Everybody loses … except the lawyers

Settlement in the bankruptcy liquidation of Nortel

lawyers-laughing

This week it was reported that a settlement has been reached in the bankruptcy liquidation of Nortel Networks Corp (read here). The Nortel group once was one of the world’s leading providers of telecommunications network solutions.

The insolvency of the Nortel Group was a dream for scholars of international insolvency law. Continue reading “Everybody loses … except the lawyers”

2016 Nobel Prize in Economic Sciences to Hart and Holmström for their contributions to Law & Economics

See statement by the Royal Swedish Academy of Sciences.

“Contract theory has greatly influenced many fields, ranging from corporate governance to constitutional law. Thanks to the work of Oliver Hart and Bengt Holmström, we now have the tools to analyse not only contracts’ financial terms, but also the contractual allocation of control rights, property rights, and decision rights between parties. The contributions by the laureates have helped us understand many of the contracts we observe in real life. They have also given us new ways of thinking about how contracts should be designed, both in private markets and in the realm of public policy.”

See also video of announcement.

“Limited Liability: A Legal and Economic Analysis” by Stephen Bainbridge (UCLA) and Todd Henderson (University of Chicago)

Read first chapter here.

“Despite its obvious benefits in encouraging socially productive risk taking, limited liability has social costs as well. In particular, it allows corporations to externalize a certain amount of costs and risks onto third parties.”