on Law and Finance 29 February and 1 March 2008 3

University of Pennsylvania Law School Jointly sponsored by Institute for Law and Economics University of Pennsylvania Financial Institutions Center The Wharton School Center for Law & Business New York University Organized by Yakov Amihud, Stern School of Business, New York University Marcel Kahan, New York University School of Law H. Franklin Allen, The Wharton School, University of Pennsylvania Michael L. Wachter, University of Pennsylvania Law School Session I Rating the Ratings: How Good Are Commercial Governance Ratings? Robert M. Daines, Stanford Law School Ian Gow, Stanford Graduate School of Business David F. Larcker, Stanford Graduate School of Business Commentator David Yermack, Stern School of Business, New York University

Session VI Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes? Steven N. Kaplan, The University of Chicago Graduate School of Business Joshua Rauh, The University of Chicago Graduate School of Business

Moderator Commentator Hon. Leo E. Strine, Jr., Delaware Antoinette Schoar, Sloan Court of Chancery School of Management, MIT Session II Creditor Rights and Corporate Risk-Taking Viral Acharya, London Business School Yakov Amihud, Stern School of Business, New York University Lubomir Litov, Olin School of Business, Washington University in St. Louis

Moderator Hon. Stephen P. Lamb, Delaware Court of Chancery Session IV Blockholders, Market Efficiency, and Managerial Myopia Alex Edmans, The Wharton School, University of Pennsylvania

Commentator David I. Walker, Boston University School of Law

Commentator Alan Schwartz, Yale Law School Commentator Katharina Pistor, Columbia Law Moderator School Hon. Stephen P. Lamb, Delaware Court of Chancery Moderator

Moderator Richard E. Kihlstrom, The Wharton School, University of Pennsylvania

Hon. Leo E. Strine, Jr., Delaware Session V Court of Chancery Hedge Fund Activism in the Enforcement of Bondholder Rights Session III Marcel Kahan, New York Attorneys as Arbitrators University School of Law Stephen Choi, New York Edward B. Rock, University of University School of Law Pennsylvania Law School Jill Fisch, Fordham University School of Law Commentator Adam Pritchard, The University Wei Jiang, Columbia Business School of Michigan Law School Moderator Hon. Stephen P. Lamb, Delaware Court of Chancery

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Moderator Richard E. Kihlstrom, The Wharton School, University of Pennsylvania Session VIII Differences in Governance Practices between U.S. and Foreign Firms: Measurements, Causes, and Consequences Reena Aggerwal, McDonough School of Business, Georgetown University Isil Erel, Fisher College of Business, The Ohio State University RenĂŠ Stulz, Fisher College of Business, The Ohio State University Rohan Williamson, McDonough School of Business, Georgetown University

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Session VII Value Destruction in the New Era of Chapter 11 Barry E. Adler, New York University School of Law Vedran Capkun, HEC School of Commentator Management Lawrence A. Weiss, McDonough Edward M. Iacobucci, Faculty of School of Business, Georgetown Law, University of Toronto University Moderator Richard E. Kihlstrom, The Wharton School, University of Pennsylvania

PENN/NYU 08 6 Gerald Rosenfeld, Rothschild North America, and Robert H. Mundheim, University of Pennsylvania and Shearman & Sterling. 7 Katharina Pistor, Columbia Law School, and Michal Barzuza, University of Virginia School of Law. 8 Andrew Metrick, Yale School of Management. 9 Alex Edmans, The Wharton School, University of Pennsylvania. 8

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Commentator Julian Franks, London Business School

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ILE/Wharton Finance Seminars Co-Sponsored by Institute for Law and Economics and Department of Finance, The Wharton School 2 April 2009 CEO Careers and Style Antoinette Schoar, Michael M. Koerner Associate Professor of Entrepreneurial Finance, Sloan School of Management, MIT Commentators Philip Bond, Wharton Finance Jill Fisch, Penn Law Lucian Taylor, Wharton Finance Michael Wachter, Penn Law 25 September 2008 Public and Private Enforcement of Securities Law: Resource-Based Evidence (co-authored with Howell E. Jackson) Mark J. Roe, David Berg Professor of Law, Harvard Law School Commentators David Abrams, Penn Law Gustav Sigurdsson, Wharton Finance Joel Friedlander, Bouchard Margules & Friedlander Lucian Taylor, Wharton Finance Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP

2 April 2009 CEO Careers and Style Antoinette Schoar, Michael M. Koerner Associate Professor of Entrepreneurial Finance, Sloan School of Management, MIT Prof. Schoar examines how early career experiences affect the career path and promotion of managers as well as the managerial style that they develop when becoming CEO. She differentiates between exogenous shocks to managers’ careers such as the business cycle at starting date and endogenous choices of individuals such as the industry, type and size of firm that someone starts in. She shows that the economic conditions at the beginning of a manager’s career have lasting effects on the career path and the ultimate outcome as a CEO. CEOs who start in recessions tend to take longer time to become CEO, are more likely to rise through the ranks within a given firm rather than moving across firms and industries and ultimately end up as CEOs in smaller firms. Moreover, managers who start in recessions have more conservative management styles once they become CEOs. These managers have less leverage in the firm where they are CEOs, rely more on internal investments rather than acquisitions, have lower SG&A and higher ROA. 25 September 2008 Public and Private Enforcement of Securities Law: Resource-Based Evidence (co-authored with Howell E. Jackson) Mark J. Roe, David Berg Professor of Law, Harvard Law School Recent work in finance concludes that financial market development is facilitated by private enforcement of investor protection—primarily via disclosure and private lawsuits— but not by public enforcement of regulatory rules, or even criminal penalties. In contrast to prior work, which used formal enforcement powers to measure public enforcement strength, we use new measures based on securities regulators’ real resources—their staffing levels and budgets. These resource-based measures of public enforcement are significantly associated with standard measures of stock market development (stock market capitalization, trading volume, the number of domestic firms, and the number of IPOs), with more intense public enforcement regularly and significantly correlating with more robust financial outcomes. In horse races between our measures of public enforcement and the most common measures of private enforcement, public enforcement is overall at least as important as private enforcement in explaining important financial market outcomes around the world. Hence, in our view, the World Bank’s rejection of public enforcement could well be a serious policy error.

