Ellias and Lalafaryan on the Global Law of Debt

Jared A. Ellias, Harvard Law School, and Narine Lalafaryan, University of Cambridge, have posted The Global Law of Debt: 

Corporate debt financing and the restructuring of large corporations are now governed by what this Article calls the “global law of debt,” a transnational system shaped more by law firms, investment banks, and investors in New York and London than by national laws or court decisions. Large companies can now optimize governing law on a transaction-by-transaction basis, for example by borrowing in New York and then restructuring that debt in the United Kingdom, or by borrowing in London through English-law governed contracts with New York-law interpretation for select provisions.  This Article provides the first account of this development, tracing its origins to the 1960s, when New York and London debt professionals expanded into each other’s markets, creating an entangled system that fostered mutual learning and competition.  In 1978, Congress enacted a new bankruptcy law that gave American lawyers and investors corporate restructuring expertise that they later exported abroad.  In the post-pandemic era, London emerged as a global restructuring hub rivaling the United States.  These developments have produced a robust global debt market, but they have also unsettled long-standing assumptions about the rights of creditors as Chapter 11’s primacy fades and controversial American innovations that erode creditor protections proliferate globally.

--Dan Ernst 

Addae on Anti-Blackness in Liquor Licensing

Angela E. Addae, University of Oregon School of Law, has published Booze, Bars, and Bias: Anti-Blackness in Liquor Licensing Enforcement in the Washington and Lee Law Review:

This Article explores the disharmonious and disturbing influence of race in the enforcement of liquor licenses. Across the length and breadth of this nation, attentive Black revelers bear witness to an all-too-familiar trend signified by the disproportionately frequent closures of Black entertainment businesses. This Article argues that the punitive disposition toward Black entertainment businesses is not just a contemporary phenomenon; rather, it is a set of practices rooted in centuries of exclusion and regulatory abuse.

Over the past two centuries, state liquor licensing agencies have emerged as contentious battlegrounds where legal, social, and economic factors converge—often to the detriment of the very businesses they were intended to regulate. Throughout the colonial, post-revolutionary, and antebellum eras, state boards and commissions used liquor license regulations to maintain systems of control and preserve the racialized status quo. By unveiling these historical and ongoing practices, this Article reconceptualizes how legal reform might rectify the structural obstacles that disproportionately affect Black entertainment businesses.

Additionally, this Article challenges the perception of drinking establishments as trivial or controversial by highlighting their significance as profound sites for meaning-making, cultural production, and reclamation. This exploration presents an emic perspective that counters the negative and inaccurate stereotypes often associated with spaces of Black entertainment, leisure, and recreation.

--Dan Ernst

Kadens on Fraud Prevention in Historical Perspective

Emily Kadens, Northwestern University School of Law, has posted The Persistent Limits of Fraud Prevention in Historical Perspective, which has been published as 118 Nw. U. L. Rev. 167 (2023):

Fraud has been ubiquitous throughout history, and so have the methods of fraud prevention. History demonstrates that no anti-fraud measures have fully succeeded in eliminating deceptive market behavior. Instead, this Essay uses evidence from premodern England to argue that societies and individual contracting parties balance tolerating a certain amount of fraud against the costs of fraud prevention. 

--Dan Ernst

Telfer and Torrie on the Saskatchewan Moratorium Act

Thomas G. W. Telfer, Western University Faculty of Law, and Virginia Torrie, Affiliated Researcher, Desautels Centre for Private Enterprise and the Law, University of Manitoba Faculty of Law, have posted Debt Postponement, Debtor Protection, and Creditor Interests: The Role of the Saskatchewan Moratorium Act Reference Case in Reinforcing the Bankruptcy and Insolvency Power, which appears in the Saskatchewan Law Review (2023) 86.1 SLR 41-82:

