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Debt’s Dominion: A History of Bankruptcy Law in America, an excerpt from a new book by Prof. David A. Skeel, Jr.

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Institute for Law & Economics

Paul Levy Delivers Lecture (cont.)

In 1988 he left Drexel to set up Joseph Littlejohn and Levy with similarly-trained colleagues to use their collective expertise to help troubled companies. “We do it in part because it’s the training we had. We do it because we avoid the auction market where there’s deal frenzy and overheated prices. We’re price-conscious. We buy cheap and increase a company’s value with our stake in ownership. We are structured much like the typical LBO firm.”

The downturn in the private equity market was due, Levy stated before unveiling “Levy’s 31 Rules” for life and the private equity manager. First on the list: “I’d rather make my own mistakes than complain about another’s failures. Be a control equity investor.” Number six: “All CEOs go their own way at the end of a deal. Handle the sale yourself.” Number twenty-five: “Beware of relative value! Assume a particular widget is fundamentally worth $1 and comparable widgets are trading at $10. You haven’t found a bargain if you’re given the opportunity to buy one for $5. This is what investment bankers do.”

I was chafing at the bit to strike out on my own. My legal training taught me about process that has served me well in structuring deals.

On a philosophical note, Levy’s Rule Number 31: “Try to remember that life’s a journey and not an end point. Money is good to have but the process of getting it is better than having it, and giving it away is better than having it, but not quite as much fun as the thrill of earning it. Enjoy what you do and don’t do it only for money. I have met several billionaires: few are particularly nice and few seem profoundly happy.”

Levy was the inaugural lecturer in the Segal Moot Court Room in the newly restored Sharswood Hall. It was a gift to the Law School from Mr. Levy and his wife Karen that funded the renovation of the second floor of Silverman Hall and its transformation into the Levy Conference Center in 2000.

The Law & Entrepreneurship Lecture Series is supported by the Ronald N. Rutenberg Fund.

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