Economic Perspectives

The Drama Over the Windstream Case: Boiled Down

05/18/20

Perhaps the most discussed and hotly debated corporate finance/contracts case of the last year was Windsteam LLC v. Aurelius (SDNY 2019) (for Stephen's wonderful post on this, see here).

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The Myth of Optimal Expectation Damages

04/10/20

Roughly eighty years ago, Lon Fuller and William Perdue (the former, then a faculty member at Duke Law, and the latter, a 3L), wrote two of the most famous articles in contract law (here). One of the puzzles they posed -- about why the law favors the expectation damages measure -- resulted in an entire body of scholarship, including the theory of efficient breach.

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Daniel Schwarcz on the Evolution of Insurance Contracts

02/07/20

I shudder even as I write these words, but I’m increasingly fascinated by insurance contracts.  If you are interested in the processes by which standard form contracts evolve – which I am -- then you can’t help but be sucked into this world. Coming from the world of sovereign bonds, the insurance world strikes as bizarre.

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Hinrichsen on Iraq’s Debt Restructuring

12/21/19

Iraq’s debt restructuring a decade and a half ago was one of the few things that went right with the US incursion into that country in 2003.  Thanks to a combination of an expensive war with Iran, mismanagement and corruption on the part of Saddam and his henchmen, and the debilitating effect of international sanctions on the economy, Iraq in 2003 found itself with one of the largest sovereign defaulted debt stocks in history.  Worse, thanks to the sanctions regime, much of the unpaid debt had, by the time of Saddam’s removal, matured into judgement

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Yadav on Dodgy Debt Buybacks

12/20/19

I’ve long been fascinated by debt buybacks by issuers, in large part because they seemed to occupy a loophole in the securities disclosure laws.  A company could do a buyback of bonds and, because bondholders are not owed fiduciary duties by the company, there was no requirement for disclosure.

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Aurelius v. Puerto Rican Control Board (or "Do Activist Hedgies Add Value?")

10/17/19

This post draws considerably from research on Puerto Rico and its current constitutional status with Joseph Blocher (see here).

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The Puzzling Pricing of Venezuelan Sovereign Bonds

10/07/19

by Mark Weidemaier & Mitu Gulati

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Badawi & de Fontenay Paper on EBITDA Definitions

10/05/19

I confess that, on its face, this did not strike me as the most exciting topic to read about (and that comes from someone who writes about the incredibly obscure world of sovereign debt contracts).  After all, who even knows what EBITDA definitions are?  Sounds like something from the tax or bankruptcy code.  But don’t let the topic be off putting.  This is a wonderfully interesting project; and elegantly executed (here).  By the way, EBITDA stands for earnings before interest

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Trump, Denmark and Greenland:  What Next?

09/08/19

(This post draws directly from ideas from co authored work with Joseph Blocher; and particularly the numerous discussions we have had about the incentives that a market for sovereign control might create for nations to take better care of their minority populations in outlying areas (e.g., the US and Puerto Rico).  Mistakes in the discussion below, however, are solely mine).

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Anderson and Nyarko's Cool New Papers on Contract Evolution

09/05/19

Two of the contracts papers I’ve been most looking forward to this fall have just been posted on ssrn. They are are Rob Anderson’s “An Evolutionary Perspective on Contracting: Evidence From Poison Pills” (here) and Julian Nyarko’s “Stickiness and Incomplete Contracts” (here).

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