Managing Principal Gaurav Jetley and Manager Yuxiao Huang Dispute Prior Research on the Effects of Appraisal Litigation on Arbitrage Spreads
April 8, 2021
Writing in The Journal of Law and Economics, Managing Principal Gaurav Jetley and Manager Yuxiao Huang respond to a paper claiming that increased appraisal litigation in the Delaware Chancery Court results in lower post-announcement arbitrage spreads, to the benefit of target shareholders. In examining the previous authors’ data, however, Mr. Jetley and Dr. Huang find no evidence of this claim. Instead, they demonstrate that the observed gap in arbitrage spread is driven entirely by outliers and sampling biases.