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Full-Text Articles in Law
Investing In Corporate Procedure, Jessica M. Erickson
Investing In Corporate Procedure, Jessica M. Erickson
Law Faculty Publications
Corporate litigation is in crisis. At the state level, shareholder lawsuits challenging mergers and other corporate decisions are ubiquitous but rarely end with meaningful relief for shareholders. At the federal level, securities class actions are rife with ethical challenges and low-value settlements. Over the last several decades, multiple groups — including judges, legislatures, and corporate boards — have tried to solve this problem, but all have come up short. This Article argues that the solution lies in rewriting the procedural rules that govern corporate lawsuits. New standing requirements would lead to better screening of these claims. Discovery limits and heightened …
The Gatekeepers Of Shareholder Litigation, Jessica Erickson
The Gatekeepers Of Shareholder Litigation, Jessica Erickson
Law Faculty Publications
Concerns over agency costs dominate corporate law. The central challenge is ensuring that directors act in the corporation's best interests, rather than their own best interests. Shareholder litigation is a key tool in controlling these agency costs. If directors cross the line, the law provides an array of litigation options that shareholders can use to hold directors accountable. Shareholders can file securities class actions if directors lie to them. They can file shareholder derivative suits if directors engage in egregious misconduct. And they can file lawsuits under both state and federal law if directors try to sell the company at …
Piling On? An Empirical Study Of Parallel Derivative Suits, Jessica Erickson
Piling On? An Empirical Study Of Parallel Derivative Suits, Jessica Erickson
Law Faculty Publications
Using a sample of all companies named as defendants in securities class actions between July 1, 2005 and December 31, 2008, we study parallel suits relying on state corporate law arising out of the same allegations as the securities class actions. We test several ways that parallel suits may add value to a securities class action. Most parallel suits target cases involving obvious indicia of wrongdoing. Moreover, we find that although a modest percentage of parallel suits are filed first, over 80 percent are filed after a securities class action (termed “follow-on” parallel suits). We find that parallel suits and, …
Corporate Misconduct And The Perfect Storm Of Shareholder Litigation, Jessica M. Erickson
Corporate Misconduct And The Perfect Storm Of Shareholder Litigation, Jessica M. Erickson
Law Faculty Publications
When it comes to combating corporate misconduct, is more litigation necessarily better? The conventional wisdom is that we should deploy every weapon in the law's arsenal to combat corporate misconduct. This wisdom, however, reflects legal scholarship that is confined to analyzing securities class actions and derivative suits in isolation, with little inquiry into the interplay between them. By Jailing to take a broader view of shareholder litigation, legal scholars have missed an opportunity to provide courts with the conceptual tools necessary to meet the complex challenges of complex corporate litigation. In courtrooms and boardrooms across the country, a debate is …