Section 365 of the Bankruptcy Code prohibits enforcement of the once common 'ipso facto clause.' The clause excuses the solvent party from performance of the contract when the other party becomes insolvent. We show that the ability of insolvent firms to continue bad projects is enhanced by the...

In this article, I study how the presence of a revolving door and potential collusion between a regulator and a regulated firm affect the regulator's performance incentives. Contrary to the conventional wisdom, these seemingly undesirable features of the regulatory system may serve the interests...

We examine the value of incorporating regulatory information into the court liability decision and making it publicly available when the causality of harm is uncertain. Public access to regulatory information, coupled with its use in a liability decision, not only improves the accuracy of court...

The holdup problem arises when parties negotiate to divide the surplus generated by their ex ante noncontractable investments. We study this problem in a model which, unlike the stylized static model, allows the parties to continue to invest until they agree on the terms of trade. These possible...

This paper studies an incentive rationale for the use of group lending as a method of financing liquidity-constrained entrepreneurs. The joint liability feature associated with group lending lowers the liquidity risk of default but creates a free-riding problem. In the static setting, the...

This paper considers settlement negotiations between a single defendant and N plaintiffs when there are fixed costs of litigation. When making simultaneous take-it-or-leave-it offers to the plaintiffs, the defendant adopts a divide-and-conquer strategy. Plaintiffs settle their claims for less...

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