Harvard Business Law Review (HBLR)

The Harvard Business Law Review (HBLR) aims to be the premier journal covering the laws of business organization and capital markets. HBLR will publish articles from professors, practitioners, and policymakers on corporate law and governance, securities and capital markets law, financial regulation and financial institutions, law and finance, financial distress and bankruptcy, and related subjects.

Industry

VOLUME 9 • COLUMNS

HEALTH INSURANCE PLAN REGULATION AFTER THE AFFORDABLE CARE ACT: A COST-BENEFIT ANALYSIS COMPARISON

Marlan Golden

In a rapidly evolving healthcare landscape, particularly since the enactment of the Patient Protection and Affordable Care Act (ACA) in 2010, regulators have confronted a number of challenges in crafting general rules of prospective applicability for health insurance plans. These challenges include quantifying costs and benefits of regulatory actions that seem difficult to predict, monetizing certain benefits, satisfying the demands of a robust cost-benefit analysis regime, and accounting for heightened uncertainty in the healthcare markets and recently, on Capitol Hill.

VOLUME 5 • COLUMNS

INEVITABLE: SPORTS GAMBLING, STATE REGULATION, AND THE PURSUIT OF REVENUE

Anastasios Kaburakis, Ryan M. Rodenberg, & John T. Holden

Balancing the protection of private business interests against governmental regulation is one of the most significant legal frictions of the modern era. Over the course of the past twenty-eight months, this conflict has manifested itself through a federal sports gambling lawsuit involving New Jersey. However, the ongoing lawsuit between a plaintiff quintet of the most powerful sports entities in the United States—the National Collegiate Athletic Association (“NCAA”), the National Basketball Association (“NBA”), the National Football League (“NFL”), the National Hockey League (“NHL”), and the Office of the Commissioner of Major League Baseball (“MLB”) (collectively “sports leagues”)—and the Governor of New Jersey over the possibility of regulated sports wagering in the state is not about gambling. It is about control: control of events, control of data, control of marketing opportunities, and control of current and future revenue streams.

VOLUME 4 • ISSUE 2 • PRINT

PHARMACEUTICAL PUBLIC-PRIVATE PARTNERSHIPS: MOVING FROM THE BENCH TO THE BEDSIDE

Constance E. Bagley & Christina D. Tvarnø

This article provides a game theory and law-and-management analysis of for- profit pharmaceutical public-private partnerships, a complex type of legal arrangement in the highly regulated pharmaceutical industry. A pharmaceutical public-private partnership (PPPP) agreement is a legally binding contract be- tween a private pharmaceutical enterprise and a public research university (or a private university conducting publicly funded research) to support research leading to new commercial pharmaceutical and biologic products. The key purpose of this article is to provide a theoretical explanation and a practical perspective on how properly crafted PPPP arrangements can promote innovation more efficiently than traditional self-optimizing contracts. In particular, a properly framed binding contract, coupled with respect for positive incentives, can move the parties away from an inefficient prisoners’ dilemma Nash equilibrium to the Pareto Optimal Frontier and thereby increase both the overall size of the pie and the value of the share retained by each participant. To deliver an efficient framework for collaboration, the PPPP contract must include mechanisms for encouraging cooperative behavior, leading to a win-win approach rather than a traditional competitive perspective. Thus, this article discusses how the PPPP contract should encourage the parties to collaborate with a strong focus on attaining common goals by sharing gains or losses and information, and by instituting risk and reward systems to build and share innovation. When coupled with appropriate attention to the difficult task of coordinating the actions of interdependent actors, a PPPP arrangement can enhance the likelihood of successful commercialization of pharmacological discoveries by flipping the par- ties’ incentives as compared with a more traditional contract.

VOLUME 3 • ISSUE 1 • PRINT

THE COMMERCIAL REAL ESTATE BUBBLE

Adam J. Levitin and Susan M. Wachter
Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention. The commercial real estate bubble, in contrast, has largely been ignored.
VOLUME 3 • ISSUE 1 • PRINT

CHAPTER 13 DEBTORS’ HOME LOSS IN THE FORECLOSURE CRISIS

Joshua L. Boehm
The foreclosure crisis that began in 2007 and continues as of 2012 has heightened interest in whether chapter 13 bankruptcy helps families in financial distress save their homes and prevent foreclosure. This Note studies whether homeowners who filed chapter 13 bankruptcy were able to keep their homes during the foreclosure crisis. Using a sample of homeowners who filed chapter 13 bankruptcy in 2007 in Broward County, Florida, a hard-hit area in the foreclosure crisis, I find that half of chapter 13 debtors lose their homes within three years of seeking bankruptcy relief. An additional 22% of the sample continued to own their homes but were in foreclosure. I estimate linear regression models on home loss and find that being in foreclosure at the time of filing bankruptcy, the months in arrears at filing, and debtors’ mortgage-to-income ratios and loan-tovalue ratios predict home loss. In the foreclosure crisis, chapter 13 was only modestly effective in saving homes. Drawing on these findings, I offer implications for financial regulatory reform, including Consumer Financial Protection Bureau rulemaking and legislative proposals on mortgage modification. For chapter 13 to become a useful instrument in combating foreclosures, I conclude, policymakers must focus on the need for troubled homeowners to file bankruptcy sooner in the home default process.
VOLUME 1 • COLUMNS

IS THE “TAX POISON PILL” THE LAST STAND FOR PROTECTING NOLS AFTER HEALTH CARE REFORM?

Michael R. Patrone

The Delaware Court of Chancery’s recent Selectica opinion garnered substantial attention, but the court’s decision upholding the tax poison pill may be of even greater importance with the passage of the Health Care and Education Reconciliation Act of 2010 (H.R. 4872)—less than a month after Vice-Chancellor Noble issued his opinion. During the global economic recession, many companies accrued substantial tax losses that can be carried forward for up to twenty years and used to offset future income for federal tax purposes, called net operating loss carryforwards (“NOLs”). These valuable tax assets will provide substantial financial benefits for companies down the road but are vulnerable to spoilage from significant changes in company ownership.