Law Commons^™

What Should We Do About Multijurisdictional Litigation In M&A Deals?, Randall S. Thomas

Vanderbilt Law Review

Companies and their investors have been battling over the value of representative shareholder litigation since at least the 1940s. Investors argue that managerial agency costs are high and that class actions and derivative suits are key shareholder monitoring mechanisms that they can deploy to keep managers in line. Companies, on the other hand, believe that the plaintiffs' bar drives representative litigation claims, as agency costs in contingency fee suits make the lawyer the real party in interest. Over the past several decades, there have been numerous skirmishes between these two sets of actors, manifesting themselves, for example, in congressional debates …