December 2009, Volume 95, Issue 8
The State of State Anti-takeover Law
by Michal Barzuza
95 Va. L. Rev. 1973 (2009)
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This Article is the first to examine systematically state antitakeover law outside Delaware. It conducts a research of all available cases to find whether states with pill endorsement and other constituency statutes follow Delaware’s enhanced fiduciary duties or replace them with weaker standards. It finds substantial variations from Delaware’s law.
Unlike Delaware, most of the states with relatively strong other constituency and pill endorsement statutes do not impose enhanced fiduciary duties on managers in change-of-control situations. Instead, they apply only the ordinary business judgment rule to management’s use of antitakeover tactics.
This Article has implications for antitakeover law, the market for corporate law, and the desirability of federal intervention. In particu-lar, it provides support for adopting Delaware’s enhanced fiduciary duties—Unocal, Revlon, and Blasius—as federally imposed minimum standards. This would not only improve state antitakeover law outside Delaware, but may also result in improvements to Delaware law since Delaware is currently dragged down by other states.
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