How A Loophole in the Bankruptcy Code is Forcing Colleges and Universities to Have Some Skin in the Game

By: Jacob Mezei

I. Introduction

Just because a college or university received a full tuition payment, that does not mean that that university will be able to keep all, or even some, of that payment. A loophole in §§ 544 and 548 of the Bankruptcy Code allows a trustee to claim “tuition payments that insolvent parents made for their children” from the university itself.[1] The possible effects of this loophole can have an enormous impact on the future of the individual student and/or the university as well. “If the student has not graduated yet, the university could suspend” her access to certain courses and prevent her from moving forward in her academic career until further payment is received.[2] However, payment would be impossible, as the debtor has already declared bankruptcy and is thus in no feasible position to make tuition payments. As a result, the student is left … Read the rest

The Agency Problem of Lehman Brothers’ Board of Directors

By: Young Ah Kim


Lehman Brothers is often cited as an example of corporate governance failure largely due to poor oversight by the board.[1] Richard Fuld, former CEO of Lehman Brothers during its bankruptcy in 2008, still does not agree with this general evaluation. Seven years later in 2015, he gave a speech at a conference in New York.[2] Fuld spoke about Lehman’s risk management, as quoted in The Wall Street Journal: “Regardless of what you heard about Lehman’s risk management, we had 27,000 risk managers because they all had a piece of the firm.”[3] The problem, however, remains that Lehman’s employees owned a very small portion of the company stock, which did not solve its agency problem.

Lehman Brothers had a high-leverage, high-risk-taking business strategy supported by limited equity.[4] For instance, it took its leverage ratio up to 30 times its equity.[5]Read the rest

Lifting the Injunctions: The end of “the trial of the century” in sovereign debt

By: Luis F. Gomez-Alfaro                                                                                                   


The newly-elected government of Argentina has offered to pay all the holders of its sovereign debt.[1] This proposal is a striking reversal of Argentina’s decade-long position of only making payments to the holders of it restructured debt (“exchanged creditors”), but not to those that had refused to exchange their bonds at a 65% loss (“holdout creditors”).[2]  If the negotiations are successful, and the injunctions against Argentina are lifted, these developments will bring an end to the so called “trial of the century in sovereign debt restructuring,” [3] and cement a remarkable empowerment of … Read the rest

Foul or Dive? Outlining the United States Women’s National Soccer Team’s Pay for Play Lawsuit

By: Alexander Karl

American women have been constantly fighting to have their voices heard and to achieve equal rights. It took until 1920 for women to receive the right to vote.[1] But it goes beyond voting as they sought to establish representation. For decades, women in the workforce have been underpaid to work in hazardous conditions. Eventually they began to strike, and in 1920, formed the U.S. Department of Labor Women’s Bureau aimed at representing the needs of wage-earning women in public policy.[2] Ultimately, laws such as the Equal Pay Act were put into place to “prohibit discrimination on account of sex in the payment of wages by employers engaged in commerce or in the production of goods for commerce.”[3] Nearly a century since the formation of the Bureau and decades since the passing of the Equal Pay Act, women are still fighting for fair compensation today.… Read the rest

Chipotle and the Need for HR Oversight In Settlement Avoidance Strategies

By: Matthew Lowe


When litigation looms for large corporations, settlement becomes a key part of the strategy discussion. In order to avoid the costliness associated with, and reputational damage from, lengthy trials, it is not unexpected for a company to dip into its litigation budget and pay a premium to avoid the hassle. Some companies, however, adopt the opposite strategy: settlement avoidance. If a company is to adopt such a strategy, it will also need to adopt proper defensive measures, such as the implementation of adequate Human Resources (“HR”) oversight, in order to effectively ride out the storm of the trial.


