What Drives the Optimal Bankruptcy Law Design?

The extensive economic research of bankruptcy within the last decade has made many issues connected with bankruptcy legislation much clearer but there is still a large area of disagreement about how an optimal bankruptcy law should look like. At the same time, the actual bankruptcy laws in various countries differ substantially and there is an agreement that there is no one-size-fits-all solution. This paper sets stage for the debate about the optimal bankruptcy law design in the Czech Republic. It shows what problems arise in connection with bankruptcy, what methods can be used to solve them, and what are the trade-offs faced by the use of individual methods. First, the question why bankruptcy legislation is needed at all is answered. Further, three mutually intersecting approaches to the determinants of optimal bankruptcy law design are presented: concepts of ex-post and ex-ante efficiency, principal-agent theory view, and the emphasis on judicial corruption problems within different bankruptcy designs.bankruptcy; capital and ownership structure; ex-ante and ex-post efficiency; asymmetric information; moral hazard; judicial corruption

Freedom and Rationality

This paper deals with Rousseau's idea of freedom in terms of rationality and deliberation. It gives support to Berlin's interpretation of the general will as a rational and objective will but dismisses the idea that Rousseau's theory necessarily leads to authoritarianism. The general will, publicly expressed by the law, may be defined as the rational and self-regarding will agents would have if put in an independent and objective state, i.e. the state of nature. The general and the particular will, henceforth considered from an individual point of view, theoretically constitute two alternative choices for an agent. A special focus will then be placed on the function of the law in the process of individual deliberation. By signalling the general will, the law urges individuals to deliberate and to question the autonomy of their preferences. I shall argue that citizenship denotes for Rousseau the tendency of individuals to favour the general will and to master their natural weakness of will. The achievement of citizenship, however, strongly relies upon man's identification with the community, i.e. patriotism, and upon the emotions stirred by the potential death of the body politic.Rousseau ; Rationality; Freedom ; Deliberation, Emotions

Defining the agency of the police: conflicting legal approaches

In view of the broad based functions of a Principal or the diverse economic nitty-gritty in global communities, a Principal is often in need of representatives who are vested with powers of an agent in an agency agreement. Similarly, in the dispensation of functions of office, agents are vital tools to authorities who are saddled with the responsibilities of service delivery to the public. These agents carry with them the aura of authority such as the law has vested on the principal. Agents possess powers to the limits of authority accruing unto them from the Principal. Much more worrisome is a situation where the agent is made to perform his responsibilities under a total stranger to the agency agreement. In this case, we are not talking of the third party, but a totally different issuing authority. This raises a very germane question of whose agent such errant or erring agent would be. This paper takes a look at some of the conflicting decisions of the Court of Appeal on the issue of the Nigerian Police and who should take responsibility for any infractions committed by the police in the course of their duties.Keywords: Agency, Police, Law, Nigeri

A multi-agent adaptive protocol for femto-satellite applications

Femto-satellites are a very promising category of satellites that weigh less than 100 grams. Also, a Pico-Rover it is a self-contained robot that weighs less than 1 kilogram and its motion works by rolling the external enclosure that keeps out any environment threats. The main advantage of this kind of small agents is the multi-point of view when they work as swarm or taking part of a larger constellation. The complexity of these kinds of network sensors, in addition to the low power requirements and low size, requires a good strategy of management that we want to present in this work. The paradigm on management-on-agent consists of a single high quality point of view and multiple low quality points of view where the selection of the point of view is done inside the network but decided externally to the network or done by a basic law. This approach optimizes the bandwidth used by the net. Instead of streaming every high quality point of view we only stream one of them. At the same time, this approach allows a task distribution on the network where there is only one producer agent, one consumer agent while the rest of agents work as relay nodes. This work is addressed, on one side, to the design of a simple but robust and adaptive protocol based on this paradigm; on the other hand, an implementation using a low performance platform like the 8051 microcontroller architecture is required

Do insurance defrauders want to be punished ?.

We analyze a Principal-Agent model of an insurer who faces an adverse selection problem. He is unable to observe if his client has a high risk or a low risk of having an accident. At the underwriting of the contract, the insurer requests the client to declare his risk. After that, the former can costly audit the truthfulness of this announcement. If the audit confirms a false declaration, the insurer is legally allowed to punish the defrauder. We characterize the e¢cient contracts when this punishment is bounded from above by a legal restriction. Then, we do some comparative statics on the efficient contracts and on the agent’s utility. The most important result of this paper concerns the legal limit to a defrauder’s punishment. We prove that there exists a unique value of this legal limit that maximizes the expected utility of a high risk type. Facing this particular value of the legal limit to a defrauder’s punishment, the insurer will effectively audit a low risk report. We also show that this particular value increases with the probability of facing a high risk policy- holder. Therefore, when this probability is su¢ciently high, the nullity of the contract is not enough. From the point of view of a potential defrauder, the law should allow harder sanctions. This is an striking result because the nullity of the contract is a common sanction for this kind of fraud in the USA and in some European countries.Insurance; Principal-Agent; Adverse Selection; Fraud; Audit; Penalties;