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Past ILE/Wharton Finance Seminars 27 March 2008 Where Do Firms Incorporate: Deregulation and the Cost of Entry (co-authored with Marco Becht and Hannes F. Wagner) Colin Mayer, Peter Moores Dean of the Saïd Business School and Peter Moores Professor of Management Studies, University of Oxford 8 November 2007 Identifying the Effect of Board Structure on Firm Value: Event Study, DiD, Firm Fixed Effects, and IV Evidence from Korea (co-authored with Woochan Kim) Bernard S. Black, Hayden W. Head Regents Chair for Faculty Excellence, The University of Texas at Austin School of Law

6 April 2006 The States as Laboratory: Legal Innovation and State Competition for Corporate Charters Roberta Romano, Allen Duffy/Class of 1960 Professor of Law, Yale University Law School

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

Commentators Richard E. Kihlstrom, Wharton Finance Andrew Metrick, Wharton Finance Chris W. Sanchirico, Penn Law Bruce L. Silverstein, Young Conaway Stargatt & Taylor, LLP

Commentators Franklin Allen, Wharton Finance Andrew Metrick, Wharton Finance Katharina Pistor, Penn Law (visiting)

20 October 2005 Creating Constituencies for Reform Raghuram G. Rajan, Economic Counsellor and Director, Research International Monetary Fund

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

Commentators Assaf Hamdani, Penn Law (visiting) Jonathan Klick, Penn Law (visiting) Andrew Metrick, Wharton Finance David K. Musto, Wharton Finance

Commentators William W. Burke-White, Penn Law Robert P. Inman, Wharton Finance Jason Scott Johnston, Penn Law Bilge Yilmaz, Wharton Finance

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

31 March 2005 What Matters in Corporate Governance? Lucian Arye Bebchuk, Harvard Law School

31 October 2002 Law and Finance: The Practice of Justice Andrei Shleifer, Harvard University

Commentators Hulya Eraslan, Wharton Finance Andrew Metrick, Wharton Finance Edward B. Rock, Penn Law David A. Skeel, Penn Law

Commentators Richard E. Kihlstrom, Wharton Finance Michael S. Knoll, Penn Law Jason Scott Johnston, Penn Law Andrew Metrick, Wharton Finance

Commentators Philip Bond, Wharton Finance Jill Fisch, Penn Law (visiting) Wayne R. Guay, Wharton Finance Tobias B. Wolff, Penn Law 30 November 2006 Who Blows the Whistle on Corporate Fraud? (co-authored with Alexander Dyck and Adair Morse) Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business Commentators Aditi Bagchi, Penn Law John E. Core, Wharton Finance Andrew Metrick, Wharton Finance Edward B. Rock, Penn Law

11 November 2004 Venture Capital Investment Cycles: The Role of Experience and Specialization Paul A. Gompers, Graduate School of Business Administration, Harvard University Commentators Rafi Amit, Wharton Finance Sean Griffith, Penn Law (visiting) Richard Kihlstrom, Wharton Finance Polk Wagner, Penn Law

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academic events

Commentators Franklin Allen, Wharton Finance Kristin Madison, Penn Law Andy Postlewaite, Penn Economics


Publications and Papers Listed below is a sampling of recently published papers and work in progress by members of the Associate Faculty of the Institute for Law and Economics. ILE maintains a series of research papers and provides copies—electronic or paper—to interested parties upon request to vhewitt@law.upenn.edu. 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.

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

Matthew D. Adler, Leon Meltzer Professor of Law

Howard F. Chang, Earle Hepburn Professor of Law

Bounded Rationality and Legal Scholarship, in Theoretical Foundations of Law and Economics, 2009.

Immigration Restriction as Redistributive Taxation: Working Women and the Costs of Protectionism in the Labor Market, Journal of Law, Economics and Policy, forthcoming.

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

Happiness Research and CostBenefit Analysis (with Eric Posner), Journal of Legal Studies, 2008. Risk Equity: A New Proposal, Harvard Environmental Law Review, 2008.

Recht und Sozialwissenschaften—Herausforderungen und Chancen der Verhaltensökonomie (Law and Social Are Firms Under-Leveraged? Sciences—the Challenge and Evidence from Improved the Promise of Behavioral Estimates of Marginal Tax Rates Economics) (with Dorothea (with J. Blouin and W. Guay), Kubler), Kritische VierteljahressMaking Cities Work: Prospects and chrift für Gesetzgebung und Working Paper. Rechtswissenschaft, 2007. Policies for Urban America, Can Differences in U.S. and U.K. Princeton University Press, 2009. Gesellschaftsrecht (comprehenCEO Pay Be Explained by Differences in Equity Incentives? The Flypaper Effect, The New sive treatise of German corporate (with W. Guay and M. Conyon), Palgrave Dictionary of Economics, law) (with Hans-Dieter 2009. Working Paper. Assmann), 2006.

Agency Problems of Excess Endowments in Not-for-Profit Firms (with W. Guay and R. Verdi), Journal of Accounting and Economics, 2006.

Director Elections and the Role of Proxy Advisors (with Stephen Choi and Marcel Kahan), forthcoming 2009.

Attorneys as Arbitrators (with Guest Workers and Justice in a Stephen Choi and A.C. Second-Best World, University of Pritchard), forthcoming 2009. Dayton Law Review, 2008. The Disadvantages of Immigration Restriction as a Policy to Improve Income Distribution, SMU Law Review, 2008.

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

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, forthcoming 2009.

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

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

Problems of Equity and Efficiency in the Design of International Greenhouse Gas Cap and Trade Schemes, Harvard Environmental Law Review, 2009.

Is This The Worst Ever Yet?, Wharton Real Estate Review, Spring 2009.

Climate Change Confusion and the Supreme Court: The Misguided Regulation of Greenhouse Gas Emissions under the Clean Air Act, Notre Dame Law Review, 2008. Tradable Pollution Permits and the Regulatory Game, in Moving to Markets in Environmental Regulation: Lessons from Twenty Years of Experience, Oxford University Press, 2007.

