Is Delaware's Antitakeover Statute Unconstitutional? Further Analysis and a Reply to Symposium Commentators

Abstract

In an Article published in the May 2010 issue of the Business Lawyer, we examined Delaware doctrine and presented new evidence to conclude that the empirical claim that the federal courts relied upon to uphold Delaware’s antitakeover statute against Supremacy Clause challenges is no longer valid, and that the constitutionality of Section 203 is therefore "up for grabs." In this brief Reply, we respond to five commentaries on our Article, written by prominent corporate law practitioners and academics. Among other points, we re-examine the sample that supported the constitutionality of Section 203 (n=17) to find that not a single one of these bids actually gave bidders a "meaningful opportunity for success" on a hostile basis, as the federal courts held that the Supremacy Clause requires. Taken together, these further findings confirm our view that Section 203 is vulnerable to constitutional attack.

Keywords: Hostile Takeovers, Tender Offers, Corporate Law, Delaware, Defensive Tactics, Poison Pills

JEL Classification: G34, K22