TY  - JOUR
AU  - Bebchuk,Lucian Arye
AU  - Ferrell,Allen
TI  - Federalism and Takeover Law:  The Race to Protect Managers from Takeovers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7232
PY  - 2000
Y2  - June 2000
UR  - http://www.nber.org/papers/w7232
L1  - http://www.nber.org/papers/w7232.pdf
N1  - Author contact info:
Lucian A. Bebchuk
Harvard Law School
1545 Massachusetts Avenue
Cambridge, MA 02138
Tel: 617/495-3138
Fax: 617/812-0554
E-Mail: bebchuk@law.harvard.edu

Allen Ferrell
Law School
Harvard University
E-Mail: fferrell@law.harvard.edu
AB  - This paper analyzes certain important shortcomings of state competition in corporate law.  In particular, we show, with respect to takeovers, states have incentives to produce rules that excessively protect incumbent managers.  The development of state takeover law, we argue, is consistent with our theory. States have adopted antitakeover statutes that have little policy basis, and, more importantly, they have provided managers with a wider and more open-ended latitude to engage in defensive tactics than endorsed even by the commentators most favorable to such tactics.  Furthermore, states have elected, even though they could have done otherwise, to impose antitakeover protections on shareholders, who did not appear to favor them, in a way that left shareholders with little choice or say.  Finally, we conclude by pointing out that proponents of state competition cannot reconcile their views with the evolution of state takeover law---and should therefore reconsider their unqualified support of state competition.
ER  -