Realizing the Value of Corporate Real Estate Management (with Hartmann, S., Pfnür, A., Siperstein, B.), Wharton Real Estate Review, Spring 2009. Is this the Worst Ever? (with John Williams), Wharton Real Estate Review, Fall 2008. Kristin Madison, Professor of Law

Quality Regulation in the Information Age: Challenges for Franklin Allen, Nippon Life Medical Professionalism (with Lawrence A. Hamermesh, Ruby Professor of Finance and Professor Mark Hall), in Medical R. Vale Professor of Corporate and of Economics, The Wharton School Professionalism in the New Business Law, Widener University Michael S. Knoll, Theodore K. Cary Coglianese, Associate Dean School of Law Warner Professor of Law, Professor Information Age, forthcoming for Academic Affairs, Edward B. Mark-to-Market Accounting 2009. of Real Estate, The Wharton Shils Professor of Law and and Liquidity Pricing (with E. School; Co-Director, Center for Tax Loyalty’s Core Demand: The Professor of Political Science Carletti), Journal of Accounting Law & Policy Defining Role of Good Faith in The Law and Policy of Health and Economics, forthcoming. Corporate Law (with Leo Strine, Care Quality Reporting, Campbell Environmental Leadership Law Review, forthcoming 2009. Jr., R. Franklin Balotti & Jeffrey The Taxation of Private Equity Programs: Toward an Empirical Understanding Financial Crises Gorris), forthcoming. Carried Interests: Estimating the (with D. Gale), Oxford University Assessment of their PerforRevenue Effects of Taxing Profit Hospital Mergers in an Era of mance, Ecology Law Quarterly Press, 2007. Rationalizing Appraisal Interests as Ordinary Income, Quality Improvement, Houston (with Jonathan Borck & Jennifer Standards in Compulsory William & Mary Law Review, 2008. Journal of Health Law and Policy, Beauty Contests, Bubbles and Nash), 2009. 2007. Buyouts (with Michael Iterated Expectations in Asset Wachter), Boston College Law The Ancient Roots of Modern Prices (with S. Morris and H. Shin), Evaluating the Social Effects of Review, forthcoming 2009. George J. Mailath, Walter H. Financial Innovation: The Early Review of Financial Studies, 2006. Environmental Leadership History of Regulatory Arbitrage, Annenberg Professor in the Social Programs, Environmental Law Sciences, Professor of Economics, The Short and Puzzling Life of Oregon Law Review, 2008. Aditi Bagchi, Assistant Professor Reporter (with Jonathan Borck & the “Implicit Minority Discount” School of Arts and Sciences Jennifer Nash), 2008. of Law in Delaware Appraisal Law (with The UBIT: Leveling an Uneven Michael Wachter), University of Playing Field or Tilting a Level Common Learning (with Martin Contract Versus Promise, The Managerial Turn in Pennsylvania Law Review, 2007. One, Fordham Law Review, 2007. W. Cripps, Jeffrey C. Ely, and Working Paper. Environmental Protection, New Larry Samuelson), Econometrica, York University Environmental Law Robert P. Inman, Richard King Friedrich K. Kübler, Professor and July 2008. Journal, 2008. The Myth of Equality in the Mellon Professor of Finance; Profes- Director of the Banking Law Institute Employment Relation, Working sor of Finance and Economics, Emeritus, University of Frankfurt, Paper. Business and Public Policy, Real Germany; Professor of Law Estate, The Wharton School Distributive Injustice and Private Medien, Menschenrechte und Law, Hastings Law Journal, 2008. Demokratie (Media, Human Rights, and Democracy), forthcoming.

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academic events

Purification in the InfinitelyRepeated Prisoners’ Dilemma (with V. Bhaskar and Stephen Morris), Review of Economic Dynamics, July 2008.

Law and the Boundaries of Technology Intensive Firms (with Oren Bar Gill), University of Pennsylvania Law Review, forthcoming 2009.

The Tax Advantage to Paying Private Equity Fund Managers with Profit Shares: What is it? Why is it Bad? University of Chicago Law Review, 2008.

Does Competitive Pricing Cause Market Breakdown Under Extreme Adverse Selection? (with Georg Nöldeke), Journal of Economic Theory, May 2008.

Reconceptualizing Trespass (with Alex Stein), Northwestern University Law Review, forthcoming 2009.

Reed Shuldiner, Alvin Snowiss Professor of Law

Comment on “Does the United States Tax Capital Income,” in Andrew W. Postlewaite, Harry P. Taxing Capital Income, Brookings Institution and Urban Institute, Charles W. Mooney, Jr., Charles Kamen Professor of Economics, School of Arts and Sciences; Professor 2007. A. Heimbold, Jr. Professor of Law of Finance, The Wharton School Taxation of Risky Investments, Core Issues Under the UNIDROIT 2005. [Draft] Convention on IntermediPolitical Reputations and ated Securities: Views From the Campaign Promises (with E. United States and Japan, Hart Aragones and T. Palfrey), David A. Skeel, Jr., S. Samuel Journal of the European Economic Arsht Professor of Corporate Law Publishing, forthcoming 2009. Association, 2007. Law and Systems for Governance in the Ruins, Intermediated Securities and the Courts of Law and Unforeseen Harvard Law Review, 2008 Relationship of Private Property Contingencies (with L. Anderlini (essay review of Curtis Law to Securities Clearance and and L. Felli), Journal of Law, Milhaupt & Katharina Pistor, Settlement: United States, Japan, Economics and Organization, 2007. Law and Capitalism). and the UNIDROIT Draft Convention, Institute for Monetary Social Assets (with G. Mailath), Who Makes the Rules for and Economic Studies, 2008. International Economic Review, Hostile Takeovers, and Why? 2006. The Peculiar Divergence of US Introductory Note to Convention and UK Takeover Regulation on the Law Applicable to Certain Edward B. Rock., Saul A. Fox (with John Armour), Georgetown Distinguished Professor of Business Law Journal, 2007. Rights in respect of Securities Law; Co-Director, Institute for Law Held with an Intermediary, International Legal Materials, 2007. and Economics The Promise and Perils of Credit Derivatives (with Frank Partnoy), The Hanging Chads of Corporate University of Cincinnati Law David K. Musto, Ronald O. Review, 2007. Perelman Associate Professor of Voting (with Marcel Kahan), Finance, The Wharton School Georgetown Law Journal, 2008. Michael L. Wachter, William B. Johnson Professor of Law and Predatory Mortgage Lending Corporate Taxation and Economics; Co-Director, Institute (with Philip Bond and Bilge International Charter for Law and Economics Yilmaz), Journal of Financial Competition (with Mitchell Economics, forthcoming. Kane), Michigan Law Review, 2008. Rationalizing Appraisal Vote Trading and Information Standards in Compulsory Aggregation (with Susan Buyouts (with Lawrence A. Hedge Funds in Corporate Christoffersen, Chris Geczy, and Governance and Corporate Hamermesh), Boston College Law Review, forthcoming 2009. Adam Reed), Journal of Finance, Control (with Marcel Kahan), 2007. University of Pennsylvania Law Review, 2007. Shareholder Primacy’s A Portfolio View of Consumer Corporatist Origins: Adolf Berle Credit (with Nicholas Souleles), Chris W. Sanchirico, Professor of and The Modern Corporation Law, Professor of Business and Journal of Monetary Economics, (with William W. Bratton), Public Policy, The Wharton School Journal of Corporate Law, 2006. forthcoming 2008. Gideon Parchomovsky, Professor A Critical Look at the Economic of Law Argument for Taxing Only Labor The Short and Puzzling Life of Income, University of the “Implicit Minority Discount” Bribes v. Bombs: A Study in Pennsylvania Institute for Law in Delaware Appraisal Law (with Coasean Warfare (with Peter and Economics Research Paper Lawrence A. Hamermesh), Siegelman), International Review Series, 2009. University of Pennsylvania Law of Law and Economics, Review, 2007. forthcoming 2009. Progressivity and Potential Income: Measuring the Effect of Changing Work Patterns on Income Tax Progressivity, Columbia Law Review, 2008.

