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Articles 1 - 3 of 3
Full-Text Articles in Business
Controlling Controlling Shareholders, Ronald J. Gilson, Jeffrey N. Gordon
Controlling Controlling Shareholders, Ronald J. Gilson, Jeffrey N. Gordon
Faculty Scholarship
The rules governing controlling shareholders sit at the intersection of the two facets of the agency problem at the core of public corporations law. The first is the familiar principal-agency problem that arises from the separation of ownership and control. With only this facet in mind, a large shareholder may better police management than the standard panoply of market-oriented techniques. The second is the agency problem that arises between controlling and non-controlling shareholders, which produces the potential for private benefits of control. There is, however, a point of tangency between these facets. Because there are costs associated with holding a …
Just Say No To Whom?, Ronald J. Gilson
Just Say No To Whom?, Ronald J. Gilson
Faculty Scholarship
"Just say no" is the current rallying cry of those seeking to give target management the unrestricted power to block hostile tender offers. Not surprisingly, the turn of phrase chosen by management leaves ambiguous the precise issue on which the debate should turn: To whom does management want the power to say no? As target management poses the issue, it wants to say no to a raider. The image is of stalwart management protecting shareholders against a marauding outsider. However, that image is seriously misleading. In fact, target management seeks the power to say no to its own shareholders.
The …
What Triggers Revlon?, Ronald J. Gilson, Reinier Kraakman
What Triggers Revlon?, Ronald J. Gilson, Reinier Kraakman
Faculty Scholarship
Delaware's new approach to takeover law is announced in three cases that address different aspects of management's role in the standard drama of defending against a hostile takeover. Unocal Corp. v. Mesa Petroleum Co. scripts a main act for the drama by prescribing a duty to compare the outsider's offer with the universe of other options and, if necessary, to resist the outsider within the guidelines fixed by the proportionality test. Moran v. Household International, Inc. writes a prologue by encouraging management to plan a vigorous defense that can thwart a coercive offer without damaging the company. Finally, Revlon …