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In a recent article, Elliott Weiss and Lawrence J. White sought to establish that seven decisions of the Delaware courts concerning corporation law had little value in predicting the future conduct of courts and corporations under the Delaware Corporations Law. Weiss and White relied, in part, on a statistical analysis of changes in the prices of publicly traded shares in Delaware corporations to show that the seven studied decisions had no statistically significant market impact.

In this Comment, Professor Fox takes issue with the explanation Weiss and White give for their data. Although the absence of an observed market impact might demonstrate the insignificance of the judicial decisions, Fox argues, it more likely demonstrates the limited capacity of market studies to reveal changes in the actual value of shares of stock resulting from such decisions.

In Part I, Fox states and defends his assumption that judicial decisions do have predictive value regarding the future conduct of courts and corporate actors. In Part II, he examines the justifications offered for the conclusion that market study techniques provide reliable evidence that the seven decisions Weiss and White studied had no impact on share value. In Part III, he argues that the market model is not well equipped to discern the significance of events like judicial decisions. Finally, in Part IV, Professor Fox examines the significance of the results of the Weiss and White study for the current debate among corporate scholars concerning the contractual model of corporate law.


Business Organizations Law | Law | Securities Law