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Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research System Risk and Market Institutions (with Andrey Pavlov), Yale Journal on Regulation, forthcoming 2009. Systemic Risk through Securitization: The Result of Deregulation and Regulatory Failure (with Patricia McCoy and Andrey Pavlov), Connecticut Law Review, forthcoming 2009. State and Local Anti-Predatory Lending Laws: The Effect of Legal Enforcement Mechanisms (with Raphael W. Bostic, Kathleen C. Engel, Patricia A. McCoy, and Anthony N. Pennington-Cross), Journal of Economics and Business, 2008. Amy Wax, Robert Mundheim Professor of Law Race, Wrongs, and Remedies: Group Justice in the 21st Century, Hoover Institution Press/ Rowman and Littlefield, May 2009. Stereotype threat: a Case of Overclaim Syndrome?, in Stereotype Threat and Unconscious Bias: The State of the Research, American Enterprise Institute, 2009. The Family Law Doctrine of Equivalence, Michigan Law Review, 2009.

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Associate Faculty

1 1 Matthew Adler 2 Aditi Bagchi 3 Richard E. Kihlstrom 4 Howard F. Chang 5 Cary Coglianese 6 Robert W. Holthausen 7 Richard J. Herring 8 John Core

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9 Charles W. Mooney, Jr. 10 Jason S. Johnston 11 Michael S. Knoll 12 Friedrich K. K端bler 13 Kristin Madison 14 Franklin Allen 15 Gideon Parchomovsky 16 David K. Musto

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

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Associate Faculty Matthew D. Adler, Leon Meltzer Professor of Law Professor Adler is a graduate of Yale College, St. Antony’s College of Oxford University, and the Yale Law School. Prior to teaching at Penn, he worked as a law clerk for Judge Harry Edwards, U.S. Court of Appeals for the D.C. Circuit, and for Justice Sandra Day O’Connor, U.S. Supreme Court, and practiced law at Paul, Weiss, Rifkind, Wharton & Garrison in New York City. At the Penn Law School, Professor Adler teaches administrative law, constitutional law, and regulation. His current research focuses on policy analysis and on risk regulation. Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School Franklin Allen is the Nippon Life Professor of Finance and Professor of Economics at the Wharton School of the University of 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, one of the leading academic finance journals. He is a past President of the American Finance Association, the Western Finance Association, the Society of Financial Studies, and the Financial Intermediation Research Society. He received his doctorate from Oxford University. Dr. Allen’s main areas of interest are corporate finance, asset pricing, comparative financial systems, and financial crises. He is a co-author with Richard Brealey and Stewart Myers of the eighth and ninth editions of the textbook Principles of Corporate Finance. Aditi Bagchi, Assistant Professor of Law Professor Bagchi received a J.D. from Yale Law School in 2003 and a M.Sc. in economic and social history from Oxford University in 2000. She clerked for United States Court of Appeals Judge Julio Fuentes and practiced law with Cravath, Swaine & Moore LLP in New York. She joined the Penn Law faculty in 2006 and currently teaches contracts and labor law. Her areas of research include normative theories of private law and comparative political economy. Elizabeth Bailey, John C. Hower Professor of Business and Public Policy, The Wharton School Professor Bailey received her Ph.D. in economics from Princeton University in 1972. From 1983 until 1990, Professor Bailey served as dean of the Graduate School of Industrial Administration at Carnegie Mellon University. She joined the Wharton faculty in 1991 where she served as Chair, Department of Business and Public Policy from 1997 to 2005. She served as head of the Economics Research Department and member of the Technical Staff at Bell Laboratories between 1960 and 1977 and was commissioner and vice-chairman of the Civil Aeroneutics Board from 1977 until 1983. She has served on the boards of many

organizations, including Princeton University, Brookings Institution, Standard Oil (Ohio), Honeywell and CSX. She currently serves on the boards of Altria Group, Inc., TIAA/CREF, and the National Bureau of Economic Research. Her research interests concern public policies that affect business, particularly those involving regulation, deregulation, and corporate governance. Howard F. Chang, Earle Hepburn Professor of Law Professor Chang received a Ph.D. in economics from the 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. Cary Coglianese, Associate Dean for Academic Affairs, Edward B. Shils Professor of Law and Professor of Political Science Cary Coglianese is the Associate Dean for Academic Affairs and the Edward B. Shils Professor of Law at the University of 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 council member of the American Bar Association’s section on Administrative Law and Regulatory Practice, and a fellow of the American Bar Foundation. He is also a founder of the peerreviewed journal Regulation & Governance, for which he now serves on the editorial board. Coglianese received his J.D., M.P.P., and Ph.D. in political science from the University of Michigan, and for twelve years served on the faculty of the John F. Kennedy School of Government at Harvard University. He has also been a visiting professor of law at Stanford University and Vanderbilt University and an affiliated scholar at the Harvard Law School.

