Research Handbook on Mergers and Acquisitions
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Research Handbook on Mergers and Acquisitions

Edited by Claire A. Hill and Steven Davidoff Solomon

Global in scope and written by leading scholars in the field, the Research Handbook on Mergers and Acquisitions is a modern-day survey of the state of M & A. Its chapters explore the history of mergers and acquisitions and also consider the theory behind the structure of modern transaction documentation. The book also address other key M & A issues, such as takeover defenses; judges and practitioners' perspectives on litigation; the appraisal remedy and other aspects of Federal and state law, as well as M & A considerations in the structure of start-ups. This Handbook will be an invaluable resource for scholars, practitioners, judges and legislators.
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Chapter 13: Freezeouts: doctrine and perspectives

Fernán Restrepo and Guhan Subramanian


One significant problem that has historically characterized freezeout transactions, most notably when they are executed as mergers, is the problem of self-dealing: since the controlling shareholder stands on both sides of the transaction because he is the buyer and typically also dominates the seller’s board, the deal could be used as a mechanism to obtain a disproportionate benefit for the controller at the expense of the minority shareholders. In response to this risk, the Delaware courts have created various mechanisms to protect the minority from exploitation, particularly by subjecting freezeouts to a stringent standard of judicial review (‘entire fairness review’) and/or promoting the use of procedural protections that seek to emulate an arms-length transaction. This chapter presents a critical review of the case law governing freezeouts and discusses some perspectives on potential ways to address aspects that have not yet been addressed.

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