Natural Law & Right Reason in the Moral Theory of St. Thomas Aquinas

A major problem with current discussions on the moral theory of St. Thomas Aquinas is the fact that many interpreters present Thomas\u27s thought as a natural-law morality. While natural law is an element of Thomas\u27s moral theory, it plays a subordinate role to the virtue of prudence. The natural law interpreters of St. Thomas\u27s moral theory hold that (1) natural law is the dominant element, (2) natural law can be treated in isolation from Thomas\u27s account of virtue, and (3) the principles of natural law make Thomas\u27s moral theory abstract and deontological. These interpretations rarely consider the virtue of prudence. Natural law, in Thomas\u27s moral theory, makes general statements about human nature and also sets the parameters for morally good human activity. However, it fails to function adequately on the level of an agent\u27s particular moral problems. The general precepts of natural law do not function as proximate principles of human action. But the special function of moral virtue is to provide the agent with the necessary proximate principles of human action. Virtue is an acquired disposition of the soul that functions as a proximate principle of action. Holding a special place in Thomas\u27s moral theory, prudence is primary among the moral virtues. It is defined as right reason concerning things to be done. Prudence holds a middle place between he intellectual virtues and the moral virtues. It requires right thinking about moral matters, but it also requires the possession of a right appetite. This essay includes some discussion of human nature, as ethics is subordinated to psychology. Furthermore, we must show how the human agent engages in moral activity, and this requires discussing the psychological processes involved in human action. It is my purpose to explore the functions of natural law and virtue and to take account of the relationship between them in Thomas\u27s moral theory. After establishing a proper understanding of Thomas\u27s view, it will be clear that the natural-law interpreters have missed a crucial element in his ethical theory

Professionalism as Interpretation

In this Article, I defend the interpretive attitude of professionalism. Professionalism is a stance toward the law which accepts that a lawyer is not merely an agent of her client. Rather, in carrying out her client\u27s lawful instructions, a lawyer has an obligation to apply the law to her client\u27s situation with due regard to the meaning of legal norms, not merely their formal expression. Professionalism requires a lawyer acting in a representative capacity to respect the achievement represented by law, namely the final settlement of contested issues (both factual and normative) with a view toward enabling coordinated action in our highly complex, pluralistic society. This social function of law gives it legitimacy, in the sense that the law becomes worthy of being taken seriously, interpreted in good faith with due regard to its meaning, and not simply seen as an obstacle standing in the way of the client\u27s goals. The grounds for the authority of law entail a conception of lawyers as custodians of the law, which in turn entails principles of legal interpretation that constrain the manipulation of legal norms to serve the ends of clients. The jurisprudential argument in the Article relies on the nature of language and its inability to capture the full range of meaning that a text must bear. In other words, there is no such thing as a self-interpreting legal text that regulates the actions of lawyers or clients apart from the exercise of interpretive judgment by a community of professionals. As a consequence, the law cannot operate as a device to settle normative conflict and coordinate activity without a commitment on the part of law-interpreters to respect the substantive meaning standing behind the formal expression of legal norms. This theory of interpretation stands in contrast to the prevailing belief of many scholars and practicing lawyers, which can be labeled legal realism, law-as-price, or the Holmesian bad man view of law. This view regards the law as functioning in practical reasoning as only one cost among many, and not as the expression of a view that individuals should, or should not do something. Professionalism, by contrast, requires lawyers to treat the law as having normative significance as such. After first considering a simple hypothetical case, the Article takes up three recent controversies - tax shelters, the Enron transactions, and the torture memos prepared by Justice Department lawyers - that show clearly the distinction between professionalism in interpretation and the Holmesian bad man stance toward the law. In my view, if the lawyers involved in those cases deserve moral criticism, it is not due to the moral wrongfulness of the clients\u27 ends, but for failing in their responsibilities to treat the law as legitimate. This paper is an updated version of a work-in-progress previously published on SSRN under the title The Jurisprudence of Enron: Professionalism as Interpretation