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associate faculty

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

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

John Core joined the Wharton School in 1996. He has a B.A. from Yale University and a Ph.D. from The Wharton School. He has worked as an investment banker for PaineWebber, as a compensation consultant for Ernst & Young, and as an assistant professor at MIT Sloan School of Management. He is an associate editor of the Journal of Accounting and Economics, and serves on the editorial board of the Journal of Accounting Research. He served as an editor of The Accounting Review from 2005 to 2008. His primary research interest is executive compensation and executive stock and option incentives, and he has also published work in the areas of corporate governance, equity valuation, and corporate disclosure.

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.

Patricia M. Danzon, Celia Z. Moh Professor of Health Care Systems, Insurance and Risk Management, The Wharton School Professor Danzon received her Ph.D. in economics from the University of Chicago in 1973 and joined the Penn faculty from Duke University in 1985. She is a member of the Institute of Medicine and the National Academy of Social Insurance, and she has served as a consultant to many private and public institutions in the U.S. and worldwide. Professor Danzon’s research interests are in health care, pharmaceuticals, insurance, law, and economics. She has published widely in scholarly journals on a broad range of subjects related to medical care, pharmaceuticals, insurance, and the economics of law. Michael A. Fitts, Dean of the Law School and Bernard G. Segal Professor of Law Michael A. Fitts was named Dean of the Law School in March 2000. Before joining the Penn Law faculty in 1985, Dean Fitts served as clerk to the Honorable A. Leon Higginbotham, Jr., U.S. Court of Appeals for the Third Circuit, and as attorney advisor in the Office of Legal Counsel in the U.S. Department of Justice. At Penn he was appointed Associate Professor of Law in 1990, Professor of Law in 1992 and Robert G. Fuller, Jr. Professor of Law in 1996. From 1996 to 1998 he served as Associate Dean for Academic Affairs at the Law School and was active in establishing a variety of joint programs with other schools within the University. In 1999 he served as Visiting Professor in Political Science at Swarthmore College. Dean Fitts’ current research focuses on the effect of various structural changes (e.g., stronger political parties, presidents or centralized legal institutions) on government budgeting and legislation. He has authored numerous law review and political science articles in this area, several co-authored with political scientists.

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Lawrence Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law Professor Hamermesh received a B.A. from Haverford College in 1973, and a J.D. from Yale Law School in 1976. Professor 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 Widener in 1994, and teaches and writes in the areas of corporate finance, mergers and acquisitions, securities regulation, business organizations, and professional responsibility. Since 1995, Professor Hamermesh has been a member of the Council of the Corporation Law Section of the Delaware State Bar Association, which is responsible for the annual review and modernization of the Delaware General Corporation Law, and served as Chair of the Council from 2002 to 2004. In 2002 and 2003 he also served as the Reporter for the American Bar Association’s Task Force on Corporate Responsibility. He served from 2001 to 2007 as a member of the Committee on Corporate Laws of the American Bar Association Section of Business Law, which supervises the drafting of the Model Business Corporation Act. In 2007 Professor Hamermesh was appointed as Chair of the Section of Business Law’s Committee on Corporate Documents and Process. In 1999 Professor Hamermesh was elected as a member of the American Law Institute. Professor Hamermesh is also a member of the Board of Directors of ACLU Delaware, Inc. Richard J. Herring, Jacob Safra Professor of International Banking, Professor of Finance, The Wharton School; Co-Director, Wharton Financial Institutions Center Richard J. Herring is Jacob Safra Professor of International Banking and Professor of Finance at The Wharton School, University of Pennsylvania, where he is also founding director of The Wharton Financial Institutions Center, one of Wharton’s largest research centers. From 2000 to 2006, he served as the Director of the Lauder Institute of International Management Studies and from 1995 to 2000, he served as Vice Dean and Director of Wharton’s Undergraduate Division. During 2006, he was a Professorial Fellow at the Reserve Bank of New Zealand and Victoria University.

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He is the author of more than 100 articles, monographs and books on various topics in financial regulation, international banking, and international finance. At various times his research has been funded by grants from the National Science Foundation, the Ford Foundation, the Brookings Institution, the Sloan Foundation, and the Council on Foreign Relations. Outside the university, he is co-chair of the US Shadow Financial Regulatory Committee and Executive Director of the Financial Economist’s Roundtable, the Advisory Board of the European Banking Report in Rome, and the Institute for Financial Studies in Frankfurt. He served as co-chair of the Multinational Banking seminar from 1992–2004 and was a Fellow of the World Economic Forum in Davos from 1992–95. He was a member of the Group of 30 task force on the reinsurance industry, as well as an earlier study group on international supervision and regulation. Currently, he is an independent director of the DWS Scudder mutual fund complex and has served on the predecessor Deutsche Asset Management and Bankers Trust boards since 1990. He is also an independent director of the Daiwa closed end funds. Herring received his undergraduate degree from Oberlin College in 1968 and his PhD from Princeton University in 1973. He has been a member of the Finance Department since 1972. He is married, with two children, and lives in Bryn Mawr, Pennsylvania. Robert W. Holthausen, The Nomura Securities Company Professor, Professor of Accounting and Finance and Management, and Chairman, Accounting Department, The Wharton School Professor Holthausen earned his doctorate and his M.B.A. at the University of Rochester. Prior to his academic career, he was a C.P.A. He worked at Price Waterhouse and was also a financial analyst with Mobil. He was on the accounting and finance faculty at the Graduate School of Business of the University of Chicago for ten years, joining the Penn faculty in 1989. During the 2001– 2002 academic year, he was a visiting professor at Harvard Business School. Since 1998 he has served as the academic director of Wharton’s Mergers and Acquisitions program. Professor Holthausen’s research interests include the effects of management compensation and governance structures on firm performance, the effects of information on volume and prices, corporate restructuring and valuation, the effects of large block sales on common stock prices, and numerous other topics. He is widely published in both finance and accounting journals and is currently an editor of the Journal of Accounting and Economics. His most recent work is entitled “Accounting Standards, Financial Reporting Outcomes and Enforcement” and appears in the Journal of Accounting Research (May, 2009, pp. 447-458) as part of the Conference on the Regulation of Securities Markets: Perspectives from Accounting, Law and Financial Economics.

