Optimal Property Rights in Financial Contracting

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 costly for third-parties to discover, ii) more likely to redistribute value from third-parties, and iii) less likely to increase efficiency. 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.

Optimal property rights in financial contracting

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 costly for third-parties to discover, ii) more likely to redistribute value from third-parties, and iii) less likely to increase efficiency. 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

Urinary And Breast Milk Biomarkers To Assess Exposure Ro Naphthalene In Pregnant Women: An Investigation Of Personal And Indoor Air Sources

Naphthalene exposures for most non-occupationally exposed individuals occur primarily indoors at home. Residential indoor sources include pest control products (specifically moth balls), incomplete combustion such as cigarette smoke, woodstoves and cooking, some consumer and building products, and emissions from gasoline sources found in attached garages. The study aim was to assess naphthalene exposure in pregnant women from Canada, using air measurements and biomarkers of exposure

Congenital amusics use a secondary pitch mechanism to identify lexical tones

Amusia is a pitch perception disorder associated with deficits in processing and production of both musical and lexical tones, which previous reports have suggested may be constrained to fine-grained pitch judgements. In the present study speakers of tone-languages, in which lexical tones are used to convey meaning, identified words present in chimera stimuli containing conflicting pitch-cues in the temporal fine-structure and temporal envelope, and which therefore conveyed two distinct utterances. Amusics were found to be more likely than controls to judge the word according to the envelope pitch-cues. This demonstrates that amusia is not associated with fine-grained pitch judgements alone, and is consistent with there being two distinct pitch mechanisms and with amusics having an atypical reliance on a secondary mechanism based upon envelope cues

Surface-Enhanced Nitrate Photolysis on Ice

Heterogeneous nitrates photolysis is the trigger for many chemical processes occurring in the polar boundary layer and is widely believed to occur in a quasi-liquid layer (QLL) at the surface of ice. The dipole forbidden character of the electronic transition relevant to boundary layer atmospheric chemistry and the small photolysis/photoproducts quantum yields in ice (and in water) may confer a significant enhancement and interfacial specificity to this important photochemical reaction at the surface of ice. Using amorphous solid water films at cryogenic temperatures as models for the disordered interstitial air/ice interface within the snowpack suppresses the diffusive uptake kinetics thereby prolonging the residence time of nitrate anions at the surface of ice. This approach allows their slow heterogeneous photolysis kinetics to be studied providing the first direct evidence that nitrates adsorbed onto the first molecular layer at the surface of ice are photolyzed more effectively than those dissolved within the bulk. Vibrational spectroscopy allows the ~3-fold enhancement in photolysis rates to be correlated with the nitrates’ distorted intramolecular geometry thereby hinting at the role played by the greater chemical heterogeneity in their solvation environment at the surface of ice than in the bulk. A simple 1D kinetic model suggests 1-that a 3(6)-fold enhancement in photolysis rate for nitrates adsorbed onto the ice surface could increase the photochemical NO[subscript 2] emissions from a 5(8) nm thick photochemically active interfacial layer by 30%(60)%, and 2-that 25%(40%) of the NO[subscript 2] photochemical emissions to the snowpack interstitial air are released from the top-most molecularly thin surface layer on ice. These findings may provide a new paradigm for heterogeneous (photo)chemistry at temperatures below those required for a QLL to form at the ice surface

No Exit? Withdrawal Rights and the Law of Corporate Reorganizations

Bankruptcy scholarship is largely a debate about the comparative merits of a mandatory regime on one hand and bankruptcy by free design on the other. By the standard account, the current law of corporate reorganization is mandatory. Various rules that cannot be avoided ensure that investors’ actions are limited and they do not exercise their rights against specialized assets in a way that destroys the value of a business as a whole. These rules solve collective action problems and reduce the risk of bargaining failure. But there are costs to a mandatory regime. In particular, investors cannot design their rights to achieve optimal monitoring as they could in a system of bankruptcy by free design. This Article suggests that the academic debate has missed a fundamental feature of the law. Bankruptcy operates on legal entities, not on firms in the economic sense. For this reason, sophisticated investors do not face a mandatory regime at all. The ability of investors to place assets in separate entities gives them the ability to create specific withdrawal rights in the event the firm encounters financial distress. There is nothing mandatory about rules like the automatic stay when assets can be partitioned off into legal entities that are beyond the reach of the bankruptcy judge. Thus, by partitioning assets of one economic enterprise into different legal entities, investors can create a tailored bankruptcy regime. In this way, legal entities serve as building blocks that can be combined to create specific and varied but transparent investor withdrawal rights. This regime of tailored bankruptcy has been unrecognized and underappreciated and may be preferable to both mandatory and free design regimes. By allowing a limited number of investors to opt out of bankruptcy in a particular, discrete, and visible way, investors as a group may be able to both limit the risk of bargaining failure and at the same time enjoy the disciplining effect that a withdrawal right brings with it

Influence de la force image et de l'agrégation des molécules sur la section efficace absolue de charge en surface : cas du chlorure et du bromure de méthane

