This paper examines the relationship between the timeliness of earnings disclosures and the expected costs of stockholder litigation. The author finds that many lawsuits result from voluntary disclosures of adverse earnings news, but these disclosures are not timely in absolute or relative terms compared to similar disclosures that do not lead to litigation. Additionally, less timely disclosures result in larger lawsuit settlements. The findings suggest that managers can reduce the likelihood and cost of stockholder litigation by disclosing bad news early. The paper also discusses the legal rationale for timely disclosure and previous research on the topic, providing a detailed methodology for the study and empirical evidence supporting the hypothesis that earlier disclosure leads to less costly lawsuit outcomes.This paper examines the relationship between the timeliness of earnings disclosures and the expected costs of stockholder litigation. The author finds that many lawsuits result from voluntary disclosures of adverse earnings news, but these disclosures are not timely in absolute or relative terms compared to similar disclosures that do not lead to litigation. Additionally, less timely disclosures result in larger lawsuit settlements. The findings suggest that managers can reduce the likelihood and cost of stockholder litigation by disclosing bad news early. The paper also discusses the legal rationale for timely disclosure and previous research on the topic, providing a detailed methodology for the study and empirical evidence supporting the hypothesis that earlier disclosure leads to less costly lawsuit outcomes.