Robert P. Inman, Richard King Mellon Professor of Finance, Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School Professor Inman received his Ph.D. in economics from Harvard University and joined the Penn faculty in 1972. He is a research associate of the National Bureau of Economic Research. He has served as a consultant to the city of Philadelphia, the state of Pennsylvania, CitiGroup, Chemical Bank, the U.S. Department of the Treasury, the Financial and Fiscal Commission of the Republic of South Africa, the National Bank of Sri Lanka, the National Academy of Sciences, and numerous U.S. federal government agencies. His research is currently focused on fiscal federalism, the urban fiscal crisis, and the political and legal institutions of fiscal policymaking. Professor Inman held the Florence Chair in Economics at the European University Institute, Florence, Italy, for the spring quarter of 2000. He was a Visiting Scholar at the Rockefeller Foundation’s Bellagio Study Center, Fall 2007. Jason Scott Johnston, Robert G. Fuller Jr. Professor of Law and Director, Program on Law, Environment and Economy After graduating summa cum laude from Dartmouth College, Professor Johnston obtained both his J.D. and Ph.D. in economics from the University of Michigan, where he was an Alcoa Fellow in Law and Economics and was elected to Order of the Coif. He served as law clerk for United States Court of Appeals Judge Gilbert Merritt, was a postdoctoral civil liability fellow at Yale Law School, and in 1995 came to the University of Pennsylvania Law School from Vanderbilt University Law School. At Penn Law, Johnston is the Robert G. Fuller Jr. Professor of Public Law and the founding Director of the Program on Law, Environment and Economy. Professor Johnston’s research includes both theoretical and empirical projects exploring various aspects of natural resource and environmental law and policy, as well as more general studies of legal rights and entitlements. He is currently writing books on the law and economics of corporate environmentalism and on the foundations of climate change law and policy. In the fall of 2006, he organized a first-of-its kind interdisciplinary conference on the law, economics, and science of liability for global warming, proceedings of which were published in July 2007 as a special issue of the University of Pennsylvania Law Review (the first and so far only time that a top ten American law journal has devoted an issue to climate change). Johnston has published dozens of articles, both in various major American law journals such as the Yale Law Journal, Virginia Law Review, and Columbia Law Review, as well as in peer-reviewed economics journals such as the Journal of Law, Economics and Organization and the Journal of Legal Studies. He is a member of the Board of Directors of the Searle Civil Justice Institute at Northwestern University and an Overseer of the Program on Environmental Law and Economics at the University of Arizona. Johnston has served on the Board of

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Directors of the American Law and Economics Association and on the National Science Foundation’s Law and Social Science grant review panel. He has been an Olin Visiting Fellow at the University of Southern California Law Center and Visiting Professor at the University of Virginia School of Law. During the Fall of 2007, Johnston was awarded the Bosch Public Policy Fellowship at the American Academy in Berlin. Richard E. Kihlstrom, Ervin Miller-Arthur M. Freedman Professor of Finance and Economics, Chairman, Finance Department, The Wharton School Richard Kihlstrom holds a doctorate from the University of Minnesota. He has been a member of the Wharton faculty since 1979, was named to the Miller-Freedman professorship in 1986, and previously served as Chair of the Finance Department from 1988 to 1994. Before coming to Penn, he taught at Northwestern University, the University of Illinois, the State University of New York at Stony Brook, and the University of Massachusetts. He is a Fellow of the Econometric Society. His areas of research interest include information and uncertainty in economics, financial market equilibrium, and corporate finance. Michael S. Knoll, Theodore K. Warner Professor of Law; Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy Professor Knoll joined the Penn Law and Wharton faculties from the University of Southern California Law School in 2000. He teaches courses in corporate finance and taxation in the Law School, the Wharton School, and the Wharton Executive Program. He is also an affiliate of the Zell/Lurie Real Estate Center at the Wharton School, and the editor of Forensic Economic Abstracts, an electronic journal published by the Social Science Research Network. Professor Knoll’s undergraduate and J.D. degrees are from the University of Chicago. He also earned a Ph.D. in Economics at the University of Chicago. In 1990 he joined the USC Law faculty as an Assistant Professor, and in 1995 he was promoted to full Professor. He has been a Visiting Professor of Law at Georgetown (1999), Penn (1998–99), and Virginia (2000). Professor Knoll was also a John M. Olin Senior Research Scholar at Columbia University School of Law (1996–97), a Visiting Scholar at New York University Law School (1996–97), and a John M. Olin Distinguished Visiting Professor of Law at Toronto University. He clerked for the Honorable Alex Kozinski on the U.S. Court of Appeals, Ninth Circuit, from January to August 1986, when he was appointed legal advisor to the Vice Chairman of the U.S. International Trade Commission. He has published extensively in the fields of corporate finance, taxation, economics, and real estate finance.

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Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law After earning a Dr. iur. from the University of Tübingen in 1961, Professor Kübler held appointments as teaching assistant in Tübingen and Paris; Professor of Law, University of Giessen (1966–70); Visiting Lecturer, Harvard Law School (1968–69); Professor of Law and Dean of the Graduate School of Social Sciences, University of Konstanz (1971–76); and Professor of Law, University of Frankfurt (1976–98). He first came to Penn in 1975 and again in 1983 as a Visiting Professor of Law, and in 1985 he joined the faculty as Professor of Law. He has served on the board of the Deutscher Juristentag and is a member of the American Law Institute. He was one of the six commissioners regulating concentration in the German television industry and is a member of the European Shadow Financial Regulatory Committee, as well as of the Frankfurt Academy of Arts and Sciences. Professor Kübler’s teaching interests are the European Union, corporations, international finance, and mass communication. His current (comparative) research interests are in the areas of corporate governance and finance, the supervision of transnational financial markets, and broadcast regulation. Peter D. Linneman, Albert Sussman Professor of Real Estate, Finance, and Public Policy, The Wharton School Dr. Peter Linneman is the principal of Linneman Associates and the Albert Sussman Professor of Real Estate, Finance, and Public Policy at the Wharton School of Business. He is widely recognized as one of the leading strategic thinkers in the real estate industry and was named one of the 25 most influential people in real estate by Realtor Magazine. He is a co-coordinator, co-sponsor and co-moderator with Samuel Zell of the prestigious industry roundtable, The Marshall Bennett Classic. Dr. Linneman holds a master’s degree and a doctorate in economics from the University of Chicago. A member of Wharton’s faculty since 1979, he served as the founding chairman of Wharton’s Real Estate Department and was the director of Wharton’s Zell/Lurie Real Estate Center for 13 years. He is a founding co-editor of The Wharton Real Estate Review. Kristin Madison, Professor of Law After receiving a J.D. from Yale Law School and a Ph.D. in economics from Stanford University, Kristin Madison joined the Penn Law faculty in 2001. She currently teaches contracts and health care law. Her main areas of research interest are health economics and the regulation of the health care industry. Professor Madison is currently studying the diffusion of new forms of health care regulation, particularly health care quality reporting requirements.

