Spring 2025 Workshop

Feb. 10, 2025 (Mon)

4:20 - 6:10 PM

Kobi Kastiel

Faculty of Law
Tel Aviv University

Presentation (in-person only) will be in The Jerome Greene Annex.

Courts, Legislation and Delaware Corporate Law

Delaware is widely regarded as the global capital of corporate law and the leader in attracting incorporations. The prevailing view has long been that while Delaware relies on its specialized courts to establish critical corporate law norms, its legislature plays a relatively passive role in major corporate law issues. In this Article, we challenge this perception by analyzing amendments to the Delaware General Corporation Law (DGCL) from 1967 to 2024 and identifying a consistent pattern of legislative responses to judicial decisions. We argue that Delaware’s reliance on these legislative responses addresses the inherent limitations of its judge-made law model. Legislative interventions enable courts to set norms without imposing out-of-pocket liability on corporate insiders, balance fiduciary duties with private ordering, and overcome other institutional constraints of courts as lawmakers. The interplay between courts and legislation also allows Delaware to adapt to stakeholder pressures and mitigate the risk of federal intervention. However, too frequent or contentious judicial overrides could create tension between the two branches and be viewed as undermining judicial independence. Uncovering the pattern of legislative responses raises new questions about the forces shaping Delaware’s corporate law and the underlying interaction between its judiciary and legislative branches. This Article explores some of these questions and considers implications for future research.

Feb. 17, 2025 (Mon)

4:20 – 6:10 PM

Elizabeth Pollman

Professor of Law
Co-Director, Institute for Law & Economics
University of Pennsylvania, Carey Law School

Presentation (in-person only) will be in Case Lounge, JGH 701.

CEO Turnover at Dual-Class Firms

In recent years, tech companies have increasingly gone public with dual-class structures, in which founders hold high-vote stock. Commentators argue that this entrenches founder-CEOs, allowing them to retain power long after the IPO. We examine a sample of U.S. VC-backed firms that went public from 2002 to 2020. Our time-to-event analysis finds that CEOs of dual-class firms have a median post-IPO tenure of 6.6 years, compared to 4.3 years for a matched sample of single-class firms. While this supports concerns of CEO entrenchment, the difference is largely due to a higher rate of M&A sales involving single-class firms. Excluding M&A-related turnover, there is no significant difference in CEO tenure, challenging the view that dual-class structures shield underperforming CEOs from internal pressure to step down. Furthermore, poor firm performance frequently precedes turnover of dual-class CEOs, and news coverage often mentions this as a reason for the change. Most dual-class turnovers occurred well before any sunset clauses were triggered, calling into question the focus on this governance mechanism.

March 10, 2025 (Mon)

4:20 – 6:10 PM

Daniel Hemel

Professor of Law
NYU Law School

Presentation (in-person only) will be in Case Lounge, JGH 701.

The Law and Economics of Guilt and Shame

The negative moral emotions of guilt and shame impose real social costs but also create opportunities for policymakers to engender compliance with legal rules in a cost-effective manner. We present a unified model of guilt and shame that demonstrates how legal policymakers can harness negative moral emotions to increase social welfare. The prospect of guilt and shame can deter individuals from violating moral norms and legal rules, thereby substituting for the expense of state enforcement. But when legal rules and law enforcement fail to induce total compliance, guilt and shame experienced by noncompliers can increase the law’s social costs. We identify specific circumstances in which rescinding a legal rule will improve social welfare because eliminating the rule reduces the moral costs of noncompliance with the law’s command. We also identify other instances in which moral costs strengthen the case for enacting legal rules and investing additional resources in enforcement because deterrence reduces the negative emotions experienced by noncompliers. We end by exploring the implications of our framework for legal policy across “guilt cultures” and “shame cultures,” for the debate over shaming sanctions, and for other moral emotions such as resentment and virtue. 

March 24, 2025 (Mon)

4:20 – 6:10 PM

Andrew Verstein

Professor of Law
Faculty Co-Director, Lowell Milken Institute for Business Law and Policy
UCLA Law School

Presentation (in-person only) will be in Case Lounge, JGH 701.

The Corporate Census

The first database of all entity formations in the United States, going back to the founding. All previous studies were based on tiny subsets of corporations, such as only large public corporations. Looking at the broader sample destabilizes core empirical assumptions in the field. For example, while Delaware is commonly thought to be the leader for incorporations, its law is not even in the top five. While Delaware is thought to have taken New Jersey’s leading role in the early 20th century, New Jersey actually continues to beat Delaware until the late 1980s. These findings are proof of concept applications, inviting other scholars to use the data to refine and test other hypotheses.

