With the public controversy generated by the explosion of hostile takeover activity during the 1980s, we again are witnessing debate about theories of the corporation. Responding to widespread concerns about the harsh impact of hostile takeovers on target company employees and others, state legislatures, courts, and commentators have focused on the notion of the corporation as aggregation, defined broadly to include not just shareholders and management but also other participants in the corporate enterprise. This broader conception serves to justify corporate law reforms responsive to the interests of these various non-shareholder, non-management constituencies. Opponents of regulation that impinges on shareholders’ financial interest in unimpeded access to takeover bids (regardless of impact on non-shareholders) have responded with argument based on their nexus-of-contracts interpretation of the corporate aggregation, but their efforts have proved to be unpersuasive in the legislatures and courts.
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