What Drives “Private Ordering” in M&A Litigation?

Abstract

This paper investigates the how companies use—and do not use—forum selection bylaws in advance of anticipated litigation. In particular, it focuses on the moment when a public company announces that it has entered into a merger agreement. It is now common practice—though by no means universal—that a board of directors announces its adoption of a forum selection bylaw at the same time it announces the merger. This paper investigates two research questions. First, which firms adopt forum selection bylaws on the eve of a merger announcement? Second, how do firms invoke or waive their forum selection bylaws?