With the enactment of the 2005 Collective Settlement of Mass Damage Act (WCAM 2005) the Dutch legal system and indeed Dutch society has taken a significant step towards a more efficient resolution of mass damage claims. The WCAM 2005 seems especially promising for attaining relatively swift...

An important set of contract terms manages potential disputes. In a detailed, hand-coded sample of mergers and acquisition (M&A) contracts from 2007 and 2008, dispute management provisions in correlate strongly with target ownership, state of incorporation, and industry, and with the experience...

Companies are sometimes accused of misleading the market. The SEC can punish this with enforcement actions. Alternatively, shareholders can seek redress through a shareholder class action (SCA). Thus, using a sample of 416 securities class actions, this paper shows that SCAs are a catalyst to...

We examine the effect of litigation risk on management's decision to issue earnings forecasts. We use a new ex ante measure of litigation risk, namely, the Directors and Officers liability insurance premium. This measure bypasses significant problems associated with the estimation of ex ante...

Some claim that rules-based accounting standards shield firms from litigation, while others argue that violations of detailed rules give plaintiffs a “roadmap” to successful litigation. We inform this debate by investigating whether rules-based standards are associated with the incidence of...

Participants in the U.S. capital markets can be sued for securities fraud by a mishmash of enforcers, including the SEC, class action plaintiffs, and state regulators. Does this multi-enforcer approach make sense from a deterrence perspective? This Article suggests that the answer is probably...

This paper offers a model to formalize the economic theory of derivative actions developed during the last 30 years. From this perspective, the derivative action presents two interrelated problems. The first is how to solve the collective action problem that prevents that minority shareholders...

Modern practice of international business requires companies to structure their corporate form into one which would be advantageous and safe for the management, growth and sustainability of business. However, when corporate structuring is used to avoid obligations of the company, the latter may...

We consider how the state should regulate the consumption of pecuniary private benefits of control by controlling shareholders. These benefits have efficient aspects: they compensate the controlling shareholder for monitoring managers and for investing effort to create and implement projects....

Retirement plan sponsors in charge of $17 trillion have a choice. They can rely on luck or use discipline to properly discharge their fiduciary duties. The former may seem easy, but the costs of poor oversight easily outweigh the benefits of a ‘‘fingers crossed'' approach. Regulators have...