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George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences Professor Mailath received his Ph.D. in economics from Princeton University in 1985. He is a Fellow of the Econometric Society, a member of the Council of the Game Theory Society, a co-founder of the journal Theoretical Economics, and is or has served as an associate editor or editorial board member of Econometrica, the Review of Economic Studies, the Journal of Economic Theory, Games and Economic Behavior, the International Economic Review, and Economic Theory. He is co-editor of the Econometric Society Monograph Series and is a member of the Economics Advisory Panel of the National Science Foundation. His research interests include the organization of the firm, noncooperative game theory, evolutionary game theory, social norms, and the foundations of reputations, law, and authority. Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law Professor Mooney received his J.D. from Harvard Law School in 1972. He practiced law with the Oklahoma firm of Crowe and Dunlevy and as a partner of the New York firm of Shearman & Sterling. Professor Mooney joined the Penn faculty in 1986, and during 1999 and 2000 he served as Interim Dean of the Law School. From 1998 to 2000 and from 2008 to 2009 he served as Associate Dean for Academic Affairs. He is an active member of the American Law Institute and the American Bar Association. He served as a member of the Uniform Commercial Code Permanent Editorial Board Article 2 (Sales) Study Committee and also served as a reporter for that Board’s Article 9 (Secured Transactions) Study Committee and as a reporter for the Revised Article 9 drafting committee. He served as a member of the U.S. Security and Exchange Commission’s Advisory Committee on Market Transactions. Mooney was awarded the Distinguished Service Award, presented by the American College of Commercial Finance Lawyers. He also served as U.S. Delegate and Position Coordinator (appointed by U.S. Department of State) at the Diplomatic Conference for the Cape Town Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment, in Cape Town, South Africa. He currently serves as a U.S. Delegate for the UNIDROIT draft convention on intermediated securities. His current research centers on intermediated securities, security interests in bankruptcy, and bankruptcy theory. Robert H. Mundheim, University Professor of Law and Finance Emeritus, University of Pennsylvania; Of Counsel, Shearman & Sterling; formerly General Counsel, U.S. Treasury and Senior Executive Vice President and General Counsel of Salomon Smith Barney Holdings, Inc.

Law School from 1982 to 1989. He has been a visiting professor at Harvard Law School, UCLA Law School, the James E. Rogers College of Law at The University of Arizona, and the University of Konstanz in Germany. Between 1977 and 1980, he served as general counsel to the U.S. Department of the Treasury. He also has served as chairman of the U.S. Tax Court Nominating Commission, a director of the Securities Investor Protection Corporation, and general counsel to the Chrysler Loan Guarantee Board. He was co-chairman of the New York firm Fried, Frank, Harris, Shriver and Jacobson from 1989 to 1992. In 1992, he joined Salomon Inc. as its General Counsel and as a Managing Director and member of the Executive Committee of Salomon Brothers. Professor Mundheim is the organizer and presiding officer emeritus of the International Faculty for Corporate and Capital Market Law, a former Trustee and President of the American Academy in Berlin, a Trustee of the New School University, a former director and President of the Appleseed Foundation, and a member of the Council of the American Law Institute and Chairman of its Governance Committee. He also serves on the American Bar Association’s Standing Committee on Ethics and Professional Responsibility. He most recently served as the chairman of the Quadra Realty Trust Board of Directors and as a director of eCollege, Inc. and of Arnhold & S. Bleichroeder Holdings, Inc. He is also the Chairman of the Legal Advisory Board of NASDAQ. Mr. Mundheim has served as a Consultant to the American Law Institute’s Principles of Corporate Governance: Analysis and Recommendations (1978–1994), as a member of the American Bar Association President’s Task Force on Corporate Responsibility (2002–2003), and as a member of the Association of the Bar of the City of New York’s Presidential Task Force on Lawyers’ Role in Corporate Governance. He has written in the areas of corporate governance, securities regulation, corporations, and professional responsibility. David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School David K. Musto is the Ronald O. Perelman Professor in Finance at the Wharton School, where he has been on the faculty since 1995. He has a B.A. from Yale University and a Ph.D. from the University of Chicago, and between college and graduate school he worked for Roll and Ross Asset Management in Los Angeles. He is an editor of the Journal of Financial Services Research and an Associate Editor of the Journal of Finance. Most of his work, both theoretical and empirical, is in the area of consumer financial services, mutual funds and consumer credit in particular. He has also published work on corporate and political voting, option pricing, short selling, and cross-border taxation.

