This is the second installment of a two-part interview of Claudia Landeo (photo right; read bio here), Associate Professor of Economics at the University of Alberta, and Kathryn Spier (photo left; read bio here), the Domenico de Sole Professor of Law at the Harvard Law School, on their forthcoming article in the Yale Journal on Regulation called “Shotguns and Deadlocks” [available on SSRN here].
Click here to read Part One of the interview, here to view Professor Landeo’s SSRN home page linking to her numerous published articles and discussion papers, and here to view Professor Spier’s lengthy list of academic publications.
Part One covered some of the basics of the shotgun buy-sell mechanism, its utility in resolving deadlock disputes, and the challenges posed by asymmetries of information and financial capabilities as between the owners. The discussion continues in Part Two, focusing on judicial implementation of the shotgun and the experimental data supporting selection of the better-informed owner as the offeror.
Mahler: You told us that, unlike in the context of ex ante private agreements, judges might have the ability to address problems with asymmetries that can better ensure equitable outcomes for shotgun mechanisms. What are some of the things judges can do?
Spier: The judge might use her discretion when one party is under financial duress. Specifically, the judge might mitigate the negative effects of financial asymmetries by giving parties adequate time to arrange for financing of the buy-sell operations. If the financial asymmetries cannot be mitigated by judicial order, then the judge can certainly consider alternative mechanisms or approaches. Continue Reading Interview With Professors Claudia Landeo and Kathryn Spier on Shotguns and Deadlocks: Part Two