A Survey of Litigation in Corporate Finance

Purpose The purpose of this paper is to review research on litigation in corporate finance. Design/methodology/approach This paper surveys studies on the estimation of litigation risk, litigation costs, stock reaction to lawsuit announcement, and the effect of litigation on corporate financial policies and outcomes. Findings The first section presents a survey of studies that estimate litigation risk. The authors then discuss a set of studies that focus on the various costs associated with litigation. The third area of review is about studies which estimate the market reaction to a lawsuit announcement. The next section surveys studies that examine the relation between litigation and a variety of corporate policies, behaviors, and outcomes. The authors then discuss the emerging literature on how corporate political connections can influence the outcome of litigation. The survey concludes with a brief summary and a discussion of suggestions for future research involving corporate litigation. Originality/value By providing an extensive review of the literature on litigation in corporate finance, this survey can help researchers to identify recent trends in litigation research and select promising new avenues of investigation in the field

When Managers Bypass Shareholder Approval of Board Appointments: Evidence from the Private Security Market

This paper investigates the influence of managerial entrenchment on private placements by examining the firm\u27s decision to appoint representatives of the private investors to the board without shareholder approval. By analyzing a sample of U.S. firms that appoint directors in combination with private offerings between 1995 and 2000, we find that firms with greater managerial entrenchment are more likely to bypass shareholder approval. Firms that bypass shareholders are less likely to appoint independent directors or to elect one of these directors as chairman. We also show that the market reacts more positively to the private offering announcement when the firm submits its board candidates for shareholder approval. Further, firms that bypass approval underperform compared to firms that obtain it. Overall our findings suggest that managers avoid shareholder approval to perpetuate entrenchment

On the use of charged-track information to subtract neutral pileup

The use of charged pileup tracks in a jet to predict the neutral pileup component in that same jet could potentially lead to improved pileup removal techniques, provided there is a strong local correlation between charged and neutral pileup. In Monte Carlo simulation we find that the correlation is however moderate, a feature that we attribute to characteristics of the underlying non-perturbative dynamics. Consequently, `neutral-proportional-to-charge' (NpC) pileup mitigation approaches do not outperform existing, area-based, pileup removal methods. This finding contrasts with the arguments made in favour of a new method, "jet cleansing", in part based on the NpC approach. We identify the critical differences between the performances of linear cleansing and trimmed NpC as being due to the former's rejection of subjets that have no charged tracks from the leading vertex, a procedure that we name "zeroing". Zeroing, an extreme version of the "charged-track trimming" proposed by ATLAS, can be combined with a range of pileup-mitigation methods, and appears to have both benefits and drawbacks. We show how the latter can be straightforwardly alleviated. We also discuss the limited potential for improvement that can be obtained by linear combinations of the NpC and area-subtraction methods.Comment: 27 pages, 10 figures; v2 adapts the discussion of cleansing to the trimming parameter choice clarified in v2 of the cleansing paper (arXiv:1309.4777) and identifies and analyses the origin of differences with Np

SoftKiller, a particle-level pileup removal method

Existing widely-used pileup removal approaches correct the momenta of individual jets. In this article we introduce an event-level, particle-based pileup correction procedure, SoftKiller. It removes the softest particles in an event, up to a transverse momentum threshold that is determined dynamically on an event-by-event basis. In simulations, this simple procedure appears to be reasonably robust and brings superior jet resolution performance compared to existing jet-based approaches. It is also nearly two orders of magnitude faster than methods based on jet areas.Comment: 26 pages, 16 figures (2 appendices with further checks added

Structure and energetics of solvated ferrous and ferric ions: Car-Parrinello molecular dynamics in the DFT+U formalism

We implemented a rotationally-invariant Hubbard U extension to density-functional theory in the Car-Parrinello molecular dynamics framework, with the goal of bringing the accuracy of the DFT+U approach to finite-temperature simulations, especially for liquids or solids containing transition-metal ions. First, we studied the effects on the Hubbard U on the static equilibrium structure of the hexa-aqua ferrous and ferric ions, and the inner-sphere reorganization energy for the electron-transfer reaction between aqueous ferrous and ferric ions. It is found that the reorganization energy is increased, mostly as a result of the Fe-O distance elongation in the hexa-aqua ferrous ion. Second, we performed a first-principles molecular dynamics study of the solvation structure of the two aqueous ferrous and ferric ions. The Hubbard term is found to change the Fe-O radial distribution function for the ferrous ion, while having a negligible effect on the aqueous ferric ion. Moreover, the frequencies of vibrations between Fe and oxygen atoms in the first-solvation shell are shown to be unaffected by the Hubbard corrections for both ferrous and ferric ions.Comment: 13 pages, 2 figures, 1 table. Submitted to Journal of Electroanalytical Chemistr

A note on the CDF high-p_t charged particle excess

It has recently been pointed out that CDF data for the cross section of high-p_t charged particles show an excess of up to three orders of magnitude over QCD predictions, a feature tentatively ascribed to possible violations of factorisation. We observe that for p_t > 80 GeV the measured charged-particle cross sections become of the same order as jet cross sections. Combining this information with data on charged particle distributions within jets allows us to rule out the hypothesis that the CDF data could be interpreted in terms of QCD factorisation violation. We also comment on the difficulty of interpreting the excess in terms of new physics scenarios.Comment: 8 pages, 4 figure