Résumé: À l'aide d'une version améliorée de la technique de charge en surface, mise au point par J. Gamache, nous avons évalué la section efficace de charge en surface pour le CH3CI et le CH3Br, condensés sur un solide de Kr, pour la région de 0 à 10 eV d'énergie cinétique des électrons incidents. Les structures observées à haute énergie n'ont aucun équivalent dans la phase gazeuse. À basse énergie (0-3 eV), l'énergie cinétique partagée entre les fragments du canal d'attachement dissociatif (AD) CH3X + e"" -- CH3X- -- CH3 + X"" est faible, permettant à l'ion produit de rester en surface, piégé par le potentiel de polarisation. Ainsi, dans cette plage d'énergie, la section efficace mesurée devient la section efficace absolue d'AD. Nous mesurons une section efficace six ordres de grandeur supérieure à celle dans la phase gazeuse calculée par I.I. Fabrikant. Cette augmentation a été reproduite en modifiant les paramètres des matrices R pour ajouter le potentiel de polarisation au potentiel diffuseur et en modifiant la fonction d'onde de l'électron incident pour tenir compte de l'interaction à longue portée de celui-ci avec le substrat. Le modèle reproduit également bien les variations de la section efficace d'AD avec l'épaisseur du film de Kr.||Abstract: With an improved version of the surface charging technique, developped by J. Gamache, we evaluated the surface charging cross section for CH3CI and CH3Br condensed on multlayer Kr, in the 0-10 eV electron energy range. In the high energy range, the two resonances we observed have no counterpart in the gas phase. At low impact energies (0-3 eV), the kinetic energy shared by the fragments of the dissociative electron attachment (DEA) channel CH3X + e"" -- CH3X- -- CH3 + X"" is very low, allowing the ionic product to remain on the surface, where it is trapped by the surface polarization potential. Thus, in this energy range, the measured cross section becomes the absolute DEA cross section. We find that this cross section increases by six orders of magnitude over the gas phase value calculated by I.I. Fabrikant in the case of CH3C1. This large increase has been reproduced by modifying the R-matrix parameters by addition of a surface polarization potential to the scattering potential and by including the long-range e"" -substrate interaction in the incident electron wave function. The model also successfully reproduces the variation of the DEA cross section with the Kr film thickness

Influence de la force image et de l'agrégation des molécules sur la section efficace absolue de charge en surface : cas du chlorure et du bromure de méthane

Résumé: À l'aide d'une version améliorée de la technique de charge en surface, mise au point par J. Gamache, nous avons évalué la section efficace de charge en surface pour le CH3CI et le CH3Br, condensés sur un solide de Kr, pour la région de 0 à 10 eV d'énergie cinétique des électrons incidents. Les structures observées à haute énergie n'ont aucun équivalent dans la phase gazeuse. À basse énergie (0-3 eV), l'énergie cinétique partagée entre les fragments du canal d'attachement dissociatif (AD) CH3X + e"" -- CH3X- -- CH3 + X"" est faible, permettant à l'ion produit de rester en surface, piégé par le potentiel de polarisation. Ainsi, dans cette plage d'énergie, la section efficace mesurée devient la section efficace absolue d'AD. Nous mesurons une section efficace six ordres de grandeur supérieure à celle dans la phase gazeuse calculée par I.I. Fabrikant. Cette augmentation a été reproduite en modifiant les paramètres des matrices R pour ajouter le potentiel de polarisation au potentiel diffuseur et en modifiant la fonction d'onde de l'électron incident pour tenir compte de l'interaction à longue portée de celui-ci avec le substrat. Le modèle reproduit également bien les variations de la section efficace d'AD avec l'épaisseur du film de Kr.||Abstract: With an improved version of the surface charging technique, developped by J. Gamache, we evaluated the surface charging cross section for CH3CI and CH3Br condensed on multlayer Kr, in the 0-10 eV electron energy range. In the high energy range, the two resonances we observed have no counterpart in the gas phase. At low impact energies (0-3 eV), the kinetic energy shared by the fragments of the dissociative electron attachment (DEA) channel CH3X + e"" -- CH3X- -- CH3 + X"" is very low, allowing the ionic product to remain on the surface, where it is trapped by the surface polarization potential. Thus, in this energy range, the measured cross section becomes the absolute DEA cross section. We find that this cross section increases by six orders of magnitude over the gas phase value calculated by I.I. Fabrikant in the case of CH3C1. This large increase has been reproduced by modifying the R-matrix parameters by addition of a surface polarization potential to the scattering potential and by including the long-range e"" -substrate interaction in the incident electron wave function. The model also successfully reproduces the variation of the DEA cross section with the Kr film thickness

Optimal Property Rights in Financial Contracting

This article adopts a definition of property rights from legal scholarship: A property right (in contrast to a contractual right) is enforceable, not only against the parties to a contract, but also against third parties outside the contract. In a financial contracting setting, we ask: When should the law enforce a lender's contractual protections as property rights, given that these rights may be hidden and costly for other lenders to discover? Our model explains why the law limits the creation and enforceability of property rights, and develops principles of optimal enforceability. These principles are often reflected in the law