Introduction

It is not uncommon that investors might consider the impact of pending litigation when deciding whether to buy the stock of a company on the open market. For example, think of a company engaged in a litigation proceeding whose outcome may materially influence the price of its stock. The question follows: If investors in the stock market are permitted to invest indirectly in the results of litigation, why not invest directly in litigation itself? From the perspective of a company that is engaged in or is facing the prospect of a legal dispute with serious consequences ...