Abstract

http://ssrn.com/abstract=1615834
 
 

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Redirecting State Takeover Laws at Proxy Contests


Stephen M. Bainbridge


University of California, Los Angeles (UCLA) - School of Law

May 25, 2010

Wisconsin Law Review, Vol. 1992, No. 4, p. 1071, 1992
UCLA School of Law, Law-Econ Research Paper No. 10-05

Abstract:     
During the 1980s, many states adopted statutes intended to regulate corporate takeovers. The Supreme Court validated one of these statutes, The Indiana Control Shares Acquisition Statute, in CTS Corp. v. Dynamics Corp., 481 U.S. 69 (1987), against both preemption and commerce clauses challenges. Since CTS, state takeover laws have routinely withstood constitutional scrutiny, even though it is generally acknowledged that, by erecting new barriers to hostile tender offerors, they make tender offers less attractive.

At the time this article was published (1992), proxy contests were becoming an increasingly important component of hostile takeover battles. Today, of course, proxy contests and various other forms of shareholder activism have become a common feature of the corporate governance scene.

This article considered whether state laws designed to regulate proxy contests would withstand constitutional scrutiny. It surveys whether such laws would be preempted by the federal proxy rules or the Williams Act’s tender offer regulations. It also briefly touches upon the Commerce Clause aspects of any such challenge. The article concludes that state regulation of proxy contests should withstand constitutional challenge.

Number of Pages in PDF File: 76

Keywords: proxy contest, preemption, commerce clause, takeovers, proxy, constitution

JEL Classification: K22

Accepted Paper Series


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Date posted: May 25, 2010  

Suggested Citation

Bainbridge, Stephen M., Redirecting State Takeover Laws at Proxy Contests (May 25, 2010). Wisconsin Law Review, Vol. 1992, No. 4, p. 1071, 1992; UCLA School of Law, Law-Econ Research Paper No. 10-05. Available at SSRN: http://ssrn.com/abstract=1615834

Contact Information

Stephen Mark Bainbridge (Contact Author)
University of California, Los Angeles (UCLA) - School of Law ( email )
385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-1599 (Phone)
310-825-6023 (Fax)
HOME PAGE: http://www.professorbainbridge.com
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