# Litigation risk

`kaal:entity:litigation-risk`

**Status.** derived

This node is assembled mechanically from the 6 claims that carry the concept tag `litigation-risk`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

6 claims across 6 works, 2010 to 2025.

**2010**

- [1664809-018](https://wulfkaal.github.io/claims/1664809-018) [failure/argued] *(failure mode)* -- Applying section 10(b) and Rule 10b-5 together with the fraud on the market theory substantially increases the potential liability of issuers and can lead to questionable results, which is why EU jurisdictions may not want that rule applied to their securities markets.
  > theory substantially increases the potential liability of issuers and
  Richard W. Painter, Wulf A. Kaal, Extraterritorial Application of US Securities Law – Will the US Become the Default Jurisdiction for (2010). SSRN: https://ssrn.com/abstract=1664809

**2015**

- [2629451-031](https://wulfkaal.github.io/claims/2629451-031) [mechanism/argued] -- The market values N/DPA governance changes during the term because those changes effectively address the underlying corporate wrongdoing and its damage to goodwill and reputation while reducing the likelihood of continuing fines and litigation.
  > The market assesses the governance changes during the term of the N/DPA as beneficial for market value because it effectively addresses corporate wrongdoing and the associated negative effects on goodwill and reputation while lowering the likelihood of continuing fines and litigation.
  Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451

**2016**

- [2715083-011](https://wulfkaal.github.io/claims/2715083-011) [mechanism/argued] -- Private party litigation against hedge fund managers stays minimal because well counseled managers make extensive disclosures to investors who are presumed sophisticated, unlike mutual fund advisers who face ongoing high value investor suits.
  > By contrast, private-party litigation involving hedge fund managers is minimal because of the extent and nature of the disclosures well-counseled hedge fund managers provide to their investors
  Kaal, Confluence of Mutual and Private Funds (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2715083
- [2811718-035](https://wulfkaal.github.io/claims/2811718-035) [mechanism/evidenced] -- The data suggest that since 2010 private fund advisers increasingly engage in investor due diligence in order to protect themselves from investor criticism and lawsuits.
  > The data provided in this study seems to suggest that private fund advisers since 2010 increasingly engage in private fund IDD to protect themselves from investor criticism and lawsuits.
  Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718

**2017**

- [2998097-029](https://wulfkaal.github.io/claims/2998097-029) [empirical/evidenced] -- Since 2010 private fund advisers increasingly engaged in investor due diligence partly to protect themselves from investor criticism and lawsuits, rather than in response to regulatory mandate.
  > the data provided in the author's study suggested that since 2010 private fund advisers increasingly engaged in private fund investor due diligence, partially in an effort to protect themselves from investor criticism and lawsuits.163 Since
  Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097

**2025**

- [5583610-034](https://wulfkaal.github.io/claims/5583610-034) [failure/argued] *(failure mode)* -- Delaware fiduciary standards create litigation exposure for LER: if distributions are judged disproportionate under Unocal or Blasius, boards face court invalidation and roughly $1 to $3 million in cost per dispute.
  > Delaware fiduciary standards, including Unocal and Blasius, add litigation risks if distributions are deemed disproportionate, potentially leading to court invalidations and associated costs of $1–3 million per dispute.
  Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/litigation-risk.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.