Professionalism as Interpretation

In this Article, I defend the interpretive attitude of professionalism. Professionalism is a stance toward the law which accepts that a lawyer is not merely an agent of her client. Rather, in carrying out her client\u27s lawful instructions, a lawyer has an obligation to apply the law to her client\u27s situation with due regard to the meaning of legal norms, not merely their formal expression. Professionalism requires a lawyer acting in a representative capacity to respect the achievement represented by law, namely the final settlement of contested issues (both factual and normative) with a view toward enabling coordinated action in our highly complex, pluralistic society. This social function of law gives it legitimacy, in the sense that the law becomes worthy of being taken seriously, interpreted in good faith with due regard to its meaning, and not simply seen as an obstacle standing in the way of the client\u27s goals. The grounds for the authority of law entail a conception of lawyers as custodians of the law, which in turn entails principles of legal interpretation that constrain the manipulation of legal norms to serve the ends of clients. The jurisprudential argument in the Article relies on the nature of language and its inability to capture the full range of meaning that a text must bear. In other words, there is no such thing as a self-interpreting legal text that regulates the actions of lawyers or clients apart from the exercise of interpretive judgment by a community of professionals. As a consequence, the law cannot operate as a device to settle normative conflict and coordinate activity without a commitment on the part of law-interpreters to respect the substantive meaning standing behind the formal expression of legal norms. This theory of interpretation stands in contrast to the prevailing belief of many scholars and practicing lawyers, which can be labeled legal realism, law-as-price, or the Holmesian bad man view of law. This view regards the law as functioning in practical reasoning as only one cost among many, and not as the expression of a view that individuals should, or should not do something. Professionalism, by contrast, requires lawyers to treat the law as having normative significance as such. After first considering a simple hypothetical case, the Article takes up three recent controversies - tax shelters, the Enron transactions, and the torture memos prepared by Justice Department lawyers - that show clearly the distinction between professionalism in interpretation and the Holmesian bad man stance toward the law. In my view, if the lawyers involved in those cases deserve moral criticism, it is not due to the moral wrongfulness of the clients\u27 ends, but for failing in their responsibilities to treat the law as legitimate. This paper is an updated version of a work-in-progress previously published on SSRN under the title The Jurisprudence of Enron: Professionalism as Interpretation

Revisiting the Gaia hypothesis: Maximum Entropy, Kauffman's 'Fourth Law' and physiosemeiosis

Recently, Kleidon suggested a restatement of the Gaia hypothesis based on Maximum Entropy approaches to the Earth system. Refuting conceptions of Gaia as a homeostatic system, Gaia is seen as a non-equilibrium thermodynamic system which continuously moves away from equilibrium, driven by maximum entropy production which materializes in hierarchically coupled mechanisms of energetic flows via dissipation and physical work. I propose to relate this view with Kauffman's 'Fourth Law of Thermodynamics', which I interprete as a proposition about the accumulation of information in evolutionary processes. Then, beyond its use in the Kleidon model, the concept of physical work is expanded to including work directed at the capacity to work: I offer a twofold specification of Kauffman's concept of an 'autonomous agent', one as a 'self-referential heat engine', and the other in terms of physiosemeiosis, which is a naturalized application of Peirce's theory of signs emerging from recent biosemiotic research. I argue that the conjunction of these three theoretical sources, Maximum Entropy, Kauffman's Fourth Law, and physiosemeiosis, allows to show that the Kleidon restatement of the Gaia hypothesis is equivalent to the proposition that the biosphere is a system of generating, processing and storing information, thus directly treating information as a physical phenomenon. I substantiate this argument by proposing a more detailed analysis of the notion of hierarchy in the Kleidon model. In this view, there is a fundamental ontological continuity between the biological processes and the human economy, as both are seen as information processing and entropy producing systems. As with other previous transitions in evolution, the human economy leverages the mechanisms by which Gaia moves further away from equilibrium. This implies that information and natural resources or energy are not substitutes, i.e. the knowledge economy continues to build on the same physical principles as the biosphere, with energy and information being two aspects of the same underlying physical process. --Gaia,non-equilibrium systems,Fourth Law,work,Peirce,triadism,hierarchy,economic growth

An Analysis of Powers and Duties of a Receiver under Nigerian Company Law

The law draws a distinction between the functions of a receiver and a manager. A receiver has the duty to stop the business, collect the debts and realize the assets. He has no authority to carry on a going concern. Nevertheless, a manager, on the other hand, has powers to continue a business or any going concern. Thus, the primary motive for the appointment of the receiver/manager is that of the realization and preservation of the company’s security of those on whose behalf he is appointed. The actual role of a receiver is that of an agent. He as an agent is personally liable on any contract entered into by him in the performance of his functions except where the contract provides otherwise. As an agent, the primary duties of the receiver involve good faith, special confidence, and candour towards another. Basically, the duties of a receiver are those which can justifiably be said to be incidental to his powers of management. The paramount duty of the receiver on his appointment is to take possession of all the assets covered by the charge, since those are the things he is appointed to manage with a view to recovering what may be due to the debenture holders or mortgagees