Law & Society: Private Law - Financial Law eJournal最新文献

{"title":"Distress-Triggered Liabilities and the Agency Costs of Debt","authors":"Richard Squire","doi":"10.4337/9781781007884.00013","DOIUrl":"https://doi.org/10.4337/9781781007884.00013","url":null,"abstract":"This chapter discusses distress-triggered liabilities: contingent obligations of a corporate debtor that are likely to be triggered by the debtor’s own financial distress. Three common examples of such liabilities are loan default penalties, loan prepayment fees such as make-whole premiums, and intragroup guarantees. Because the risk that a distress-triggered liability will become payable correlates positively with the debtor’s insolvency risk, the incurring of the liability shifts expected losses onto the debtor’s general creditors. The result is an incentive-distorting value transfer from creditors to shareholders that generates the agency costs of debt. Bankruptcy courts could prevent these costs by subordinating distress-triggered claims to general creditor claims. Subordination would preserve the positive economic functions of distress-triggered claims, which in most instances require only that the claims be enforceable to the extent the debtor is solvent. A subordination rule would be consistent with both the purpose and the text of the Bankruptcy Code.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121777207","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Aircraft Financing: Legal and Regulatory Framework in Nigeria","authors":"Ikemefuna Stephen Nwoye","doi":"10.2139/ssrn.3049745","DOIUrl":"https://doi.org/10.2139/ssrn.3049745","url":null,"abstract":"Airline services have increasingly become capital intensive. In this multi-billion dollars’ industry, manufacturers, aircraft leasing companies and operating lessors, investment banks, export credit agencies and investors want a seamless and successful transaction. Typical transactional work involving domestic and cross border acquisition, mortgage and leasing of aircrafts/engines require an understanding of each jurisdiction’s regulatory and legal framework.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124686896","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Persistence of Bankruptcy Stigma","authors":"Michael D. Sousa","doi":"10.2139/SSRN.3048422","DOIUrl":"https://doi.org/10.2139/SSRN.3048422","url":null,"abstract":"The debtor-creditor relationship has always been intertwined with notions of morality. Failing to pay one’s financial obligations has traditionally been met with social opprobrium, internal shame, and external stigma. This dynamic did not change with the advent of American bankruptcy law. Indeed, for much of the twentieth-century, scholars have studied and debated whether the stigma associated with filing for bankruptcy has declined over the years, particularly in the 1980s and 1990s when the number of consumer bankruptcy filings increased dramatically. Existing studies suggest that the stigma regarding personal bankruptcy has declined in the latter portion of the twentieth-century. \u0000Using a data set previously untapped by bankruptcy and social science scholars, this study explores the trend of bankruptcy stigma for approximately four decades, from the advent of the Bankruptcy Code in 1978 to the present day. Contrary to both existing studies on this issue and the arguments set forth by some commentators, the results of the present study suggest that the stigma surrounding personal bankruptcy has actually increased over time, rather than decreased, and this trend paradoxically tracks the number of consumer bankruptcy filings each year. \u0000The results of this study should not only serve to re-invigorate the debate regarding Americans’ views about the bankruptcy process from a social perspective, but it also offers evidence for policymakers and Congress should they choose to re-examine the 2005 amendments to the Bankruptcy Code occasioned by the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”). If, indeed, the results of this study are accurate insofar as bankruptcy stigma has increased from 1977 to 2016, then our nation’s bankruptcy laws currently rest upon an entirely faulty premise.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134592434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Introduction: International Financial Law","authors":"P. Paech","doi":"10.2139/ssrn.3043171","DOIUrl":"https://doi.org/10.2139/ssrn.3043171","url":null,"abstract":"Financial law consists mainly of a combination of contract, property and insolvency law and the relevant private international law rules. It is specifically adapted to the use by parties active on the financial markets. This paper presents an overview of the axioms underlying financial law and identifies risk and return as the threshold concept in light of which all financial activity, in particular, risk creation and risk mitigation, must be considered.