April 7, 2025 (Mon)

4:20 - 6:10 PM

Natasha Sarin

Professor of Law
Yale Law School

Presentation (in-person only) will be in Case Lounge, JGH 701.

Broken Budgeting

As peacetime deficits rose over the course of the last half century, policymakers searched for tools to assess how close—or far off—new budget, tax, and spending proposals would bring them to fiscal sustainability. This search led to the birth of modern scorekeeping, a complex and highly technical exercise undertaken by neutral government analysts known as scorekeepers. Because its origins are tied to rising deficits, scorekeepers are governed by rules that focus their attention on myopic cost/benefit analysis, rather than long-term policy evaluation. Over the years, many have criticized the process and questioned the accuracy of scores in particular arenas.

This Article offers a more provocative and fulsome take. While ostensibly neutral, the primacy of scorekeeping and scorekeepers has created impediments to legislating a progressive vision of government. Progressive policymaking has at its core government interventions that give society the ability to reap benefits down the line—like investments in children, or in combatting climate change—benefits that accrue in the long-term and are difficult to quantify. Presently, scorekeepers register these types of interventions as costs to the fisc rather than profitable investments, and that hinders their adoption. This is not the fault of scorekeepers, who have limited scope to act outside the rules and parameters set out by the members of Congress they serve. But it is a critique of those rules, which through manipulation and misunderstanding create a process that is far from neutral: instead, one that skews policy outcomes against progressive reforms that invest in future generations and in redressing inequality.

In this piece we lay out the ways in which deficit-centrality has shaped the federal budgeting and scorekeeping process, synthesize the deficiencies of this approach, and offer a way forward. Our piece is a call-to-arms, as academics have an important role to play in helping policymakers arrive at a more holistic approach to policy analysis, as opposed to the narrow focus on cost estimates that guides policy discussions today.

April 21, 2025 (Mon)

4:20 - 6:10 PM

Yaron Nili

Professor of Law
Duke University School of Law

Presentation (in-person only) will be in Case Lounge, JGH 701.

Opting Out of Court? Extralegal Relations and Informal Norms in Private Equity

Private equity, an industry characterized by high-stakes investments and complex contractual arrangements, operates in a governance paradox. Despite the substantial financial stakes involved—billions of dollars locked into multi-decade funds—and the potential for fiduciary conflicts, litigation between limited partners (LPs) and general partners (GPs) is exceptionally rare. In stark contrast to public markets, where shareholder litigation plays a prominent role in deterring misconduct and shaping corporate norms, the private equity world is largely defined by its absence. The puzzle, then, is this: in an industry where fiduciary breaches or misaligned incentives are not uncommon, why do LPs almost never turn to courts to enforce their rights?

Utilizing proprietary documents, public records and qualitative interviews with market players, this article provides the first account of the rarity of litigation in private equity and the ecosystem of extralegal relations and informal norms that have long been championed as key pillars of the industry distinctiveness. Yet, the article also highlights how opting out of court is not necessarily a win-win outcome but rather the result of reputational concerns, contractual barriers and institutional (dis)incentives rather than the lack of grievances.

This article makes three contributions to the literature on private equity. First, using novel data, the article provides the first empirical account of the non-litigious private equity landscape and the underlining causes that explain it. Second, in the absence of litigation, the article investigates how private equity resolves disputes and enforces norms without recourse to courts. Through a unique set of interviews with LPs, GPs, and legal advisors, this article sheds light on the alternative mechanisms that dominate the private equity landscape. Third, the article explores the implications of this non-litigious environment for investor protection, market efficiency, and regulatory oversight, questioning whether reliance on reputation and extralegal mechanisms is sustainable in the face of growing industry complexity.

April 28, 2025 (Mon)

4:20 – 6:10 PM

Jonathon Zytnick

Associate Professor of Law
Georgetown Law

Presentation (in-person only) will be in Case Lounge, JGH 701.

Custom Proxy Voting Advice

This paper studies institutional investors’ decision-making using novel data from a major proxy advisor. We highlight the significant role of customized proxy advice in shaping shareholders’ voting decisions. About 80% of funds receive customized advice, and custom recommendations differ substantially from benchmark recommendations. We show that customization plays two key roles. First, it helps shareholders express their ideologies through the vote. Second, it facilitates shareholders’ decision-making process by reducing the need to pay attention to every proposal individually and enabling focus on the more important proposals. Customization thus influences both the aggregation of preferences and the aggregation of information in voting outcomes. Our findings offer a new perspective on the role of proxy advisors and suggest a shift away from solely focusing on benchmark recommendations.