In this paper we use a signaling model to analyze the effect of (endogenously-determined) third-party non-recourse loans to plaintiffs on settlement bargaining when a plaintiff has private information about the value of her suit. We show that an optimal loan (i.e., one that maximizes the joint...

This article explains what independent fund directors should know about fund litigation. While independent directors were named defendants in prior lawsuits – for example, § 36(b) excessive fee lawsuits – the scope of litigation that followed 2003 was without precedent both in terms of the...

Basic economic analysis of litigation funding shows that risk neutral plaintiffs without budget constraints will not accept funding unless they are pessimistic relative to the funder. Risk aversion makes a plaintiff who shares probabilistic beliefs with the funder act observationally equivalent...

This paper investigates whether anticipation of adverse events (litigations over market-timing and late-trading) can trigger runs in mutual funds. We find that runs start as early as four months before litigation announcements. The pre-event runs over a six-month window accumulate to 4.95% of...