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134599241","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Are Robo-Advisors Fiduciaries?","authors":"Melanie L. Fein","doi":"10.2139/SSRN.3028268","DOIUrl":"https://doi.org/10.2139/SSRN.3028268","url":null,"abstract":"This paper addresses whether robo-advisors are “fiduciaries.” The simple answer is “yes.” As registered investment advisers, robo-advisors are deemed to be “fiduciaries” that owe a fiduciary duty of loyalty to their customers and can be liable for breach of fiduciary duty. But that is only half of the equation. Merely labeling robo-advisors as “fiduciaries” does not signify what fiduciary standard of care they are subject to, which should be of most interest to investors and regulators and is the subject of this paper.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"106 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123717261","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Debt Priority Structure, Market Discipline and Bank Conduct","authors":"Piotr Danisewicz, Danny McGowan, E. Onali, K. Schaeck","doi":"10.1093/RFS/HHX111","DOIUrl":"https://doi.org/10.1093/RFS/HHX111","url":null,"abstract":"We examine how debt priority structure affects bank funding costs and soundness. Leveraging an unexplored natural experiment that changes the priority of claims on banks’ assets, we document asymmetric effects that are consistent with changes in monitoring intensity by various creditors depending on whether creditors move up or down the priority ladder. The enactment of depositor preference laws that confer priority on depositors reduces deposit rates but increases nondeposit rates. Importantly, subordinating nondepositor claims reduces bank risk-taking, consistent with market discipline. This insight highlights a role for debt priority structure in the regulatory framework.Received September 1, 2016; editorial decision August 31, 2017 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130855123","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Multinational Enterprises and National Insolvency Laws (Or: Lobbying for Special Privileges)","authors":"C. Paulus","doi":"10.2139/SSRN.3096434","DOIUrl":"https://doi.org/10.2139/SSRN.3096434","url":null,"abstract":"The article describes how various industries follow different lobbying strategies to exempt or privilege themselves from the general insolvency risk in individual jurisdictions.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121483044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Too Complex to Work: A Critical Assessment of the Bail-In Tool Under the European Bank Recovery and Resolution Regime","authors":"Tobias H. Troeger","doi":"10.2139/ssrn.3023184","DOIUrl":"https://doi.org/10.2139/ssrn.3023184","url":null,"abstract":"This paper analyzes the bail-in tool under the Bank Recovery and Resolution Directive (BRRD) and predicts that it will not reach its policy objective. To make this argument, this paper first describes the policy rationale that calls for mandatory private sector involvement (PSI). From this analysis, the key features for an effective bail-in tool can be derived. These insights serve as the background to make the case that the European resolution framework is likely ineffective in establishing adequate market discipline through risk-reflecting prices for bank capital. The main reason for this lies in the avoidable embeddedness of the BRRD's bail-in tool in the much broader resolution process, which entails ample discretion of the authorities also in forcing private sector involvement. Moreover, the idea that nearly all positions on the liability side of a bank's balance sheet should be subjected to bail-in is misguided. Instead, a concentration of PSI in instruments that fall under the minimum requirements for own funds and eligible liabilities (MREL) is preferable. Finally, this paper synthesized the prior analysis by putting forward an alternative regulatory approach that seeks to disentangle private sector involvement as a precondition for effective bank-resolution as much as possible form the resolution process as such.