AN ANALYSIS OF THE DECISION TO OPT OUT OF PENNSYLVANIA SENATE BILL 1310

Pennsylvania Senate Bill 1310 protects firms from unsolicited takeover bids. It was signed into law on April 27, 1990, and gave firms ninety days to opt out of all or some of its provisions. During the twenty months before the Bill's introduction, firms choosing protection outperformed firms opting out of at least one provision. Institutions owned a greater percentage of shares of firms opting out of select provisions of the Bill, indicating that shareholder pressure influenced the opt-out decision. No significant differences are found in share price performance, CEO turnover, or restructurings during the twenty months following the last opt-out date. But firms opting out exhibit superior accounting performance two years after the Bill's enactment.     

THE ELIMINATION OF DIRECTOR LIABILITY AND STOCKHOLDER RETURNS: AN EMPIRICAL INVESTIGATION

In this paper, the performance of the common stock of Delaware and non-Delaware firms is examined during the Delaware legislature's debate and approval of an amendment to the Delaware General Corporation Law permitting the elimination of director liability. In addition, stockholder returns surrounding the proxy and meeting dates for certain Delaware firms are examined. Results indicate that Delaware firms performed worse than non-Delaware firms during the legislative period; however, strong differences between the two groups are not documented.