{"id":4857,"date":"2021-05-16T12:15:26","date_gmt":"2021-05-16T16:15:26","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/hblr\/?page_id=4857"},"modified":"2025-05-28T01:22:59","modified_gmt":"2025-05-28T05:22:59","slug":"volume-11-issue-1","status":"publish","type":"page","link":"https:\/\/journals.law.harvard.edu\/hblr\/volume-11-issue-1\/","title":{"rendered":"Volume 11, Issue 1"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]<\/p>\n

CORPORATE LAW & GOVERNANCE<\/h5>\n

AN EFFICIENCY ANALYSIS OF DEFENSIVE TACTICS<\/a><\/h3>\n
Ronald J. Gilson & Alan Schwartz<\/strong><\/em><\/h6>\n
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For thirty-five years, courts and scholars have been divided over the effects of defensive tactics in the market for corporate control. Strong defensive tactics locate authority to accept a hostile bid in the target\u2019s board. The board can bargain for a higher takeover price than uncoordinated shareholders could realize, but high takeover prices may reduce shareholder returns by reducing the likelihood of receiving a bid. The Delaware Courts themselves disagree. The Delaware Chancery Court would locate ultimate decision authority in the tar- get\u2019s shareholders, while the Supreme Court, by permitting strong defensive tac- tics, allocates extensive power to the target\u2019s board. Though the Supreme Court\u2019s view settles the legal issue in Delaware for now, the normative debate among scholars and decision makers regarding whether the shareholders or the board should decide remains unresolved.<\/p>\n

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SECURITIES & FINANCIAL REGULATION<\/h5>\n

POWER AND STATISTICAL SIGNIFICANCE IN SECURITIES FRAUD LITIGATION<\/a><\/h3>\n
Jill E. Fisch & Jonah B. Gelbach<\/i><\/b><\/h6>\n
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Event studies, a half-century-old approach to measuring the effect of events on stock prices, are now ubiquitous in securities fraud litigation. In determining whether the event study demonstrates a price effect, expert witnesses typically base their conclusion on whether the results are statistically significant at the 95% confidence level, a threshold that is drawn from the academic literature. As a positive matter, this represents a disconnect with legal standards of proof. As a normative matter, it may reduce enforcement of fraud claims because litigation event studies typically involve quite low statistical power even for large-scale frauds.<\/p>\n

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BUSINESS & CORPORATIONS<\/h5>\n

THE FUTURE OR FANCY? AN EMPIRICAL STUDY OF PUBLIC BENEFIT CORPORATIONS<\/a><\/h3>\n
Michael B. Dorff, James Hicks, & Steven Davidoff Solomon<\/strong><\/em><\/h6>\n
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The public benefit corporation (\u201cPBC\u201d) is one of the most hyped developments in corporate law, due to the PBC\u2019s unique social purpose. Unlike the traditional corporation, directors of PBCs are required under their fiduciary duties to con- sider the impact of their decisions on a range of stakeholders and communities. This new form is hailed by many as a framework for a reformed capitalism. Critics, on the other hand, have assailed PBCs as unworkable, at best allowing corporations to \u201cgreen wash,\u201d or providing a thin disguise for ordinary corporate profit-seeking behavior.<\/p>\n

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SECURITIES & FINANCIAL REGULATION<\/h5>\n

REGULATING FINANCIAL GUARANTORS<\/a><\/h3>\n
Steven L. Schwarcz<\/strong><\/em><\/h6>\n
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To improve financial regulation, scholars have engaged in extensive research over the past decade to try to understand why systemically important financial firms engage in excessive risk-taking. None of that research fully explains, how- ever, the unusually excessive risk-taking by financial guarantors such as bond insurers, protection sellers under credit-default-swap (CDS) derivatives, credit enhancers in securitization transactions, and even issuers of standby letters of credit. With tens of trillions of dollars of financial guarantees outstanding, the potential for failure is massive. This Article argues that financial guarantor risk- taking is influenced by a previously unrecognized cognitive bias, which it calls \u201cabstraction bias.\u201d Unlike banks and other financial firms that pay out capital\u2014for example, by making a loan\u2014at the outset of a project, financial guarantors do not actually transfer their property at the time they make a guarantee. As a result, they may view their risk-taking more abstractly, causing them to underestimate the risk (even after discounting for the fact that payment on a guarantee is a contingent obligation). The Article provides empirical evidence showing that abstraction bias is real and can influence even sophisticated financial guarantors. The Article also examines how understanding abstraction bias can improve the regulation of financial guarantor risk-taking.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text][Leadership Archive]<\/a>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_column_text] CORPORATE LAW & GOVERNANCE AN EFFICIENCY ANALYSIS OF DEFENSIVE TACTICS Ronald J. Gilson & Alan Schwartz For thirty-five years, […]<\/p>\n","protected":false},"author":109,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-4857","page","type-page","status-publish","hentry"],"jetpack_shortlink":"https:\/\/wp.me\/PgKEUK-1gl","jetpack-related-posts":[{"id":5258,"url":"https:\/\/journals.law.harvard.edu\/hblr\/corporate-law-governance\/","url_meta":{"origin":4857,"position":0},"title":"Corporate Law & Governance","author":"wgu","date":"February 15, 2025","format":false,"excerpt":"VOLUME 15 \u2022 COLUMNS THE DUAL CLASS DILEMMA AND THE SUNSET-CLAUSE SOLUTION\u00a0 Adrian Brown The desirability of dual-class stock has been a source of substantial controversy. 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It used to be that the period of time that elapsed between a serious policy mistake and the\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3822,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-4-issue-1\/","url_meta":{"origin":4857,"position":4},"title":"Volume 4, Issue 1 (2014)","author":"Dayme Sanchez","date":"August 8, 2014","format":false,"excerpt":"SECURITIES & FINANCIAL REGULATION \u2022 BANKING REGULATING CAPITAL Prasad Krishnamurthy Most observers agree that the excessive debt or leverage of systemically important financial institutions (SIFIs) was a central reason why the housing crash of 2007\u20132009 led to a recession. 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These blind spots are distorted reflections of the perfect market assumptions underpinning the\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/4857","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/users\/109"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/comments?post=4857"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/4857\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/media?parent=4857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}