Professor Mundheim received his LL.B. from Harvard Law School in 1957. He joined the New York firm of Shearman & Sterling, of which he is now Of Counsel, and then served as special counsel to the U.S. Securities and Exchange Commission before joining the Penn faculty in 1965. Professor Mundheim served as Dean of the

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Gideon Parchomovsky, Professor of Law Professor Parchomovsky received his LL.B. from the Hebrew University of Jerusalem in 1993, his LL.M. from the University of California at Berkeley in 1995, and his S.J.D. from Yale Law School in 1998. Prior to joining the Penn Law faculty in fall 2002, Professor Parchomovsky served as an Associate Professor at Fordham Law School and a Visiting Lecturer at Yale Law School. His research interests include intellectual property law and property theory. His recent work focuses on unlocking synergies among sub-fields of intellectual property and devising innovative mechanisms for protecting property entitlements. Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School Professor Postlewaite received his Ph.D. from Northwestern University in 1974 and joined the Penn faculty from the University of Illinois in 1980. He is editor of American Economic Journal: Microeconomics, past editor of the International Economic Review and past co-editor of Econometrica. He serves on the Board of Directors of the National Bureau of Economic Research, the Executive Committee of the Game Theory Society, and on the Executive Committee of the American Economic Association. He has published widely in the areas of strategic behavior and industrial organization. Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics Professor Rock received his J.D. from the University of Pennsylvania in 1983. He joined the Penn faculty in 1989 from the Philadelphia law firm of Fine, Kaplan and Black, where he specialized in antitrust, corporate, and securities litigation. He has written widely in corporate law, on topics including: hedge funds; the role of institutional investors in corporate governance; close corporations; the role of norms in corporate law; the overlap between corporate law and antitrust; the overlap between corporate law and labor law; comparative corporate law; and the regulation of mutual funds. In 1994, Professor Rock was a Visiting Professor of International Banking and Capital Markets at the Institut für Arbeits-, Wirtschafts- und Zivil Recht, Johann Wolfgang GoetheUniversität, Frankfurt am Main, Germany. During the 1995–96 academic year, he was a Fulbright Senior Scholar and Visiting Professor of Law at the Law Faculty of the Hebrew University of Jerusalem, Israel. In 2001, he was appointed the first Saul A. Fox Distinguished Professor of Business Law. During 2005–06, he was again a Visiting Professor of Law, and Lady Davis Fellow, at Hebrew University. Professor Rock’s current research focuses on government ownership of corporations, mergers and acquisitions, hedge funds, and corporate voting.

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Chris W. Sanchirico. Professor of Law; Professor of Business and Public Policy, The Wharton School Professor Sanchirico received his A.B. from Princeton and both his law degree and his Ph.D. in economics from Yale. Before joining the Penn Law and Wharton faculties in 2003, he was a law professor at the University of Virginia and an economics professor at Columbia. Professor Sanchirico has written widely on tax policy, distributive justice, the information problems of legal enforcement, the rules governing trial evidence and pretrial discovery, and the evolution and stability of social norms. Professor Sanchirico has published extensively in top law reviews as well as the premier peer-reviewed journals in both law and economics and economic theory. Reed Shuldiner, Alvin L. Snowiss Professor of Law Professor Shuldiner is a recognized expert in the taxation of financial instruments and transactions. His area of research is taxation and tax policy. His current research includes the taxation of risk under income, wealth and consumption taxes, and the viability and effects of a federal wealth tax (with David Shakow). Professor Shuldiner served as Associate Dean at Penn Law from 2000–02. During spring 2005, Professor Shuldiner was the William K. Jacobs, Jr. Visiting Professor of Law at Harvard Law School. He was a Visiting Assistant Professor at Yale Law School during 1994–95. Before joining the Penn law faculty in 1990, he served in the Office of Tax Legislative Counsel of the U.S. 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. 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.

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

Amy Wax, Robert Mundheim Professor of Law a graduate of Yale College and Harvard medical school, professor Wax trained as a neurologist at new York Hospital before completing a law degree at Columbia Law school in 1987. she served as a clerk to the Honorable abner J. mikva of the U.s. Court of appeals for the d.C. Circuit and worked for six years at the 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.

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

funding for the institute for law and economics comes from a diverse group of individuals, law firms, corporations, and foundations who endorse our work each year. we are pleased and privileged to recognize and thank the ile investors whose generous contributions underwrite the activities described in this report. we deeply appreciate their support and their active participation in institute programs. Benefactors $25,000 or above Charles I. Cogut robert L. Friedman paul s. Levy skadden, arps, slate, meagher & Flom LLp sullivan & Cromwell LLp

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. she was the editor of Real Estate Economics from 1997 to 1999 and serves on the editorial boards for several real estate journals. dr. Wachter has been a member of the advanced studies Institute of the Homer Hoyt Institute since 1989. she is author of more than 100 scholarly publications and is the recipient of several awards for teaching excellence at the Wharton school.

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ILE Investors, 2008–2009

Sponsors $10,000 to $24,999 apollo Capital management, L.p. Barclays Bernstein Litowitz Berger & grossmann LLp Buchanan Ingersoll & rooney pC Isaac d. Corré Ct, a Wolters Kluwer Business dechert LLp delaware department of state dewey & LeBoeuf LLp the dow Chemical Company dupont saul a. Fox research endowment

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goldman, sachs & Co. perry golkin grant & eisenhofer p.a. paul g. Haaga, Jr. Leon C. Holt, Jr. Hughes Hubbard & reed LLp Innisfree m&a Incorporated andrew s. Jacobs roy J. Katzovicz macKenzie partners, Inc merck & Co., Inc. millennium management Foundation morgan, Lewis & Bockius LLp morris, nichols, arsht & tunnell LLp potter anderson & Corroon LLp proskauer rose LLp richards, Layton & Finger, p.a. rothschild Inc. schulte roth & Zabel LLp a. gilchrist sparks III sungard data systems Inc. UBs Investment Bank

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vanguard Wachtell, Lipton, rosen & Katz Young Conaway stargatt & taylor, LLp Members $5,000 to $9,999 James H. agger Blank rome LLp Harkins Cunningham LLp Lockheed martin Kenneth W. Willman Donors Up to $4,999 mary J. grendell andrew metrick James a. ounsworth myron J. resnick John F. schmutz eric Wilensky

ile investors


Institute for Law and Economics University of Pennsylvania 3400 Chestnut Street Philadelphia, PA 19104-6204 215.898.7719 www.law.upenn.edu/ile/ September 2009

Michael L. Wachter, Co-Director William B. Johnson Professor of Law and Economics 215.898.7852 mwachter@law.upenn.edu Edward B. Rock, Co-Director Saul A. Fox Distinguished Professor of Business Law 215.898.8631 erock@law.upenn.edu

Jill E. Fisch, Co-Director Perry Golkin Professor of Law 215.746.3454 jfisch@law.upenn.edu Vicki L. Hewitt, Program Director 215.898.7719 fax 215.573.2025 vhewitt@law.upenn.edu


ILE Annual Report 2008-2009