In US derivative cases, plaintiffs? lawyer fees and monetary awards have a distorting
effect on shareholder value. We evaluate the benefits of corporate litigation without
these externalities using a dataset for the Netherlands between 2002 and 2013. We find
significant abnormal returns within a short timespan surrounding the filing and resolution
of M&A related lawsuits.
Over longer horizons, we document that resolutions have little
impact on shareholder value. Moreover, our findings suggest that longer waiting times for court resolutions are costly. The evidence from the Netherlands supports the view that, in settings without strong distortions, derivative style litigation may enhance firm value.
This chapter explores class action nuisance suits by examining the plaintiffs that bring them. It focuses on merger litigation—claims brought by shareholders in the wake of corporate mergers and acquisitions transactions—and uses as evidence the...Read more
Much has been written on the subject of abusive shareholder litigation. The last decade has witnessed at first an increase and then a dramatic spike in such suits, primarily suits filed in connection with mergers and acquisitions. Delaware courts...Read more
In 2010, Morrison v. National Australia Bank Ltd. destabilized the world of securities litigation by denying those who purchased their securities outside the U.S. the ability to sue in the U.S. (as they had previously often done). Nature, however...Read more
Has corporate law and its bundles of fiduciary obligations become irrelevant? Over the last thirty years, the American public corporation has undergone a profound metamorphosis, transforming itself from a business with dispersed ownership to one...Read more