What Will the New Year Bring?
First, two preliminary matters: I want to thank Danielle Citron and the other authors at Concurring Opinions for inviting me to guest blog this month, and I want to wish everyone a very Happy New Year. Second, as Danielle mentioned in her much-too-kind introduction, my scholarship and teaching focus on business law, insolvency law and ethics, and that background informs much of my commentary.
I am starting this new year as I typically do, trying to figure out where the past 12 months went, what happened during that time and what the future might hold. I have always undertaken this exercise to some extent on a personal level, but since changing careers a few years back, I also reflect on matters relating to my research and teaching interests. (Prior to that time, I was in private practice, and unfortunately you cannot bill for time spent on professional reflection; although I think the profession certainly could benefit from the exercise.) Consequently, I thought I would use my time with Concurring Opinions to consider some of the key issues raised in the corporate governance and insolvency contexts during 2009 and what new surprises might be in store for us in 2010.
Much of what transpired in my legal fields of interest during 2009 was connected in some way to the global economic crisis dating back to 2007. (For an interesting exploration of the crisis, visit PBS Frontline: Inside the Meltdown.) Politicians and commentators called for government reform in executive compensation and financial institutions and securities regulations. The administration and Congress bailed out not only financial institutions but also two of the big three U.S. automakers by orchestrating and essentially overseeing the General Motors and Chrysler chapter 11 bankruptcy cases. The number of home foreclosures skyrocketed, as did unemployment and the national debt. And although many analysts have declared the recession over, most of these “trailing” issues remain on the table and unresolved as we start 2010.
Like many observers, I am intrigued by and keenly interested in the events of the past three years. I also am somewhat skeptical (perhaps “concerned” is a better word) about whether we will really learn any meaningful, long-lasting lessons from the experience. As Lawrence Cunningham recently noted in an insightful post, “This century’s inauspicious beginnings, marred by terrorist attacks on Sept. 11, 2001 and 2001-02’s corporate ruination at Enron and a half-dozen likewise fraudulent industrial companies, are eerily echoed by this decade’s ill-fated close, marred by the terrorist airplane assault on Christmas Day 2009 and ruination at AIG, Bear Stearns, Citicorp and a score of likewise irresponsible financial companies in 2008-09.” I hope to explore several of these issues with you in my upcoming posts.