Protecting Shareholders from Themselves? A Policy and Constitutional Review of a State Takeover Statute

Citation data:

Nebraska Law Review, Vol: 67, Issue: 3, Page: 2

Publication Year:
1988
Usage 86
Downloads 83
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Repository URL:
https://digitalcommons.unl.edu/nlr/vol67/iss3/2
Author(s):
Bradford, C. Steven
article description
I. IntroductionII. Prior Nebraska LegislationIII. A Review of the Nebraska Shareholders' Protection Act … A. What Corporations Are Covered? ... B. Substantive Prohibitions ... 1. The Voting Rights of Control Shares ... a. The Limitation of Voting Rights ... b. What Shares Are Included—Groups and Related Parties ... 2. The Five-Year Prohibition of Business Combinations ... a. Who Is an Interested Shareholder? ... b. What Transactions Are Prohibited?IV. Is the Nebraska Act Constitutional? ... A. The Supreme Court's Review of Anti-takeover Statutes ... 1. Edgar v. MITE Corp ... 2. CTS Corp. v. Dynamics Corp. of America ... B. The Constitutionality of the Act's Regulation of Foreign Corporations ... C. The Constitutionality of the Act as Applied to Nebraska Corporations ... 1. The Voting Rights Limitation ... 2. The Prohibition of Business Combinations ... a. Preemption ... b. Commerce Clause ... c. Legislative PurposeV. Is the Act Good Policy? ... A. The Arguments for Takeovers ... 1. Disciplining Inefficient Management ... 2. Achieving Synergistic Gains ... B. The Arguments for Regulation ... 1. Preventing the Coercion of Target Shareholders … 2. The Effect of Takeovers on Corporate Indebtedness ... 3. The Effect of Takeovers on the Long-Term Focus of the Firm ... 4. Protecting Non-Shareholder Groups ... 5. Curtailing Inefficient, Empire-Building ExpansionVI. Application of the Act—Making an Offer ... A. The Act's Effect on Hostile Offers ... 1. Why Bother? ... 2. Application of the Act to Hostile Offers ... B. The Act's Effect on Friendly Transactions ... 1. Application to Friendly Transactions with the Corporation ... 2. Application to Transactions with Controlling Shareholders ... C. Application of the Act to Subsequent OffersVII. Conclusion