Following Chipotle Mexican Grill, Inc. (“Chipotle”) going public in January of 2006, it came to be known as an “industry darling”.[1] Recognized for its transparency and its commitment to utilizing farm-fresh, high-quality ingredients, Chipotle was a trendsetter and leader in the fast-casual movement in dining.[2]Read the rest

It’s a Bird . . . It’s a Plane . . . It’s a Drone! State and Local Drone Applications in Law Enforcement

By: Steven Wittenberg


Drone technology is here to stay. They are the Obama administration’s instrument of choice for high-level officials to execute “lawful . . . lethal operations in a foreign country” aimed at enemy combatants (who can be U.S. citizens) who happen to be an “operational leader.”[1][2] To qualify, there must be an “imminent threat,” capture must not practical, and the slaying must be consistent with the laws of war. “Imminent” is a self-defense term, which demands that the official must “know, in a detailed manner, who poses such a threat, in what circumstances, and how and when such persons can be targeted.”[3] At the intersection of intelligence gathering and the decision to strike are the so-called “kill lists,”[4] which are maintained to ensure the targets satisfy all the conditions of a lawful targeted killing.

As a vestige of President Obama’s grand strategy to … Read the rest

A Fiduciary Duty Requirement for Financial Professionals is Great, in Theory

By: Joe Zender

On April 6, the Department of Labor released a new regulation pertaining to the duties owed by financial advisors to their clients.[1] The new regulation, which is scheduled to go into effect on January 1, 2018, transforms fundamental aspects of the financial services industry.[2]  The new rule, called a fiduciary duty rule, requires financial professionals to act in the best interest of their clients.[3] While a savvy investor or an ethical advisor may have already required this as part of their relationships, many retail investors do not know the ramifications of such a duty. The new rule forces this type of duty.  Opponents of the rule argue that the new regulation will increase costs across the financial services industry, which could force small budget investors out of the advising market, during a time when they could use it. At the same time, those … Read the rest

Third-Party Litigation Finance: Leveling The Playing Field or Overstepping Ethical Boundaries?

By: Alexander Karl

A teacher of mine once described capitalism as taking piles of money and making them grow. While this is a somewhat elementary definition, the idea is on the right track. The American economy proudly boasts of its capitalist background. We paint a picture (though some say it’s wrongly painted) in which an immigrant with no money to his name can strike it rich with a little sweat and elbow grease. Capitalism and its general principles resonate with many Americans to this day as they are finding new unique ways to watch their piles of money grow. As many Americans have figured out, there is no better way to grow your money than investments. When pondering the investments prevalent within today’s society a few come to mind such as stocks, bonds, real estate, and gold. However, capitalists are always on the cutting edge of new investment trends and … Read the rest

New Legal Problems Created by Wearable Devices

By: Young Ah Kim

I. Introduction

Wearable devices have been drawing serious attention in the media as the next big thing since Google glass, a wearable device with an optical head-mounted display, was launched in 2013.[1] Fitbit, the maker of fitness-tracking wristbands, went public in 2015 after its sales rose 174% to $745 million in 2014.[2] Since GoPro’s initial public offering in 2014, the maker of the action camera has climbed over 100% from its top-of-the-range IPO price-per-share.[3] Apple unveiled the Apple watch that can monitor heart rate and activity and create a one-stop shop for health information of consumers.[4] Apple CEO Tim Cook called the Apple Watch “the most personal device we’ve ever created.”[5] According to Statista, an Internet-based statistics provider, “the global wearable device market is expected to grow from $5 billion in 2014 to $12.6 billion by 2018.”[6] In a 2014 … Read the rest

New York’s Legally Dubious and Harmful Sodium Labeling Scheme

By: Joseph Zender

In September, New York City’s Board of Health (“Board”) passed an ordinance that requires restaurants to post warnings on items on their menus that are have high sodium content.[1] The National Restaurant Association is challenging the new law in state court on the grounds that it is overly burdensome and that it circumvents the legislative process.[2] The new law would require restaurants with more than 15 locations nationwide to place a black triangle next to any item on their menu that contains more than 2,300 milligrams (0.08 ounces) of sodium.[3] Not only is the New York City Board of Health’s move legally dubious by circumventing the legislative process and overly burdening the restaurants, it will also have unintended consequences that will affect the community at large in adverse ways.

The sodium posting requirement is reminiscent of another action by the Board back in 2012, … Read the rest