Paramount: The Mixed Merits of Mush

Abstract:     
The Article critiques the Delaware Supreme Court’s 1990 decision, Paramount Communications, Inc. v. Time Inc. It argues that Paramount left no clear standards in its wake. While the decision seemed to lean in favor of more managerial discretion in the takeover context, it was not clear how far it leaned, or how closely tied the court’s reasoning was to the peculiar facts of the case. While other commentators critiqued Paramount for its management bias, this article instead focuses on the decision’s murkiness. It considers the merits of moving takeover jurisprudence away from the clearer standards that had been evolving in the lower courts. It considers whether an undefined standard that gives courts broad discretion to evaluate management defensive actions is appropriate in light of the complexity of the takeover phenomenon.

Number of Pages in PDF File: 31

Keywords: corporation law, Delaware, takeovers

JEL Classification: K22

Accepted Paper Series