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Business Combination Antitakeover Statutes, The Unintended Repudiation Of The Internal Affairs Doctrine, And Constitutional Constraints On Choice Of Law, Robert E. Suggs

Faculty Scholarship

This article examines the constitutional validity of business combination antitakeover statutes. Delaware and other important corporate law jurisdictions enacted these statutes during the 1980s to inhibit hostile leveraged corporate takeovers and protect incumbent managements. These statutes work by prohibiting transactions which enable a hostile acquirer with a mere majority of target stock to sell target assets for cash and retain all the cash to service acquisition debt while paying off with securities the minority shareholders' interest in the assets sold. This allows the takeover to be financed with the assets acquired. Analyzing the structural operation of these statutes in greater …