Corporate Governance

Is Delaware’s Antitakeover Statute Unconstitutional? Further Findings and Reply to Commentators

By Harvard Law School Program on Corporate Governance

In an Article published in the May 2010 issue of the Business Lawyer (discussed on the Forum here, and available for download here) Steven Herscovici, Brian Barbetta, and I make three straightforward points:

• 1. Three federal district courts held in 1988 that Delaware?s antitakeover statute must give bidders a ?meaningful opportunity for success? in order to be valid under the Supremacy Clause of the U.S. Constitution.
• 2. These three courts upheld Section 203 because the empirical evidence available at the time appeared to show that bidders were able to achieve an 85% tender on a hostile basis reasonably often, but these courts left open the possibility that future empirical evidence could change this constitutional conclusion.
• 3. No bidder in the past nineteen years has been able to achieve 85% in a hostile tender offer against a Delaware target.

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Full post as published by The Harvard Law School Corporate Governance Blog on June 04, 2010 (boomark / email).