Table of Contents

The Cape Town Convention's Improbable-but-Possible Progeny Part One: An International Secured Transactions Registry of General Application

Charles W. Mooney, University of Pennsylvania Law School

The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement

Myriam E. Gilles, Benjamin N. Cardozo School of Law

From Chrysler and General Motors to Detroit

David A. Skeel, University of Pennsylvania Law School, European Corporate Governance Institute (ECGI)

Notice, Assent, and Form in a 140 Character World

Juliet M. Moringiello, Widener University - School of Law

How Much is Too Much? Large Termination Fees and Merger Outcomes

Jordan Neyland, The University of Melbourne, Financial Research Network (FIRN)
Chander Shekhar, University of Melbourne, Financial Research Network (FIRN)
Mengchen (Irene) Yang, University of Melbourne


CONTRACTS & COMMERCIAL LAW eJOURNAL

"The Cape Town Convention's Improbable-but-Possible Progeny Part One: An International Secured Transactions Registry of General Application" Free Download
Virginia Journal of International Law, Vol. 55, Pg. 1, 2014
U of Penn, Inst for Law & Econ Research Paper No. 14-29

CHARLES W. MOONEY, University of Pennsylvania Law School
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This essay is Part One of a two-part essay series. It outlines and evaluates two possible future international instruments. Each instrument draws substantial inspiration from the Cape Town Convention and its Aircraft Protocol (together, the “Convention�). The Convention governs the secured financing and leasing of large commercial aircraft, aircraft engines, and helicopters. It entered into force in 2006. It has been adopted by sixty Contracting States (fifty-four of which have adopted the Aircraft Protocol), including the U.S., China, the E.U., India, Ireland, Luxembourg, Russia, and South Africa.

A novel, distinctive, and path-breaking feature of the Convention is the international registry for the registration (i.e., public notice) of international interests in aircraft objects. It is a completely electronic, computer-based registry operated out of Ireland. It is operational 24-7. Inspired by the Convention’s international registry, Part One proposes a different sort of international registry — one of general application. This registry would constitute the national registry for each adopting State that would provide public notice of security interests in personal property (movables) created under the State’s domestic substantive law on secured transactions. Part One explores the potential scope and structure of such a registry and its benefits as well as the potential means of creation, implementation, and operation of such a registry. It also examines the feasibility of a project on an international registry of general application. Part One concludes that there is a plausible basis for the feasibility of such a project. It urges interested States and intergovernmental organizations to seriously consider an international registry project and to take preliminary steps toward more formal consideration and discussion.

"The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement" Free Download
Cardozo Legal Studies Research Paper No. 436

MYRIAM E. GILLES, Benjamin N. Cardozo School of Law
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This story begins in 1980, when a budding anti-lawsuit movement found an energetic champion in a new conservative president. Over time, the movement became a dominant feature of political life, as its narrative of activist judges, jackpot justice and a thriving lawsuit industry stirred partisan passions. And yet, some thirty years on, it is clear that the primary legacy of the anti-lawsuit movement is the movement itself – not legislative achievements, which have been few and far between, but committed adherents, including future Supreme Court Justices, lower court judges, and business leaders.

Meanwhile, and also in the early 1980s, federal courts began a long, slow, and initially apolitical process of invigorating the staid legal backwater of arbitration. Over the next thirty years, arbitration came fully of age. By 2013, the Supreme Court had held that companies may freely and openly use provisions mandating one-on-one, confidential arbitration in standard form agreements with employees, consumers and others to escape the judicial system – and avoid potential exposure to class actions.

And finally, over these same thirty years, class actions became a dominant force in litigation, having managed to dodge the most serious reform initiatives of the anti-lawsuit movement. Class actions – for better or for worse – have proven to be extremely powerful weapons in a wide variety of subject-matter areas, accounting for billions of dollars in damages settlements. Companies of all stripes dearly want to avoid class exposure.

And so, as these three movements have unfolded over the past thirty years – separately and together – we are now at a unique point in our legal history: one that portends, quite literally, the end of doctrinal development in entire areas of the law. Companies, anxious to avoid any and all exposure to class actions are highly motivated to insert confidential, one-on-one arbitration mandates into the standard-form agreements that, over these same thirty years, have come to govern their relationships with employees, consumers, direct purchasers, and all manner of counterparties. As a result, all disputes under these agreements – whether they would have otherwise been brought as class or individual claims – will now be shunted into the hermetically-sealed vault of private arbitration, where there is no public, transparent decision-making process, much less stare decisis or common law development.

"From Chrysler and General Motors to Detroit" Free Download
Widener Law Review, Vol. 19, 2015, Forthcoming
U of Penn, Inst for Law & Econ Research Paper No. 14-31

DAVID A. SKEEL, University of Pennsylvania Law School, European Corporate Governance Institute (ECGI)
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In the past five years, three of the most remarkable bankruptcy cases in American history have come out of Detroit: the bankruptcies of Chrysler and General Motors in 2009, and of Detroit itself in 2012. The principal objective of this Article is simply to show that the Grand Bargain at the heart of the Detroit bankruptcy is the direct offspring of the bankruptcy sale transactions that were used to restructure Chrysler and GM. The proponents of Detroit’s “Grand Bargain� never would have dreamed up the transaction were it not for the federal government-engineered carmaker bankruptcies. The Article’s second objective, based the comparison of the Detroit cases, is to make a very brief case for reform of bankruptcy sales.

