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ON THE WEALTH EFFECTS OF THE SUPERVISORY GOODWILL CONTROVERSY
Author(s) -
Bierman Leonard,
Fraser Donald R.,
Zardkoohi Asghar
Publication year - 1999
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1999.tb00715.x
Subject(s) - legislation , goodwill , supreme court , loan , business , plaintiff , government (linguistics) , economics , actuarial science , finance , law , political science , linguistics , philosophy
Abstract We provide evidence on the potential wealth effects of the 1996 U.S. Supreme Court decision that the U.S. government had violated contractual obligations when, in 1989, it passed legislation prohibiting savings and loan associations from counting “supervisory goodwill” as capital. The Supreme Court decision produced large wealth gains for the savings and loan plaintiffs, as did prior court decisions in favor of these savings and loans. However, little evidence exists to suggest negative market responses to important events surrounding the 1989 legislation.