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127887094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Leidos and MD&A: Seeing MD&A through the Eyes of the SEC","authors":"J. Huber","doi":"10.2139/SSRN.3004064","DOIUrl":"https://doi.org/10.2139/SSRN.3004064","url":null,"abstract":"The Supreme Court has never agreed to decide whether an item in Regulation S-K, like MD&A, creates a duty to disclose that is actionable under Rule 10b-5. By taking cert on Leidos, Inc. v. Indiana Public Retirement System, the Court may be doing just that. If the Court decides that a violation of Item 303 of Regulation S-K creates an independent cause of action for private plaintiffs under Rule 10b-5, the Court must then decide whether violating Item 303 leads “automatically” to a violation of Rule 10b-5 or if additional factors are required. These factors may include the materiality of any omitted disclosure, scienter or the ability of the company to predict the outcome of a trend or uncertainty at the time the omitted disclosure should have been made. Contrary to the Second Circuit’s decision, the Third and Ninth Circuits held that Item 303 does not create a cause of action under Rule 10b-5 in part because of the different materiality standard the SEC has applied to Item 303 in 1989 as compared to the materiality standard articulated in Basic v. Levinson in 1988. In resolving this conflict between the circuits, the Court is not just deciding a discrete and limited issue under Item 303, but may also be determining whether a violation of every one of the SEC’s disclosure rules creates an independent cause of action under Rule 10b-5. Deciding that Item 303 creates a duty to disclose that is actionable under Rule 10b-5 could lead to an implied right of action under Rule 10b-5 with respect to the rules adopted under Sections 13(a) and 15(d) and perhaps Section 14(a)of the Exchange Act. Creating a duty to speak would increase the likelihood of private actions under Rule 10b-5 alleging omitted disclosure in periodic reports against public companies which previously were not subject to Rule 10b-5 liability that did not cause a statement made to be materially misleading. \u0000A decision affirming Leidos could have a number of adverse effects: The SEC may need to revisit the trade-off made in 1980 of giving companies a general and flexible rule to foster the exercise of management judgment in providing meaningful disclosure in MDA Companies drafting defensive MDA Defensive disclosure can defeat the SEC’s ongoing effort to make documents readable and make already lengthy documents even longer and more forbidding to read; Voluminous defensive MDA MDA Faced with increased liability exposure and costs of compliance, the trend of companies ceasing to report to the SEC and going private may accelerate. Companies that would have made initial public offerings may decide to stay private.","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134290659","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Bondholder Reorganization of Systemically Important Financial Institutions","authors":"Steven Gjerstad","doi":"10.1108/JFEP-09-2017-0087","DOIUrl":"https://doi.org/10.1108/JFEP-09-2017-0087","url":null,"abstract":"\u0000Purpose\u0000This paper aims to describe a resolution process for faltering financial firms that quickly allocates losses to bondholders and transfers ownership of the firm to them. This process overcomes the most serious flaws in resolution plans submitted by banks under Dodd–Frank Title I and in the Federal Deposit Insurance Corporation (FDIC) receivership procedure in Dodd–Frank Title II by restoring the balance sheet of a failing financial institution and immediately replacing the management and board of directors who allowed its demise.\u0000\u0000\u0000Design/methodology/approach\u0000Feasibility of the proposed resolution procedure is assessed by comparing long-term bonds outstanding for the largest American banks just before the 2008 crisis to the capital needed by these banks to restore their balance sheets after their losses prior to and during the crisis.\u0000\u0000\u0000Findings\u0000In almost all bank failures, this process would eliminate the need for government involvement beyond court certification of the reorganization. The procedure overcomes the serious incentive distortions and inefficiencies created by bailouts, and avoids the destruction of value and financial market turmoil that would result from the bankruptcies and liquidations that Dodd–Frank requires for distressed and failing banks.\u0000\u0000\u0000Originality/value\u0000Title II of the Dodd–Frank Act would require liquidation of any banks that enter into its resolution process. The case of Lehman Brothers indicates the severity of losses to investors that liquidation imposes and the disruption to financial markets and the economy. The procedure developed in this paper would avoid the disruptions that Dodd–Frank requires, preserving core functions of faltering financial firms and maintaining them as going concerns, even in a severe financial crisis.\u0000","PeriodicalId":137765,"journal":{"name":"Law & Society: Private Law - Financial Law eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132458642","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}