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.
We survey law firms, firms and institutional investors to better understand their preferred method of intracorporate dispute resolution in Brazil. Consistent with a number of theories, we find that these organizations prefer arbitration to...Read more
A 1970 New York Times essay on corporate social responsibility by Milton Friedman is often said to have launched a shareholder-focused reorientation of managerial priorities in America’s public companies. The essay correspondingly is a primary...Read more
This paper critiques an assessment by Bebchuk and Tallarita (BT) of the relative merits of shareholder and stakeholder governance. BT’s paper argues that stakeholder governance is either nothing more than enlightened shareholder value, or it...Read more
Event studies, a half-century-old approach to measuring the effect of events on stock prices, are now ubiquitous in securities fraud litigation. In determining whether the event study demonstrates a price effect, expert witnesses typically base...Read more