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Simple English definitions for legal terms

enhanced scrutiny test

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A quick definition of enhanced scrutiny test:

The enhanced scrutiny test is a way to evaluate the decisions made by a company's board of directors during a takeover. The test has two parts: the reasonableness test and the proportionality test. The reasonableness test requires the board to show that they had a good reason to believe that the takeover would harm the company. The proportionality test requires the board to show that their response to the takeover was reasonable and not too extreme. If the board passes both tests, then their decisions will be evaluated using the business judgment rule. In constitutional law, the enhanced scrutiny test is used to determine if a law is constitutional.

A more thorough explanation:

The enhanced scrutiny test is a legal term used in corporation law and constitutional law.

In corporation law, the enhanced scrutiny test was established in Unocal Corp. v. Mesa Petroleum, 493 A.2d 946 (Del. 1985), also known as the Unocal Test. The test is applied to a target board's decision-making process when a takeover is occurring, to determine if the business judgment rule will apply to their decisions.

There are two prongs to the enhanced scrutiny test:

  • Reasonableness Test: The target board must demonstrate that it had reasonable grounds for believing that a danger to corporate policy and effectiveness existed.
  • Proportionality Test: The target board must demonstrate that its action or response was reasonable in relation to the threat posed and that the response was not draconian and inappropriate in response to the threat.

If both prongs of the enhanced scrutiny test are satisfied, then the court will use the business judgment rule to evaluate decisions made by the target board.

In constitutional law, the enhanced scrutiny test is a term used to refer to intermediate scrutiny, which is used to determine the constitutionality of a statute.

An example of the enhanced scrutiny test in corporation law is when a company is facing a hostile takeover bid. The target board must show that they had reasonable grounds for believing that the takeover would harm the company's policies and effectiveness. They must also show that their response to the takeover bid was proportionate to the threat posed.

An example of the enhanced scrutiny test in constitutional law is when a law is challenged for violating the Equal Protection Clause of the Fourteenth Amendment. The court will apply intermediate scrutiny to determine if the law is constitutional. This means that the law must be substantially related to an important government interest.

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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.
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