Canada’s prairie provinces have long attempted to secure the economic fortunes of their residents by enacting legislation to restrict the enforcement of debt. Provincial efforts to restrict creditor collection actions date back to the Financial Crisis in 1914 and extended through the Dust Bowl and Great Depression of the 1930s, and into the early 1940s. Saskatchewan enacted its first such statute in 1914, but by 1929 it had followed Alberta’s lead and created a comprehensive scheme of debt relief with its Debt Adjustment Act. In 1941, Alberta’s Debt Adjustment Act was declared ultra vires by the Supreme Court of Canada. The ruling cast doubt on the validity Saskatchewan’s Act by implication. Saskatchewan responded by repealing its Debt Adjustment Act and enacting the Moratorium Act in 1943. However, the province’s constitutional problems did not end there. In 1955 it referred the validity of its newest Moratorium Act to the Saskatchewan Court of Appeal, and on appeal the Supreme Court of Canada declared that the statute ultra vires for trenching on the federal government’s jurisdiction over bankruptcy and insolvency. The decision continued the trend of expanding the bankruptcy power and was influential for clarifying the broad scope of this federal power, articulating clear definitions of bankruptcy and insolvency, and acknowledging the stigma of bankruptcy and the dual policy goals of social and economic rehabilitation. This paper argues that the Moratorium Act Reference case is a landmark decision, for affirming that debt adjustment legislation is exclusively within the scope of federal bankruptcy and insolvency law, and the enduring influence of Justice Rand’s judgment on the further development of the modern Canadian bankruptcy and insolvency system.

--Dan Ernst

Baird's "Unwritten Law of Corporate Reorganizations"

Douglas G. Baird, University of Chicago Law School, has published The Unwritten Law of Corporate Reorganizations (Cambridge University Press, 2022):

The law of corporate reorganizations controls the fate of enterprises worth billions of dollars and has reshaped entire sectors of the economy, yet its inner workings largely remain a mystery. Judges must police a small and closed fraternity of professionals as they sit down at a conference table and forge a new future for a distressed business, but little appears to tell judges how they are to do this. Judges, however, are in fact bound by a coherent set of unwritten principles that derive from a statute Parliament passed in 1571. These principles are not simply norms or customary practices. They have hard edges, judges must enforce them, and parties are bound by them as they are by any other law. This book traces the evolution of these unwritten principles and makes accessible a legal world that has long been closed off to outsiders.

Here is (quite) an endorsement:

'When the leading bankruptcy scholar of the past generation writes his magnum opus, The Unwritten Law of Corporate Reorganizations is what we get. Reaching back through the centuries, with an especially acute lens on the period from the late nineteenth century to today, Douglas Baird flips the conventional wisdom about corporate reorganization on its head, demonstrating that the solution to financial distress has not been technical legal rules; it has been the unwritten practices of generations of bankruptcy insiders. Baird tells the story in a way no other legal scholar can, with remarkable historical discoveries, vivid anecdotes, subtle analysis, and a prose style that makes The Unwritten Law of Corporate Reorganizations the most unlikely of page turners. It is destined to be a classic not just of bankruptcy, but of American business history.'

David A. Skeel - S. Samuel Arsht Professor of Corporate Law at the University of Pennsylvania Law School

--Dan Ernst

Swain and Fairweather on Usury Law in New South Wales

Warren Swain and Karen Fairweather, University of Auckland, have posted To Your Marrowbones All: Loan Transactions and the Law in 19th Century New South Wales:

Economic growth in the early Australian colony was fuelled by credit. The boom ended in a slump in the 1840s. By this time questions had started to be raised about how credit should be regulated in the colony. In England, the prohibitions on usury which governed loan transactions were not completely abolished until 1854. The application of the English usury laws in the colony was controversial. Some favoured regulating interest rates whilst others saw it as likely to discourage investment. Usury provides a good example of a wider debate about the extent to which English law ought to apply in the different conditions of the early colony of New South Wales.

