Law Commons^™

Power And Statistical Significance In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach

All Faculty Scholarship

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 their conclusion on whether the results are statistically significant at the 95% confidence level, a threshold that is drawn from the academic literature. As a positive matter, this represents a disconnect with legal standards of proof. As a normative matter, it may reduce enforcement of fraud claims because litigation event studies typically involve quite low statistical power even for large-scale frauds.

This paper, written for …

Value Creation By Business Lawyers In The 21st Century, Ronald J. Gilson

Faculty Scholarship

It’s a delight to be here. When I started working on Value Creation by Business Lawyers – or when I was in law school – we could have held today’s meeting in a telephone booth. There was nothing even remotely in the curriculum. Victor Brudney and Marvin Chirlestien’s Corporate Finance book was still in mimeograph form – note the dated technology reference. David Herwitz’s Business Planning book had been around for a while, but it was strictly legal. And that exhausted it. What I take the greatest pleasure from is the fact that a number of years later, enough to …

A Normative Analysis Of New Financially Engineered Derivatives, Peter H. Huang

Publications

This Article analyzes whether the introduction of new derivative assets makes a society better or worse off. Because trading such non-redundant derivatives produces new distributions of income across time and over possible future contingencies, individuals can utilize such financial instruments to hedge risks not possible before the introduction of these assets. Thus, it may seem that new derivatives unambiguously benefit society. In fact, introducing sufficiently many new derivatives completes asset markets. Asset markets are complete if trading on them can attain every possible payoff pattern of wealth across time and over possible future contingencies. The first fundamental theorem of welfare …

Running The Asylum: Governance Problems In Bankruptcy Reorganizations, Christopher W. Frost

Law Faculty Scholarly Articles

Like much of life, the study of bankruptcy is the study of leverage. Chapter 11 of the United States Bankruptcy Code may be appropriately described as providing a framework within which interested parties may negotiate solutions to the problems facing a troubled company. The allocation of leverage to the negotiating parties is critical to the ultimate outcome of the process. In any negotiation setting control over the bargaining process is a key item of leverage. This Article proposes a framework for analysis and suggests solutions to the problem of control over corporations during the pendency of a Chapter 11 reorganization …