In case you are wondering why managers would be willing to run the substantial litigation risk associated with failure to disclose bad news, SP and Peter have an explanation- "career concerns", that is to say, good old-fashioned self-interest.

While managers have incentives to disclose bad news early under certain circumstances, we conjecture that these incentives can be outweighed by other considerations such as career concerns. Career concerns can motivate managers to withhold bad news and gamble that subsequent corporate events (i.e., future corporate turnaround or restructuring) will allow them to “bury” the bad news. Career concerns encompasses effects of the management’s disclosure strategy on management compensation in the contemporaneous period as well as over a long horizon. The long-horizon effects might be from the impact on the manager’s career, e.g., promotion, employment opportunities within and outside the firm, and loss of employment.

One other interesting fact that they uncover in the study is when the delayed bad news is more likely to be released. In a word, it the trend is "give me the bad news last."

managers of small firms with greater inside ownership and leverage are more likely to delay large bad news write downs and special items until the 4th quarter of the fiscal year.

If I could get a look at the data set, I'd try and figure out just when in the 4th quarter that bad news tends to be released. My guess would be sometime between Thanksgiving and Christmas or Christmas and New Year's- the time of the year when people are otherwise occupied and in a festive and giving, if not forgiving, mood.