Greenmail Payments | Article about Greenmail Payments by The Free Dictionary
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greenmail, payment, by a corporation that is a takeover target, of a premium price for the shares of its stock that have been accumulated by the potential buyer. In exchange, the potential buyer stops the takeover bid.
When companies threaten to close or relocate (often to another country) if they are forced to comply with environmental laws.
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Amounts paid by a corporation in connection with the reacquisition of its stock must generally be capitalized.(105) Thus, greenmail payments
must be capitalized.
. Payments made to a hostile suitor by the target company to buy back shares of its own stock.
Observation: This decision could adversely affect corporations that paid and deducted greenmail under a survival theory by threatening the deductibility of greenmail payments