Abstract
In US derivative cases, plaintiffs' lawyer fees and monetary awards distort shareholder value. Using a data set form the Dutch Enterprise Chamber, this chapter analyzes the benefits of corporate litigation without these externalities. We find significant abnormal returns within a short timespan surrounding the filing and resolution of mergers and acquisitions (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. In settings without strong distortions, derivative style litigation may therefore serve an important function.
| Original language | English |
|---|---|
| Title of host publication | Oxford handbook of corporate law and governance |
| Editors | J. Gordon, W.-G. Ringe |
| Place of Publication | Oxford |
| Publisher | Oxford University Press |
| Chapter | 42 |
| Edition | 2nd |
| Publication status | Accepted/In press - 2025 |