The Economic and Monetary Constitution

On November the 27th of 2018 emeritus professor Viktor Vanberg of the University of Freiburg gave a lecture at the Research Unit Economic Law of the KU Leuven about the constitutional approach in economics. In his lecture he explained the rules-based approach defended by the Freiburg School of Ordoliberalism and the Viriginia School of Constitutional Economics. You can find the video of this lecture below.

Continue reading “The Economic and Monetary Constitution”

Glen Weyl presents “Radical Markets” (co-written with E. Posner) at the Brussels’ campus of KU Leuven

Prof. Glen Weyl (Microsoft Research & Princeton University) will present his book “Radical Markets”, co-written by Prof. Eric Posner

Tuesday 4 December 2018 Glen Weyl, Principal Researcher at Microsoft Research and a Visiting Senior Research Scholar at Yale’s Law School and Economics Department, will present at the Brussels’ campus of KU Leuven his book “Radical Markets“, co-written with Eric Posner (University of Chicago).

The Economist called this book “(A)n arresting if eccentric manifesto for rebooting liberalism…the policies they advocate…may help jolt liberals out of their hand-wringing, and shape a new line of market-oriented thinking, as Milton Friedman’s ‘Capitalism and Freedom’ did…refreshing and welcome in its willingness to question received wisdom…(L)iberals must find some antidote to populism and protectionism. A little outlandishness may be necessary.” Nobel Prize laureat Jean Tirole commented: “Whether you are convinced by the specific proposals or not, your confidence in your worldview may well be shattered by the depth and originality of the analysis.
Continue reading “Glen Weyl presents “Radical Markets” (co-written with E. Posner) at the Brussels’ campus of KU Leuven”

‘Enterprise liability’ for entities of a group?

Allowing creditors of one member of a corporate group to pierce horizontally to reach the assets of other members

Belgian private law is traditionally very distrustful of asset partitioning in the shape of both owner shielding and entity shielding. It has inherited from the 19th century French doctrine (Aubry & Rau) the idea that: (i) only persons have an estate; and (ii) every person has only one estate. An ‘estate’ (‘vermogen’ / ‘patrimoine’) is a pool of assets which serves as collateral for a pool of liabilities. Accordingly, the traditional théorie du patrimoine entails that a person cannot have separate pools of assets which serve as collateral for separate pools of liabilities. This theory betrays a strong distrust of asset partitioning, both internal and external.

In the beginning of the 19th century the rule ‘one person, one and only one estate’ was generally understood as referring to natural persons. The incorporation of legal persons, particularly of legal persons with owner shielding (limited liability), was exceptional and restricted. It was limited to certain types of activities and subject to governmental authorization. As a result, the 19th century doctrine of ‘one person, one and only one estate’, while at face value barely modified, presently has completely different practical consequences. Presently a natural person can easily incorporate, control and benefit from, one or more legal persons.

This raises the important question: Why is the traditional animus against asset partitioning not an issue, or less so,  in case the technique of the corporate form with legal personality is used to bring about such asset partitioning? Continue reading “‘Enterprise liability’ for entities of a group?”

The relevance of rules constraining or enjoining distributions in organizational law

Donner et retenir ne vaut: a rule protecting personal creditors

In the French-Belgian legal tradition the technique of the legal person was restricted during the 19th century to entities with a ‘for profit’ nature, i.e. entities geared towards the distribution of the profits towards members. The distrust of non-profit entities should partially be understood as a legacy of the French Revolution and the cultural, political and social struggles of the 19th century (a distrust of intermediary bodies, a hostile attitude towards religious organizations, guilds and trade unions;) (J. Vananroye, Morele wezens en wetsontduikende monniken, opening address at the Belgian Supreme Court on the occasion of the opening of the judicial year 2012, Antwerp, Intersentia, 2012, 2, nr. 2).

A present-day justification of a positive bias towards ‘for profit’ entities would be this: the legal obligation to distribute any profits causes the shares of the shareholders to be a valuable bundle of rights; this makes the shares into an economically valuable asset which can be seized by the personal creditors of the shareholders; and this in turn mitigates the harmful effects of asset partitioning for these personal creditors. Continue reading “The relevance of rules constraining or enjoining distributions in organizational law”

Debate on Corporate Social Responsibility: Leuven 26 November 2018

On Monday 26 November 2018 from 8 to 10 p.m., a debate on the added value of Corporate Social Responsibility (CSR) will take place in the aula Zeger Van Hee (DV1 91.56). Both prof. dr. Marieke Wyckaert (KU Leuven) and em. prof. dr. Viktor Vanberg (Albert-Ludwigs-Universität Freiburg and Walter Eucken Institut) will give a short lecture and subsequently comment on each other’s point of view. Prof. dr. Joeri Vananroye will provide an introduction and moderate the debate.

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6 objections against the AG’s opinion in ECB case


The Advocate General Wathelet delivered his opinion in the case Weiss. The preliminary questions in that case relate to the extensive purchase of public sector debt (PSPP) by the ECB in the secondary market. According to the Advocate General those purchases didn’t transgress the ECB’s mandate and were in full compliance with the prohibition on monetary financing. This blog post makes a critical review of the main arguments made by the AG Wathelet. Continue reading “6 objections against the AG’s opinion in ECB case”

Council agreed on a general approach on the proposal for a Directive on insolvency, restructuring and second chance

Yesterday (11 October 2018), the Justice and Home Affairs Council has agreed on a general approach on the proposal of the Commission (22 November 2016) for a Directive on “preventive restructuring frameworks, on discharge of debt and disqualifications and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt”. The general approach goes further than the partial general approach that was reached during the Council meetings on 4 and 5 June 2018. The approach reached yesterday also includes Titles I (General Provisions), II (Preventive restructuring frameworks) and VI (Final provisions).

As stated on its website, the position of the Council keeps all the main elements of the initial Commission’s proposal but provides more flexibility for Member States to adapt the new legislation to their existing frameworks. In particular, the Council has amended the provisions on: Continue reading “Council agreed on a general approach on the proposal for a Directive on insolvency, restructuring and second chance”