--Dan Ernst

Kadens on a 1613 Star Chamber Fraud Case

Emily Kadens, Northwestern University School of Law, has posted A Marine Insurance Fraud in the Star Chamber, which appears in Star Chamber Matters: The Court and Its Records, ed. K.J. Kesselring and Natalie Mears (2021), 155-174:

The Star Chamber was an active forum for litigating cases of fraud in the sixteenth and early seventeenth centuries. But some complaints alleging fraud were themselves fraudulent. This book chapter provides a detailed study of a 1613 Star Chamber suit claiming marine insurance fraud against London- and Amsterdam-based merchant insurers, which was allegedly committed in Livorno, Italy by two Portuguese crypto-Jews and a young English merchant. But did the fraud actually occur, or did the accuser invent the whole story?

--Dan Ernst

Krishnan on the Dubai International Financial Centre Courts

Jayanth K. Krishnan, Indiana University Maurer School of Law, has posted The Dubai International Financial Centre Courts: A Retrospective (Motivate Publishing House, 2018):

Can Western-based, English-speaking, common law commercial courts operate successfully in an environment that are not their own—such as in the Middle East? This question is not a simple thought experiment but rather the reality that has occurred since the mid-2000s in the Emirate of Dubai. This monograph recounts the history of how the ‘Dubai International Financial Centre Courts’ emerged. Drawing on extensive interviews with key stakeholders involved in the process, along with rich original documents as well as all of the Courts’ judgments, this narrative offers important lessons for those seeking to understand more fully the complex interplay of how law, legal institutions and legal and political actors operate in today’s globalised world.

A Conference Report: Business and the Law in Historical Perspective

The Blog H/SOZ/KULT: has a very full report by Raphael Hennecke, University of Bayreuth, on the workshop Business and the Law: Historical Perspectives on Legal Change, held June 21-23, 2018.  It commences:

The purpose of the workshop was to take a historical perspective on the interconnection of business and the law. How did new products and economic practices question their legal environment? How did legal changes influence business practice? Did firms comply with new legal regulations? To clarify these questions, historians, economists and legal scholars presented and discussed a wide range of research topics related to the interplay of business and law. This workshop did not include an actual presentation of the papers by the authors and instead limited presentation to a short comment by another participant to enable thorough discussions. [More.]

Two Business History Prizes to Balleisen

Congratulations to Edward J. Balleisen, Duke University, for his receipt of two prizes at the annual meeting of the Business History Conference’s annual meeting in Baltimore, Maryland, April 5-7, 2018.  The first was the Harold F. Williamson Prize, awarded biannually to a mid-career scholar who has made significant contributions to the field of business history.  Previous recipients include Christopher McKenna, Sally Clarke, Richard R. John, Kenneth Lipartito, and Naomi Lamoreaux.  Professor Balleisen also received the Ralph Gomory Prize, awarded for “historical work on the effects of business enterprises on the economic conditions of the countries in which they operate,” for Fraud: An American History from Barnum to Madoff (Princeton University Press, 2017).

While we’re at it, we’ll note that the Philip Scranton Prize for the best article published in Enterprise & Society went to two articles with legal themes: David Higgins and Aashish Velkar, “’Spinning the yarn’: Institutions, law, and standards, c. 1880-1914,” 18 (3): 591-631, and Patricio Sáiz and Rafael Castro, “Foreign direct investment and intellectual property rights: International intangible assets in Spain over the long term,” 18 (4): 846-892.  H/t: Anne Fleming.

Davis on Commercial Law in Medieval India

Donald R. Davis, University of Texas at Austin, has published The Dharma of Business: Commercial Law in Medieval India with Penguin. From the press:

Business law in medieval and early modern India developed within the voluminous and multifaceted texts called the Dharmashastras. These texts laid down rules for merchants, traders, guilds, farmers, and individuals in terms of the complex religious, legal, and moral ideal of dharma. This exciting book provides a new perspective on commercial law in this period. In addition to a description of the substantive rules for business, the book reinterprets the role of business and commerce within the law generally and demonstrates that modern assumptions about good business practice could benefit from the insights of this ancient tradition. It thus makes a compelling case for the relevance of the dharma of business to our own time.

 Here's the Table of Contents:

• 1: How to Read a Dharmasastra
• 2: Business Law in Context
• 3: Relationships as the Foundation of Commerce
• 4: Why Government is Necessary for Business
• 5. Virtue in Business

Further information is available here.