A Fact-Oriented Approach In Macro-Case Analysis: A Section 385 Illustration

Abstract

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt;">Prior research has not adequately addressed the coding issue in macro-case analysis research. </span><span style="font-size: 10pt; mso-fareast-language: ZH-TW;">This</span><span style="font-size: 10pt;"> study provides a fact-oriented approach (</span><span style="font-size: 10pt; mso-fareast-language: ZH-TW;">in </span><span style="font-size: 10pt;">contrast to the traditional opinion-oriented approach) to deal with this issue. We argue that while a traditional opinion-oriented approach can reveal the influential factors considered by judges in the precedents, a fact-oriented approach provides a decision model with predictability which does not exist in an opinion-oriented approach. The differences between these two approaches are demonstrated by applying them to the </span><span style="font-size: 10pt; mso-fareast-language: ZH-TW;">Code S</span><span style="font-size: 10pt;">ection 385 dilemma (i.</span><span style="font-size: 10pt; mso-fareast-language: ZH-TW;">e.</span><span style="font-size: 10pt;">, the debt-equity classification</span><span style="font-size: 10pt; mso-fareast-language: ZH-TW;">)</span><span style="font-size: 10pt;">. Results show that decision models developed by these two approaches are very different but with similar classification accuracy. Consequently, management and practitioners can use a fact-oriented approach as a supplemental method to the traditional opinion-oriented approach to predict the judicial outcome.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>