Part I of the Article briefly surveys the increased use of bankruptcy sales and related shifts in Chapter 11 practice over the past several decades. Part II describes the Chrysler and General Motors bankruptcies, which built on but radically expanded the scope of a bankruptcy sale. Part III turns to the Detroit bankruptcy, focusing primarily on the “Grand Bargain,� while also exploring the city’s use of another recent bankruptcy strategy, known as “gifting.� The Article concludes, in a brief final part, that the Detroit cases have pushed recent bankruptcy innovations to their logical extremes — and beyond — exposing the need to update the oversight of bankruptcy sales.

"Notice, Assent, and Form in a 140 Character World" Free Download
Southwestern Law Review, Forthcoming
Widener Law School Legal Studies Research Paper No. 14-20

JULIET M. MORINGIELLO, Widener University - School of Law
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This essay is a contribution to a symposium on Professor Nancy Kim’s terrific book, Wrap Contracts: Foundations and Ramifications. In the book, Prof. Kim examines this explosion in volume of online contract terms and offers some suggestions for improving the judicial approach to these terms. Despite the ease of presenting online terms in a visually appealing format, today’s electronically presented terms are even less comprehensible than those of fifteen years ago. At the same time that individuals have become accustomed to receiving information in small doses due to the proliferation of social media platforms such as Twitter, Instagram, Facebook and the practice of text messaging, online terms have become more voluminous. Rather than using the online format to make their terms more appealing to the reader, purveyors of online terms are offering terms that are not only less readable because of their volume, but that include provisions that few people would expect to be contained in contracts of the sort being offered.

Professor Kim’s emphasis on the importance of form may be the most significant contribution of her book. Although she makes many important observations in her book, this essay focuses on three related observations. The first relates to the voluminous nature of online terms. Unhindered by the limitations of the paper form, websites engage in what Professor Kim dubs “contracting mania,� which leads them to “stuff their online contracts with many pages of terms.� She then explains that these extra terms include those that are different from terms offered in physically limited paper forms, and include “crook� terms that purport to appropriate “benefits ancillary or unrelated to the transaction.� Both of these characteristics render online terms less readable than paper terms, yet courts, in finding that an individual has notice of online contract terms, have substituted “notice of notice� for notice of the purported contract terms.

In this essay, I will briefly discuss the role of the relationship between notice and assent in standard form contracting and then turn to some of the recent cases addressing the enforceability of online terms. This discussion will illustrate that although courts have wisely avoided making entirely new law for online contracts, they have largely ignored the “term creep� that has made online terms less, rather than more, readable.

"How Much is Too Much? Large Termination Fees and Merger Outcomes" Free Download

JORDAN NEYLAND, The University of Melbourne, Financial Research Network (FIRN)
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CHANDER SHEKHAR, University of Melbourne, Financial Research Network (FIRN)
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MENGCHEN (IRENE) YANG, University of Melbourne
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We investigate the use and impact of large target termination fees in acquisitions. Large termination fees are associated with more post-bid competition and lower completion rates, suggesting bidders use high fees in expectation of bid competition. Large termination fees are more common in deals with small and distressed targets and deals with high advisory fees. Switching regression estimates predict that high-fee deals would receive lower premiums with reduced termination fees. Overall, our evidence suggests that targets use large termination fees to overcome contracting problems when bidders face high transaction costs and information risk. In contrast to prior literature, there is limited evidence that managerial self-interest motivates high fees, as target managers in these deals are not more likely to receive severance packages or employment with the bidder in high-fee deals.

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Contracts & Commercial Law eJournal

IAN AYRES
William K. Townsend Professor of Law, Yale University - Yale Law School, Yale University - Yale School of Management

RANDY E. BARNETT
Carmack Waterhouse Professor of Legal Theory, Georgetown University Law Center

LISA E. BERNSTEIN
Wilson-Dickinson Professor of Law, University of Chicago Law School

CLAYTON P. GILLETTE
Max E. Greenberg Professor of Contract Law, New York University School of Law

ROBERT A. HILLMAN
Edwin H. Woodruff Professor of Law, Cornell Law School

AVERY W. KATZ
Milton Handler Professor of Law, Columbia University - Law School

RANDAL C. PICKER
Leffmann Professor of Commercial Law; Senior Fellow, The Computation Institute of the University of Chicago and Argonne National Laboratory, University of Chicago - Law School

ALAN SCHWARTZ
Sterling Professor of Law, Yale Law School

MICHAEL J. TREBILCOCK
Professor and Chair in Law and Economics, University of Toronto - Faculty of Law

ELIZABETH WARREN
Leo E. Gottlieb Professor of Law, Harvard Law School