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Green With Envy? Greenmail Is Good! Rational Economic Responses To Greenmail In A Competitive Market For Capital And Managers, Eric A. Engle
Green With Envy? Greenmail Is Good! Rational Economic Responses To Greenmail In A Competitive Market For Capital And Managers, Eric A. Engle
Eric A. Engle
Greenmail denotes the decision by a corporation's board of directors to repurchase its shares that are held by a corporate raider, often at a significant premium, thereby keeping the board of directors in office. It may represent a conflict of interest between the corporation's shareholders and the board of directors. While greenmail is legal, 50% of greenmail gains are subject to taxation. This Article argues that greenmail has a healthy role in a competitive market economy.