Friday, June 1, 2007

Ayotte and Bolton on Optimal Property Rights in Financial Contracting

Kenneth Ayotte (Columbia Business School) and Patrick Bolton (Princeton University) have posted Optimal Property Rights in Financial Contracting on SSRN.  Here's the abstract:

In this paper we propose a theory of optimal property rights in a financial contracting setting. Following recent contributions in the property law literature, we emphasize the distinction between contractual rights, that are only enforceable against the parties themselves, and property rights, that are also enforeceable against third parties outside the contract. Our analysis starts with the following question: which contractual agreements should the law allow parties to enforce as property rights? Our proposed answer to this question is shaped by the overall objective of minimizing due diligence (reading) costs and investment distortions that follow from the inability of third-party lenders to costlessly observe pre-existing rights in a borrower's property. Borrowers cannot reduce these costs without the law's help, due to an inability to commit to protecting third-parties from redistribution. We find that the law should take a more restrictive approach to enforcing rights against third-parties when these rights are i) more likely to redistribute value from third-parties ii) less likely to increase efficiency, and iii) more costly for third-parties to discover. We find that these qualitative principles are often reflected in observed legal rules, including the enforceability of negative covenants; fraudulent conveyance; corporate veil-piercing; and limits on assignability.

Ben Barros

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June 1, 2007 in Property Theory, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 30, 2007

Stahl on The Suburb as a Legal Concept

Kenneth Stahl has posted The Suburb as a Legal Concept: The Problem of Organization and the Fate of Municipalities in American Law on SSRN.  Here's the abstract:

This article argues that suburban municipalities obtained a privileged status vis-à-vis cities in American law – a reversal of the historical pattern – because the suburbs, as conceived by legislators and the judiciary, were more readily integrated as organs of the modern administrative state. In particular, where the city represented a mode of organization that emphasized autonomy from the sovereign and the rights of the collectivity as against those of the individual, the suburb was constructed as a conduit for the State to exert authority on and distribute goods to isolated single-family homeowners. This article traces the evolution of the legal concept of the municipality by situating it within the context of parallel transformations in two similar corporate organizations: the business corporation and the labor union. Beginning in the Progressive Era of the late nineteenth century, rapid industrialization caused the city, the business corporation, and the labor union to swell in size and influence. Threatened by the challenge these organizations posed to State authority and individual freedom, political elites and the courts responded by stripping them of their corporate legal powers. A more sophisticated approach appeared after the First World War, as the elites opted to reconstruct and reinvigorate organizations in a manner that served their own goals. The organizations were endowed with a collective legal status that superficially recalled the grand stature of their past while codifying their subordinate roles within the bureaucratic state. Thus, the suburb assumed the trappings of corporate personality once reserved for the city even as it proclaimed the emergence of a new legal concept of municipal organization.

Ben Barros

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May 30, 2007 in Land Use, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 29, 2007

AALS Property Section Listserv

I've recently received a number of questions about signing up for the AALS Property Section's listserv.  To sign-up, just fill out this form.  You must be a member of the AALS Property Section to join.  I highly recommend it -- the discussion on the listserv has been very informative.

On a related note, I should clarify that while I'm chair-elect of the Property Section, and often promote various Section events here, there is no formal connection between the Property Section and this blog.

Ben Barros

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May 29, 2007 in Law Schools | Permalink | Comments (0) | TrackBack (0)

Dick on Blight in Detroit

Andrew Dick has posted Blight Fight: Detroit's Aggressive Approach to Nuisance Abatement is Sparking Some Redevelopment on SSRN. Here's the abstract:

For those of you who do not know, Wayne County and the City of Detroit have been combatting blight for many years. Several years ago, as a law student working in Michigan, I had the opportunity to work for Wayne County codemning blighted and abandoned properties. The program files legal complaints against these properties and forces the owner to repair the property, sell the property and if the owner does nothing, the County will take title to the property. Not surprisingly, Wayne County's program is one of the most aggressive blight programs in the nation when compared to other large cities. This article speaks to the evoluction of the Wayne County Nuisance Abatement Program and whether its tactics are legal.

Ben Barros

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May 29, 2007 in Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)