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Simple English definitions for legal terms

anti-greenmail provision

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A quick definition of anti-greenmail provision :

An anti-greenmail provision is a rule in a company's charter that stops the board of directors from paying a shareholder more than their shares are worth to avoid a hostile takeover. Hostile takeovers happen when someone tries to take control of a company by buying up a lot of its shares. Greenmail payments are bad for the company because they waste money that could be used for other things. Anti-greenmail provisions help prevent this from happening, but they also make it easier for someone to take over the company if they really want to. Nowadays, there are other ways to stop hostile takeovers, so greenmail payments are not as common as they used to be.

A more thorough explanation:

An anti-greenmail provision is a rule in a company's charter that stops the board of directors from making greenmail payments. Greenmail payments are when a company pays a shareholder an inflated price to buy their stock. This practice became popular in the 1980s when raiding was common. Raiders would take over companies through hostile takeovers and sell off their valuable assets. To avoid this, companies would use greenmail payments to buy out the raider's interest. However, this harms the company by reducing the money available for other business purposes.

Anti-greenmail provisions prevent executives from abusing this practice and reduce the potential for harm to the company. However, it also increases the chances that a raider will successfully liquidate the company. In recent years, the use of greenmail has decreased due to the adoption of poison pill clauses and regulatory taxes designed to reduce the profitability of greenmail-related practices.

For example, if a company has an anti-greenmail provision in its charter, the board of directors cannot make greenmail payments to a shareholder who is threatening their position. This prevents executives from using company funds to protect their jobs instead of investing in the business.

Another example is if a raider tries to take over a company, but the company has an anti-greenmail provision in place. The raider cannot force the company to make greenmail payments, which makes the takeover less profitable and less likely to succeed.

anti-contest clause | anti-lapse statute

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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