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Business Organizations Law

Michigan Law Review

Journal

1986

Articles 1 - 2 of 2

Full-Text Articles in Law

Shareholders Versus Managers: The Strain In The Corporate Web, John C. Coffee Jr. Oct 1986

Shareholders Versus Managers: The Strain In The Corporate Web, John C. Coffee Jr.

Michigan Law Review

Part I will seek to understand why firms trade in the stock market at a substantial discount from their asset value. It will answer that existing theories of the firm have not given adequate attention to a critical area where shareholders and managers have an inherent conflict, one that the existing structure of the firm does not resolve or mitigate. Despite the significant changes in the internal structure of the corporation over the last half century that have been described by business historians, there remains a deep internal strain between shareholders, on the one hand, and managers and employees, on …


Target Litigation, Michael Rosenzweig Oct 1986

Target Litigation, Michael Rosenzweig

Michigan Law Review

In Part I, I explore the motives of litigious target managers. I briefly examine the takeover defense literature and empirical evidence regarding the frequency of target litigation, both of which indicate that target managers usually sue bidders in order to defeat unwanted takeover attempts. I also suggest that judicial reactions to target lawsuits largely confirm this hypothesis.

I then discuss, in Part II, target management's conflict of interest in control contests and the particular strategic considerations that lead target managers to sue hostile bidders. I argue that target litigation is peculiarly likely to be frivolous and, based on a study …