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William Mitchell Law Review

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Conventional wisdom holds that corporate takeovers benefit both shareholders and society in general. In examining the constitutionality of state takeover statutes, numerous courts have uncritically adopted this view of takeovers. As a result, they have consistently invalidated state statutes as burdening interstate commerce, both by depriving shareholders of premiums and supposedly impeding an efficient reallocation of resources. This conventional wisdom has been challenged by recent empirical evidence on the adverse efficiency effects of many mergers. In light of this evidence indicating a divergence of investor and other interests in takeovers, Professor Lyman Johnson argues for revised judicial analysis of takeover legislation which will acknowledge a state's interest in determining how to reconcile investor and non-investor claims on the modern corporation.


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