Research Interests: corporate reorganization; corporate management and finance; municipal finance and bankruptcy; theory of the firm
Vince Buccola is an assistant professor at the Wharton School, where his research and teaching focus on the financial restructuring of businesses and government entities, in addition to corporate managerial and financial law more broadly.
Before joining the faculty at Penn, Buccola served as a law clerk to Judge Frank Easterbrook, of the U.S. Court of Appeals for the Seventh Circuit; practiced law at Bartlit Beck; and was a Bigelow Fellow at the University of Chicago Law School. His degrees are from Wesleyan University (B.A.) and the University of Chicago Law School (J.D.).
Abstract: This short response, prepared for the University of Pennsylvania Law Review’s symposium on Bankruptcy’s New Frontiers, takes stock of the contributions of Baird, Casey & Picker, The Bankruptcy Partition, 166 U. Pa. L. Rev. 1675 (2018), and criticizes indeterminacy in the scope of the article’s central construct. Coase’s approach to the theory of the firm would provide a useful supplemental framework, I argue. Questions about the scope of bankruptcy jurisdiction—about the kinds of investor disputes a bankruptcy process should seek to resolve—raise the same tradeoff between opportunism and information costs that Coase and scholars following in his tradition identified long ago. Although optimal scope is unknowable in any given case, the firm investors have created in fact is, I suggest, a useful starting place.
Abstract: The internal affairs doctrine is the sine qua non of modern corporate law. It assigns to a corporation’s chartering state sole authority to govern relations among constituents “inside” the firm—its stockholders, directors, and officers—while leaving to territorial law the relations between “outside” constituents and the firm. But why law should cleave an enterprise in this way is a puzzle. Economic theories of the firm can’t explain it, and the academic literature is short on answers. This article offers an account of the internal affairs doctrine that simultaneously explains the doctrine’s contours, accords with its historical emergence, and defends its status as one of the economy’s central organizing principles. It argues that the internal affairs rule is best understood as the law’s adaptive response to a collective-action problem distinctive (historically) to stockholders. Because selling shares across state borders is cheap, shares would, absent the rule, tend to flow into jurisdictions that provide stockholders with robust capital withdrawal and control rights, even where such rights, in the aggregate, would undermine the corporate form’s signal virtues. The internal affairs doctrine forestalls opportunistic trading and so facilitates capital formation. Moreover, as this article shows, the doctrine in fact emerged in the years following economic and legal changes that made such trading a threat for the first time. The prospect of opportunism, then, rather than anything inherent in the idea of the firm, defines the corporate boundary.
Abstract: The Supreme Court’s judgment last Term in Czyzewski v. Jevic Holding Corporation exposes a curious fact about modern reorganization law. In large measure, two distinctive paradigms now color interpretation of the Bankruptcy Code. One paradigm governs during the early stages of a case and is oriented toward the importance of debtor and judicial discretion to use estate assets for the general welfare. The other paradigm governs a bankruptcy’s conclusion and is oriented toward the sanctity of creditors’ bargained-for distributional entitlements. In combination, they produce practical uncertainty as well as what appears to be policy incoherence. After identifying the Janus faces of reorganization law, this essay explores their significance for modern bankruptcy practice and theory. Most strikingly, it argues that, under the conditions of modern corporate finance, the two paradigms might actually cohere in service of a more general norm of investor wealth maximization. What appear on one level of analysis to be contradictory postures may prove, upon reflection, to be but two faces of a single god.
Abstract: The most significant municipal bankruptcies in history have been filed in the last decade. Chapter 9’s newfound importance has stimulated academic attention, much of it critical, but no general framework has been developed against which scholars and policymakers can evaluate the law’s performance. This article offers a normative, economic account of municipal bankruptcy and uses that account to assess current law and suggest changes. It contends that bankruptcy’s singular aim should be to preserve spatial economies—the advantages to locating within a municipality’s unique geographic boundaries—where large public debts, by discouraging investment, threaten to dissipate them. Judged with this end in view, it is argued, Chapter 9 is a marked failure. The law’s compass is so narrow that intervention comes, if at all, only when spatial economies are likely to have been squandered and economic dysfunction taken hold. Municipal bankruptcy, as it now exists, serves mainly as an ad hoc and ill-conceived subsidy program. This article outlines changes to the law that could hasten debt relief, while acknowledging potential objections.
Vincent Buccola (2014), Who Does Bankruptcy? Mapping Pension Impairment in Chapter 9, Review of Banking & Financial Law, 33, pp. 585-608.
At Wharton, Buccola has recently taught:
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Puerto Rico suffered a worse disaster -- and faces a much longer, more fraught, path to recovery -- than Texas, Louisiana or Florida.Knowledge @ Wharton - 2017/09/27