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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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Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
BulbasaurNoLikeCardio
7:51
@texaslawhopefully: best prices and only fast food that doesn't make me sick
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